By David M. Greenwald
Executive Editor
Can Cities Avoid Housing Laws By Going Charter? Article Suggests Don’t Count on It
Yesterday, the Vanguard reported that AG Rob Bonta announced his office would appeal a Los Angeles Superior Court ruling that invalidated SB 9 for Charter Cities.
As CalMatters reported last week, “The late April opinion from Los Angeles County Judge Curtis Kin held that a 2021 state law letting homeowners split up their houses into as many as four separate units regardless of local zoning restrictions had no effect in Redondo Beach, Carson, Torrance, Whittier or 
Del Mar.”
The reason: those jurisdictions are “charter cities.”
“The April ruling opened up a new potential strategy,” the article continued.
Just don’t count on it.
CalMatters explained, “Many legal experts are skeptical that the ruling will hold — and if it does, whether that would be the death blow to state land use authority that many local control advocates hope it will be.”
“If I were looking to become a charter city in order to avoid (the state’s duplex law), I would not waste my time,” said UC Davis law professor Darien Shanske. “This decision will be overturned.”
While the constitution does not “actually specify what Municipal affairs” are, the article notes, in general, the courts have allowed the pro-housing laws to apply to all cities regardless of status.
“The courts generally have not been very receptive to charter city arguments given the housing crisis,” Barbara Kautz, a land use attorney who regularly represents cities and counties, told CalMatters.
While the April ruling is a notable exception to that trend, Kautz believes “it’s also exceedingly narrow one and not something on which to hang a legal revolution in land use policy.”
She told CalMatters, “As a long term strategy to avoid (state housing law), I just don’t know if it would have any effect.”
So for those thinking they might be wanting to go charter city to avoid housing laws—watch this case but, again, probably not.
UC Davis Unlikely to Provide More Money to the City
Once again a commenter suggested that UC Davis could alleviate the need for the city to raise its sales tax. Once again, that seems very doubtful.
One person writes: “If UCD were a for profit company inside the Davis City limits the City of Davis would be a very wealthy municipality. Instead Davis get’s nothing directly from UCD and only a very small amount of secondary sales tax revenue. It’s time the UC’s start contributing financially directly to their host cities to help cover their impacts.”
First of all, as I pointed out last week, that doesn’t seem likely to occur.
But second of all, if it did occur, it is likely that UC Davis would transfer the costs to the students in the form of increased tuition.
So are we really going to argue that students should subsidize our lifestyle here in Davis? I don’t see that as a viable solution.
Advocate Argues Building More Doesn’t Fix the Housing Crisis
Michael Weinstein, the president of AIDS Healthcare Foundation, the largest global HIV/AIDS organization, and AHF’s Healthy Housing Foundation, puts forth an argument in the Hill this week that we need to do more than just build housing.
Here’s the crux of his argument:
There is general agreement about California’s severe shortage in affordable housing, but not enough progress being made. The homelessness and housing affordability crises are solvable, but the solutions lie in reversing the policies that dug this hole in the first place.
Corporate landlords own a larger share of rentals than ever before; they spend tens of millions of dollars fighting renters’ rights and opposing policy fixes like rent control.
The dominance of landlord groups such as the California Apartment Association corrupts our entire political structure. Multiple Los Angeles City Council members have been indicted and jailed over pay-to-play development schemes, many of which involve luxury developments pushed in low-income, inner-city neighborhoods, even though there is currently a glut of luxury apartments.
Surprisingly, many liberals who eschewed Reagan-era “trickle-down” economics have subscribed to the false notion that if you build anything at all, it will alleviate the affordable housing crisis. But the opposite is true — when you gentrify an area by putting up luxury buildings in working-class neighborhoods, thereby making them more desirable, surrounding rents go up, not down.
His solution: “adaptive reuse.”
In order to increase the affordable housing supply in the short term, it actually needs to be affordable — both affordable to rent and affordable to supply.
If you spend $700,000 to build an “affordable” unit, it will have to be heavily subsidized for years on end, severely limiting the number of units that can be produced in these times of local and state budget cuts.
But what if that cost could be whittled down to $100,000 a unit?
There is only one way to do this: adaptive reuse.
Thanks for reading…
This blog entry suggests that UCD and the state of CA paying for impacts UCs have on host cities amounts to students subsidizing the lifestyles of Davis. Ridiculous. UC Davis is a massive state institution (one of the largest employers in all of California), and it benefits the larger region and the entire state, while its impacts are focused in one small city. UCD’s lack of direct tax to contribution to Davis while draining resources makes Davis a poor municipality. It is not reasonable to expect the residents of one small city to subsidize the education of students from all over the state. If individual residents want to do more to fund the school, well they probably have already received a fundraising letter in the mail that tells them exactly how they can make a charitable donation.
It is simply not reasonable to expect a single small town to carry the financial burden of a state institution on it’s back
UCD contributes $1 billion to the Yolo County economy and increases the residential property value within City limits by at least 50% compared to every comparable Yolo and Solano city. Further, UCD provides its police, fire and health care services as well as utilities and waste management, all for about 20,000 people on campus. In addition, no other state university pays local taxes to its community. There’s two sides to the equation, and on net, the City is unlikely to gain from annexation. That’s why the City didn’t accept West Campus when UCD offered it in 2005.
It’s obvious comparing Davis to neighboring cities that we are not a “poor municipality”. Our problem is a lack of development of retail and manufacturing businesses that generate tax revenues locally. We will be in distress as long as we’re a bedroom commuter community.
A for profit company would contribute to the local economy AND pay taxes. Of the contribution to the regional economy, only a small fraction of that ends up in Davis, and even less makes it’s way to City coffers but Davis is faced with big impacts. Further, UCD doesn’t even help fund local charities like the food bank or homeless shelter. It also does nothing for the school district.
The complaint about the local economy lacking retail development is misplaced. The entire commercial part of the cannery remains undeveloped and downtown is losing businesses. Retail development could be happening, but isn’t. As to manufacturing Matt has done a good job addressing that.
Rich really put his finger on the issue when he points out that Davis is a bedroom community with inflated housing prices. Davis is first and foremost a bedroom community to UCD and that does inflate housing prices. That is exactly the impacts I am talking about and that is why UCD should start paying into the City of Davis Housing Trust Fund.
UCD is the one local organization that could do the most for housing affordability in Davis by establishing annual contributions to Davis affordable housing. It is the right thing for UCD to do, since as Rich points out, the housing market is inflated because of UCD.
And when you build million-dollar homes in car-centric developments on greenfield peripheral sites, you get higher housing costs throughout the city while merely scratching the surface of affordable housing needs. Thus my continued opposition to the proposals currently on the table, and my ongoing support of Measure J.
The answer isn’t Measure J because it leaves developers guessing at what we want. The answer is a clear set of baseline feature requirements that specify those objectives and a provision that gives clear approval without having to pay for a political campaign full of disinformation spread to a disinterested electorate who have better things to focus on. Those baseline feature requirements would be approved by voters. Any developer who wants to ignore those requirements would go through the standard Measure J/R/D process.
“There’s two sides to the equation, and on net, the City is unlikely to gain from annexation. That’s why the City didn’t accept West Campus when UCD offered it in 2005.”
That isn’t why West Village wasn’t annexed. It wasn’t annexed because the elected City Council members and Supervisor at the time didn’t want it annexed. The Supervisor claimed it was about sales taxes from the Bookstore that went to the County and members of the CC at the time didn’t want all those students voting in City elections. There was also a dispute over whether the housing would count towards our Sacog requirement if it were annexed.
The council position at the time reflected the council split that prevailed on many issues. All three parties (city, county, UCD) would have to agree and it would have had to be revenue-neutral for all of them, which was basically impossible.
Here’s the Vanguard from 2010, a couple of years later when the issue resurfaced:
https://www.davisvanguard.org/2010/02/council-discusses-the-issue-of-annexation-of-west-village/
Those could be official arguments made at the time but UCD was willing to negotiate an MOU to pay its share while the City and the County weren’t interested. Gary Sandy was representing UCD at the time and told me he didn’t think I knew what I was taking about until I brought up how the housing would be counted by Sacog.
A member of the Cc at the time told me they were worried how students would vote if their interests differed from those of City residents.
The report that Don cites is the correct version. Maybe a council member was also worried about the vote but that was secondary. The City wasn’t having good experiences with MOUs with UCD at the time so was skeptical. This is consistent with my point.
The university WOULD be an insanely powerful driver of revenue for the local community if we did either of two things:
1) Allow more retail to serve the student population ( not making people drive out of town to shop)
2) Create space to retain for the billion+ $$ valuation startups that emerge from university, or who locate here because of local intellectual talent… People dont see a lot of this, but we have multiple agtech companies that have gone public here in town, and with the recent advances in genetics, we stand to be the world center for a revolution in crop science and agricultural robotics, renewable energy and sustainable materials….
But we have opted to mostly just be housing… and single family housing is net negative revenue wise in the long term…
1) Show me a retail project that has been turned down anytime recently. No retail project has come forward for the retail space at the cannery, UMall has no increase to retail space despite being redeveloped.
2) Any new large scale tech businesses would come with their own new impacts compounding Davis’s problems and of setting the potential benefits new revenue streams with new impacts that need to be mitigated. You can’t just fill a hole by digging a new hole – you still have a hole.
It is time for UCD to be part of the housing affordability solution. UC Davis should contribute directly to the City of Davis Housing Trust Fund. UCD is helping fund affordable housing around the new Aggie Square project in Sac – they can do that in Davis as well.
That’s because The Cannery is a ridiculous place for retail.
Don, there are probably quite a few reasons why The Cannery is a less than ideal place for retail. I can certainly think of some,what are the key reasons from your perspective?
The City of Davis has had a long approached retail demand as coming only from its own residents/constituents. The idea of Davis as a retail destination that could attract “other people’s money” has been an anathema. Given that significant constraint, when one looks at a map of Davis, isn’t the southern edge of The Cannery “well located” with a significant population of homes and/or businesses full of Davis residents/constituents surrounding that location?
With the above said, if Davis were to actually make an effort to have a destination retail economy that attracts “other people’s money” then The Cannery’s remoteness from any freeway exit/entrance is definitely a drawback.
The simple answer is no.
Don, you have all of Wilodhorse, all of Green Meadows, all of Slide Hill, all of North Davis above 8th Street, all of the Cannery, all of Northstar, all of Grande, and all of Covell Park. I don’t know what the population of those neighborhoods is but it is at least a quarter of the Davis population, possibly a third. Where is there a population center in Davis outside of Downtown that has that kind of concentration of Davis households?
But that doesn’t take into account the other half of the equation – the proximity to existing commercial.
Proximity to existing commercial?
What non-Downtown location in Davis has proximity to existing commercial?
What form of retail demand does the existence of commercial contribute to I can see services (like restaurants and bars) demand being a biproduct of the existence of commercial, but I’m not coming up with incremental retail demand. What am I missing?
There are several problems with retail in Davis. First has been a fantasy about protecting local businesses. Unfortunately that hasn’t borne out and we are left with legacy hangover as Vacaville, Woodland and West Sac have cannibalized our local demand. It hasn’t been so much that Davis has discouraged demand from outside as we’ve exported our demand to other places.
In a related policy, Davis has overemphasized protecting downtown businesses while also making it more difficult to sustain those businesses. We’ve made accessing downtown more difficult by failing to modernize the Richards underpass and making the opening of a new business there arduous.
Third ins the failed attempt to focus on neighborhood shopping centers. At least 3 of those are struggling. The floor space limits that discourage many types of large retail has made this worse.
If we decided that East Covell could be a new commercial center then we might find that we can solve the retail drought.
The Cannery is a retail deathtrap.
That is an interesting comment Walter.
Care to elaborate on why you feel that way?
Another way to look at the Cannery retail space is that shopping centers on Covel/Mace currently have the best overall track record for success. There may even be a synergy to locating on Covel. There are certainly a higher percentage of vacancies in Davis shopping centers not on Covell. One might even start to think that easy Covell car access to retail and ample parking helps retail thrive.
Is there enough demand for another shopping center on Covell? It probably depends on what located there. If the Cannery is not a good place for new retail, the bigger cause may actually be that brick and mortar retail is struggling all across the country and that money for new retail construction even with high interest rates is hard to come by rather than that Davis is inordinately more hostile to retail.
Agglomeration of retail and services can multiply local business activity. That’s what downtowns are and will be about. There’s lots of places where retail thrives, but it’s about experience and choices.