On Tuesday, the council is being asked to approve an interim ordinance for affordable housing that would allow the council to accept projects with less than 35 percent of the units as affordable units just ahead of their vote on Nishi, which sets aside about 12 percent of its units as affordable.
As staff describes it, “The proposed ordinance amendment to the inclusionary requirements for multifamily rental housing developments is intended to serve as a bridge that would allow City Council to act on multifamily development proposals with a project specific affordable housing plan with less than 35% of the units being designated as affordable housing, while staff prepares a comprehensive update to the inclusionary requirements for multifamily projects for further City Council consideration.”
Interestingly, staff also cautions, “Should City Council choose not to adopt the proposed ordinance amendment, Council would be precluded from affirming housing proposals that do not fully comply 
with the existing 35% affordability requirement.
“The proposed ordinance amendment allowing for City Council consideration of project specific affordable housing plans is subject to specific considerations described in the ordinance and is proposed to sunset by December 31, 2018 as the comprehensive update to the inclusionary housing ordinance for multifamily housing is anticipated to be completed in 2018.”
Currently, the city’s affordable housing ordinance requires that the developer of rental housing that contain more than twenty units needs to provide 35 percent of the units as affordable housing for low (25 percent) and very low (10 percent) income households.
However, because of the Palmer decision from 2009, local governments are precluded “from requiring a developer to set affordable rent levels for private rental housing unless the developer has agreed to such rental restrictions in exchange for financial assistance or other consideration from the local government.”
Thus the city has several development applications in progress “with the understanding that Palmer was in effect and that inclusionary housing would be negotiated with the City as consideration for project entitlements.”
At the council workshop, the council “recognized that the existing inclusionary ordinance requirements should be studied to see if revisions are warranted. City Council expressed interest in providing for greater flexibility in how to provide inclusionary housing in various development prototypes could be accommodated recognizing a one size fits all approach may not be appropriate given the complexity different rental housing models.
“The City Council also expressed interest in allowing for original proposals that integrate affordable units/beds into projects inclusive of the potential to serve the student population.”
This is just an interim ordinance until the city can more appropriately study the fiscal implications of the 35 percent requirement.
Council will consider the following factors:
- Whether the market rate component and/or the affordable component of the proposed development is anticipated to meet a specific housing need as identified in the City’s housing element or general plan policies;
- Whether the market rate units are anticipated to provide housing to low or moderate income households through the incorporation of design components that will encourage greater affordability including reduced units sizes and reduced utility costs;
- The extent to which the proposed development furthers other land use goals of the City, including but not limited to reductions in the need for private vehicles and the encouragement of development consistent with the Metropolitan Transportation Plan/Sustainable Communities Strategy adopted for the Sacramento Region by the Sacramento Area Council of Governments;
- Whether the proposed market rate development includes unusually high infrastructure costs or other cost burdens as conditions to the development of the project;
- Whether the proposed affordable housing component may be partially funded by public subsidy or other public financing from a source other than the City;
- Whether the affordable component is provided on a bed or bedroom basis, that encourages greater integration of the affordable and market rate components of the project;
- Whether any or all of the affordable housing is provided at a deeper level of affordability (such as Extremely Low Income housing, as defined in California Health & Safety Code Section 50106); and
- Whether the application for the proposed development was submitted to the City for consideration prior to the adoption of AB 1505.
When the Social Services Commission reviewed the proposed ordinance, the majority “expressed concern about enacting the amendment prior to the completion of the consultant work underway, which will inform staff’s ultimate recommendations on a comprehensive update of rental housing inclusionary housing requirements. Specifically, the majority felt the amendment was premature and did not expressly state the temporary nature of the amendment as a bridge ordinance. The majority also questioned the potentially deleterious impacts on the City’s affordable housing stock.”
Staff assured the commission that the amendment was only meant to serve as “a bridge ordinance” until the update was completed.
Still the commission voted 4-3 recommending that the council reject the proposed ordinance amendment.
—David M. Greenwald reporting
“When the Social Services Commission reviewed the proposed ordinance, the majority, “expressed concern about enacting the amendment prior to the completion of the consultant work underway, which will inform staff’s ultimate recommendations on a comprehensive update of rental housing inclusionary housing requirements. Specifically, the majority felt the amendment was premature and did not expressly state the temporary nature of the amendment as a bridge ordinance. The majority also questioned the potentially deleterious impacts on the City’s affordable housing stock.”
I will repeat here the public comment I made at the Social Services Commission meeting. It is arguably fiscally irresponsible for the City to spend many thousands of dollars on a constant expert’s professional advice, and then rush to ram through an Ordinance change without the benefit of the consultant’s professional opinion/advice. It is not like the City has money to burn.
That is especially true given that the consultant expert’s report is due to be delivered to the City within the next 30 days. Why is it important to make an ill-informed decision now rather than a well-informed decision 30-60 days from now?
That’s why putting an interim ordinance in makes sense.
An interim ordinance without the benefit of the consultant expert’s advice?
Are you proposing they rescind the interim ordinance when the consultant expert’s advice is received and reviewed by staff, the Commissions and the Council?
You appear to be advocating throwing away taxpayer money by emasculating the consultant’s report before it is even received?
What was the point in spending the money on the consultant’s opinion/advice if you were going to disregard it before it was even received/delivered?
Approving these changes now represents a total lack of process discipline and a full measure of fiscal irresponsibility.
Here’s the “justification” for this effort:
In other words, “adjust” city policy to adhere to current development proposals, such as Lincoln40 (and Nishi, for that matter).
Let developers set the policy.
Just curious… do you actually care about affordable housing opportunities, or just use it as a ‘foil’ for other purposes?
I find it curious that certain folk don’t seem to be active in regards to affordable housing, unless they can ‘wrap themselves’ in the issue to oppose projects… the rest of the time, nada.
Howard: There’s often a nasty, unfounded implication in your comments. Seems like you often don’t put a lot of thought into your frequent responses, before posting them. (Actually, you also ignore obvious mean-spirited comments from those that you apparently agree with.)
Yes, I believe that affordable housing requirements are ultimately the only way to ensure affordability. (Actually, rent control can also accomplish this for long-term renters.)
And, so what constructive efforts are you making in regards to provision of affordable housing? Within the existing framework?
If none, my comment rings true…
Howard: I’m making my preferences known, in more than one way. However, I am not in a position to establish (or bypass) city policy, which is the subject of this article.
Nice dodge!
Would you be willing willing to pay a parcel tax of say, $300/year to fund vouchers, etc. to make housing affordable? That’s a small part of what we do… just to Habitat for Humanity…
edited
[moderator] Yes, you are getting off topic and this is unnecessarily personal.
Howard: I’d prefer that development proposals include affordable housing. In other words, build what is actually needed, instead of what creates the biggest profit.
On a more personal level, I have considered volunteering for “Habitat for Humanity”, but haven’t done it so far. I can envision a lot of benefits from doing so. (Yes, I realize that you’re involved in such activities.)
My primary interests are still related to preventing sprawl and preserving undeveloped land, in Davis and beyond.
The irony is that by tying affordable housing to developers, you increase the pressure to build more in order to create more affordable housing.
David: By reducing the enormous potential profits from a fully-market rate proposal, developers would be less inclined to continually propose developments that don’t actually meet the need for affordable housing.
In other words, if they’re going to build, it’s going to have to be something that doesn’t necessarily adhere to their goal of maximizing profits.
I’m not sure you’re making an apt point Ron.
You have exhibit A: “the requirement of payment for off-site infrastructure and provision of 12 percent of the beds for affordable housing suggests the developer will obtain a lower return on investment than is typically targeted for new development in Davis”
And exhibit B: which is West Davis going with twice the amount of required affordable housing.
Two cases where clearly they are not maximizing profits. So I don’t know that you’re comment has any validity.
David: I’m honestly not sure of what your point is.
Regarding your reference to the “lower rate of return” regarding Nishi, this seems to be a reference to your other article, today (regarding an “economic analysis” for Nishi), today. (The same article in which Matt pointed out that the finance and budget commission is not being allowed to review that analysis, as they had for Nishi 1.0.)
As a side note, it’s interesting to note the disagreement between Dan Carson and the rest of the commission, regarding the analysis for Nishi 1.0. (See Matt’s comment, in which those results are shown.)
It seems like you understood my point just fine. You are grasping at a thin reed there Ron.
No, I didn’t understand your point.
You said: “In other words, if they’re going to build, it’s going to have to be something that doesn’t necessarily adhere to their goal of maximizing profits”
I provided two current examples where the developer is clearly not trying to maximize their profit
Well, yeah. I guess they felt compelled to do “something”, to minimize criticism and get their developments approved. (I suspect that they’d rather build no affordable housing, at all – e.g., as with the first Nishi 1.0 proposal.)
Ron… your 10:57 post was instructive… and I appreciate it and the sentiments behind it…
To the topic… as a community, I do think we need to honestly explore the actual needs for affordable housing, and the parameters… should students have housing at lower cost than young families? Resource based (income) or ‘preference’ (yeah I’d like to have a Lexus, but…)? Housing for the chronically homeless? Rental vs. ownership?
Still think the absolute numbers currently in play have no factual justification. I say again, maybe too high a bar, maybe too low.
12%? Don’t know… but it is on the table…
Ron, I fully agree with you here.
Ron is correct. An interim ordinance allows the Council to approve pending proposals under standards that may be far more lax than what the consultant may recommend.
It seems to me, as a non-lawyer, that the interim ordinance would allow them to approve the current batch of proposals that will mitigate our present housing crisis without threat of lawsuit. Nearly every project that goes forward in Davis is subject to lawsuits by a couple of specific attorneys here in town, and this seems like a very prudent way to inoculate against that.
That’s the idea. The question is, though, is that good practice? The Council took the sound step of hiring a consultant to offer recommendations on whether and how the affordable housing ordinance should be revised. Seems they should wait for the outcome before revising the requirements. It’s not like the developers with pending proposals didn’t know what the current standards were when they proceeded, yet they chose to proceed anyway rather than waiting for the review process to run its course.
Don, when the Council approved Staff’s proposal to hire the Expert Consultant, the target delivery date for the consultant’s report was January 2018. It is reported that the actual report will arrive in February 2018. What difference does three weeks make in the processing of the current batch of proposals? For that matter what difference does three months make in the processing of the current batch of proposals?
Many an office has a sign that says “Your failure to plan does not constitute my emergency.”
You are correct, Eric.
Do you know/understand how the current standards were arrived at? At local and state levels?
Looks arbitrary to me. Might be too high, might be too low… maybe derived from throwing darts, and rounding to the nearest 5%…
“Affordable” means different things to different people… subjective… have lived in housing where it was a significant “stretch” for us, at the time… it wasn’t ‘comfortably’ affordable, but we made it work, as we needed housing. Made other budgetary sacrifices to do so…
Now, if you want to talk about “affordable” housing, let’s talk about the “unsheltered”…
Mark West said . . . “Waiting for the consultant’s report as Matt suggests guarantees the 6-12 months of delay (not 30 days) with all the associated costs for the developer,”
Mark, how are you calculating your time-line. The original target delivery date for the consultant’s report was/is January 2018. My understanding is that it will be delivered to Staff one month late during the month of February. Commission hearings in March/April. Council action in April/May. I don’t see where you are getting 6-12 months. Care to enlighten me?
I explained my reasoning Matt, your reading comprehension issues are not my emergency.
Even better: Let developers set the policy, and then change the ordinance to protect them.
And then, possibly change the ordinance again, after the consultant’s report is received (in 30-60 days from now). Possibly giving an advantage to current development proposals, compared to those that follow afterward. (Actually, I wonder if that approach might face a legal challenge?)
What a mess.
It is very clear that our current affordable housing policy is constraining development, so it is clearly counter-productive. Developers are not setting the policy, they are proposing housing projects that pencil out for them and are thus possible. Until the policy is changed to more realistically reflect market conditions necessary to allow housing development, it will be necessary to pass an interim measure to accommodate these proposals.
In the long run we need to acknowledge that a 35% requirement is inhibiting provision of housing and is certainly not providing affordable housing.
While I tend to agree with Don, I will say I talked to some legit affordable housing proponents this week (i.e. not people using affordable housing to stifle housing development) and they have concerns about this proposal.
The affordable housing policy, including the 35% requirement, is one of many ‘costs’ that the City imposes on developers. Measure R is another if those ‘costs’ as are the open space requirements, parking minimums, environmental standards, net zero energy, plan check fees, burrowing owl mitigation, and many other assorted exactions (each by themselves quite reasonable) that add to the total bill for development. It isn’t the affordable housing policy per se that is constraining development, it is the combination of all those exactions that the City requires, driving up the cost per square foot of development (and the associated financing risks) that are responsible.
Matt’s suggestion that the commissions need more time to analyze the project (which with the Measure R vote requirement and the election cycle means another 6-12 months) is yet another ‘cost’ that he clearly wants to impose on a project that has already been years in development.
The Nishi developers have proposed a different approach to addressing affordable housing in their project. The current ordinance does not provide the CC the flexibility to consider this alternative approach without the threat of yet another lawsuit. The temporary ordinance provides that flexibility. Waiting for the consultant’s report as Matt suggests guarantees the 6-12 months of delay (not 30 days) with all the associated costs for the developer, not to mention the added delay in the construction of the much needed new housing.
We cannot stop all development for four or five years while we update our General Plan and all the associated bits and pieces. We need to find ways to solve our challenges in the meantime, and the approach that the CC is currently considering with regards to this project is a reasonable one.
Agree with Mark here.
And…
Monitor… this is a veiled pejorative against developers. If I cannot say that Ron and his ilk are complete business and capital investment subject neophytes, NIMBY change-averse, Davis new-comers that wants to keep Davis there exclusive high property value enclave, then I think you need to also stop Ron from denigrating developers this way.
I wonder if Ron even knows that a developer built the place he lives in today. However, maybe Ron’s house developer was one of those angelic types that does it out of the goodness of his heart instead of evil profit.
Jeff: It’s not a perjorative (which means expressing contempt, or disapproval).
That’s what developers (and most businesses) do. Pursue the highest profit, with the least cost. Successful developers often become very wealthy, as a result. There’s at least a few of them, in Davis. (Again, not expressing contempt, or disapproval.) Truth be told, the ability to do this is quite impressive. (I suspect that many would rather do this if they could, vs. experiencing the daily grind, demands, and limited income from a normal/regular job.)
Now, whether or not that meets the goals of a community is a different matter.
The rest of your statements are perjoratives.
Ron (et al.)… please grasp a basic tenet (and legal fact)… vacant (or even underdeveloped land) in the City, or the periphery, does NOT belong to the “community”… the “community” has no rights in that regard.
Yeah, the “community” can favor its ‘goals’, but no one is obligated to achieve them. Some goals are unattainable. Saying, “everyone should have a right to be housed, at the lowest possible cost, with all amenities, with zero taxes”… that’s a noble goal!
Ain’t going to happen, at least in this life…
Howard: Your comment has no relationship to my comment.
“That’s the idea. The question is, though, is that good practice?”
Yes, unless you are one of the predator attorneys..
Don
“Developers are not setting the policy, they are proposing housing projects that pencil out for them and are thus possible”
While I agree that developers are not “setting policy”, we have only their word that the projects they propose based on “pencilling out” do not include inflated profits for themselves. We do not know because they do not disclose, and in at least one recent case in Trackside, the neighbors were not given a heads up in order to determine whether “Trackside 3” would or would not have “pencilled out” but were instead quizzed about it in “gotcha moment” by a member of the City Council while the word of the developer was accepted without question.
This experience has led me to question the wisdom of a “bridge proposal” before getting the consultants advice.
What, do you consider to be “inflated profits?”
Who do you think should define the standards for inflated vs. acceptable profits for proposed projects within the City?
I think Tia has in mind a committee of Davis residents that get to decide what an except-able (pun-intended) profit should be. After all, as a medical doctor she is also an expert in capital investment and real estate development.
And by the way, isn’t accusing a developer as pursuing inflated profits a pejorative?