Davis, CA – City Council took the first step on Tuesday toward creating a down payment assistance program for first-time home buyers when they unanimously supported a motion by Mayor Bapu Vaitla.
The council approved the introduction of an ordinance to add a down payment assistance framework to the Municipal Code. The Ordinance itself does not provide funding for the program, nor the specifics of the program.
Instead, council asked the fiscal subcommittee, consisting of Mayor Bapu Vaitla and Councilmember Donna Neville, to “work with staff to include review of a down payment assistance program in the discussions about budget priorities as the City prepares the upcoming biennial budget with recommendations to return to the City Council for consideration.”
In the motion, the subcommittee was asked to “consult with the fiscal commission and the Social services commission either before or after the amount of funding for affordable housing has been determined as they see fit.”
“I think we’ve set this up in a way where we can adopt the ordinance and then most of the programmatic details and fiscal details we can write into resolution,” Mayor Vaitla explained.
“I am very supportive of the First Time Home Buyers Assistance Program. I think it’s a really good idea. It’s one tool that we can use to help individuals get into the housing market. I fully agree with the comments made tonight that there are a lot of details that do need to be worked out, fleshed out about how the program would operate for a number of reasons,” said Councilmember Donna Neville.
Council clarified in response to public comments that the program “is not ready for prime time,” as Councilmember Neville pointed out, “All this ordinance does is create an express authority. It expressly states the authority of the city to actually have a down payment assistance program.”
In fact, as she pointed out, “We don’t even need an ordinance to do that. We could have simply decided to allocate funding in our annual budget act for this purpose without an ordinance in place.”
Neville added “so in some ways it’s to some extent, it’s a bit symbolic. It’s a formal expression of our intent to have a program.”
In response to questions from Councilmember Gloria Partida, Assistant City Manager Kelly Stachowicz explained that the funds provided would not require payback on a monthly basis like one would a mortgage, but rather it would be “like a silent second mortgage that you repay when you go to sell the property.”
She said, “Upon resale of the property, then you’re going to have to pay that money back plus an amount that would ideally be proportionate to the increase in the equity that you’ve gained over the however long you’ve owned the home. So if you get $25,000 for a down payment assistance amount, then when you go to sell the house, you’re going to have to pay back to the city that $25,000 plus additional amount. And that’s not specified.”
“I think the key here though also is just that those would all be elements that would be defined in the guidelines that would be yet to be developed,” City Manager Mike Webb added.
For Partida, overall, she said, “I am very supportive of this type of a program. I think that it does provide a way for folks to build that generational wealth and to continue to support people who work in our community. I know a lot of people who work in our community (but) live elsewhere, and as we’re talking about keeping people in our schools and being able to bike to where they work, I think this is one of the things that would be most instrumental in that.”
“I share some of the concerns that my colleagues have and some of the concerns that were noted during public comment,” Councilmember Josh Chapman said. “I do think that I am 100% in support of us exploring this and figuring out what it looks like. And it’s clear that what’s here before us this evening is just a framework.”
He added, “Some of the concerns that are raised I think are very legitimate. I think that there are ways that we can manage those.”
He noted some of the concern about loopholes and people trying to take advantage of those.
Chapman said, “I am supportive of moving it forward, but I do think that there’s a lot of work that really does need to be done to make sure that this is done well and is done right.”
He noted concerns over moving this “to the front of the line” but noted, “for me personally don’t know if I would envision this coming forward that we’re going to have all this in place and get everything passed for a June budget cycle. So I think that there’s, for me, a lot that we need to dive into and some clear guidance if this does go that way, two commissions if we decide to do that around what we really want to see them dive into.”
Councilmember Linda Deos echoed the concerns, but is in support of her colleagues.
“I think in general, I think this is a great direction to go in by having a down payment assistance program,” she said.
Deos added, “I do believe, though, that it should be going to our commissions to take a look at this and those specifically being our fiscal and our social services commission. I think that’s very important because, as you said, the devil is in the details. And I’ll use another one. I don’t want to put the cart before the horse.”
Deos said, “I want to make it accessible to the people who need this the most. And as we know, the demographics of Davis, I don’t want to limit what that might mean.”
Council moved this forward in concept, but subject to the direction of the Fiscal Subcommittee along with commission feedback.
