By David M. Greenwald
Executive Editor
Davis, CA – It has been over a year since the HCD (California Department of Housing and Community Development) sent the city a letter rejecting the housing element for failure to comply with State Housing Law.
The staff spent several months revising the Housing Element, working with HCD on proposed revisions. In August of 2022, a revised draft was posted for a 30 day public comment period.
Among the concerns by HCD was Nishi and suitability for the student housing project to have 105 units of housing that counts towards RHNA.
According to the letter from HCD, “To credit the 105 units toward the RHNA, the City must verify that the Nishi project meets the census definition of a housing unit and is not considered group quarters.”
They write, “For example, the City can provide documentation that assures verification of income status, and provides substantial evidence that rent is based on the student’s income, and not the corresponding legal guardian’s income.”
HCD added, “However, given that the restricted leases are only available to students and not the general population, the element should analyze the existing development agreement to ensure compliance with all applicable fair housing laws”
In response, the city noted, “The Nishi Student Housing project is intended to provide housing to help address the City’s long-standing low vacancy rates by providing by-the-bed rentals primarily marketed to UC Davis students, due to its proximity to UC Davis.”
However, consistent with fair housing laws, the units are available for rent to anyone “with no preference given to students over members of the general public.”
The city notes, “The rental model would be unlikely to appeal to families, but it could provide for some workforce housing, which, in addition to student-oriented housing, is also a great need in Davis.”
As such, “The project currently falls into a gray area within the Census definitions for housing units versus noninstitutionalized group quarters for college/university student housing. Each apartment would be a fully-contained housing unit with living and eating facilities and direct access to the outside of the building that is separate from other units.”
The city believes that this aligns with the Census definition of a housing unit.
HCD also expressed concern about suitability of non-vacant sites.
HCD writes, “the element must now provide substantial evidence that the existing use is not an impediment to additional residential development in the planning period and is likely to discontinue during the planning period.”
HCD notes that the revised analysis for 240 G State, which was Ace Hardware “is now sufficient, as it demonstrates a discontinued use, developer interest, and most importantly feasibility that the site has redevelopment potential during the planning period.”
However, HCD said, “The two remaining sites will need to demonstrate similar suitability for redevelopment and most importantly, link recent development trends to factors utilized for identifying these sites.”
One of those sites is “envisioned as the future E Street Plaza or Davis Square in the Downtown Davis Specific Plan, which would be a primary catalyst project for the area.”
The city explains, “The site is anticipated to become a central gathering place and key focal point of the Downtown. When completed, the E Street Plaza could support two mixed use buildings, up to seven stories in height, surrounding a large public plaza area.”
The city continues, “The City recognizes that several of the parcels would need to be consolidated and brought under common ownership in order to take on a project of this magnitude, either as one or two new large parcels.”
The city notes, “the City has approved several lot consolidations within the last planning period to facilitate housing development, including the Lincoln 40 Apartments project which consisted of 11 parcels many less than 0.5 acre in size.”
The City continues “to see redevelopment of commercial uses, including the Trackside Center, Paul’s Place, and University Commons projects, and anticipates that such trends will continue”
They believe that approval of the Downtown Specific Plan will help support development by increasing building heights and allowable density while streamlining the review process.
HCD noted that the “revised element identifies a shortfall of adequate sites to accommodate the regional housing need for lower-income households. It also identifies candidate sites that will be rezoned within the first three years of the planning period.”
HCD then adds, “the element must demonstrate that sites of equivalent size were successfully developed during the prior planning period for an equivalent number of lower-income housing units as projected for the site or unless the housing element describes other evidence to HCD that the site is adequate to accommodate lower-income housing.”
HCD notes, “As recognized in the housing element, Measure J poses a constraint to the development of housing by requiring voter approval of any land use designation change from agricultural, open space, or urban reserve land use to an urban use designation. Since the ordinance was enacted in March of 2000, four of the six proposed rezones have failed.”
The city responded, “While Measure J adds costs, extends processing times, and has been used to halt development projects that would convert agricultural land to urban development, it is only a constraint to meeting housing needs if the city lacks sufficient infill housing sites.”
The added, “Had DISC passed, the City would have substantially more units to help meet the sixth-cycle RHNA. The City will need to rezone additional sites to meet the RHNA…”
The city continued, “The City has identified sufficient candidate rezone sites within its limits to meet the RHNA, averting the need for a Measure J vote. In addition, adoption of the Downtown Davis Specific Plan will increase infill potential within the City by allowing for increased building heights and higher density development.”
The Planning Commission weighed in on the Housing Element on Wednesday and the matter will come back to the council for final approval.
Trackside is for sale. Nobody seems to want it. Nishi gave up its access to get through a Measure J vote. These sites are unlikely to get built any time soon. University Commons ditched its housing. The HCD is a mound of dung built on a foundation of sand.
I would add to that I’m not sure how realistic housing is in the core, though Hibbert seems possible.
A policy that creates higher costs is by definition a “constraint.” The City’s response is disingenuous on this point. Infill housing is always more expensive than “greenfield.” I’ve posted a study here that shows just collecting the parcels increases land costs by 10%-40% and the cost of utilities on developed land is at least ten fold of that for greenfields based on the utility data I’ve reviewed at the CPUC.
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The statement above by HCD is unbelievable on at least two levels
1) The State has been crystal clear that the housing production performance in recent years has fallen short (far short?) of what they believe the State’s housing need is. NOTE: Ron Oertel has also been crystal clear that that need is fictitious. Hopefully Ron will spare us from another recitation of what he believes. He has made himself abundantly clear on that subject numerous times.
What is unbelievable about HCD’s response is their willingness to use that inadequate past performance as an achievement benchmark. What they have proposed to the City is a Catch 22. As they know full well there isn’t any evidence in recent Davis history that provides what they have asked for. If they are really serious about having future housing starts meet their needs targets, then they are going to have to accept projections that deviate from that history.
2) What is even more astounding/unbelievable is that the very same parcels that they are telling the City are “no good” were used as justification for the assignment of the City’s RHNA allocation. Double standard much?
There is a fundamental flaw in this second HCD statement. Only two of the four Measure J votes were for parcels that are/were in the City of Davis’ RHNA footprint (the City Limits), and only four of the six Measure J votes were for a “land use designation change from agricultural, open space, or urban reserve land use to an urban use designation.” Covell Village, DiSC 2020, DiSC 2022, and WDAAC were all in Yolo County’s RHNA footprint.
“What is unbelievable about HCD’s response is their willingness to use that inadequate past performance as an achievement benchmark. ”
You raise an interesting point Matt, but I don’t read it quite the same as you do. What I think HCD is saying is if the jurisdiction has not been able to approve and develop a similar parcel in the past, what makes them think they are going to be able to do so in the future?
While I understand your point that if the housing has been inadequate in the past how can that serve as a benchmark in the future, but HCD seems to be taking the approach that unless given developments have succeeded in the past, there is no reason to assume they will in the future. That’s a slightly different point from the one you are making.
David, you and I read what HCD is saying in the same way … HCD is saying that if the jurisdiction has not been able to approve and develop a similar parcel in the past, what makes them think they are going to be able to do so in the future?
It is a very reasonable position to take, and I have no problem with HCD taking it; however, if they do indeed use that logic to disqualify a specific parcel from counting toward a Housing Element, then logically they should disqualify that same parcel from their own calculations used to establish the RHNA Allocation for the jurisdiction that contains the disqualified parcel. Otherwise they are using a double standard.