By David M. Greenwald
While the data is more difficult to parse then you might think, in part because the huge percentage of students who live in Davis likely drag down the median income, the cost of housing is clearly a problem.
A recent study examined data for around 592. In order to determine the affordability of home purchases, they used the average home price data for each city for homes with between one and five
bedrooms, and then they used census data to determine “the distribution of households in homes of different sizes for each city and combined this data with the home price data” this allowed them to create a weighted average housing price for each city.
It is an imperfect measure to be sure, but then again, it gives us a ballpark figure of comparing actual cost by indexing the home price to median income.
The result—a whole bunch of cities in California are really expensive. Davis is one of them.
“The most affordable homes were mainly found in small and midsize midwestern cities, with a sprinkling of southern cities as well,” the study found.
On the other hand, Palo Alto, to no one’s surprise is the nation’s most expensive city with the five least affordable in California: “with Palo Alto, Newport Beach, Santa Monica, Santa Barbara, and Berkeley leading the way.”
They broke the list down by small, midsize and large cities.
On the small cities list, Davis checks in at No.7 and 9 of the 10 cities on the list are from California, with only Miami Beach (not to be confused with Miami which makes the large city list at No.5) not from California.
In fact, of the 30 cities list in the three lists, a whopping 25 are in California. The exceptions: Miami Beach, Honolulu, New York, Miami, and Boston.
Overall they found, “80% of the top 50 most unaffordable cities in the nation were located in California, and the state also dominated the top ten, taking all top ten positions. Palo Alto, California was the nation’s most unaffordable city, with a price-to-income ratio of 16.7, and other major cities in California were also among the most unaffordable, including Los Angeles (#11), San Francisco (#15).”
The data looks reasonable for Davis—the 10th least affordable city overall. Average home price of $664,773 with a median household income of $60,619. While that is clearly weighted down somewhat by students, it is notable that college towns, while present, aren’t dominating the list—Palo Alto, Santa Barbara and Berkeley join Davis on the list, but a number of non-college towns like Newport Beach and Santa Monica are also prevalent.
One key factor here: while Davis has nowhere near the median home price of the top 5 on the list, all of which top $1 million with the exception of Santa Barbara, median income is far less as well. Even if you want to argue that is weighted down by students, that data is likely fairly accurate.
In a sense, this may be worse because a lot of the homeowners in Davis purchased their homes when housing costs were far lower in the 80s and early 90s. Housing in Davis may be less affordable than these metrics would suggest.
None of this of course is surprising. But it does factor into points we have been raising over the last week concerning affordability of housing and the shrinking middle in Davis—families and middle age (30-55) and middle income people in this community. All of this should help to focus the conversation over the next Housing Element and General Plan.
But while there is a huge focus here on housing, the picture here is not just housing but jobs to housing, and the lack of high paying, private sector jobs to complement the university. All of this should be a focus of discussion and concern, but hasn’t been.
—David M. Greenwald reporting
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So the position of the article just assumes that unaffordability is simply a bad thing.
Other than school funding (which I think is debatable to a degree), I still haven’t heard a reason to embrace growth. I’m not dogmatically against it. But I don’t think it’s unreasonable to expect some beneficial reasons from the policy makers for embracing growth.
But so far most of what I hear is how bad it is that Davis is so expensive; think of the poor students (who are here because of UCD and it should be UCD’s problem to house them) and everyone else (who could just as well live in Dixon, Woodland or West Sac). There’s some assumption that we should simply feel bad for these people and adopt housing policies to accommodate them.
This is the key point that I’m glad David brought up. It is my belief that if there is any beneficial residential growth to come to Davis that it should first come from the commercial sector. What you don’t want is for Davis to become a bedroom community. That’s where Davis incurs the expense of supporting services for communities that work and spend their money else where. What you want is commercial growth to further fund the city that is then supported by residential growth. If growth (both economic and population) is what the city wants.
The only thing ‘bad’ about Davis’ cost of living is that Davis voters took what started out as a well-intentioned means of citizen control over peripheral growth and turned it into a ever-giving slot machine of keeping property values high via Measure JeRkeD. Vote yes, and keep your life investment value ever rising! Dåmn the majority renters! They don’t vote or can’t vote anyway.
You might recall that another commenter on here (who has been banned) put forth a detailed analysis which showed that Measure D is not having the impact that you believe.
Regardless, as long as Woodland (in particular) is continuing to build the type of housing that families desire, that’s where they’re going to go. Assuming that growth even continues, in an area without massive job growth.
Of course, housing in surrounding communities is also likely having a dampening impact on the price of housing in Davis.
It’s not just the price of housing itself, either. Various taxes/CFDs are significant for new housing, as well. (We won’t get into the entire cost of home ownership.)
In any case, new housing in Woodland is usually in the $500-$600K range (and more), as can be seen in the link below. How is it that some believe that another housing development in Davis is going to lower housing prices? Did the Cannery lower housing prices?
Here’s some other “news” – families want a place to park their car (assuming that they don’t fill up their garages with junk, and end up parking on the street). And, they’ll get it in communities like this:
https://www.lennar.com/find-a-home?state=CA&market=SAC&city=Woodland
But yeah – the premise of this article is absurd in the first place, as it’s including income of students in the median income. Not too many students are going to be able to buy a house, unless their parents do it for them.
As they say, don’t pˆss on my shoes and tell me it’s raining.
“put forth a detailed analysis which showed that Measure D is not having the impact that you believe.”
Which was hotly disputed and failed to index for a number of factors.
” the premise of this article is absurd in the first place, as it’s including income of students in the median income. ”
We don’t actually know to what extent that is true, I put it forward a caution. However, given that several other communities on the list are college towns and several aren’t, it allows us for a perspective. Even without the students, the likelihood is that Davis would be on the list.
Quote: “put forth a detailed analysis which showed that Measure D is not having the impact that you believe . . .”
As they say, don’t pˆss on my shoes and tell me it’s raining.
And even more to the point, don’t hire some expert-witness meteorologist to prove it.
Believe whatever you want, but at least one of the articles still exists:
https://davisvanguard.org/2018/10/comparison-regional-housing-growth-housing-cost-increases/
But again, I’d ask the developers how much they’d “lower housing prices” as a result of a new development.
I think you ask the wrong question. You’re not going to lower housing prices with a new development. In fact, probably the obvious since new homes sell for more than older homes. But constraining supply will cause housing prices to rise much more quickly than increasing supply.
I’ve said it here before many times; yet it doesn’t seem to sink in for many people here:
New home construction does not bring down or even stabilize housing prices in their markets. Homebuilders do not go into a project with the intention of lowering an area’s housing prices. In fact it’s their job to bring housing prices up by building nice new homes with all the fixins and create the upper end of the housing pricing spectrum in a community.
You’d have to massively expanded infrastructure and plan out a project that hasn’t been seen since Levittown in New York and Pennsylvania when the intent was to have mass affordable homes available for returning G.I.’s…in order to impact home prices.
And none of this even addresses WHY does a community want to expand?
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The question that flows from Keith’s statement above is “If the City of Davis is not currently a bedroom community, then what is it?”
There are several different ways to approach answering that question. One way is to use US Census information available from https://onthemap.ces.census.gov/ . To get City of Davis information choose Places (Cities, CDPs, etc.) from the drop down menu immediately below the Search window, and then enter davis in the Search box itself. Then choose Davis city, CA and after you click on the Perform Analysis on Selection Area link in the subsequent window, the following window of choices opens:
You then choose either Home or Work, the Analysis Type, a Year, and a Job Type category. Choosing Work, Inflow/Outflow/ 2018, and All Jobs produces the following report.
What does that report tell us about Davis?
· We have 24,520 people living in the City Limits who are employed
· 4,173 of them are employed within the City (26%)
· 20,347 of them are employed outside the City (74%)
Bankrate.com defines a bedroom community as “a residential area in which a large number of people live but do not work. They come home to sleep, but the rest of their lives are spent where they work, socialize, and take part in activities that interest them.”
The 74% figure from the above Census numbers appears to match that definition pretty well.
Another statistic from the Census adds weight to “the City of Davis is a bedroom community” argument. Specifically, the 2018 Census population estimate for Davis is 67,988. That means the 24,520 Davisites who are employed represents only 36% of the population. Said another way, according to the Census, 64% of Davis’ residents are not employed.
The 2018 Age and Sex breakdown of the 67,988 can be seen HERE, with
· 22.4% in ages 0 through 19 (the DJUSD age group),
· 26.5% in ages 20 through 24 (the University/College age group),
· 11.0% in ages 65 and over (the retired age group), and
· the remaining 40.1% in ages 25 through 64.
The bedroom community label is further reinforced by the fact that the bulk of the University/College age group have a primary “job” as students outside the City Limits at either UCD or a further distant educational institution. Paraphrasing the Bankrate.com definition “They come home to sleep, but the rest of their lives are spent where they go to class, socialize, and take part in activities that interest them.”
The OnTheMap census data provides us with one final piece of bedroom community evidence. There are 15,607 jobs in the City of Davis, of which only 4,173 (27%) are filled by Davis residents, while the remaining 111,434 (73%) are filled by people who commute to Davis from places beyond the City Limits.
So, the evidence is very compelling that the bottom-line is that the City of Davis is already a bedroom community.
“So the position of the article just assumes that unaffordability is simply a bad thing.”
That says it all right there.
Like we all just carelessly assume homelessness and kids and families going without is simply a bad thing.
Like we all irresponsibly assume that human misery is a bad thing.
How thoughtless of me to make such assumptions!
One has to look at what the “supply” consists of – e.g., “competing” communities, such as Woodland. One also has to consider “demand”, which you consistently ignore:
Adding high-paying jobs increases the cost of housing – as can be seen throughout Silicon Valley and the Bay Area.
You’re being silly, you know full well that Davis housing costs far more than surrounding communities and there is a reason why that’s the case.
Adding high-paying jobs reduces the housing/ median income ratio. making the cost of housing more affordable.
I’d suggest that it’s primarily the presence of UCD, and secondarily – “quality of life” in Davis (the school system, bike paths, relatively low crime, etc.). (Also, proximity to Sacramento, and the job market there. Without all of the “drama” from living in Sacramento.)
The difference in housing prices existed prior to Measure J/R/D. Again, surrounding communities are absorbing much of the demand. Now, if one could control what they do . . .
Apparently, you’re claiming that the Bay Area has no “affordability” problem.
Truth be told, I think that (given your point of view), you ought to just come out and honestly state your desire to get rid of Measure D. Seems to me that you’re frightened to do so, given its popularity. But popularity is not a reason for anyone to lie about what they actually think. (Other than a politician, perhaps.)
You’ve got another 9 years or so to work on it.
Adding high-paying jobs reduces the housing/ median income ratio. making the cost of housing more affordable.
Affordable? Maybe. Brings down the cost of housing? No. It wouldn’t help teachers, policemen and even workers at UCD that make less than full professors. You’re fixing the ratio but exacerbating other problems. You’d end up with those people living in Woodland, Dixon, West Sac…etc…. Is that a bad thing? Yes? No? That’s another but related discussion.
I think the underlying assumption is wrong; that new home construction will significantly impact housing supply. The point being that homebuilders aren’t going to build to the point where it impacts home prices negatively (I know…I used to do these calculations/market projections for potential new developments). And it’s a moot point because of Measure J makes it impossible for expansion (should there be a reason to do so in the first place) nearly impossible anyway.
I agree that simply adding jobs will not solve the problem. I also agree that simply adding housing will not solve the problem. We have to find ways to create affordable housing that can provide the type of housing we need. But not only do we run up against Measure J, we run up against the difficulty of providing affordable housing. There is a reason we have the problem that we do. One thing that is pretty clear to me – if you believe we have a problem, doing what we are doing now is not working. If you don’t believe we have a problem, then no need to have this conversation.
You want your cake and to eat it too. Didn’t you support reupping Measure J in the last election?
To me that kind of sounds like a binary limited view of the situation that lacks nuance.
First things first. You still have said WHY you want housing to become more affordable and for there to be growth in Davis. Other than the debatable school funding issue; it just comes off as some moral imperative (who has a right to live anywhere?) and not a reasonable stance. Like I said…for me…I’m not against affordability and growth in Davis but I want a tangible benefit from that growth.
To me affordability and growth are related but different subjects to be addressed by policy. Growth policy should be based on what best impacts the existing residents of the community. So does that mean commercial growth which provides funding for the city and the residential growth that supports the commercial growth?
As far as affordability goes; why and for whom are you making housing affordable? You can’t just easily build your way into affordability. Nor should you as that kind of growth needs to be justified as benefiting the existing community. But targeted affordable housing that benefits the community can be done. Grande Village had housing reserved for DJUSD teachers (I believe the property was originally DJUSD’s property?). Affordable housing solution for police, teachers firefighters etc….those that support the community can be justified if they get priced out of housing because of higher paying jobs and supply constraints (that again can’t be fixed by simply building your way out of it through conventional means). If an economic opportunity comes to Davis and the business says it needs housing (affordable or otherwise) to operate then the city of Davis should consider it.
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David’s statement above is only correct if the rate of increase in high-paying jobs is not offset by the rate of increase in the UCD student enrollment. Adding additional students whose income is either zero, or the small annual amount they earn from part-time jobs, will increase the housing/ median income ratio.
Further, the high-paying jobs will only reduce the housing/ median income ratio if (1) the person filling the job actually chooses to live in Davis, and (2) the residence that they purchase was previously owned by someone whose annual income was lower than theirs.
There is another massive flaw in using the housing/ median income ratio in cities like Davis where the proportion of residents who rent rather own is high. If the median income calculation excluded renters it would eliminate most of that massive flaw.
Bottom-line, for Davis, the study is doubly damned by the high proportion of students and the high proportion of renters.
As the old saying goes, “Figures lie, and liars figure”
Untrue. In many situations, but then we get to…
Very true, as to the first sentence… mostly true, particularly in recent markets, as to the second sentence…
And, locally, Davis actually required “bells and whistles”, like required landscaping/irrigation in front yards for new construction, as a condition on the developer… not a big cost item, but a signal…
The City ‘planners’ also pushed for all interior amenities, for ‘affordable housing’, as an “equity issue” thingy… no formica counters… no ‘basics’ for interior… had to be “bells and whistles”… THAT was a big cost item, and flies in the face of ‘affordable housing’… ex.: one for every full bathroom for every room… state of the art appliances…
One cannot be all things to all people, if one wants to control costs… unless one wants to operate at a loss…
For the listed smaller communities in California and wealth measurement in terms of residential real estate, there are several cities missing here.
Piedmont, Atherton, Beverly Hills, Rancho Palos Verdes, Los Altos Hills (to name just a few) are all small incorporated cities in California with enormous wealth. California ranks among the top “nations” in terms of GNP, so why is it such a revelation that our real estate is proportionately the same?
It’s relative to wealth of population. Davis #’s counted students. So relatively un-wealthy compared to cost of housing is the measure and why Davis ranks so high.
The wealth of those students would change appreciably if the wealth calculation included their parents, who are frequently (but not always) paying the tuition, room and board for their student children.
Matt – maybe you can find out just how many students are showing up on the census data here.
David, give or take a student or two, the numbers in my other comment are probably pretty close … 26.5% in ages 20 through 24 (the University/College age group),which amounts to 18,014 City of Davis residents.
Some of that number will be going to a college/university different than UCD, but some of the UCD students will be younger than 20. Those two marginal adjustments will probably offset one another, so 18,000 + or minus 1,000 seems like a good approximation.
How will it help focus the conversation? Look at the map that was put out in advance of the public discussion of the Housing Element. There’s nothing to work with. Building housing for “families and … middle income people” would require land that isn’t there. Housing for the people who work in our local service industries and retail stores would require land that isn’t there, except for a couple of sites on the east edge of town, and would require a landowner and developer willing to build housing for a lower return on investment than most consider customary.
As I said earlier in the week, this seems like an exercise in futility. The city’s growth is hemmed in and those who vote here seem to like it that way. I can’t think how the conversation is going to reach or persuade people who have an investment stake in the value of their homes, who no longer have children in the school district, and who think UCD should house everyone who attends school there or works there.
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It is hard to argue with Don’s statement. The more I have looked into this issue the more and more the evidence points to the fact that Davis has been a bedroom community for households where the residents in those households who work go to jobs that are outside the City Limits. Matt Kowta of Bay Area Economics may have specific data on which are the large employers beyond the City Limits for the 20,347 residents in 2018 who are employed outside the City. UC Davis will clearly be the largest such employer with high counts at both campuses. Government-related jobs will probably run second, and medical jobs at Sutter, Mercy, Kaiser and UCD will probably run third.
The decision made many, many years ago to not cultivate jobs (other than service jobs) in the City was just as effective at “hemming in” the city as any of the slow-growth policies, which only began after the year 2000.
The end result of that decision to not cultivate jobs in the City is the following breakdown of the 15,607 jobs that do exist in the City. It is a very clear picture of what “hemmed in” looks like.
— 31.3% in Education and Health Services (4,890 jobs)
— 19.7% in Leisure and Hospitality Services (3,075 jobs)
— 15.2% in Trade, Transportation and Utilities (2,370 jobs)
— 14.0% in Professional and Business Services (2,189 jobs)
That is over 80% of the jobs. And just as importantly, only
— 4.9% in Goods Producing (only 763 jobs)
“But not only do we run up against Measure J, we run up against the difficulty of providing affordable housing. There is a reason we have the problem that we do.”
From the publisher who over the years has supported Measures R and D. Cry me a river.
“The wealth of those students would change appreciably if the wealth calculation included their parents, who are frequently (but not always) paying the tuition, room and board for their student children.”
For some that is true, for others high rents add to the debt burden they will leave Davis with when they graduate.