By David M. Greenwald
Executive Editor
Davis, CA – It was an interesting experience watching the city council discussion on the inclusionary housing ordinance. To me there were almost three independent discussions going on simultaneously.
One was by members of the community who were pushing for as much affordable housing as possible. It was striking to me, however, that many of the people who were speaking about the need for more affordable housing are the same people pushing against housing more often than not.
I heard push back against, for instance, the Cascadia report—which in my mind simply replicated what we already knew from previous affordable housing/inclusionary housing studies.
On the other end, I heard from a lot of the applicants and potential applicants who know just how hard it is going to be to build anything in this economy, and then you add on affordable housing requirements on top of them, and you quickly see that we could end up exacerbating the overall housing crisis as we attempt to build more affordable units.
This is the point that City Attorney Inder Khalsa made.
She noted, “A few years ago I would’ve said that HCD was warmly supportive of inclusionary ordinance, but that has changed over the last few years, and they’re now looking at them more critically in the context that some of these inclusionary requirements are so onerous that they’re preventing the development of any housing, market rate or otherwise, and therefore contributing to the overall housing crisis.”
In the middle of the conversation was the council. On one level, they seemed to understand the tricky dynamics.
Bapu Vaitla said, “I think in the past we’ve been hamstrung a bit by the fact that some developments can afford to provide a lot more affordable units and some can’t.”
Gloria Partida acknowledged, “To be clear, this inclusionary ordinance is not going to be the end of how we solve our affordable housing requirements.” She noted, “We have a certain number of units that we have to build, and through the inclusionary housing ordinance, it’s not how we’re going to get all of these units.”
Partida’s point in my view needs to be underscored. Let’s say we have a 120-unit vertical mixed-use project. A 5 percent affordable would be 6 units. A 15 percent would be 18 units.
By the logic of the public, we should push for the 15 percent because obviously 18 is better than 6. But consider two counter points here. One is 6 is better than zero. In other words, if we make the requirements too onerous, the project just doesn’t get built.
This isn’t hypothetical, I was literally texting with someone in plans to submit a proposal to the city, but if their vertical mixed-use project has to go to 15 percent, they aren’t going to bother. That means we don’t get any affordable units.
But the second point that gets lost is whether it’s 6 or 18, neither of them makes a dent into the 900 or so units we have to plan for this RHNA cycle. In other words, as Partida noted, we aren’t going to solve our affordable housing requirements on 120-unit infill sites anyway. So let’s get what we can built and focus on the projects that are going to move the needle in this respect.
As such, the council spent way too much time on whether the minimum should be 20 units or 7. At seven units you are looking at one affordable unit. Again, are we losing sight of the end goal here? Providing sufficient affordable housing for our community.
There is a lot of distrust here. It came out in the community comments but also the council proposals.
Some of that discussion focused around a notion of transparency or “show your work,” a potential requirement that a prospective developer demonstrate in writing why the project cannot include inclusionary housing.
Gloria Partida noted, “You hear often that either we’re not holding developers accountable or that there’s not enough transparency in the process.” She said, I think that this is an important piece to start a conversation if someone comes forward and says we can’t meet 15 percent.”
Vaitla added, “I think the show your work requirement for discretionary projects is a reasonable request to say that there needs to be some evidence more than just your word. That certain requirement is not feasible.”
He also suggested that the city hire consultants or analysts to check that claim.
I do agree with council here to a point. We often hear from developers that they can’t make certain things pencil out. Sometimes I have gotten them to walk me through their calculations on the back of the envelope. Often I have begged to be able to put them on the record and they aren’t comfortable with it.
But it’s a problem. The public and council need to have a realistic understanding of what the economics are here.
We all can lose when this doesn’t happen. For instance, University Commons. The council, negotiating on the dais, got an agreement to lower the building height in order to forge a compromise with neighbors concerned about impacts.
But as it turned out that compromise made it such that the applicant could not find a builder willing to do the project. The result was they dropped the housing component.
Think about it, we lost about 264 units across the street from the university at an underutilized but prime location.
Had we slowed down the process, had the council paused the discussion and been able to understand the economics of what they were proposing, maybe that problem could have been averted.
Finally, what we are seeing is that too high an affordable requirement can end up not producing any housing.
San Francisco provides us with a perfect example. Data last week showed that San Francisco only approved about eight permits PER MONTH of new housing in February, March and April.
Assemblymember Matt Haney this week reacted on Twitter, “It’s a shameful, embarrassingly slow start to a binding commitment by the city to build 82,000 units of new housing over the next 8 years in a city with some of the highest rents in the country.”
The Chronicle reported that the problem stems from “high interest rates and excessive construction costs” not to mention the ailing economy downtown.
The city has higher than state average affordable requirements with 22 percent of rental units and 24 percent of condos required to be priced below market rate.
Mayor London Breen and Supervisor Aaron Peskin are suggesting the city reduce those percentages to about 12 percent for those that have been approved but not moving forward.
For those arguing we need more not less affordable housing in this community—I completely agree. But we aren’t going to get that by extracting 18 units at a time from 120-unit apartment complexes. We are going to need either the city to have the funds to entitle entire sites as affordable or, more likely, large peripheral projects with land dedication sites.
I think on land dedication sites, the city can easily move the needle from 15 to 25 percent and perhaps higher if we can throw in additional inducements such as waiving Measure J requirements altogether.
“I think on land dedication sites, the city can easily move the needle from 15 to 25 percent and perhaps higher if we can throw in additional inducements such as waiving Measure J requirements altogether.”
There you go again. As the old song goes:
Dream a little dream, dream, dream, dream
Rather than challenge the usual repetitive nonsense on here, let’s focus on this one claim:
There is no evidence that this was the reason for the withdrawal of the housing component. The city is the entity that pushed them toward housing in the first place, and they initially responded with a rent-by-the-room (or bed?) proposal.
The latter of which was pointed out on this blog by a planning commissioner who is highly supportive of housing development.
The city ultimately approved the subsequent housing proposal over the objections of the neighbors. Brett Lee was the unexpected deciding vote in support.
Some time later, the developer withdrew the housing component, and returned to their original plans.
Reality is not reflected in the Vanguard’s version of the sequence of events.
Ron is completely correct on this U-Mall issue. No matter how many times the Vanguard laments about the “loss” of the residential units that were explored for U-Mall, the reality is that the Brixmor developers originally applied to redevelop and improve the U-Mall retail mall as retail only, not mixed-use. It was the City Staff who talked them into exploring the possibility of mixed-use. Well they did just that and it cost Brixmor a fortune to do the analysis and they realized the site was too small for a huge multi-story project, plus it would not have had enough parking to support the mall retail businesses as well as provide some parking for the housing, and it simply did not pencil out.
So, no matter how many times anyone may try to re-invent what happened here, it simply made no fiscal sense to make U-Mall mixed use. So it is time to stop trying to re-invent history on U-Mall. Thank heavens we are getting new and much needed retail there. Retail relies on conveniently parking to survive and the City desperately needs more retail for shopping locally and the sales tax revenue. Beating this subject to death to try to reinvent the facts is really not helpful.
“ the reality is that the Brixmor developers originally applied to redevelop and improve the U-Mall retail mall as retail only, not mixed-use. ”
I’m missing the point here I guess. Given the location, why does having a flat strip mall make land use sense?
I guess you are missing the point David that having a retail mall dedicated to providing shopping with adequate parking so it can be convenient for Davis residents and to bring in much needed sales tax revenue for the City is a very good thing. We are very fortunate that Brixmor is willing to invest in U-Mall and to bring much needed brick and mortar stores to Davis. Nordstrom’s Rack alone will bring in a ton of sales tax revenue, plus will give residents an option to shop in person rather than on-line.
Retail malls across the country are dying. We have a huge space that’s underutilized. We have a housing crisis. Seems like we could have done things better. Not sure why we dived into this point, it was a small point overall in my piece.
David,
The fact that Amazon and so much on-line shopping has impacted brick and mortar stores is tragic and is doing harm to communities like Davis. Again, we are very fortunate that Brixmor is willing to redevelop the U-Mall into an new and improved brick and mortar shopping mall. Putting housing on top of it would not have worked because you can’t control the raiding of the retail parking by the housing. The retail depends on parking to survive, so this is not that complicated to understand. So, let’s just be grateful that the City will have a renewed revenue steam that has been lost for over 5 years at U-Mall, plus a great way to shop locally which Davis desperately needs.
Retail need not rely on convenient parking. The thriving retail in the East Bay where parking is a competitive enterprise illustrates that. More important is having ready access, whatever the means. In the East Bay it includes residential located close by. That’s why mixed use development pencils.
Davis’ retail problems are self inflicted through a mythological belief that retail should be focused downtown. Restrictions on grocery store size, excluding retail from neighborhoods unlike more enlightened cities like San Luis Obispo, and a mistaken belief that car sales would continue to grow at historic rates are examples of shooting ourselves in the foot.
If Brixmor didn’t thinking mixed use penciled out, why did it go so far to make a proposal through to the Council? If the original proposal was doomed financially, why push it through?
The reporting at the time was that Brixmor was unable to find a partner willing to do the residential component. Brixmor is not a home builder. Given the reception the plan met at the Planning Commission, I am not surprised they were unable to find any company willing to go through the Davis planning process.
Don
That speaks more to the hostility of certain segments of the Davis community to housing for students rather than financial considerations.
Brixmor got talked into exploring the vertical mixed-use idea by the City, however they had never built housing on top of a shopping mall. They were willing to see if it could work it but it did not work and one reason was the physical constraints, due to the small foot print of the parcel and, then the risk versus the gain was essentially what did not pencil out, which is also why they could not find a builder. They explained all of this at the Council meeting.
Richard,
I think you are naive to think that shoppers want to haul packages, boxes and bags via a bicycle, or on the very limited and very inconvenient public transit that Davis offers. Another issue is the extremes in weather we have here in the valley like 100+ weather in the summer (like today for instance) and the wind, rain and cold in the winter is not very compatible with trying to haul shopping items without a car.
I, for one, am looking forward to “Nordstrom Rack” at University Mall. Now that they’ve got that nonsense regarding a megadorm (on top of the mall) out-of-the-way. I’ll combine it with a visit to Trader Joe’s (and whatever else they populate that mall with). Looking forward to it, now.
Meanwhile, San Francisco has lost Nordstrom’s entirely (at both Stonestown and downtown), as well as the downtown mall owner itself.
“Doom loop” (in San Francisco), indeed.
Something that rarely gets mentioned is the percentage of low income housing that RHNA itself has put forward. The two tables below, the first one from a past Vanguard article showing several regional cities, and the second one from the City of Davis Housing Element, show a low percentage of 33.8% (Woodland in the Vanguard graphic) and a high percent (the Davis Housing Element graphic number) of 44.8%. If those are the RHNA targets, why aren’t they our targets? Is RHNA unreasonable in setting the targets that high?
https://davisvanguard.org/wp-content/uploads/2023/06/IMG_0489.jpeg
https://davisvanguard.org/wp-content/uploads/2023/06/IMG_0490.jpeg
That’s for sure.
Good question.
Yes – absolutely. And not just in Davis.
The state is headed for a massive failure. The only question is, whether or not they’ll actually admit it at some point. (Not likely, as they’d probably just “soft-peddle” it when it becomes increasingly obvious.
Unless those like Rob Bonta, Gavin Newsom, and Scott Wiener (and thousands of YIMBYs and the interests behind them) suddenly pick up a hammer and join something like Habitat for Humanity. Which doesn’t seem likely, as they all seem far more comfortable behind a desk in an air-conditioned office, threatening their own constituents.
The latter of which will never result in more affordable housing, regardless of how much saber-rattling they engage in.
Matt,
Those RHNA numbers are only achievable through peripheral development. It isn’t possible to hit those targets through infill in my opinion.
It’s pretty clear and the city has acknowledged this.
From what I’m gathering, even a 400-acre peripheral development won’t “achieve” this.
Someday, someone might explain how the vast population centers along the coast (where the state’s efforts are focused) are “expected” to achieve this – especially since they aren’t sprawling outward.
The “real” answer is that they won’t. This really isn’t even in dispute.
At which point, Gavin Newsom, Rob Bonta, and Scott Wiener (and a bunch of YIMBYs and their supporters) will have to learn some carpentry skills – and volunteer their efforts, at that. (Which won’t make some of their underlying supporters very happy.)
I’ve showed you it several times – SF has two very large available parcels of land that are larger than what is being proposed on the periphery of Davis.
San Francisco:
https://sf.gov/news/san-francisco-announces-acquisition-five-sites-will-deliver-more-550-new-affordable-homes-0
I’ve posted links to many articles which specifically show that San Francisco’s “plans” are not viable – especially as it relates to Affordable housing. Regardless of the land that you pointed out.
Again, it would take something around $19 billion to make those plans come to fruition, in regard to Affordable housing.
But it’s not just San Francisco. However, San Francisco has a publication (48 Hills) that other communities don’t have, specifically pointing-out the unworkable assumptions.
Some other communities are flat-out telling the state to “take a hike”.
But many of the other cities along the coast (perhaps even “all” of them) will still fail to meet the state’s “targets” – especially in regard to affordable housing.
Meanwhile, not even the “400-acre peripheral” proposal (outside Davis) will do so. Which I believe is related to Matt’s point.
I’m sorry not to catch this sooner, but the second graphic/table didn’t come through. Here it is. It is from the City’s Housing Element.
https://davisvanguard.org/wp-content/uploads/2023/06/IMG_0490.jpeg
Regarding the affordable housing for mixed-use, the meager 5% affordable housing requirement is a sore subject. For over a decade, I have pleaded (in writing as well as public testimony) with the City and the City Council multiple times to fix the lack of affordable housing requirement for vertical mixed-use projects. The requirement use to be zero affordable housing was required for decades until just a few years ago when the meager 5% was finally added.So, the developers would target putting in a token commercial use (for a coffee shop for instance) for the privilege of providing zero affordable housing. The developers for the first Nishi proposal tried this, as did the DISC developers for their vertical mixed-used project proposals.
So, instead of acting on updating the vertical mixed-use ordinance and correcting this problem, the ordinance was simply renewed temporarily several times which simply lost us the window of time to fix the problem before new vertical mixed-use projects came through.
So now we have two of the three high-density vertical-mixed use project proposal trying to get away with just 5% affordable housing downtown, which is where rents are typically very high, so these project need to be providing their fair share of affordable housing.
The City needs to reject these two vertical-mixed use proposals (at the Hibbert site and the old Ace Hardware sites) and to make them provide the 15% (or 20% like the Regal Theater proposal). Further, they need to send them both back to the drawing board to provide ample parking for each of those two mixed-use projects. The Hibbert’s project is offer no parking, and the the Ace Project is only offering around 50 parking spaces for twice as many apartments.
These proposals are ridiculous to propose for Davis because of their scale and the fact that the City simply does not have the robust transit public system needed to have little or not parking for enormous high-density projects like these, especially with all three of them on one street. The parking needs would just be pushed over to the surrounding neighborhoods and furthermore, it would simply destroy the retail downtown since there would be no place for shoppers to park anymore.
The City needs to preserve and protect its downtown retail for the much needed sales tax revenue as well as the shopping. We would risk losing Davis Ace and the few retail stores left downtown, which would be disastrous since Davis has so little brick and mortar retail left. And in particular, to instead have enormous high-density, expensive housing with little or no parking which is not even doing its fair share of affordable housing like the Hibbert’s site and old Davis Ace site proposals.
The question is why is that a sore subject when the difference between 5 and 15 percent is not going to make a dent in our overall housing needs?
David,
I can’t say I agree, because every single affordable unit built is valuable, and cumulatively over time, it does help and it does matter regardless of how much it moves the needle for our total RHNA affordable housing requirement.
This is why the recent mantra has been, “build affordable units instead of easily allowing in lieu fees”. Further, the in-lieu fees have been too low for decades to actually build affordable housing units. The developers opted for it whenever they could just like vertical mixed-use, which required zero affordable units until just a few years again. Then vertical mixed-use was only assigned a token 5% affordable housing requirement. I find it interesting that you of all people would be arguing against affordable housing of any number of units.
But the point is, let’s take the 120 unit example – Vertical Mixed Use.
At 5 percent, you would have 6 affordable units.
At 15 percent, you would have 18 affordable units.
No matter which one you do, you are going to have to find another 900 units of affordable housing in the city.
But what happens if by requiring 15 percent, the developer can’t build the project at all? Then we don’t even get the six affordable units and we don’t get the 120 units.
This is the tricky issue – I think the council was correct to push for transparency, because unless there is transparency, there is going to be skepticism.
David,
The cost of rents downtown are amongst the highest in the City. Further, the downtown Regal Theater redevelopment project is offering 20% affordable housing for its vertical mixed-use project. So, I don’t think that adding these few additional units for affordable housing, relative to the total number of units in the entire project would prevent the project from being built, particularly due to the high rents the market-rate units in the downtown will yield the developers.
You realize that the way that inclusionary housing works, it will actually bring up the cost of rents more, because the units are not getting government subsidies, like other kinds of affordable.
It’s true that 4th and G will have 20 percent. It’s also true that it will be 20 percent low (80%) rather than split between low and very low (50%). There are a few reasons they were able to do it there, while most others won’t be.
David,
The bottom line is that we need more affordable units, regardless of if they are low or very low income, and if these high density projects will not provide their fair share of affordable housing, they need to be outright rejected. If that raises the other rents, when then maybe this is simply not a good model for housing. Likewise, these high density projects need to be rejected if they try to eliminate parking. It makes no sense practically, and would be seriously detrimental to the downtown retail and surround neighborhoods.
I don’t know if the city has that latitude, in view of the laws that have been passed by the state.
https://www.hklaw.com/en/insights/publications/2022/10/california-2023-housing-laws-what-you-need-to-know
That contradicts the intent of the City’s Climate Action and Adaptation Plan to reduce VMT citywide and free parking downtown. The plan also envisions different transit and mobility options. There are many beyond just conventional bus service.
As for downtown parking, the easy way to protect retail parking is through meters. Metering will have discernable impact on retail sales and more likely will easy such parking by increasing turn over. (Business owners may have to change how they get to work.)
With more people downtown the nature of the retail will likely change. That was envisioned during the workshops for the Downtown Plan that had high citizen participation (SRO at some events.)
The fact that DISC didn’t “contradict” that supposed plan should tell you all that you need to know about that “plan”.
(Not to mention the apparent “non-contradiction” in regard to the I-80 expansion.)
So, I guess it seems that the goal here is to prohibit at least 90% or more of anyone who wants to live downtown in one of these 500+ apartments from owning a car? And that means even that 10% (or less) of the residents, could not own more than one car. Is that realistic? Is that going to work for even small families? I don;t thing so, so no families will be able to live down town. Also, parking spaces are to store a car, and do not necessarily equate to VMT’s every day.
Also, do you think everyone will be willing to pay for parking who want to spend less than 30 minutes at a store downtown? THAT does not enhance a shopping experience nor give enough time for the shopper to spend those local dollars in town.
Do you think people will want go downtown to eat at the restaurants if they have to pay for parking? No, they will go somewhere else. Either to a neighborhood shopping centers where there is more and free parking or, Woodland, Winters, DIxon or Sacramento for the same reason. So, that has would not City’s with sales tax, nor keeping the downtown healthy, nor reduce the VMT’s. In fact, all of these high-density vertical-mixed use projects, cumulatively in particular, would have a serious counterproductive effect on the City.
Paid parking downtown, a bad idea that will never die.
Yes, I guess the paid parking concept keeps getting resurrected unfortunately. Implementing it is only to the detriment of both the downtown itself, and the City’s revenue due to the loss of sales tax that charging for parking is costing the City. No one wants to pay for parking, so folks will simply not go downtown and will not spend their dollars there. It just hurts downtown businesses there and the community.
If the city was serious about controlling costs for long-term renters, officials would at least be discussing rent control, which has several advantages over Affordable housing.
They’re not serious.
They are serious about supporting development, and searching for reasons to do so.