- Davis City Council reaches tentative agreement on affordable housing units.
- Agreement includes 100 deed-restricted low-income units in baseline project features — 300 total.
- Councilmembers will review finalized exhibit language at the January 20 meeting.
DAVIS, Calif. — The Davis City Council reached a tentative agreement Tuesday night during a Village Farms workshop to include 100 deed-restricted low-income affordable housing units as a baseline project feature (300 total), while adjusting when those units must be commenced in relation to market-rate development in Phase 3 of the project.
The agreement emerged after discussion and negotiation during a workshop that exposed sharp differences among council members over whether allowing partial buildout of Phase 3 before affordable construction begins weakens the city’s leverage to ensure the units are ultimately built, according to the meeting transcript.
Mayor Donna Neville said the proposal reflected significant movement by the applicant team after private discussions with council members and staff.
“I would say in fairness to the applicant team that they have been very receptive to the concerns they heard here,” Neville said.
City staff emphasized that the agreements reached were tentative and still subject to formal council approval and contract drafting.
“Very much tentative,” staff said. “I would say a proposal that we heard from the applicant coming out of this room.”
Under the framework discussed, the developer would agree to include 100 deed-restricted low-income units in the project’s baseline features, remove a sunset clause from the development agreement, and provide the city with the final $3 million contribution to the Housing Trust Fund at the start of Phase 3. That payment would bring the developer’s total affordable housing contribution to $6 million.
“They were okay with removing the sunset clause in its entirety,” staff said, adding that the developer was also “okay with referencing the 100 units in the baseline project features.”
In exchange, the developer would be allowed to pull the first 150 building permits in Phase 3, which consists of 310 low-density market-rate homes. No additional Phase 3 permits would be issued beyond that point unless construction of the 100 affordable units has commenced elsewhere on the site.
“That also addresses the concern related to the final three million contribution, which would come earlier,” Neville said.
While several council members described the revised framework as a significant improvement over prior proposals, others questioned whether shifting the timing of the affordable housing trigger reduced the city’s leverage.
Council Member Bapu Vaitla said he struggled to assess, in real time, what the city might be giving up.
“There’s only 310 units in that phase three,” Vaitla said. “And so 150 means half is done. I have no idea what the numbers mean. I have no idea what the leverage is.”
Vaitla repeatedly raised the concern that once half of Phase 3 permits are issued, the developer may have less incentive to proceed with the remaining affordable housing obligation.
“How much more likely does it make them to walk away and say, ‘We don’t need to build those other 150 units’?” he asked.
Staff responded that the inclusion of the 100 units in baseline project features provided stronger protection than earlier versions of the agreement.
“They’re willing to include the hundred units in baseline project features,” staff said.
Council Member Josh Chapman focused on whether the revised proposal altered the underlying obligation or simply delayed enforcement.
“It just shifts the timing of the release of permits or the phasing to after 150 units,” Chapman said.
Staff confirmed that interpretation.
“That’s correct. It’s just later in phase three,” staff said.
Council Member Gloria Partida said the revised structure provided more assurance than what the council had discussed previously.
“I think that when we had this conversation previously, we had less assurance and now we have more insurance,” Partida said.
Neville also emphasized that bringing the affordable units into baseline features marked a substantive change.
“It’s a huge gain of getting the units into baseline,” she said.
Still, the discussion underscored a fundamental divide over risk assessment. Vaitla argued that issuing permits for half of Phase 3 before affordable construction begins could materially reduce the cost to the developer of walking away from its obligation.
“The disincentive to walk away is not the profit from 310 units, it’s the profit from 150 units,” Vaitla said.
Neville countered that the remaining market-rate homes are central to the project’s financial model.
“Those last 160 units, that’s the gravy,” she said. “There’s very little incentive for them to walk away from those units that are market rate.”
Developer representative Sandy Whitcombe warned that placing too much uncertainty on Phase 3 could jeopardize financing for the entire project, including earlier phases.
“There’s a very good chance that phase one and two don’t pay for themselves,” Whitcombe said, citing infrastructure, habitat mitigation, and off-site transportation costs. “So there’s like a chicken and egg thing.”
Whitcombe said lenders and partners evaluate the project holistically.
“They’re going to look at the whole thing, phase one and two and say, ‘Sorry, Charlie,’” he said, if Phase 3 access appears too uncertain.
As the debate continued, council members grappled with whether to approve a single framework or break decisions into separate motions. Vaitla proposed an alternative structure that would give the city multiple decision points during Phase 3, but staff questioned whether that approach actually preserved leverage.
“What prevents the developer from walking away from the project after the 150th unit is built?” staff asked.
Vaitla acknowledged the difficulty of evaluating the tradeoffs without final contract language.
“It’s really hard for us to just assess here in real time what we lose,” he said. “I really don’t.”
Despite those reservations, the council voted 4-1 to direct staff to revise the development agreement to remove the sunset clause, require payment of the final $3 million before Phase 3 permits are issued, and halt additional permits after the first 150 until construction of the affordable units has commenced.
The council then voted 4-1 to amend the baseline project features to explicitly require commencement of the 100 affordable units before issuance of the remaining Phase 3 permits.
Councilmember Vaitla was the sole no vote on both motions
“My notes indicate that the applicant team agreed to include a reference to commencing a hundred units of low income housing prior to issuance of the 150th building permit,” staff said.
The workshop also included discussion of 80 moderate-income affordable units planned on the city-owned land dedication site. Some council members advocated for requiring ownership units, while others urged flexibility given market uncertainty.
“I think we all know we love affordable ownership because of the intergenerational wealth that helps people to acquire,” Neville said. “But I think we need the flexibility right now.”
Staff said the city would issue a request for proposals to select an affordable housing developer and that council would play a role in approving that partner.
“This is a city-led process,” staff said.
Vaitla said he supported ownership units in principle but wanted more financial clarity before committing.
“I would happily prioritize moderate income for sale units,” he said, “but I really need more information about what that is going to mean financially for the city.”
No binding decision was made on that issue, and staff was directed to preserve flexibility in the language.
As the meeting drew to a close, council members discussed looming deadlines to finalize baseline project features and zoning changes needed to place the project before voters.
“The items that are going to be on the ballot… are the resolution that actually says we’re going to change the zoning, the land use map, and then the baseline features,” staff said.
The development agreement and environmental impact report will also return to the council, though staff clarified those items are not part of the ballot submission.
Neville acknowledged the strain of the evening’s deliberations but said the process reflects the complexity of the decision.
“It’s really hard to develop a complex policy at the dais,” she said. “As you sit down and you write the actual language, all sorts of other questions and issues become more clear to you.”
The council is expected to review finalized exhibit language and take formal action at its Jan. 20 meeting.
Follow the Vanguard on Social Media – X, Instagram and Facebook. Subscribe the Vanguard News letters. To make a tax-deductible donation, please visit davisvanguard.org/donate or give directly through ActBlue. Your support will ensure that the vital work of the Vanguard continues.
According to my property tax assessment, developed urban land is worth about $1.75M per acre. Infrastructure development costs are range from $100K to $200K per acre. Even if we are very conservative, the net gain on selling that land to builders before construction will be about $1.5M per acre. If the entire 390 acres is sold, that’s a net gain of $585M. That tells us that the developer still has a significant amount of margin to offer the City for this project and still be very profitable.
Did you subtract out the land not in the parcels? The streets bike paths parks etc?
I appreciate David’s valuable report of the meeting.
However, I am not at all comfortable with the many loose ends on this plan up to the last minute.
Why should the Affordable Housing Plan be the only unclear and unsure element at the finale?
There should have been many more than 100 units in the baseline features.
In his report David includes this information;
“My notes indicate that the applicant team agreed to include a reference to commencing a hundred units of low income housing prior to issuance of the 150th building permit,” staff said.
What is the definition of “commencing” ? I would rather use the term “construction begins”.
When I think of the timeline on the 150th permit I think City approval June 2026, infrastructure in by June of 2027, building of the first phase of 150 homes, 2027-2028, 2028 commencement of the 100 units of affordable apartments, two to three years to assemble the funds and a year and a half to build.
Could be 2030-31 before they are occupied.
Seems like a long time to wait for the affordable housing product to be completed for occupancy.
And only 100 apartments out of 260 or so required in the baseline?
Not very convincing!
“What is the definition of “commencing” ? I would rather use the term “construction begins”.”
I would think that either of those terms is essentially the same as a “placeholder” (basically, a post in the ground, pending funding).
A better phrase would be “construction and occupancy permit completed by”.
Post hole diggers are pretty inexpensive, though I wouldn’t want to try it out there in the middle of summer. And if Trump has sent back all of the illegal immigrants by then, I’m not sure if anyone else would be willing to try it, either.
Actually, the housing would take significantly longer to be built because it would take a minimum of 2 years and likely longer to move ONE MILLION cubic yards of soil from the former UATA dig pit site to try to raise the level of the massive 200-acre flood plain. Also, the proposed re-routing of Channel A is another massive undertaking, Plus, FEMA has a moratorium still on for floodplain relief certification so no houses could be built until that certification happened. Even the State has legislation discouraging development on massive floodplains like this. This is because the State cannot be expected to bail out the City’s foolish enough to allow building on enormous flood plains Like Village Farms has, when flooding inevitably happens. We are getting more and more flooding events due to climate change and more and more frequent atmospheric rivers.
Village Farms has this flood plain issue as well as toxics issues, including trying to haul away tons of ultra-high toxaphene level and elevated levels of lead soil where Heritage Oak Park would be located, so that would cause delays. Then if the grade-separated crossings ever get built since there is uncertain feasibility. It is astonishing that the City is only asking for the developer to cover 20% of the cost of the two multi-million-dollar grade separated crossings. So, the community will be subsidizing those Village Farms infrastructure costs as well. This is just another giveaway to the Village Farms developer by the City like not requiring the 2:1 agriculture mitigation for the 107-acre dig-pit for the one million cubic yards of soil, which is an urban use, not an agricultural use.
So, the Village Farms proposal was originally proposing 360 affordable housing units but now it is only 300 affordable housing units. How is the City going to get the vast majority (200) of these affordable houses built? The City’s Affordable Housing Trust Fund is in it neophyte stage and does not have that kind of money to get 200 units built even if the developer were to build 100 units? Or for the City to build all 300 units if the developer does not build the 100 units and then abandons the last 160 market rate units to be built in Phase 3? Does this mean that the City would try to impose a tax to on Davis residents for the affordable housing to build the Village Farms affordable housing? This affordable housing tax has been suggested by some City Council members before to build affordable housing.
I appreciate and value David Thompson’s comments that he has posted today and in several articles he has written, pointing out the problems with the Village Farms affordable housing proposals that needed to be addressed He has had more than 30 years’ experience building affordable housing in Davis. Yet, the City ignores all of this important input. Instead, they continue to barrel forward with a disastrous project, rushing though important decisions like the affordable housing, when there is no urgency to rush this Village Farms project to the ballot this June.
The City is prioritizing the developers wishes for his Village Farms to be placed prematurely on the June ballot, rather than our community’s need for a fair and thorough process. There is NO reason for this Village Farms project to be on the June 2020 ballot because the City’s Housing Element is until June 2030. The Village Farms process has been aberrant and chaotic from the beginning, as it is now, as the City Council is rushing though these critical decisions and negotiations to the detriment of Davis residents. This current proposal is a maze of caveats and unwarranted assumptions and these negotiations need the time to get acceptable conditions for the community.
Let’s not forget that this same Village Farms developer has not delivered the Nishi project housing nor its promised grade-separated crossing. So, why is the City rushing though these critical affordable housing decisions for his Village Farms project to give him more entitlements increasing the value of the land and yielding leverage to the developer? The Village Farms project is clearly not ready for the June ballot.
Also, what would be the arrangement of how the 16 acres of dedicated land gets divided up if the developer does agree to build the 100 affordable units? Is it still 16 acres being dedicated to start with? Although, of course, it is supposed to be 18.6 acres per the Municipal Code, yet another giveaway to the Village Farms developer.
Also, does the ownership of part of the land, or all of the land, go back to the developer as well as the $3 million if the developer agrees to build the 100 units? And, good points raised by David T. and Ron O. about “commencing” is not the language that should be used. It needs to be “constructed and completed for occupancy” or the developer may never finish building the affordable housing if the word “commencing” is used. After all, the same developer’s Nishi project has never “commenced” since 7 years ago when it was approved.
My observation about last night’s Council meeting was that the members of Council were performing a whole lot of clerical minutiae, and displaying precious little leadership. With the exception of Bapu Vaitla, none of the Council members were looking to the future or showing any vision.
Engaging a leadership role would have caused them to ask very different questions than the ones they asked. Questions like:
“How many of the 280 “permanently” affordable “homes” will be owner-occupied?”
“Is an apartment a “home” or simply a residence?”
“Will any current Davis seniors be able to downsize to Village Farms from their current too large home?”
Those are the kinds of questions Planning Commissioner Georgina Valencia had clearly asked herself prior to making her public comment last night. The public comment of Ellen Kolarik of Interfaith Housing Justice Davis clearly showed she was asking herself similar questions. And the vanguard comments above by Richard McCann and David Thompson show similar insight. It is a shame that all our council wants to do is kick the can down the road by getting this project on the June 2026 ballot at all costs.
Did you watch the meeting because many of your points were addressed?
Vaitla made demands and got what he asked for. One hundred affordable units be put in the baseline features. Then he voted no anyway.
Vaitla hasn’t shown leadership he has shown consistent and dogmatic opposition to the project at every opportunity throughout his entire time on the Council going back to 2023. Tuesday was more of the same. At one point, late in the evening, when everyone was visually exhausted, the City Manager seemed to express everyone’s frustration questioning what more he wanted. What Vaitla demonstrated was more filibuster than leadership.
Ron, I absolutely watched the meeting. And none of the Council members addressed any of the three questions … and you didn’t answer any of them either.
How many Affordable homes will be owner occupied? While several council people expressed preference for private ownership of the Affordable housing the city wanted the flexibility to figure that out as market conditions dictate.
Is an apartment a home or a residence? Depends. In general an apartment resident doesn’t build equity. Those are called condos.
Will any Davis residents be able to downsize. I don’t know but I have a neighbor who recently did that moving to the West Davis Active Adult Community so there is already a project designed to fill that market niche.
“My observation about last night’s Council meeting was that the members of Council were performing a whole lot of clerical minutiae, and displaying precious little leadership.”
Matt, what you call clerical minutiae I call governing. Mayor Neville’s leadership and negotiating skills exceeded expectations for someone’s second meeting as Mayor. There was certainly some sausage making that required clerical minutia but I can easily forsee people complaining if the details were less well defined.
For what it’s worth – I didn’t watch this meeting, but I did watch the previous one where Bapu Vaitla “tore the proposal a new one”, so to speak. And seemingly shocked Neville in the process.
Needless to say, I gained a newfound respect for Bapu Vaitla, even though I disagree regarding his motivation (Affordable housing).
But clearly, those who actually value Affordable housing would be better-served by Bapu Vaitla.
Honestly, if the developer can’t (or won’t) even make this work with whatever Bapu (and others) seek, it’s not likely to succeed among those who think the developer can do better, than what they’re proposing. (In other words, the Affordable housing activists.)