Davis, CA – I thought I was in a time warp reading the staff report for the budget priorities. There we are in 2024, and I’m writing about OPEB, Roads, and the city’s General Fund reserve.
I could have sworn we were back in 2010 – and maybe we should be, because we should have addressed OPEB and Roads back then. But the ball keeps getting kicked forward and the problems persist if not increase.
For all the handwringing about the lowered reserve, for instance, during the election, the plan will now be to restore that General Fund reserve. That will be costly, even with the possibility of doing it over three years, but once done, it is basically a one-time cost, not ongoing costs.
On the other hand, other costs such as restoring full OPEB contributions and Pavement management, will be ongoing and also substantial, costing nearly $5 million of the $11 million annual budget bump in ongoing money.
If you look at the staff report, you quickly recognize just how daunting this task is going to be.
Let’s however, take two issues – affordable housing and homeless services.
For what we are bringing in with Measure Q money, we could actually go a long way towards solving our homeless problem. The problem is that would eat up most of the $11 million.
When he was running for Council in 2022, Bapu Vaitla said we know how to solve homeless problems, it’s permanent supportive housing. I have heard almost that verbatim statement from most homeless advocates.
It’s costly. I have seen some cost estimates at around $50 thousand per person per year. That actually represents a cost savings over what we do now. A Study out of UC Irvine “Irvine study found that the annual cost of services for a chronically homeless person on the street is $100,759, while the cost for the same person in PSH is $51,587.”
Why that savings? Because the cost of publicly funded crisis services including jails, hospitalizations and emergency rooms are a lot more expensive.
Unfortunately, it is tricky to do a direct translation of that cost savings to put into the housing – because the city doesn’t pay for any of those costs, but the city could pay for the housing costs.
Nevertheless, given the 161 or so homeless people in Davis, per the latest point in time count from last January, we could permanently house all the homeless people in Davis for about $8 million or so.
That would eat up much of the Measure Q revenues – and clearly the city is going to have to address its reserve, roads, and OPEB.
Someone asked if that was really the responsibility of the community – but unless we can make homelessness go away, there is going to be a cost.
There are basically three categories of options that the city has:
First, they can allow the unhoused to remain on the streets and then deal with whatever nuisances they cause. That has largely proven untenable over the last decade and more and more people want to see these encampments cleaned up.
One way to do that would be to simply incarcerated the homeless, clear the camps, and pay for those costs. But as we pointed out above, those costs are actually a good deal higher than the alternative which is to address homelessness through permanent supportive housing.
Not only is it more cost effective, it is more effective and the right thing to do. But money doesn’t grow on trees, and the city is balancing a lot of priorities.
That doesn’t even start to address the even broader problem of affordable housing. As bad as the homeless problem appears to be, we are still only talking about a relative small number of people in Davis.
The bigger problem is housing insecurity due in part to the high cost burden of rental housing where rent costs more than half of a person’s take home income. That along with other factors is a key driver of homelessness both in this community and California.
The state has issued mandates for the city to build an additional 930 affordable housing units over the eight year RHNA cycle. But as many have pointed out, there is a lack of resources to actually reliably build that number of deed restricted units.
From the staff report: “The Council has a goal to shore up the housing continuum, and has long been seeking resources to backfill the loss of redevelopment agency revenue. Current sources of funding include the annual federal HOME grants, the City’s percent of proceeds from sales of ownership units in the affordable program, occasional housing in-lieu fees, and grants.
“The Council has expressed interest in programs related to affordable housing, from permanent supportive services for extremely low-income households to down payment assistance for ownership opportunities.”
I’m supportive of all of these goals, but at the end of the day, we are really only scratching the surface of a vast need.
There were some regionally based funding mechanisms for affordable housing that were proposed but disappeared. The state legislature also attempted to make it easier to pass such measures, but that effort was defeated in the November election.
Unlike addressing homelessness, affordable housing is probably in need of a regional and statewide solution, but it is less than clear that the will is there to do it.
In the meantime, that is going to mean siphoning off 15 to 20 percent of market rate housing to build some more affordable housing. And the city can supplement a lit of that with some sort of assistance problem.
“I thought I was in a time warp reading the staff report for the budget priorities.”
I think that’s what a lot of the Vanguard readers feel when they see the almost daily housing articles that’s been going on for years and years.
“Money doesn’t grow on trees.”
Yes it does. Ask any almond farmer.
What I think will be interesting to watch is who comes out of the woodwork for a piece of the $11 million and how the City Council allocates the money. Already the Fire Department wants a new downtown station. I heard about Affordable Housing and roads during the campaign and shoring up the city budget is a must have. But spending millions on a new fire station downtown I hadn’t heard about.