DAVIS, Calif. – The Davis City Council this week dissected its affordable housing ordinance, grappling with questions of transparency, developer accountability, and the city’s ongoing struggle to produce affordable homes. The discussion, which took place during Tuesday’s council meeting, was framed as an informational item meant to prepare for a more detailed policy workshop scheduled for Nov. 4.
City Social Services and Housing Director Dana Bailey, joined by Affordable Housing Manager Iris Grace, presented an overview of Article 18.05 of the Davis Municipal Code, which governs the city’s inclusionary housing requirements. Bailey said the ordinance is designed to ensure “that affordable ownership and rental housing is provided to the residents of Davis.”
Bailey said her department wanted council direction before the November workshop.
“We are here, as the city manager explained, to really provide a high-level overview of affordable housing, some of the climate related around affordable housing right now,” Bailey said. “And to ask a couple of correcting questions of you so we can get a little feedback and move in a way that’s conducive to what you’d like to see in this arena.”
According to Bailey, the city’s Regional Housing Needs Allocation (RHNA) calls for about 930 affordable units for extremely low to low-income households and roughly 1,200 when moderate-income units are included. The median income for a family of four in Yolo County is $135,900, she said, and “the ordinance is there to ensure inclusion across a range of income levels and housing types.”
Bailey explained that the ordinance not only sets affordability requirements but also helps “create inclusion for the community across a range of income levels and housing types.” She said the city aims to “create housing for local workers” and “ensure proportionality between market rate and affordable units.”
To illustrate the challenges facing developers, Bailey presented a hypothetical 700-unit for-sale housing project, showing how affordability requirements affect feasibility.
“The code dictates what we’re supposed to get,” Bailey said. “In this make-believe development, that would be 130 units out of 700 committed for affordability.” She explained that construction costs average about $560,000 per unit in Yolo County and that “there is no distinction for the cost per door when it comes to affordable housing.”
“That’s one of the first areas where it becomes difficult for developers to bring about the affordability,” Bailey said.
Bailey also highlighted a provision in city code—Section 18.05.040—that exempts developers from providing financial information if they are not seeking city funding. She said the clause limits staff’s ability to evaluate claims of infeasibility. “It becomes kind of difficult to have conversations with developers if they’re telling us that the feasibility of a project is not there and we’re not able to look at the figures that they’re supporting that stance with,” she said.
During public comment, developer Wesley Sagewalker of Gateway Development said the city’s inclusionary housing policy “creates barriers to building housing of any type.”
Walker, who is a partner in the planned 383-unit Leonardo project downtown, said Davis’ affordable housing production has fallen behind due to “the economic infeasibility of the current inclusionary housing requirements.”
He called the policy “counterproductive to the creation of housing in general and affordable housing in particular.”
Following public comment, council members debated two key questions: whether to require financial review for projects not seeking city assistance and how to balance objectivity and flexibility in project individualized plans, known as PIPs.
Councilmember Gloria Partida said she supported adding financial review requirements even when developers are not seeking city subsidies. “We said that we wanted a review, but that doesn’t line up with our code,” she said. “I think that we should definitely line that up and we should definitely have this be something that we review.”
Councilmember Bapu Vaitla agreed that greater financial transparency was necessary. “We can’t be negotiating blind,” he said. Vaitla, who co-authored the city’s inclusionary housing updates, suggested the city adopt a hybrid approach that includes “objective but flexible” criteria so the city can adapt to changing housing needs.
Vice Mayor Donna Neville raised legal and practical concerns about requiring developers to submit pro formas or detailed financial data. “Market rate private developers, in my experience, will simply refuse,” she said. Instead, she supported allowing staff to conduct independent analyses. “If you were going to amend this ordinance,” she said to Bailey, “what would it actually be? Soliciting what information?”
Bailey responded that staff was not seeking to compel developers to turn over private financials but to be empowered to perform their own feasibility analyses. “It really is an opportunity for us to negotiate with them,” she said. “It’s the ability to have the conversation without the language being pointed to and saying, well, we don’t have to have this conversation.”
Neville also emphasized that any alternative offered through a PIP should directly contribute to affordability. “If you’re not going to build the affordable units, then you’ve got to give us something that’s equivalent,” she said. “It’s really important that there’s a nexus between whatever that developer is offering up under the PIP and still achieving equivalency of affordability.”
Councilmember Linda Deos said she shared concerns about legality and transparency. “If they’re not requesting financial assistance from the city, what right do we have to open up their books?” she asked. However, Deos said she supported staff’s proposal to prepare their own pro formas to strengthen negotiations. “I understand looking for transparency,” she said, “but I also don’t like going in with the assumption that the developers are bad people.”
Councilmember Josh Chapman said the city needs more tools to challenge claims from developers that affordable housing requirements make projects unworkable. “We get someone who comes forward and says, ‘I can’t do this,’ and we just kind of take their word on it,” Chapman said. “It gives staff a position to come from where you can say, well, here’s what we’re thinking with this.”
Chapman also said the city should take a more active role in building housing itself by leveraging publicly owned land. “How do we as a city and as a council prioritize that as something that we continue to talk about up here?” he asked.
Councilmembers also discussed the need to incentivize deed-restricted for-sale units and extremely low-income housing. Partida said the city should “push the production of for-sale houses” to promote ownership opportunities, while Vaitla expressed concern that extremely low-income units have been largely left out of recent projects. “We’ve made some good strides in some areas,” Vaitla said, “but we’re lacking the units, and that’s the point of the inclusionary housing ordinance.”
The discussion ended with general agreement among council members to give staff clearer authority to conduct feasibility reviews and to update the inclusionary ordinance to ensure that project individualized plans produce affordable housing outcomes equivalent in value to on-site construction.
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The solution is to shift the burden of proof. Impose the appropriate requirements in all cases unless the developer provided factual, quantitative data that shows the requirements are infeasible. The next question then is setting targets that are generally feasible. That will take research into industry practices and finances. Looking at other communities is an important element.