Building low-income affordable housing is one of the most complicated endeavors in real estate. Every decision we’ve made in designing the Village Farms Affordable Housing Plan has been aimed at one thing: giving these affordable homes the highest possible chance of actually getting built.
We live in a moment when many market rate rental projects are indefinitely stalled because they simply aren’t financially feasible given building costs and high interest rates. Low Income Affordable Housing faces an even steeper climb: rents are just a fraction of market rate, which means developers must find ways to dramatically reduce building costs. Typically, a project must qualify for multiple overlapping funding sources and stack them together until the math works.
At the top of that financing pyramid sits one critical program: the federal 9% Low-Income Housing Tax Credit (LIHTC). This is the most competitive and most powerful source of affordable housing funding in the country. These are credits purchased by banks and corporations to offset their federal tax liability. One positive development: the amount of available LIHTC funding permanently increased in the last tax bill, providing another $1 billion annually in this funding.
When a project qualifies, this funding can cover 70% of construction costs.
The catch? Funds from these credits are fiercely competitive. In California, fewer than one in three applications win this funding. Village Farms is uniquely designed to be that one.
Location is Key
The scoring process for LIHTC funding rewards proximity to community resources. These are points that can’t be manufactured; they’re either there or they’re not. The site we chose, on the corner of Covell and L Street, earns these proximity points across the board.
High-scoring projects are generally located within walking distance of public transit hubs, full-service grocery stores, schools, libraries and parks. The Village Farms Affordable Housing checks all the boxes. It’s walking distance from multiple grocery stores, downtown, and nearby dental and medical offices. It’s directly across from Oaktree Plaza with pharmacy, groceries and businesses like Subway, and Supercuts. Crucially, it earns points for access to all three levels of public school: elementary, middle, and high school. And it will sit adjacent to our expansive new community park – another scored amenity.
Improved Donated Land, Early Delivery and Real Cash
Readiness to proceed is a factor. The land donation for all 360 affordable homes is prioritized at the beginning of the development. The Affordable Housing parcel will be shovel-ready (graded and improved with streets, sidewalks and utilities) before a single market rate permit can be issued.
The value of improved land itself is part of the financing stack. Sixteen acres in a prime Davis location could be valued at more than $24 million. Further, points are awarded for cost-efficient development. By donating substantial acreage, we enable the kind of two- and three-story walk-up construction that reduces building costs by at least 15% compared to taller structures.
Some have questioned our decision to dedicate this land to the City rather than directly to a developer. Setting aside the politics: this is the right call. The City will select the best qualified affordable housing developer and City-owned land provides another meaningful additional advantage in the LIHTC scoring process. This is precisely why the City recommended this path.
Beyond 16 acres of improved land, Village Farms has guaranteed an unprecedented six million dollars cash toward construction. This cash contribution significantly strengthens our competitive position for funding.
It’s unfortunate that an opponent of Measure V wrote an op-ed picking apart the most generous Affordable Housing contribution in Davis history. It’s upsetting that anyone would jeopardize this most promising opportunity for 280 low and very-low income families to have a roof over their heads in Davis.
In regards to criticism of our construction guarantee language, context is key: Davis has never required such guarantees for affordable housing due to complex financing process and timelines. However (on top of unprecedented land and cash) we added an unprecedented commitment to withhold 160 of our premium custom until at least 100 affordable homes break ground. We are not holding back townhomes or starter homes, but the majority of the large lots that represent the most (and maybe only) profitable phase of the project: ie, after tens of millions in infrastructure and transportation improvements are finished and all parks, open space, greenbelts, trails and the Davis Bike Loop are completed. These custom lots are effectively held in reserve as a backstop. It’s a meaningful commitment, structured to allow our missing middle housing to move ahead while the affordable housing financing moves through its complex financing process.
Davis needs housing, both affordable housing and attainable housing, and we need it soon. We want to see families housed. We want to support our schools. And we want to do it in a way that’s actually achievable.
We are local families with deep roots in this community. We have never walked back a commitment or gone back on our word in the over five decades we have been building homes for our community. Village Farms Affordable Housing represents our genuine effort, informed by expert guidance, structured for competitive success, and backed by real financial skin in the game, to bring these homes to the people who need them most.
Please learn more about our seven local families at VillageFarmsDavis.com
Sandy Whitcombe is one of the Village Farms Davis Project Managers and a member of one of the seven families behind Measure V
“The catch? Funds from these credits are fiercely competitive. In California, fewer than one in three applications win this funding.”
So what this means is that when one proposal “wins” in California, another one “loses”.
The same way it works when DJUSD “poaches” students from somewhere else – either by encouraging out-of-district students, OR by encouraging them to move to Davis from outside of the area.
That’s not a good framing. It is true that funding competitive. However, projects aren’t competing in a single statewide, zero-sum bucket. Second, timing matters as projects don’t compete just once. A proposal not funded in round one, could be funded in future rounds – it’s not win or go home, but rather part of an iterative pipeline.
Better way to think about it: This funding is highly competitive, and not all projects are awarded credits in a given round—but projects can reapply over time, and success depends heavily on how well-positioned a proposal is.
“However, projects aren’t competing in a single statewide, zero-sum bucket.”
If they’re not, you’ll need to explain more. It doesn’t matter how many buckets there are, in regard to the point (unless they’re all a bottomless pit).
You’re claiming that the more that are approved, the more that government funding will come forth?
Sort of like, “the more you spend, the more you save”?
Hell, we should just stop building market-rate housing altogether, if that’s the case. :-)
I’d like to have the gov’ment pay for my housing, as well, if there’s a bottomless pit. Can I pick the location? (If so, I pick Tiburon.)
I think David Thompson can explain better how nonprofit developers coddle together grants and streams of money.
And David is skeptical that the VF proposal can gain funding.
The problem is that this Affordable housing project may not be competitive because it lacks good access to transit and is in a neighborhood that is not particularly friendly to pedestrian and bike travel. Other projects that are gaining funding are more transit oriented developments (TOD). Village Farms strayed by not following Alternative 4 in the Draft EIR.
This article makes a false, or least unsubstantiated, assertion that the project can’t be profitable with more restrictions. I ran the calculations on profitability based on various factors in housing development. Here’s a list:
Developed urban land value – my property tax statement shows a value of $1.75M (and that’s constrained by the Prop 13 escalation limit)
Saleable property – we’ll use the 63% that VF has presented in its materials
Investment hurdle rate (the expected return to move forward) = 20% pre tax
Commercial loan for land development = 13.5% at the upper end (the developers may have access to lower cost credit)
Time for land development = 3 years
Based on this, the developers should be able to sell the land for about $330 million. So long as the total development costs are less than $265 million, the developers will gain a sufficient return on investment, i.e.,. be sufficiently profitable.
I have not seen any estimates of these costs approaching this amount. The highest single cost likely will be moving the 1 million cubic feet of soil to raise the northern section out of the flood plain. The developers can obviously avoid this cost by shrinking the foot print by building to the housing density specified in Alternative 4 in the Draft EIR.
The following statement is untrue, when all one must do is look at Nishi 2.0 which passed in 2018 and never got built and is being walked back:
“We have never walked back a commitment or gone back on our word in the five decades we have been building homes for our community.”
Here is the short history of Nishi 2.0, thanks to Microsoft Copilot.
“How the Whitcombe Family Was Involved in Nishi 2.0
The Whitcombe family — through John Whitcombe and Tandem Properties — was central to Nishi 2.0. They developed, promoted, and publicly defended the project, and Whitcombe personally articulated the rationale for the redesigned, student focused plan that ultimately passed in 2018.
Current Status of Nishi 2.0 (as of 2026)
1. Construction has not begun
• The project does not appear on the City of Davis list of “Approved Projects – Under Construction.”
• It appears only as “The Promenade (formerly Nishi Housing)” under projects in planning review.
This means no site work, no grading, and no building construction has started.
2. The developer resubmitted planning applications in 2023…”
So construction HAS NOT begun and the plans ARE being walked back.
One shouldn’t be surprised at the rumors that Nishi 2.0 will never get built and it will go back to a measure J vote to undo the promised student housing, replacing it with offices.
You don’t need to be a basketball player to know a “fake” move when you see one!
What this article is saying is that the affordable housing is a 30% gamble and that someone else has to put the paperwork in ( place the bet), not the developers – does that sound like generosity or a guarantee?
The reason Nishi never got built is because to get it past a Measure J Vote they gave up access to Richard’s Blvd. The railroad then blocked the underpass they wanted and the overpass financing is in limbo or pergatory or something.
“We have never walked back a commitment or gone back on our word in the five decades we have been building homes for our community.”
What about the Nishi project? The Nishi project is John Whitcombe’s (Sandy’s father) of Tandem Properties who own 13 apartment complexes in town.
The Nishi project was approved by a Measure J/R/D almost 8 years ago. That project has been walked back by the Whitcombe’s and his partners. The Nishi project required ONE grade-separated crossing to get over the railroad tracks to access the residential planned. Village Farms needs TWO (actually it needs three) grade-separated crossings. What makes anyone believe that he would deliver on the massive Village Farms project which is, literally, 10X the size of Nishi, AND needs TWO grade separated crossings?
Also, let’s just address the elephant in the room. Are these developers planning to simply flip both of Nishi and if Village Farms gets approved? That is exactly what happened with Bretton Woods and Palamino Ranch, which made a lot of promises which did not transpire once those properties changed hands.
Plus, where is Whitcombe and his partners going to get the capital to develop both of these projects in these uncertain financial times? How well is Village Farms, with its toxics issues, a massive flood plain, and needing at least two grade-separated crossings going to compete for money for any loans, grants, or public funding? Would you invest in this property with all of these problems and infrastructure costs?
Further Village Farms project is NOT building the 360 affordable units! Yet, their glossy AI generated “booklet” implies that they are. That’s not transparency, that is disinformation. Regarding this generous” affordable housing “plan”. This developer is NOT responsible for affordable housing. The only caveat is that the develop “may” (as in “might”) build just 100 affordable apartments only IF the City has not first built 100 affordable units by the second half of the last phase of the project (Phase 3) 10+ years down the road. Plus, the City has a huge loophole that they “may” ask the developer to build the100 affordable apartments.
But then, if he does build the 100 apartments, then the developer gets back his $6 million “donation” plus interest (of whatever has not been spent).
But, by then halfway through the last phase, 90% of the project is built of the ultra-expensive homes (regardless of their size) and the developer will have made a fortune. So, he can simply walk away from building 100 affordable apartments.
Village Farms affordable housing “plan” isn’t a plan, it’s a scam.
Sandy, thanks for the primer on Affordable Housing financing. And pay no attention to the cheap attacks on your family about Nishi. Remember as Taylor Swift sang:
Haters going to hate, hate, hate , hate,
Shake it off.