DAVIS, Calif. — Davis city staff are proposing a significant shift in how developers satisfy affordable housing requirements for ownership projects, advancing a proposal that would require builders who dedicate land for affordable housing to also provide financial resources to ensure the homes are actually constructed.
A staff report for Tuesday’s council meeting recommends that the City Council consider introducing an ordinance amendment requiring developers who select the land dedication option to provide not only land, but also “adequate resources to realistically allow” the required affordable units to be constructed.
The proposal would apply to ownership developments of five or more units.
Under existing rules, developers of ownership projects must meet inclusionary housing requirements through one of several options: building affordable units on site, acquiring and recording permanent affordability restrictions on existing homes in the city, paying in-lieu fees, submitting a project-specific affordable housing plan, or dedicating land to the city for affordable housing development.
The land dedication option is calculated using a density assumption of 15 units per acre, with a two-acre minimum.
Once land is dedicated, the city becomes responsible for securing an affordable housing developer and ensuring the required units are ultimately built.
The city has not historically developed those units directly, but it has almost always been asked to provide gap funding through grants or its affordable housing fund to make projects financially feasible.
Prior to 2012, the former Redevelopment Agency provided a dedicated stream of affordable housing revenue. When redevelopment funding ended, the city lost that ongoing source of capital. As a result, land dedication projects have often required the city to assemble substantial subsidy dollars to move them forward.
The current proposal emerged following a Dec. 16, 2025 City Council discussion in which Councilmember Bapu Vaitla raised concerns that the value of land dedicated under existing rules frequently represents only a fraction of the total cost required to construct the required affordable units. In response, staff and the city attorney drafted amendments intended to address what the report describes as an imbalance between land value and actual construction costs.
The proposed ordinance would require that any developer using the land dedication pathway also provide “adequate resources to realistically allow for the total number of units required” to be constructed.
In addition, staff and the developer would be required to conduct “an exploratory review, including evaluation of supporting financial information, to assess the adequacy of available resources.”
The amendment would incorporate that requirement into ownership projects of five or more units, as well as larger ownership developments of 201 or more units.
The land dedication standards themselves — including the 15-units-per-acre calculation, two-acre minimum, infrastructure and zoning requirements, environmental review standards and irrevocable offer provisions — would remain unchanged.
What would change is the financial expectation attached to land dedication. Under the proposal, land alone would no longer be sufficient. Developers would be required to demonstrate that meaningful resources accompany the land so the city is not left solely responsible for securing construction funding.
The staff report identifies both benefits and potential complications. On the positive side, requiring resources in addition to land could increase the likelihood that affordable units are actually built on dedicated sites, rather than relying on uncertain future subsidies.
At the same time, staff acknowledges that the language introducing an “adequate resources” requirement is inherently subjective.
The City Council would determine whether a developer’s proposed contribution meets that standard on a project-by-project basis.
The report notes that state housing law requires cities to maintain more than one objective compliance option in addition to direct construction of units, raising questions about how the revised land dedication pathway would be categorized.
Staff also flags timing concerns.
Affordable housing projects typically assemble their full capital stack after entitlements are granted, because certain public funding streams require approved projects before applications can be submitted.
As a result, developers seeking project approvals may not have their entire financing package in place at the time the Council considers their applications.
Requiring proof of “adequate resources” at the entitlement stage could therefore complicate implementation or create higher barriers for proposed ownership projects.
Staff notes that changing the requirement for land dedication could result in fewer housing proposals or lead to allegations that the city has imposed onerous requirements.
Conversely, the report suggests that receiving resources in addition to land could make it more likely the city moves forward with construction on dedicated sites.
The Council has several options.
It may introduce and advance the ordinance as drafted, decline to adopt it and retain the current framework, or modify the proposed language to clarify what constitutes adequate resources or when such resources must be demonstrated.
Staff also notes that a broader modernization of the ownership housing standards is anticipated in the future, though that comprehensive revision is not yet ready for Council consideration.
Staff formally recommends that the Council consider introduction of the ordinance amendment to add the additional expectations tied to land dedication. The report does not recommend rejection or deferral, instead presenting draft language for potential introduction and further deliberation.
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“Staff notes that changing the requirement for land dedication could result in fewer housing proposals or lead to allegations that the city has imposed onerous requirements.”
That is how I see it.
Is there a fiscal analysis of how this would effect project viability?
My initial take is the same as yours.
I can’t imagine any developers would be willing to develop under these rules. Did anybody speak to local developers to get their input on these requirements?
Does anyone ever ask developers to provide evidence of their claims?
I can think of more than one example where they claimed that something didn’t “pencil out” (but ultimately did).
But hey – if you want to take their word for it, that certainly makes the process more efficient at least.
Turns out that McMansions pencil out, regardless.
“ Does anyone ever ask developers to provide evidence of their claims?”
I’ve often asked various folks to walk me through the numbers. Not on this one yet. But eyeballing it doesn’t seem like a wise policy
I guess it depends on what the goal is.
If folks want to approve peripheral developments that don’t contain any funded Affordable housing component, then I guess the status quo is satisfactory to them. Certainly, the market-rate housing would be built.
Due to the state’s housing “mandates”, there’s likely a lot more competition for very limited state funding (for Affordable housing).
And any Affordable housing proposal that is funded in one locale is one less proposal that isn’t built elsewhere. The pot of state money is essentially fixed, and doesn’t increase when the number of proposals exceed the amount available.
The funding situation for Affordable housing is remarkably similar to “poaching students” from other districts.
In other words, no net gain regarding the supposed overall goal.
. . . and there goes any chance of anything being built on the periphery of Davis ever again. Ironically, the far-left will end up doing more to end development in Davis than Measure J ever will.
Congratulations?
Yes, if we take control of the planning process and tell the developers exactly what we want ahead of time. There are many of these types of developments being built elsewhere in the region so clearly they are profitable. Our problem is that we play a shell game with them that discourages good planning.
The better solution is to require a large share of market affordable housing as an offset to Affordable housing, e.g., 3 to 1 ratio, and force the developers to comply with the City’s CAAP by going with the environmentally preferred alternative such at Alt 4 for Village Farms and Alt 3 for Willowgrove. The developers will still make a bunch of money. Developed urban land (which what the developer will sell to builders) is worth $1.75 million per acre according to my property tax bill.