The Atlantic in the past week wrote an article, “Why Housing Policy Feels Like Generational Warfare (To Millennials, at least).” The theme captures my thinking on local land use wars – the divide between the haves and have nots has a very generational component to it, especially when we are talking about housing like student housing and workforce housing.
The article makes a number of points worth considering, including the quote from Jeffrey Horstein’s 2005 history, A Nation of Realtors. He writes, “Americans, particularly white Americans, came to think of themselves as inhabiting a classless society, composed of one big ‘middle class,’ its membership defined to a large degree by actual or expectant homeownership.”
What has happened since then is that locations where real estate is inexpensive and plentiful lack good jobs, while those with lots of jobs, particularly coastal communities, “have seen their real-estate markets go absolutely haywire.”
Unison, a real-estate firm that provides financing for homebuyers through a process of co-investment, has calculated how long it takes to save up for a 20 percent down payment for a home in a given city. What they have found is “the gap between income and home value has been rising. Using Unison’s methodology, it took nine years to save up a down payment in 1975. Now it takes 14.”
To put the numbers into perspective in California, it takes 43 years in LA, 40 in San Francisco, 31 in San Jose and San Diego, and moving northward, even Seattle and Portland are up there at 27 and 23 years.
The Atlantic argues that this has huge consequences, not only in an era of vast income disparity but also generationally. To put this into perspective: “Imagine you’re a 30-year-old in Los Angeles with 
the median income. By Unison’s math, you can imagine buying a home at 73.”
The result: “For young people in high-opportunity metro areas, the route to home ownership is basically blocked without the help of a wealthy family member or some stock options. Meanwhile, older people who bought under much more favorable circumstances have seen their equity stakes grow and grow and grow.”
The data here are suggestive of the problem in places like Davis where there is a jobs-housing imbalance. Our most recently available data show that a large number of people work in Davis but do not live in Davis (in 2014, that number was 21,000 of the 28,000 people employed in Davis) while, at the same time, 16,655 of 24,000 who live in Davis (and work) commute outside of the area.
But the Atlantic’s point is far broader – it suggests the mismatch between real estate and jobs. The places where people can go and find that home prices are reasonable are places where they will not find jobs. So people’s suggestion that the solution is simply to move to other locations turns out not to be a real remedy.
What is driving this gulf? The Atlantic suggests, “One part of the problem is easy to identify: housing scarcity. The Bay Area has become the poster child for this factor.”
They point out that from 2010 to 2017, the Bay Area created half a million jobs. But they only built 76,000 housing units.
“You don’t have to be a market fundamentalist to see how that could cause problems,” the Article points out. “The simplest way to read these numbers is that the real-estate market in job-rich cities like San Francisco does not work for the vast majority of young people. That’s why so many housing debates in big coastal cities feel like generational warfare.”
This has produced a policy gap as well. The Atlantic points out that changes to restrictive zoning have been pushed by some politicians responding to the needs for housing. But those policies are opposed by many homeowners who see “see propping up real-estate values as what the government does.”
We have seen those types of policies at play in Davis as well. It took a pretty large shortage of student housing to convince the majority of voters to support Nishi. Housing concerns seemed high enough that even when the project was senior housing – housing that the developers at least argued might free up existing single-family homes – the majority of the community backed it.
Getting demographics for the support of Nishi and WDAAC (West Davis Active Adult Community) might be instructive in understanding the local dynamics.
I think understanding these larger trends helps to illustrate the local situation in Davis better. Given the gulf between real estate and jobs, it is understandable that a proposal which is primarily a jobs proposal like the Aggie Research Campus would want to have workforce housing tied to it as well.
—David M. Greenwald reporting
[It] seems ironic that in an article attempting to stir up anger among young people, a senior housing development was referred to as “social justice champions”. And attended the Vanguard “fundraiser”.
Left out is any justification whatsoever that Davis needs jobs. Is the local unemployment rate high? Is there already a net inflow of commuters? What about outbound commuters, who would live at the development and work in Sacramento?
How can Davis even consider a freeway-oriented development on prime farmland, while simultaneously setting a local goal of reducing greenhouse gasses?
Seems like the Vanguard is advocating for Davis to follow in the footsteps of the Bay Area, which is cited as a negative example regarding the cost of housing. Even for a talented political writer, there comes a point when basic logic overcomes writing ability.
“Left out is any justification whatsoever that Davis needs jobs. ”
What does it mean for Davis to need jobs?
Craig, there are lots of different answers to that question.
One of those answers is supported by some comparative jobs and population statistics from University towns similar to Davis.
The combined total of UC campus jobs and Davis jobs is anemic (for a world class research university host community) when compared to the number of Davis residents.
For example:
Ann Arbor, MI has a population of 114,000, with 47,000 households and 192,000 jobs
Palo Alto, CA has a population of 67,000, with 27,000 households and 98,000 jobs
Davis, CA has a population of 69,000, with 26,000 households and 35,000 jobs
Boulder, CO has a population of 97,000, with 41,000 households and 94,000 jobs
Ames, IA has a population of 67,000, with 25,000 households and 57,000 jobs
Corvallis, OR has a population of 57,000, with 24,000 households and 44,000 jobs
One of the arguments based on those statistics is that the City, as a consequence of UCD’s large student enrollment business plan, is saddled with the local economic consequences of a predominant student demographic which has profound implications for its land use priorities, housing needs, declining K-12 enrollment, purchasing and budgeting necessities, its permanent transient character, and its large proportion of unemployed and/or retired residents. It is an unsustainable model as it currently exists.
“Jobs” is a useful proxy for that community challenge, which currently manifests itself in the recurring (and growing) $10 million annual Budget shortfall and the deteriorating City infrastructure.
Matt: Why do you suppose that there’s a net inflow of commuters through Davis?
What’s the local/Davis unemployment rate?
How many Davis residents work in Sacramento?
Thank you Matt.
I’m looking forward to Matt’s response to my questions, as well.
As a side note, students are not always a part of a full-time workforce. Including that population as such skews any results.
Again, why is there a net inflow of commuters/workers through Davis?
What is the Davis/local unemployment rate?
How many Davis residents work elsewhere – including Sacramento?
Indeed, are there not enough local/regional “jobs” for current Davis residents (who are actually in the workforce)? Nothing indicates that this is true.
And frankly, how does increasing the number of jobs by (X) amount, while also adding (X) amount of housing units “improve” the current ratio?
Ron, one thing that all University towns have in common is that they are economic magnets, often regional economic magnets. Economic magnets attract an net inflow of commuters.
I honestly don’t know how to calculate Davis’ Unemployment Rate. Both the numerator and denominator are elusive. For example I am unemployed. Do I count in the calculation?
The following Tables provide you with an answer to your last question.
Matt: those statistics you cite are anecdotally interesting. However, it should be noted that they can be highly skewed based on the geographic boundaries by which they are tabulated. And I suspect that a more comprehensive comparison of a broader range of locales that accounted for geographic extents would tell a different story.
Just as one example, Boulder County is listed as having 322.5K population with 177K jobs here :https://datausa.io/profile/geo/boulder-county-co
That jobs/population ratio of 0.55 is very comparable to the Davis stats you cite (69K population and 35K jobs) that provide a jobs/population ratio of 0.51. That does not jibe with your characterization of the “anemic” amount of employment on Davis.
One of the difficulties in calculating an unemployment rate is accounting for young graduates looking for employment but having to go elsewhere because nothing is available. That’s not reflected in an unemployment rate in the classical sense, but it is a talent drain.
Ron asked … “Indeed, are there not enough local/regional “jobs” for current Davis residents (who are actually in the workforce)? Nothing indicates that this is true.”
The jobs to working population (typically something close to 50% of the total population) statistics for economic magnet towns is without exception greater than the 1:1 ratio that your question assumes. Ann Arbor’s ratio is 192:57 (greater than 3:1). Palo Alto’s is 98:33.5 (just under 3:1). Boulder’s ratio is 94:48.5 (just under 2:1). Ames’ ratio is 57:33.5. Corvallis’ ratio is 44: 28.5. Davis has by far the lowest ratio 35:34.5.
It is often argued that a huge part of the retail economy anemia in Davis is that for the most part the businesses rely on local customers only.
Matt: Again, how many Davis residents are actually in the full-time workforce, and how many are unemployed?
How many work at UCD, how many work in Sacramento, etc.?
Sacramento is its own “economic magnet”.
Ron: Why is it Matt’s job to look it up for you?
Another example: Story County, Iowa, where Ames is located: https://datausa.io/profile/geo/story-county-ia
51K employees and 96K = 0.53 ratio.
Anyone who is claiming that Davis “needs” more jobs should be prepared to tell us the reason why. Normally, this is reflected in the local unemployment rate, for example. (For those who are actually in the workforce.)
An inbound flow of workforce commuters indicates a more than sufficient number of local jobs.
But again, left out of this is the fact that Sacramento is also an economic magnet, for all of the communities which surround it.
Another example: Benton County, OR, where Corvallis is located: https://datausa.io/profile/geo/benton-county-or
42K jobs and 88K population = 0.48 ratio.
Ron, there are two simple answers to the question about why Davis needs additional jobs.
The first reason is the 1,540 person decline in the Age 25-54 demographic cohort and the 867 person decline in the Age 0-19 demographic cohort between 2000 and 2010. That was in a period where the total Davis population grew by 5,314 persons. A lack of jobs that can support the economic needs of families is not the only reason for that decline, but it is probably the #1 such reason.
The second reason is the $201 million cummunlartive Budget Shortfall for the City of Davis over the 20-year period in the just approved City Budget. That is a $10 million per year Shortfall. An influx of jobs will partially address that Budget Shortfall and its causes.
JMO
With that said, what is your plan for addressing the Budget Shortfall?
Matt: A reduction in the size of the workforce would not indicate that more jobs are needed. (As a side note, I have not seen any statistics which suggest that “0-19 year olds” are in the workforce. At least, not in this country.)
One would have to examine the actual cause of the budget shortfalls (in communities throughout the state) to determine where the real solution lies. Davis is by no means alone in that – even within the region.
I have almost always had at least one employee between the ages of 16 and 19.
Jobs don’t increase revenues to the city, so this whole sidebar of the discussion is pretty pointless. Consumers do, by paying sales tax. Property creates revenues to the city via property taxes. There is nothing intrinsic in a job that directly provides funds to the city. No taxes are collected from employees that go to the city.
The goal of the business parks with respect to the city’s budget is to create revenues via hotel occupancy taxes, sales taxes, the increased value of the property, the fact that the property is now in the city limits instead of in the county, etc.
Jobs are a nice benefit to the region.
Matt W. said “A lack of jobs that can support the economic needs of families is not the only reason for that decline, but it is probably the #1 such reason.”
I think a more realistic analysis would focus on UC Davis’ skyrocketing enrollment that went hand-in-hand with their lack of provision of adequate student housing, both of which put tremendous pressure on the housing market and helped to drive the family demographic out of town.
Matt W. Those table graphics you posted for Davis and the region are a mishmash of old (2000 & 2005) data with varying geographies (i.e. sometimes “Davis” includes just the city and sometimes UC Davis). They are not a good basis for comparative analysis.
Also, what is your data source for the numbers you used for the comparison to other college towns? The definitions and geographic extents are important to know to vet that data.
Ron said . . . “[I] have not seen any statistics which suggest that “0-19 year olds” are in the workforce. At least, not in this country.”
Ron, you unilaterally made an assumption. Put the words I wrote together and you will see that a correct assumption on your part would have been that “0-19 year olds” are in families rather than in the workforce. I apologize if I led you astray.
and
Rik Keller said . . . “Those table graphics you posted for Davis and the region are a mishmash of old (2000 & 2005) data with varying geographies (i.e. sometimes “Davis” includes just the city and sometimes UC Davis). They are not a good basis for comparative analysis.”
No comparative analysis was requested by Ron when he asked “How many Davis residents work in Sacramento?” The tables provide him with the necessary data to discern that answer. The question by its construction included varying geographies. I will pass on your concern to Ron, the question asker.
Rik Keller said . . . “Also, what is your data source for the numbers you used for the comparison to other college towns? The definitions and geographic extents are important to know to vet that data.”
The CAFRs of the respective Cities, which provides the data, the definitions, and the geographic extents. I did give Davis the benefit of the doubt by including UCD jobs, which technically are not within the City Limits. If I had excluded them the ratios would have gotten much, much worse.
With that said, is there a particular reason why you have changed the topic of discussion from the City level to the County level?
I’m sorry, Matt. My time is limited today, so I’m not going to try to guess where you think this answer lies. If you’d care to explain further, you’re welcome to do so.
But again, what is your point? Are you claiming that more jobs needed to support the current working population of Davis residents? I’m pretty certain that nothing you’ve posted supports this.
Matt Williams asked Ron . . . “With that said, what is your plan for addressing the Budget Shortfall?”
Ron replied . . . “One would have to examine the actual cause of the budget shortfalls (in communities throughout the state) to determine where the real solution lies. Davis is by no means alone in that – even within the region.”
Thank you for that non-answer Ron. [edited] Yet, your answer above to my question appears to indicate that you have not personally formed a constructive plan for addressing the Budget Shortfall. If that is the case, that is your prerogative. Please let me know if I should avoid asking that question of you again in the future.
In the meantime, I’ll continue to try to formulate constructive steps toward a solution, vet them with Davis stakeholders, and promote community dialogue about those possible solutions.
My peers on the FBC said it very well when they passed the following resolution at the June 3 FBC meeting and delivered it to the Council the following night during Public Comment.
Full-time? (Regardless, those folks are probably generally not qualified to work at an “innovation center”.)
More importantly, Matt’s statistics show that the number of Davis residents who are in the workforce is likely decreasing, if anything. It’s quite a leap to say that a decreasing workforce needs more jobs.
Yeap. Thank you.
Now, one would have to ask Matt why he brings this up as a “solution” to the city’s budget shortfall. Especially since just about every other city is experiencing the same problems. (Some of which are competing to land the same employers, despite a lack of evidence that there’s actually sufficient commercial market demand to support it.)
The fact that the MRIC/ARC employers are pursuing housing demonstrates a lack of sufficient commercial market demand. How is it that Matt is “hanging his hat” on something which has no evidence of working – other than converting more farmland to housing?
Ron asked . . . “But again, what is your point? Are you claiming that more jobs needed to support the current working population of Davis residents? I’m pretty certain that nothing you’ve posted supports this.”
You are the one who has introduced the concept of “support[ing] the current working population of Davis residents” I’m not sure what that concept has to do with closing the City’s recurring annual Budget Shortfall.
Incremental additional jobs that leverage the Intellectual Capital Creation engine at UC Davis, retaining that newly created intellectual capital (rather than losing it to other communities as we do now) will increase both the velocity and magnitude of the local economy, thereby generating incremental additional net revenues for the City Budget.
That is my point/opinion.
With that said, what is your plan for addressing the Budget Shortfall?
As a side note, what’s to prevent the MRIC/ARC developers from offering a “sweet deal” to the first couple of commercial tenants, to “prove” that there’s sufficient commercial market demand for the rest of the development? At a time when multiple cities are suddenly attempting to land the same commercial tenants (at what would likely be a lower cost, to those future tenants)?
I suspect that the “solution” to the budget shortfall will ultimately be the same one that every other city is experiencing. Probably some combination of limiting costs, and state assistance. (I believe that the latest budget coming out of Sacramento provides some limited relief to CALSTRS, regarding its unfunded liabilities.)
In short, I frankly don’t believe there’s an emergency that only Davis is experiencing. The numbers statewide do not support that conclusion. I can post them (as I’ve done in the past), if needed.
Ron said . . . “The fact that the MRIC/ARC employers are pursuing housing demonstrates a lack of sufficient commercial market demand. How is it that Matt is “hanging his hat” on something which has no evidence of working – other than converting more farmland to housing?”
Ron, again your imagination is running away with you. Where have I said anything about MRIC/ARC other than to point out that the Economic Analysis completed by EPS/Plescia was never presented to the FBC, and as such is unvetted in my opinion. The MRIC project proponents never showed up at the FBC meeting wheter that presentation, discussion, vetting was scheduled to take place. Rather they sent a letter to the City putting the project application on hold.
We can start by having fun with this, regarding the scope of the statewide problem:
https://www.pensiontracker.org/
(Actually, the problem reaches beyond state borders, as well.)
Ron said . . . “In short, I frankly don’t believe there’s an emergency that only Davis is experiencing. The numbers statewide do not support that conclusion. I can post them (as I’ve done in the past), if needed.”
Whether or not other jurisdictions are experiencing a recurring annual Budget Shortfall, and attendant deterioration of the City’s capital infrastructure is irrelevant. The $10 million per year the City is not able to spend on properly, proactively maintaining that capital infrastructure is a very clear reality that no amount of ethereal words can make go away.
With that said, what is your plan for addressing that $10 million a year Budget Shortfall?
Matt said “The CAFRs of the respective Cities, which provides the data, the definitions, and the geographic extents. I did give Davis the benefit of the doubt by including UCD jobs, which technically are not within the City Limits. If I had excluded them the ratios would have gotten much, much worse.
With that said, is there a particular reason why you have changed the topic of discussion from the City level to the County level?”
Can you link to the actual data sources where you derived the data? One of the reasons that I linked to county-level data is that it provides more of a reasonable basis for analytical comparison.
Davis is one example of a place where excluding jobs outside of the city limits that are located in UC Davis distorts the picture tremendously. (As a side note of interest: the EIR for MRIC did exactly that and claimed that Davis has a massive jobs deficit). Other places have different geographic anomalies, including most frequently a large population residing outside of the strict city limits that causes the jobs/population ratio to appear higher than it actually is.
It is tough to find data for jobs by location (rather than employees by residence). And it is really tough to find this data disaggregated at sub-county levels. Then there is the issue of appropriate geographic extents.
SACOG has aggregated data for a 4-mile radius around defined “employment centers” and that is most appropriate for comparison. But the equivalent data does not exist in the rest of the state or nationally.
Bottom line: a closer look at the figures you provided would likely contradict your conclusion about them”anemic” level of employment in Davis.
Ron said . . . “We can start by having fun with this, regarding the scope of the statewide problem: https://www.pensiontracker.org/ (Actually, the problem reaches beyond state borders, as well.)”
Ron, are you aware that the $10 million Budget Shortfall for the City contains exactly zero Pension dollars?
Stick to the topic at hand. The Unfunded Pension Liability is another subject altogether.
Rik Keller said . . . “Can you link to the actual data sources where you derived the data? One of the reasons that I linked to county-level data is that it provides more of a reasonable basis for analytical comparison.”
My pleasure:
https://www.a2gov.org/
https://www.cityofpaloalto.org/
https://bouldercolorado.gov/
https://www.cityofames.org/
https://www.corvallisoregon.gov/
So you’re saying that the city does not pay retirement/medical costs for employees? And that the $10 million is for direct salary costs – for employees or contractors?
This makes no sense. The pension tracker website that I listed above includes Davis’ unfunded liabilities.
Ron said . . . “So you’re saying that the city does not pay retirement/medical costs for employees?”
No, I am not saying that. The annual Pension Costs are not part of the Budget Shortfall because the amount due is being paid each year. The table below from the FY 2018-2019 Budget shows those amounts that have been or are scheduled to be paid.
Ron said . . . “And that the $10 million is for direct salary costs – for employees or contractors?”
Yes, that is correct. Mostly contractor costs since Capital Improvement Projects (CIP) are typically put out to RFP and bid on by private firms. Every CIP project has a project management component performed by City staff.
Ron said . . . “This makes no sense. The pension tracker website that I listed above includes Davis’ unfunded liabilities.”
That site only lists the City’s unfunded liabilities for Pension. CalPERS does not repair streets, nor do they track the accounting of street repairs. Go to pages 4-20 and 4-21 HERE to see the 20-year listing of the Budget Shortfall amounts by category The unfunded liabilities for Pension and OPEB (Retiree Medical) are over and above the amounts shown. When you realize that, it makes perfect sense.
Matt: you didn’t provide links to the actual data sources you used to compile your comparison. If you had, a vetting/analysts would likely contradict your summary conclusion, so it is understandable that you are withholding information.
In any case, Davis (or rather the 4-mile radius UC Davis Employment Center area) has a jobs-housing ratio slightly higher than the regional average, and SACOG policy calls moving closer to that average, meaning less of a concentration of jobs in Davis:
“Since the adoption of the Blueprint, many of the local jurisdictions have updated their plans and policies to strive for a better jobs-housing balance within their community. This means some communities are focusing on adding jobs while others are particularly focused on adding more housing options for their current and projected workers. A goal of the MTP/SCS is to move communities closer to the regional ratio of 1.2 jobs per household for growth between 2012 and 2036. The six-county SACOG region is one of the few in the state that has an approx imately even balance of current and projected jobs and housing. This is a major benefit to the region, which can be leveraged for even greater benefits if this regional jobs-housing balance can be replicated at the sub-regional level.”
Yes we have a bunch of university jobs, without enough housing for them. This isn’t rocket science. That doesn’t mean we have enough jobs, we just don’t have enough housing.
Craig Ross: jobs/housing balance is a ratio. That’s not rocket science.
Why would you push for more jobs at MRIC/ARC when that would throw the jobs/housing balance even farther away from the regional average? Adopted SACOG policy argues directly against doing this. And one of the reasons is that Davis has the longest inward-bound commuting times in the region.
And, conversely why would you advocate for upper-income housing that has not met our moderate/low income workforce/family needs such as The Cannery, Nishi, and WDAAC? Those are lost opportunities in addressing our primary and most pressing housing need: affordable workforce housing.
remarkable… For Rik and Ron, jobs are bad. I think it would be more honest to simply state that there is no major development that you’re going to support and leave it at that.
Ron
Housing is largely a “fungible” good–that is one type can be a substitute for another. In the cases of Nishi that is targeted at younger households and WDAAC targeted at seniors, both give those populations to move out or not buy other existing housing in the city. Miller Ave is a good example where the average household age is 70 in houses built for young faculty and staff in the 1950s and 60s. WDAAC can attract some of those households which opens up those homes for younger families. Housing doesn’t exist in silos with no crossover effects, and too many people pretend. This must be looked at systemically.
The Atlantic article and the research/facts behind it resonates… it took our daughter ~ 6 years to get enough for a down payment @ 10% down to buy a house in CO… single, a professional dietician, and very frugal… fortunately, her grandfather had left her some money, unavailable to her until age 30, except for specific purposes… in a Trust… the trustee figured that @ 29.5 years, the trustor would approve of an ‘early’ disbursement… got her to 20%, avoiding PMI… she was lucky… the CO housing market was still somewhat distressed, and mortgage interest rates were very low…
Yes David added his views of how it pertains to Davis, but they were logical.
It should be noted that you question David, rather than the underlying article he drew from… do you dispute the underlying article?
Who is this question directed to? And what exactly is the question? Something along the lines of following in the Bay Area’s footsteps?
Ron, I read the last paragraph of your 8:39am comment as questioning the Vanguard’s intent. Bill’s comment appears to be referencing that “talented political writer” reference..
Matt: I believe that the question was directed to another commenter, whose comments have since been deleted.
But in response to your statement, I do believe that David is a very talented and incessant “political writer”.
Not going to say… either withdrawn by poster or ‘moderated’… mine was edited, but I pointed ‘issues’ per guidelines… let’s leave it at that…
I also wonder what I missed when I see this YIELD sign.
1. Perhaps we can stop using the term workforce housing. Just call it housing.
2. By whose definition is this a “jobs proposal?” From the very beginning, these peripheral business parks were proposed in order to provide locations for businesses to locate, preferably home-grown ones like Schilling, and to help balance the city’s finances.
Jobs and housing are regional markets. As Rik Keller said in April:
What he said applies just as readily to the jobs market. If any of you have had young adults living with you or working for you, and watched as they search for employment, they aren’t looking in the city limits. Their job search may go as far as 30 – 40 miles away. If they work in Davis and are looking for housing, they will seriously consider Woodland, Dixon, West Sac, or Sacramento.
I suggest that we stop arguing about the “jobs/housing balance”. It’s pointless. We won’t solve that problem, or make it better or worse by the inclusion or exclusion of some housing on this site.
Most high-cost regions in California that have this issue have nearby communities with less-expensive housing. People who work at UCSD, in La Jolla, live in University City or Kearney Mesa. People who are coming to Davis to work are living in Spring Lake subdivision of Woodland, or will be looking at the new housing development proposed for southwest Dixon, or they are buying in West Sac.
If there is an actual desire to build more housing where younger people can buy homes, then the city needs to discuss an actual subdivision. New housing. The only places that will be big enough to provide the range of housing at the range of prices that everyone seems to want will be peripheral sites such as the northwest quadrant, or the Covell Village site. Sites big enough to provide for a range of housing sufficient to give the builder a ROI and still provide affordable and mid-range priced housing units.
I doubt there is such a desire in the voting public here. Housing for young urban professionals is probably not high on the radar of housing needs for most Davis voters. Housing For Yuppies isn’t exactly a saleable slogan. Hence the constant use of “workforce housing” as if it will provide housing for baristas and landscapers. Nope. Not at those prices.
Adding some stand-alone housing on the MRIC site will dilute its purpose, reduce the space available for those home-grown businesses, and reduce the revenues to the city. In short, housing on MRIC would be counterproductive to the stated, original goals of annexing that farmland and developing it.
“Adding some stand-alone housing on the MRIC site will dilute its purpose”
I met with Dan Ramos on Friday for a future article and he made it very clear that the housing would not be stand alone housing.
Don: I agree with some of what you write, here.
If the proposal reverted to its original purpose, I suspect it would have a greater chance of passing.
Personally, I still wouldn’t be crazy about it, but it would likely deflect some of the outright anger among some resulting from the “bait-and-switch” due to the subsequent inclusion of housing. At this point, I’m personally energized to work toward defeating the proposal. (And as I told the council once before, I have both the time and energy to do so.)
Hopefully, we won’t have an opportunity to see how effective I (and others) may be, if this goes forward as currently planned.
I actually support the term ‘workforce housing’ as it is an element of the need for housing… as is ‘student housing’… but neither should be a sole goal… you are correct that is all ‘housing’…
By the same token, we should not lump housing into a category as to MF or SF, nor rental vs. ownership. As a student, MF rental was realistic… there is also MF ownership (condos), SF rentals (which has several flavors, depending whether you’re talking a nuclear family, or a ‘family’ of students who are close friends, or a ‘mini-dorm’), MF rentals (norm) or SF ownership (tends to be the ‘nuclear family’, but can include that, plus a ‘boarder’ to help cover mortgage payments)…
So, Don you are correct that it is all ‘housing’, but there are distinct needs/wants within that, and one is workforce housing. Which might be rental, might be ownership, might be MF, might be SF… and all the permutations… my Aunt was a librarian at Carnegie-Mellon in Pittsburgh… always lived in an apartment, even though she could have afforded buying a small house, or condo… so, her apartment, on a transit line within 2-3 miles of where she worked (she never owned a car) for over 40 years, was ‘workforce housing’… it is a need, but not a ‘unique’ need for housing… I think we should keep the term, but recognize its nuances, and recognize the other housing needs as well…
I feel no need to guarantee anyone a specific type/location of housing, but support local housing to support those who live and/or work, and/or study in Davis… why we have communities, historically…
by passing on the word “warfare” as the situation description of the housing debate? How could that stir up anger? #cough#
Well, ya see, the seniors will move over heee-ya, and the young people will move from over heee-ya to over heee-ya. That’s what we call “building senior suburbs for the love of students”.
The irony as misunderstanding the Law of Unintended Consequences.
Since some keep asking the question “how would you solve the city’s budget problems”, I’d suggest not spending money that it doesn’t have (or making “promises” to do so). Or taking actions that actually make it worse.
Same thing I’d suggest for all of the other entities throughout the state.
But, I guess that concept is too difficult to grasp, for some. (I know some individuals who cannot grasp this concept regarding their own finances, as well.)
Another “commonality” between entities and individuals is that those who are perennially “fiscally-challenged” tend to remain that way, regardless of how much money they “beg, borrow, or steal”. Both also tend to say that “things will be different this time” (if you give us the money – just once more).
Unfortunately, there’s not any evidence that there’s money to be had – except for developers. Those folks tend to do pretty well – although it’s “none of our business”. Even when they claim that a development won’t “pencil out”. 😉
Thank you for the answer Ron.
Many times here in the Vanguard (and elsewhere) I have said that the solution to the problem has three legs (1) Cost Containment, (2) Raise Taxes and (3) Increase Revenues from sources other than the current sources … otherwise known as Economic Development.
The concept of Cost Containment has been discussed actively for at least 5 years, and so far we have seen virtually no Cost Containment. It isn’t unreasonable to say that the community’s thoughts about Cost Containment are quite similar to their thoughts about Infill Development. It is a great idea as long as it doesn’t happen in “my neighborhood.”
So, practically speaking, your suggestion of cost containment is DOA. What is your Plan B for addressing the $10 million annual Budget Shortfall?
Matt: In the first place, you’re the only one who claims it’s $10 million.
Again, where are those costs coming from, and why doesn’t the city have enough money to pay it? The city has existed since its inception, without an “innovation center”. So have all the other cities that are suddenly pursuing them.
Even if the development isn’t a money-loser for the city (e.g., when considering the cost of providing services in the long-run), what makes you think that the funds would be used to pay down the debt? (That certainly hasn’t occurred with any of the other developments.)
Frankly, I don’t fully trust the numbers in the first place. I’d like to see all of the money that’s taken in, and all of the money that’s going out. And the reason that there’s a claimed imbalance.
I’m perfectly happy with the roads, level of services, etc. In fact, the condition and status is already superior to many other areas in California.
Where is the money going to come from to pay for additional road maintenance, as a result of the traffic generated by new development? Not to mention all of the other new services that will be needed to serve the development?
The additional road tax came pretty close to passing. Maybe the city should try again, if there’s such a god-damn “emergency”. The statewide gas tax should also be helping, when it’s not being diverted to take traffic lanes away.
I’d suggest keeping our pants on, and stop crying about problems that don’t actually exist.
I’d also suggest that now is not the time for an additional parcel tax for DJUSD.
To provide a more measured response, I’d suggest looking at the history of city budgets (incoming, and outgoing money) to determine when and where the problem first started occurring. It’s likely that you’d find your answer as to the cause, there. Once you know the cause, solutions can be considered.
By the way, what is the percentage of expected property tax from the development (after county tax-sharing agreements, etc.)? I recall that in other parts of the city, it’s around 20% of the property tax collected. What a windfall!
Also, why has the city continuously allowed the conversion of other commercial sites for residential usage, if there’s actual market demand for commercial development? And, why have the other innovation center sites been converted to residential development?
Ron said . . . “I’d suggest looking at the history of city budgets (incoming, and outgoing money) to determine when and where the problem first started occurring. It’s likely that you’d find your answer as to the cause, there. Once you know the cause, solutions can be considered.”
What you have suggested above in bold has been done … very thoroughly. That budget history shows that shortly after 9-11 the massive dropoff of development activity dried up the stream of one-time revenues that come with new development. As a result the combined run rate of General Fund and Capital Infrastructure Maintenance costs began exceeding revenues. As a result, the City began an era of what Page 4-14 describes as “There will always be a trade-off between operating budget needs and infrastructure needs, and this will play out over time in the ongoing budget process.”
I have it on very good authority that the first such tradeoff happened in the Third Quarter Budget Review by City Council with Staff. In that meeting Staff informed the Council that if the budgeted expenses remaining for the Fourth Quarter were all spent, then the revenues would fall short of expenses by a bit over $3 million. When asked by the Council what options the City had, two were the most prominent. The first option was to use $3 million of the General Fund Budget Reserve to make up the difference. The second option was to defer $3 million of Capital Infrastructure Maintenance until the next budget year. The Council chose the second option because they had promised the voters that the City would maintain a 15% Reserve, and the first option would have dropped the Reserve below 15%.
That same tradeoff happened every year thereafter. Since repair costs, especially road repair costs, escalate sharply over time (see the graphic below), what was $3 million in the first year has grown to $201 million after 15 plus years.
Matt:
One-time revenues are generally intended to offset one-time costs. Are you stating that after 9/11 (for some reason), this was no longer occurring? Sounds like a Ponzi-scheme, which shouldn’t have occurred in the first place.
I’d note that your table doesn’t actually show increments of “time”, regarding how fast roads deteriorate. But, this is another statewide issue, which is the reason that the gas tax increase was approved.
In general, it is sometimes less-expensive to maintain structures in a semi-deteriorated state. (As an extreme example, I’m sure it costs less to maintain the ghost town of Bodie, than it does to maintain first-rate buildings.)
I’ll take bad roads over another massive traffic-generating (and road-deteriorating) development, any day of the week.
But really, I’d prefer a modest tax (similar to the one that was almost approved), vs. doing nothing (or to hope that “someone else” might pay for it, in the form of a new traffic-generating development).
Ron said . . . “But really, I’d prefer a modest tax (similar to the one that was almost approved), vs. doing nothing (or to hope that “someone else” might pay for it, in the form of a new traffic-generating development).”
Doing some quick math, $10 million divided by 25,000 “doors” (counting each MFR apartment unit the same as a SFR) comes to $400 per year for 20 years. Do you consider that “modest”?
If the settlement terms of Jose Granda’s lawsuit against DJUSD, where apartments are taxed by the parcel rather than by the door, then the $400 per year for 20 years goes up to over $800 per parcel per year for 20 years. Do you consider that “modest”?
Do you think an innovation center will pay for this, for us? What’s your “Plan B”, if that doesn’t work out as you apparently hope?
Do you think this will also work in the other locales that are hoping for the same thing, and are competing for the same companies?
Again, I don’t fully trust these numbers in the first place. Were they even worse before the statewide gas tax was approved?
All I can tell you is that I wouldn’t be staying up until midnight, out of “concern” for existing roads. In all honesty, I care a lot more about preventing more sprawl (and traffic), than I do about existing roads. Especially if that’s the claimed “reason” for approving more sprawl.
Ron, again you return to the innovation center argument. As I have said over and over and over and over again, there is no innovation center proposal until the economics of an innovation center proposal are presented to the FBC by the economic consultant, with the project proponent present to answer the FBC’s questions. How many times do I have to repeat that explicit statement before you remove your fears of an innovation center from our discussion? You appear to have ears, but you do not hear.
Have you been following the Downtown Specific Plan Update process? If you haven’t, then perhaps you should. There have been some very interesting jobs creation discussions in that process, with the focus on leveraging the UCD Intellectual Capital Creation engine.
Yes – I heard you the first time. The article itself (and all of the comments) immediately focused on MRIC/ARC.
To be honest, the downtown redevelopment effort is another attempt that will probably fail. Who the heck wants highrises full of residences, there? (Other than developers?) How might that impact existing traffic, parking, and existing/future businesses?
But, at least it’s more difficult for developers to wreck existing developed sites, vs. prime farmland outside of city limits. And, some argument might be made that it’s more environmentally-friendly, than alternative development patterns.
Why aren’t you more concerned about the existing sites around the city, which are being converted from commercial to residential usage? (In fact, that includes downtown, for the most part.) There wouldn’t even be any effort downtown, if developers could only pursue commercial development.
Ron said . . . “The article itself (and all of the comments) immediately focused on MRIC/ARC.”
Go back and reread the article Ron. When you do that you will find that it has 783 total words, and the first 732 words have absolutely zero focus on MRIC/ARC. Zero. Nada. Niente. The final 51 words mention MRIC/ARC in passing. So 93.5% of the article was “MRIC/ARC free” and 6.5% was not.
Further, the comments that introduced MRIC/ARC were by you and Rik. So the focus on MRIC/ARC was yours and yours alone. You need to own that reality.
Ron you wrote: Matt: In the first place, you’re the only one who claims it’s $10 million.
This is absolutely false and as a long time reader of the Vanguard you should be familiar with the multiple analyses for the City that show budget gaps of similar magnitude. The actual fact is that you are the only one who denies that the budget gap isn’t significant (or maybe you can come up with your own analysis that proves your claim.)
This along with your assertion about certain individuals and entities always being financially distressed are both wild assertions not based in any facts. You are entitled to your own opinion, but not your own facts.
Ron said . . . “Matt: In the first place, you’re the only one who claims it’s $10 million. Again, where are those costs coming from, and why doesn’t the city have enough money to pay it? “
No Ron, the Fiscal Year FY 2019-2021 Adopted Budget very clearly and explicitly provides that information on Pages 4-14, 4-20 and 4-21 in both hard copy and on the City website. The tables on 4-20 and 4-21 provide year-by-year breakouts of (1) Street Needs, (2) Bike Path Needs, (3) Facilities Needs (otherwise known as Buildings Needs), (4) Traffic Needs, and (5) Parking Lot Needs. I believe those amounts answer your “where are those costs coming from” question.
Your “why doesn’t the city have enough money to pay it?” question is addressed in the following text on Budget page 4-14 “There will always be a trade-off between operating budget needs and infrastructure needs, and this will play out over time in the ongoing budget process.”
Matt: I’m sure that you’re getting those numbers from somewhere, but the figure I heard (from Dan Carson?) was $8 million. I’m not seeing either number readily, in the tables above.
Regardless, looking at charts does not illuminate the underlying reason for the claimed budget shortfall. At what point did revenues start falling behind costs, and why did it occur?
Just stating that there “is” a shortfall is not a complete analysis. Why is there one? Revenues increase each year, so what costs are increasing faster than revenues, and why?
And, what’s to prevent that from continuing to occur, regardless? What’s your “Plan B”, if an innovation center fails to bring in a net $10 million/year “profit”, for the city?
And actually, why doesn’t the city approve about a dozen “innovation centers”, to bring in $120 million per year in “profit” for the city? How foolish we are, to not encourage more! (I’m sure that “some” would agree!)
I’m trying to envision all of the benefits this would bring! (Don’t tell any of the other cities, though. What they don’t know can’t hurt them.)
Now, if only the city would stop converting existing commercial sites, this might have some creedence.
In looking at the table again, I guess you’re performing some kind of averaging over the next few years, until the projected liability drops on its own. At which point the “crisis” dissipates.
But again, left out of all of this is the underlying reason “why” it occurred, and what assumptions are being used.
Again, it’s pretty difficult to believe there’s a crisis, when everything seems relatively fine. (With the exception of development activists attempting to use the crisis as a justification for more development. But, what else is new?)
Ron, if you add up the 20 bottom line totals for the 20 years in the Forecast. The aggregate amount is $201 million. Divide $201 million by 20 years and you get $10 million per year.
I do not know where Dan is getting his $8 million number. Nitish Sharma, the City’s Finance Director is reaching out to Dan to get an understanding of why the two numbers are different. It was very strange that Dan did not bring that discrepancy up during the Budget hearing on June 4th. $40 million (20 years times the $2 million difference between $10 million and $8 million) is a substantial difference.
Regarding your re-asked question about when the Shortfall began appearing, the answer provided in my 11:16 pm comment is that an examination of the City’s budget history shows that shortly after 9-11 the massive dropoff of development activity dried up the stream of one-time revenues that come with new development. As a result the combined run rate of General Fund and Capital Infrastructure Maintenance costs began exceeding revenues. As a result, the City began an era of what Page 4-14 describes as “There will always be a trade-off between operating budget needs and infrastructure needs, and this will play out over time in the ongoing budget process.”
You keep erroneously attributing support of the MRIC Innovation Center to me. I was explicitly clear in my 1:04pm comment on that subject. Since you appear to have missed that comment, here it is again.
Matt: It looks like our responses to each other are going in the wrong places. I believe I’ve already responded to this, above.
Perhaps the most relevant portion of my response is to question the reason that the city was (according to you) previously dependent upon a Ponzi-like scheme, using one-time development fees (which are supposed to offset one-time costs). Seems like a bad habit that had been broken (but not fully resolved), and is attempting to resurface now. Perhaps it’s time to actually kick the habit.
Also, why does the liability drop off on its own, after a number of years (e.g., in the first table above)?
And Matt (since you’ve asked me a number of times), what’s your “Plan B” to address the shortfall?
Ron, for one-time revenues there is a “normal” period during which those one-time revenues are spent to cover one-time costs. Based on my discussions with multiple cities in California, a ten-year period for completing the projects related to those one-time costs is typical.
The budgeting problem arises when the one-time revenues have been fully expended and the City finds itself faced with new one-time costs. When that happens, the City has no alternative other than to use revenues from the General Fund or defer the expense.
The budgeting behavior pattern you object to (which I fundamentally object to as well) was never stopped (a more accurate term than your use of the word “broken”), and it was definitely never “resolved.”
I’m not sure why you say “is attempting to resurface now”? Are you arguing that all one-time fees should be eliminated? That would be a very painful way to “kick the habit.” It also would add a lot of money to the bank accounts of developers. Is that your intent?
Ron, regarding your Plan B question, that question has been asked and answered (see my 12:57 pm and 2:56 pm comments). Since you appear to have missed them, I will repeat that Plan here.
Many times here in the Vanguard (and elsewhere) I have said that the solution to the problem has three legs (1) Cost Containment, (2) Raise Taxes and (3) Increase Revenues from sources other than the current sources … otherwise known as Economic Development that will come from leveraging the Intellectual Capital Creation engine at UC Davis, retaining that newly created intellectual capital (rather than losing it to other communities as we do now) will increase both the velocity and magnitude of the local economy, thereby generating incremental additional net revenues for the City Budget.
This means that developments are not actually paying full costs (or more accurately, their portion of those costs). As you note, costs do not “disappear” in year 11.
That’s ultimately the reason that cities are facing budgetary challenges. And each new development generally adds to the problem.
Sounds like we agree that it’s a problem that should be resolved. That’s where the problem apparently lies.
You might consider trying to resolve the underlying problem, in your plan. As you’ve noted elsewhere on this page, your existing plan already has some demonstrated failures (e.g., the lack of cost containment – your first point).
Do you really lie awake at night, worrying about the condition of the roads? 😉
Ron asked . . .”Do you really lie awake at night, worrying about the condition of the roads?”
In a word, “Yes.” That is a core part of the function of the Finance and Budget Commission.
Oh – and your second point has also “failed”, as well (e.g., a road maintenance tax).
None of this is your “personal” responsibility, of course. I don’t expect you to have a plan, in the first place.
I don’t worry much about the condition of the roads. I do, however, worry about another sprawling, traffic-generating (and roadway-deteriorating) development on prime farmland, outside of city limits.
My “plan” is to try to help stop it. I’m in it for the long haul.
The first step is to see if the council actually wants to foist another fight, upon the city.
If they simply tell the developer that they prefer to stick with the original plan, a lot of the “wind in my sail” will probably dissipate (even though I’d still prefer to not annex the land into the city).
“Indeed, are there not enough local/regional “jobs” for current Davis residents (who are actually in the workforce)? Nothing indicates that this is true.”
This is the narrowest of views. I think a better question is what is the regional poverty rate and what can Davis do to help alleviate poverty in the area? The more jobs the better to lift people out of poverty, give them self esteem and create opportunities for others through multiplier effects. Call me old fashion if you want but in my reality using the human capital created by UC Davis to help the entire population of the region is a good thing.
Here is some relevant data, gleaned from various sources:
The Davis poverty rate data is likely skewed by the demographics.
There may be problems with the unemployment rate #’s as well… if unemployed “give up” and are not actively seeking work/filing for unemployment, they drop out of the stats in many studies… have seen some studies where # of jobs increase, with no appreciable population growth, and the unemployment #’s go up, because folk start trying again… study methodology and data sources can skew #’s…
Not saying the numbers are wrong, just saying, as you did for poverty rate, gotta’ consider data and methodology… looking at “trends” seems to work better, as it tends to ‘smooth ‘ data variations, if the same methodology is used, over time.
The ‘absolute #’s’ are generally suspect… too many variables…
The bigger problem is that an unemployment rate doesn’t measure the problem here. The problem is that students who graduate have to move elsewhere for jobs. That doesn’t show up in an unemployment rate.
As you say, many variables…
When I graduated from UCD in 1977, the market for entry-level engineers, particularly civils had just tanked… Adrianna Gianturco, and the then-Governor Jerry Brown laid off a lot of engineers, eliminated jobs at CalTrans, and the ripple effect, particularly due to the general economy at the time, made it very tough for new graduates…
I was lucky… I’d been an intern with a bay area city for a couple of years, working summers… the guy who I worked with, took on a new position in Millbrae, and his entry level engineer left for another position, a promotion. Lyle knew I was just about to graduate, and got a hold of me, via my parents, and asked if I could fill in, until they could do a recruitment effort to fill the position… I started one week after graduation… 6 months later, I was appointed on a regular basis. Kinda’ like a ’70’s version of LinkedIn… many of my classmates were not so lucky… those who found employment generally had worked summers for their new employer, while in college.
Your point, Craig, is similar to mine… gets to methodology and data sets… lots of variables…
Don,
“The Davis poverty rate data is likely skewed by the demographics.” I think this is definitely true, but understates the skewing of the data. We do not typically think of living in poverty as a choice. But for myself and many of my colleagues in medical school, that is what it was. We were making a bet on our futures, that living as inexpensively as possible while in school was going to have a big pay off after graduation. For those of us who succeeded ( almost all), and were frugal as opposed to taking out big loans, that was indeed the outcome. In my opinion, this choice should be separated out from those who are involuntarily living in poverty. I have no idea how to do that except not to give to much credence to the comparative numbers.
On a lighter note, employment (including “self-employment”) at the Vanguard itself might be “reduced” if the Chicken-Little “sky is falling” claims can no longer be made.
I’d suggest that we all buy SUV’s and mountain bikes to navigate the impassable roads, and plan on “home-schooling” your kids, as “life as we know it will no longer exist”.
Gee, I wonder what tomorrow morning’s “Monday Morning Thoughts” might be about? The same made-up crises?
Lost in all this garbage is the more positive reason for keeping the site as is. Prime farmland, logical boundary in the form of Mace Curve, no additional traffic on an already-overburdened roadway and freeway system, etc.
Already a new hotel and Nugget headquarters being constructed across the street (within city boundaries). That’s not enough for that area, for now? Really?
Does anyone (other than a developer or his allies) go to Ikeda’s, look out at the farmland, and say to themselves “if only there was a massive development right there. Something that would also incorporate the 25-acre city-owned designated open space parcel, within the development.)”
Same question would apply regarding those already getting stuck in traffic in that area.
And then ask yourself if you honestly believe that the city would “solve” it’s fiscal problems in any realistic way, by approving a development for which there doesn’t seem to be any “honest” commercial demand. (And not just another housing development, with a commercial component “reluctantly” included.)
Of course, that also leaves out the question of what the actual fiscal impact of commercial development is in the first place.
Farmland preservation or poverty. Priorities, priorities. As for the poverty rate being skewed by students that is true, I have no doubt, but the other city, county and regional numbers tell a different story. It is a story that economic development driven by proximity to UC Davis can help alleviate.
Matt said: “The annual Pension Costs are not part of the Budget Shortfall because the amount due is being paid each year.”
And yet the chart he posted above states that funding increases in future years, as pension costs fall with the payoff of unfunded liabilities, freeing up funds for infrastructure. (Exact wording can be found in the table that he posted above.)
I’m not sure what your point is Ron. Can you elaborate … make your point clearer?
Throughout the 20-year Forecast period, the City pays its CalPERS and OPEB bills as they come due and payable. As is clearly stated in the Forecast text, annual Pension costs do come down in the later years of that 20-year Forecast period. That is a correct statement. Do you understand why it is correct.
When the money an entity (or person) has to spend on a budget item is reduced, that frees up money that can be used to pay for item(s) that otherwise would be categorized as Budget Shortfall.
“Using Unison’s methodology, it took nine years to save up a down payment in 1975. Now it takes 14.”
It would be interesting to see this methodology. Although I agree that it takes too long to save up for a down payment, especially in the age of student loan usury, there are some things people can do to lessen the time.
Upon graduation and finding employment (college grads have low unemployment rates and this year is probably the best ever for grads finding employment) continue living a frugal lifestyle. Once you improve your life style its hard to go back.
Then pay down debt starting with the highest interest rate and working your way down. Every dollar you use to pay off a loan early can be viewed as a dollar invested in yourself at whatever the interest is on the prepaid loan.
Second, open a Roth IRA. You put in after tax money but the return on the investment is tax free. Roth IRA’s can be tapped early without penalty for certain expenses including a down payment on a first home. If someone had dollar cost averaged the maximum allowed into an simple S&P500 ETF for the last ten years they would have doubled their money and would have around $110,000 or $220,000 for a couple.
Third, although this isn’t related to saving for a down payment but will ease your mind about having a cushion when you write that big first down payment check, open a 401k and maximize your savings. These are pre-tax dollars that can grow tax deferred. At least save enough to capture all the available matching dollars, if your employer has such a plan, this is essentially free extra money provided by the employer.
Ron,
Really? You don’t believe that real estate prices have grown much faster than income levels? You are really out of touch if you don’t immediately recognize the fundamental truth.
Here’s the Case Shiller Index that shows that average real estate prices have risen 50% in the last 10 years: https://us.spindices.com/indices/real-estate/sp-corelogic-case-shiller-20-city-composite-home-price-nsa-index
Here’s two tables that show that household median income has been stagnant over the same period.
https://www.advisorperspectives.com/dshort/updates/2018/10/16/u-s-household-incomes-a-51-year-perspective
https://www.multpl.com/us-median-income/table/by-year
Oh I do get it. I was writing about how to prudently save for a down payment.
As for Case-Shiller I would remind you that Nobel Prize winner Shiller, who predicted the 2006-2011 housing bust, showed that over the 100 preceding years real estate prices were flat on an inflation adjusted basis.
What would you suggest to a recent college grad who might be carrying student loan debt? Would you suggest that they lever up even more to buy into a market that just doubled in a decade? Are you suggesting that they make as small a down payment as possible and pay the extra insurance? Perhaps you were thinking of an interest only nothing down loan or a negatively amortized pick a payment World Savings type loan or one where you must refinance in five years. After all real estate prices only go up right? So the lenders window is always open, right?
If this was 2011-12 it might be a good strategy but with prices high taking on too much debt in the belief that prices will continue rising seems risky to me.
Oh and by the way in that decade where you say real estate prices doubled the S&P500 tripled.
Ron G… overall, ownership vs. rental of units/houses has been a crap shoot… over the last 40 years… made sense for some, but not others… ownership is definitely more expensive… your ‘gains in value’ are ephermeral, as long as you live in your owned residence… paper only… if you move, you gain some “profit”, but if you are going to live somewhere, that is offset by what you pay for your new housing, plus property gains tax, if the new housing costs less… there are reverse mortgages, for cash flow, but that doesn’t help for passing on wealth to others.
Once you’ve “paid the price” of home ownership, purchase, mortgage interest costs, prop taxes, maintenance, operation, etc., broker fees, etc., etc., one might be better off, financially in good mutual funds…
Yet, living in a home where we have no mortgage anymore, does give a sense of security as to housing costs, and can be a ‘legacy’ when we no longer live in it… but, historically, just looking at the cash flow/finances, alternative, home ownership is overrated as an investment choice. Not bad, but not a financial panacea either, if all costs, including ‘opportunity costs’ are weighed… many variables… depends on the individual and their situation, goals… financially, given all the variables, for an individual, may not be the best investment, depending on their goals…
Nice thing about ownership… you can pretty much choose what you do on your property/house…
Just saying.
It was David’s final “statement/conclusion”, regarding “generational warfare”. Maybe you should ask him, why he included that statement.
Then others (including you) started talking about how Davis “needed” jobs – despite having a 2.2 percent unemployment rate. (Funny, how some are so obsessed about a low rental vacancy rate, but not about an unusually low and probably “unhealthy” low unemployment rate.)
Ron said . . . “Then others (including you) started talking about how Davis “needed” jobs.”
Understood Ron, but there was absolutely no geographic connection made in those comments by either the others or me regarding the jobs. I personally expect the bulk of Intellectual Capital Jobs created by improved collaboration with UCD to be located in the Downtown Specific Plan Area, especially along A Street between 1st and 5th.
Ron said . . . “It was David’s final “statement/conclusion”, regarding “generational warfare”. Maybe you should ask him, why he included that statement.”
So you are saying that you ignored the first 700 plus words of the article and only focused on the 50 word aside at the end? I saw those 51 words as simply a throw-away comment rather than a conclusion. JMO
Well, the point is that you (incorrectly and directly) stated earlier that this wasn’t a factor regarding the ongoing budget shortfall. And now, you’re apparently acknowledging that it is – but only after I challenged your statement in which you initially said I was incorrect.
I had brought it up, because it’s a factor in communities throughout California – not just in Davis. The enormous scope of the problem (statewide) suggests that communities are not likely to resolve the challenge on an individual basis.
Is there some kind of chart or graph showing the city’s projected yearly payments for pension costs (including medical)?
Yes, local government pensions are part of the problem. But we should not just wait around to solve this problem one at a time in a sequence, which is what you appear to be suggesting. We know that much of the budget shortfall excluding those costs is due to a poor revenue base. That’s what the economic development proposals are targeted to address, at least in part.
Richard McCann said “We know that much of the budget shortfall excluding those costs is due to a poor revenue base. That’s what the economic development proposals are targeted to address, at least in part.”
No they aren’t. They are targeted to address profits for the developer. It’s pretty clear what’s happening with MRIC/ARC: there is not actually sufficient demand for the research park product they were proposing, so they have returned with a vague proposal to do a lot of residential development to make their numbers work.
No Ron, I never said it wasn’t a factor. I correctly and directly said it was/is not a component of Budget Shortfall.
A “component” means that it’s part of something. How are pension liabilities not a “component” of the budget, when you’ve already acknowledged that it’s impacting the budget?
Pension liabilities are a large part of the reason that there isn’t sufficient funds to cover projected expenses for some period of time. The same situation that’s occurring in cities, counties, the state itself, school districts, throughout the state.
Again, if one wants to understand the actual reasons for the shortfall, that’s the type of analysis that’s needed. In general, understanding root causes can lead to different conclusions.
I was referring to the fact that Dan Carson apparently believes it’s a lesser amount.
I assume that you’re referring to the fact that other cities are experiencing even greater challenges than Davis – but have not even take steps to identify them. As noted in the documentation that Matt provided:
The most concerning point of all is that development activists are attempting to suggest that an innovation center will resolve the city’s fiscal challenges. Unfortunately, some might be fooled by the activists’ claims.
Your original comment made NO reference to the distinction of Dan’s vs Matt’s statement, and again it turned out not to be not true.
That cities currently have problems does not in any way support your statement that “individuals and entities” have continuing problems.
You were simply wrong in both cases and you should just admit it.
You also have not shown that the “activists” are wrong. You don’t pull together a set of supported facts and analysis to support your case–it’s all assertions based on your suppositions. Come forward with an analysis that demonstrates your conclusions.
Had you read further down in the comment section, you would have seen that I clarified what I was referring to, with Matt.
The rest of your comment makes zero sense. I don’t even know what you’re talking about.
I understand your clarification, but it still was wrong.
You can’t even track your own comments. Others reading will understand what I’m referring to.
It was absolutely not wrong – even Matt acknowledged the discrepancy between himself and Dan. However, I probably should have clarified that in the beginning.
Others will likely think that you’re just trolling, as Bill is now doing.
Feel free to point out where else you think I was “wrong”.
Ron, it isn’t a discrepancy between Dan and me. It is a discrepancy between Dan and the published Budget. Note: that Budget was approved by Council by a unanimous vote, so Dan, by his vote, is aligned with the Budget number, and by his words is aligned with a different number. With luck Dan will come on the Vanguard and explain the differences between the two numbers.
Your clarification made it crystal clear that you don’t care about the condition of the roads at all. All you care about is blocking peripheral development. That is your prerogative, but I suspect that the majority of Davis stakeholders do not share that opinion of yours.
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Actually, there’s not even a defined proposal at this point. Therefore, it’s not possible to perform an analysis. If you’d like to put forth one under such conditions, I’d be willing to help look it over. 😉
Regardless, the incentive to mislead is baked-in, and there’s already been claims that this proposal will “resolve” the city’s fiscal challenges. And the city has an extensive history of dispute (even among officials), regarding how costs should be allocated to various developments. A lack of acknowledgement of resulting costs has led to the situation that cities are now facing.
In any case, I find it amusing that a lot of the supposed benefit is based upon claims of increasing the number of jobs, in a city with a 2.2% unemployment rate.
This article doesn’t appear to mention to other important group for which this is a barrier to entering the housing market: minority groups, particularly African Americans. The average wealth of these households is only one-twelfth of that of white households. In this case, there’s not even an older parental household with the money to bail them out with the down payment. This is not just a problem of the young.
Yeap – “people of color” have often not benefited from economic development and rising housing prices in the Bay Area. In fact, they’re being displaced.
I care, but not nearly as much as I do about a development that will impact traffic on those roadways (and cause further deterioration, to boot). (Assuming that some will “frame” the choice in that manner.)
But frankly, I drive outside of Davis, as well. What about all of those roads? By comparison, Davis roads seem to be in much better shape.
Some seem to present Davis as an island onto itself, regarding housing, jobs, roads, economy, etc. Especially if they can twist the argument into some form of support for development.
As a side note, I see that the gas tax (for “transportation projects”) will be increasing on 7/1:
https://www.sacbee.com/news/politics-government/article231643868.html
Ron said . . . “As a side note, I see that the gas tax (for “transportation projects”) will be increasing on 7/1”
Regarding Ron’s side note, Nitish Sharma, the City’s Finance Director already has that additional gas tax revenue included in both the Budget and the 20-year Forecast. Nitish is very good at doing due diligence that is in the best interests of the City. For him not to know that that incremental gas tax money is coming this year would be a dereliction of his duty, and in the 12 months that Nitish has been here in Davis he has been proactive and diligent … the very opposite of derelict.
In the words of a Prego Spaghetti Sauce commercial, “It’s in there!”
But yeah, I will push back whenever someone starts claiming that “more development” is needed, to improve roads. That’s b.s., with no evidence to back it up.
But Matt, I would appreciate it if you didn’t quote more serious comments, together with sarcastic comments – e.g., regarding “mountain bikes, SUV’s, and home schooling”.
I think you know better than to do that.
In the meantime, yeah – go ahead and stay awake at night, worrying about local roads. 😉
And if you think that economic development leads to better roads, I’d suggest that you might want to look around the state (including areas where there’s lots of economic development). Anecdotally, I haven’t found that those areas have better roads. They do have lots of road-deteriorating traffic, though. And lots of disruptive, ongoing, half-ass repair work. Nothing new about that.
You know that engineers have methods for measuring the condition of roads, that they have done so, and that the condition of the city’s roads is documented and reported to the city council?
Are you aware of the measured condition of Davis roads and how they compare to the other cities in the region, and with respect to established engineering standards about such things?
It isn’t necessary to use anecdotal observations about the condition of the local roads. There’s also known to be a phenomenon that the longer you wait to do repairs, the costlier it gets.
I am curious if you trust engineers to accurately measure and report these things.
I was just looking at a report regarding that.
Do you have some objection or point that you’d like to make?
A few nuances, Don…
Engineers have had generally accepted methods for evaluating the conditions or roads, their prognosis as to further deterioration (based on observable and logical factors for like, 50 years… some refinement has taken place and continues to take place…). One is the fact that water, and in colder climes, ice, accelerates the deterioration of both AC and PCC pavements when the surface has cracks that allow water (which can turn to ice) to enter and weaken the subgrade (dirt, often clays which are expansive)or physically damage the pavement.
You are correct that Davis PW engineers have been attempting to educate the public and CC about that since at least 1985. Something about deaf ears.
Measurement of roadway conditions are pretty standard over the last 30 years.
The comparisons with other communities is valid, to a point… variables include, but not necessarily limited to, rainfall, seasonal temperatures, age of pavements, and measures taken for preventative maintenance, knowing most of the variables.
It is not, anecdotal evidence, as to causes and remedies to avoid pavement failures. You are correct. It is science. It is not a phenomenon that the longer you wait, the worse things get, and more expensive to treat… very well documented, and logical compared to things like disease, particularly cancer. Many engineers have co-opted the phrase, “pay me now, or pay me later”… at a much higher cost of treatment and ‘premiums’…
But, to your last point, suspect few here on VG will trust me, with only 40 years of experience and training in roadway design and maintenance as an engineer, as to the validity of my observations/facts… after all, just an engineer…
Oh, forgot to mention underlying soil types… still, even more variables… science and ‘art’… aka, engineering…
And Matt: I suspect that you might be misunderstanding what drivers are generally more concerned about regarding traffic, vs. condition of roads.
If you ask drivers if they’d prefer more traffic generated by new developments in order to “improve” the roads, I think you might get some responses that are pretty close to mine. (They might even start off with a pejorative, before responding to the question itself.) 😉
Ron, I suspect your words of qualification … “some responses” and “might” … are spot on.
As they say, you can’t please all the people all of the time … some of them might describe themselves as “the loyal opposition.”
I was being “conservative”.
I suspect that the correct adjectives are “many” and “will”. In fact, I suspect that this concern (alone) might be enough to sink MRIC/ARC. Even before any promises are made, regarding the claimed “profit” to the city.
For what it’s worth, I supported the gas tax. Had I known that Newsom was going to try to play political games with it (regarding development), or that a chunk of that money would be used for “road diets”, I might not have.
I’d support some amount of parcel tax for roads (and bike paths).
But, I’m not staying awake at night, worrying about the roads in Davis. If you or anyone thinks that makes me irresponsible, so be it.
I’m more concerned about development activists making promises or projections which aren’t supported. There’s solid evidence of this, and it will no doubt occur again – with the Vanguard leading the way.
I’d suggest ending this thread, as it’s becoming off-topic and repetitive. And I’m not aware of any essential disagreement with you.
Actually Ron, I think there are rather massive essential disagreements between us in this thread. The most important of those is your inability to think about or talk about jobs in Davis anywhere west of Mace Boulevard. You aren’t engaging the community’s fiscal challenges, but rather flaying an ethereal demon … a demon that may or may not ever make it to an Election Day decision. So while you fiddle, Davis burns. There is no balance to your approach. Your pendulum is swung fully to its apex, and it is stuck there. Yours is a classic Litmus Test approach to community decision-making. It is either your way, or the highway … you riding your SUV to navigate increasingly impassable roads.
The gulf between us is heightened by your inability to see how the here-and-now problems of our infrastructure maintenance are more pressing than a hypothetical future that may never actually happen. You are afraid of the imaginary, and at the same time oblivious to the reality.
In addition, we are radically different because you feel compelled to sing a One Note Samba, and I feel equally compelled to sing an array of multi-task ballads.
But the most important way you and I are different is that your quest is to not make a mistake, while my quest is to try to do the right thing.
JMO
Matt: I see that you don’t want to let the conversation end, and for some reason feel compelled to make statements about me which are inaccurate.
I have no objections to that. But, there’s already a 2.2% unemployment rate in that area. This does not suggest that “more jobs” are needed.
I don’t have an SUV. But, if those roads and freeways are increasingly gridlocked, the condition of them won’t matter much.
The reality is that one glaring freeway-oriented note is on the horizon, which is in no way environmentally responsible. Questions regarding actual commercial demand remain, as does its fiscal cost.
I support much of your plan (including the portions which have been “rejected” so far, including cost containment, parcel taxes, and economic development which doesn’t sprawl across farmland).
Neither you nor I created the problem. However, you haven’t exactly arrived with the firetruck (e.g., as existing commercial sites have been converted to residential, the fiscal impact of megadorms has not been fully examined, etc.).
Go ahead and beat the drum some more, but it hasn’t been very effective so far. And has missed some glaring examples regarding developments which likely make things worse (about which you have sometimes been inexplicably silent).
You’re apparently not even aware of the fiscal analysis regarding Sterling, which David previously posted on here. (You might want to ask him for it. It apparently came from the city, itself – perhaps the staff report.)
This seems to be a rather ego-driven statement.
Oh – and when you find that Sterling megadorm report, you might want to see if it addresses any unreimbursed ancillary costs, such as the wear-and-tear of heavy Unitrans buses on city streets that you’re concerned about.
Perhaps also examine the city’s contribution toward bike overpasses that wouldn’t be needed, had developments such as Lincoln 40 been placed on campus, instead.
Examining such issues might provide some enlightenment, regarding some of the other reasons that the city is facing fiscal challenges. (In addition to issues which impact all cities, such as relying upon development Ponzi schemes, uncontrolled pension costs, etc.)
Ron O, I have contacted Finance Department staff, including the Finance Director, and they have never seen, nor analyzed a Sterling fiscal report. I have also contacted the fiscal analyst in the Community Development Department and she has never released/published a fiscal report on Sterling. I have also looked through the electronic copies of the Staff Reports for the deliberations of the Sterling project proposal, and have found no such fiscal report. David told me that the Vanguard article was in October 2018 and I have searched through all the articles 60 days either side of that date and found nothing. So, until either you or David can provide me a link that transforms your imaginary article into a reality that I can sink my analytical teeth into to, I have no alternative other than to come to the conclusion that the article you refer to, with its embedded analysis, is a figment of your imagination … and David is eating the same figs that you are.
Yeah – we both must have “imagined” it – including the lengthy online discussions that David and I engaged in, regarding it.
Given your rather dismissive comments, it seems like your healthy ego is on display, again. 😉
Regardless, perhaps a better question is why didn’t the Finance and Budget commission look into the cost of megadorms – despite specific suggestions to do so?
Ron Oertel said . . . “Neither you nor I created the problem.”
That is a statement that is worthy of Pontius Pilate. You are walking in good company
In effect what you are saying is “It’s not my problem” and I’m not saying anything original or creative when I say to you, “No four words in the English language are more potentially damaging than “it’s not my problem.”—
The phrase “it’s not my problem” carries an air of flippant apathy that is so seductive and simultaneously so destructive.
Whether it’s someone whose car has broken down on the side of the road, or someone who needs a hand crossing the street, or an overworked janitor who sweeps the floor we’re currently walking on, or violence and discrimination breaking out thousands of miles away, it is all connected and it effects every single one of us in some way.
But it’s so easy to turn away. And it’s so easy to rationalize that it is indeed not our problem. And it’s so easy to come up with a thousand reasons why we don’t have to concern ourselves with whatever it is that’s currently happening.
But it is worth recognizing that where there’s pain, it is everyone’s problem. Where there’s suffering, it is everyone’s problem. Where there’s injustice, it is everyone’s problem. Once we’ve recognized these things, we can then decide how we want to react.
You react by obsessing on a “what if” imaginary future. You have said that over and over and over again. In this land of the free that is your prerogative.
Nor do we necessarily agree on the cause of the problems, or individually have control over the solutions. We may not even fully agree on what the problems are.
Perhaps if they just let me or you “run things”, the world would be a better place! (Well, maybe me. Since you started it, I thought I’d inject some of my own “ego” into the conversation.) 😉
Your first sentence above beautifully captures why I compared you to Pontius Pilate. It is a quintessential “I wash my hands” statement.
In this land of the free it is your right to say “It’s not my problem.”
Although Davis does not have unique problems, it does have a plentiful supply of problem-noters.