The Davis City Council became the third entity in the last two weeks to look at the city’s affordable housing ordinance. Ultimately, they followed staff recommendations by keeping the 15 percent interim ordinance in place until the end of June 2019, while at the same time they look into ways to modify the vertical mixed-use exemption. Staff will come back with some language either next week (December 4) or in three weeks (December 18).
“I’m comfortable extending the ordinance,” Councilmember Will Arnold explained. “This 15 percent number, it wasn’t pulled out of thin air, but it’s about as good as anybody’s guess appears to be.”
He added, “I’m not sure if there is a perfect number or what it might be… so that 15 percent number feels right or at least worth extending for the next six months.”
The two issues that gave him the most discomfort are the issue of the bed/bedroom leases and vertical mixed-use exemption.
On the one hand, he said, the need for purpose-built housing, specifically for students, “was so immense” and “I appreciate creativity that went into those affordable programs starting with Lincoln40, Nishi and Davis Live. However, he said, “It’s my opinion that we’ve now done enough of that for the time being that I would be interested in seeing whatever we put together not include those types of affordable requirements being checked off by the beds and bedroom leases.
“It would be my preference going forward not to do those in the near term,” he said.
On the issue of vertical mixed-use, he said this was the issue that he “thought the most about,” specifically because “we want to see these things built.”
He noted that especially in the downtown there are a number of advantages to living in this type of property and “those benefits should not be reserved for folks who can afford it.” On the other hand, “35 percent of nothing, is nothing. So if the thing doesn’t get built because we’ve put an onerous requirement on there, then no one gets to live there… So that’s the balancing act that we have in front of us.”
Will Arnold was one of several who argued that they needed flexibility. He noted the cost of construction in the downtown and was inclined to carve out the downtown and eliminate the 
exemption for places outside of the downtown.
The question was what the right level is and there he was less certain. “Fifteen percent is not feasible,” he said. But, then again, “zero percent is unacceptable.” He said, “I would be hard pressed to approve either of (the current proposed mixed use projects) if the affordable number were zero.”
“This report was quite alarming,” Mayor Pro Tem Gloria Partida stated. “This is an opportunity to take a look at where we are around our housing and where we want to be.”
She wondered if they couldn’t “offer units from previous developments that have matured” and were already making money, rather than attempting to get new projects to provide affordable units at the time they were built. “If our goal is to provide housing that’s affordable, we should explore all possibilities and give people options.”
Councilmember Partida said, “I think we should remove the (vertical mixed-use) exemption for when it is feasible.”
She noted that the lowest income folks were the hardest to fund housing for. Therefore, she said, “I prefer stand alone projects for this, I think this is the best way to provide the affordable units for the lowest income.
“The percentage should be up to 15 percent depending on the residual land value,” she stated.
She was also more in favor of bed and bedroom leases as a way to provide affordable housing which she saw as not simply being for students. She saw that by-the-bed leases were “great for affordability but not great for people trying to rent apartment units together.” She said, “Unless a project is clearly for students – affordability should only be by the bedroom with the provision that if two people were low income, they would essentially get two low income (bedrooms) in that unit.”
Councilmember Lucas Frerichs took stock of the successes of affordable housing in Davis and called land dedication “the most effective tool due to land availability (previously) and also the ability to leverage state and federal dollars.” He noted that “the one major tool taken away from local government is… redevelopment. That was $2 million per year that Davis had for affordable housing that is gone overnight.”
The good news is, he believes, that Governor-elect Gavin Newsom is “commented to the reestablishment of a redevelopment 2.0 – some sort tax increment, particularly for affordable housing and 
giving local governments once again the ability to create affordable housing through tax increment.”
One top priority that he sees “should be supporting a legislative attempt at funding Redevelopment 2.0 creating a tax increment to fund affordable housing.”
For Dan Carson, we need other tools to fund affordable housing – he listed some as bond monies, density bonuses, other legislation and leveraging city land. “Let’s come up with a comprehensive approach,” he said. “This inclusionary ordinance cannot and will never be the solution completely to the problem. The real solution to the problem is if we want more affordable housing, we need to build more rental housing, period. The laws of supply and demand are the larger long term solution here.”
He was willing to support an extension of the ordinance for six months, but wanted more information about whether 15 percent was the ideal number.
“I want more information to guide me with the ultimate decision that we make,” he stated.
He also stated that he was not against by the bed or bedroom affordability. He noted that he has been writing college checks for three boys for ten years now.
“From a personal standpoint, the flexibility it has given them to be able to go into an apartment complex and pay by the bed has been really important for us to be able to make it for them to be able to live in places they want to live,” he said.
He added, “We’ve made some real progress in being able to add affordable units by adding this as a tool – so I’m reluctant to throw this away.”
Councilmember Carson stated that he would like to see more emphasis on family and workforce housing, but there will be other opportunities for student housing and “when we see them, I want this tool still available to us.”
Mayor Brett Lee said, “It’s a little depressing that the analysis really shows that requiring affordability really tilts many of the project types into a negative, no build scenario.”
The mayor didn’t disregard the report, however, he said, “I think what the interim ordinance did was it gave the council flexibility to adapt the requirements based on the individual proposal.”
The mayor recommended that they keep the interim ordinance, but eliminate the full vertical mixed-use exemption. He suggested they set the number to five percent, but, as a nod to the fiscal difficulty, only require that five percent be for low income (as opposed to very low or extremely low) income people.
“The idea here is that it’s not zero,” he said. “We’ll work with you.”
Will Arnold pushed for a core area carve out, which he felt along with adding flexibility “gives me a comfort level.” He said, “We don’t want people not to redevelop because of this.”
Brett Lee stated that “while vertical mixed-use and stacked flats (in the core) do not have a numerical requirement, there is an expectation that they will provide some level of resources for the city’s affordability program.”
This is the placeholder, and when they get to a permanent ordinance, they hope to have this fleshed out a bit more clearly.
—David M. Greenwald reporting
