The City of Davis has often boasted of its innovative and far-reaching affordable housing program. However, as we saw in the early part of this decade, that program has often been abused and the subject of serious impropriety and corruption at the city level. The current DACHA problem is yet another stain on the city’s ability to provide low income people with affordable housing.
The Vanguard has spent a good amount of time on and off over the past year examining the core of the city’s affordable housing program. The bottom line is that Davis’ program fails to provide housing at an acceptable level for people making less than 36,000 dollars per year. Subsequently except for Federal Section 8 Vouchers, the core of the city’s affordable housing program is aimed people making between 36,300 and 58,100 dollars per year. Even for those residents, we might question as to how “affordable” the rental housing is. What follows is a look strictly at rental housing, but we will probably do a follow up for ownership housing.
Defining Affordability
By definition low income households are those that 80% of Yolo County’s median income while very low income households are those that make 50% of Yolo County’s median income.
On surface, this seems to be a reasonable provision until one begins to put actual numbers to the program. For Yolo County, the median income is $72,600. That means that low income is $58,100 and very low income is $36,300. To get 30% of median income, extremely low income, it would be $21,800.
The federal government has defined housing costs to be affordable when they take no more than 30% of a household’s income. For a rental housing unit, utilities are typically required to be subtracted. The goal is that the household pay 30% of its income on all housing-related expenses, including utilities. (Link to utility allowances)
The end result is a series of rent calculations based on number of bedrooms and income level.
For the very low income units, a one bedroom apartment is $641.25 and a two bedroom is $713.25. Move to low income and you have a $1077.50 rent for a one bedroom and a $1204.50 rent for a two bedroom. When you look at the final calculations, one has to question just how affordable these rents are, particularly for the low income units. The very low income units seem more reasonable. 30% in theory may work for people who are debt free, but in reality many are not and these rental prices seem fairly high given the ultimate purpose of the program.
An example would have been the recent Wildhorse Ranch proposed development. The city’s affordable housing ordinance required it to have 15 units affordable to 50% of median income and 23 units affordable to 80% of median income.
All told, there are 1666 affordable rental units in the city of Davis at 38 different properties. That figure includes 63 beds at the University Retirement Community.
Getting Below 50% Median Income
In fact, New Harmony across the board is far more affordable than other projects in the city of Davis. According to Danielle Foster, who supervises the city’s affordable housing programs, New Harmony was able to set its rents at a lower level based on the combination of funding sources and city and redevelopment agency conditions on the project due to the city and the redevelopment agency contributing land and funding. Moreover, the lower rents makes it more competitive in the application process for tax credit financing.
The result is that it’s units are among the most affordable in the city of Davis. Of the 68 units, just 9 are for more than $1000 and 25 are for less than $600.
Even with New Harmony under construction, that is a total of 76 rental units in the entire city available for rent to people making less than $36,000. And while it is certainly true that people might be able to rent rooms or share apartments for less than these rents, that does not work well for families.
That leaves Section 8 Vouchers are the only other option for people making less than $36,000 to live in Davis. Currently there are 245 recipients of Section 8 Vouchers in the city of Davis. This is according to information acquired by Danielle Foster from Yolo County Housing. The city of Davis lists 35 housing sites that accept Section 8 vouchers. (Click here for the full list)
Who is eligible for Section 8 Vouchers? According to the HUD website, in order to eligible the family’s income may not exceed 50% of the median income for the county. 75% of its vouchers go to people whose incomes do not exceed 30%. That would appear to cover people making $21,000 or less.
One immediate question is whether there is any housing available for those making between $21,000 and $36,000 in the city of Davis.
Concluding Thoughts
First, the city has basically set a policy into place that provides housing for people making between $36,000 and $58,000, give or take.
Second, even for those people the rental rates are still fairly high, even if they fall within the acceptable range provided by the federal government. 30% is a high percentage of the income to set aside for housing particularly for people who are struggling with debt–as many people are these days.
Third, the city does not supply sufficient housing for people who make less than $36,000. However, a number of people both at the University and throughout town work at jobs that earn less than that. We are basically telling people that while they can work in the city, they cannot live in the city.
Fourth, we need to evaluate whether this program has done what it claims it is doing–providing low income people with housing opportunities. Again, I’m not sure I would categorize someone making nearly $60,000 per year, low income, even if they are below the median income range. That gets into the range of state workers, teachers, and assistant professors being low income people.
This discussion did not touch the issue of affordable ownership housing. That has been fraught with problems and corruption since its inception. The first problem was that the city originally set a two year moratorium on re-sale, people then were able to sell the affordable home for market rate and thus it was no longer an affordable home. It became a huge scandal in the early part of this decade as city staffers would purchase the property for family members and other relations and then make a killing in two years when the property could go on the open market. As a result, the city imposed a provision to make these homes limited equity. That had the advantage of keeping the units affordable but the disadvantage of preventing individuals from using the program to build equity and be able to eventually move into a market-rate home.
The city has put the issue of affordable housing on the long-range calendar. These are all issues that city needs to evaluate.
—David M. Greenwald reporting
[i]First, the city has basically set a policy into place that provides housing for people making between $36,000 and $58,000, give or take.[/i]
Most of this discussion has focussed on the level of affordability. I have not seen an answer to the question, “How many affordable housing units does Davis need?” If that’s not an important question, then the simple solution is to just let one family live in one free-standing house rent free.
[i]That had the advantage of keeping the units affordable but the disadvantage of preventing individuals from using the program to build equity and be able to eventually move into a market-rate home.[/i]
On the other hand, even if it is just one house, the city has no business helping people who lack money build home equity in Davis. We’ve all heard of limousine liberalism. This policy is limousine welfare. Seriously, it’s cheaper for the city to provide limousine service to a limited income family, than to create off-market home equity. Affordable housing in Davis should be zero equity.
Greg:
“How many affordable housing units does Davis need?”
That’s the other question I’ve been trying to get at, but have not come up with the answer yet.
Greg: “How many affordable housing units does Davis need?”
David: “That’s the other question I’ve been trying to get at, but have not come up with the answer yet.”
So here are some other questions that come to mind. They are not about Davis specifically (as is the question above) but about cities in general. I don’t have an answer for any of them, but I’d be interested in what others have to say (i.e. they are intended to be provocative):
1. Does a city have an obligation to provide affordable housing to anyone?
2. Is there something inherently wrong with people working in one city and living in another nearby city?
3. Does low-income housing increase crime rates in a city?
4. Does low-income housing have a disproportionate impact on city services (police, fire, ambulance, etc.)?
5. Do low-income families increase the burden disproportionately on the local school system?
6. Do wealthier home-owners (and renters) have an inherent financial interest in keeping affordable housing out of a city?
I have some thoughts on some of these questions, but I’ll save them for later…
Wow, Crilly, those are some provocative questions. I too will give my thoughts a bit later, I’ll be interested to see how this proceeds.
Another interesting question is how much does the Davis affordable housing program add on average to the cost of a typical market rate home? Most of these costs are passed on to the buyer, creating an ripple effect that disproportionately impacts the lower end of the market rate housing pool. I’ve heard rumors that, when everything is accounted for, there is something on the order of $50,000 to $100,000 of exactions per new dwelling unit in Davis. This would include affordable housing, open space, ag and Swainson hawk mitigation, a whole host of fees, etc. It seems to me that it is important to understand how affordable housing fits into this overall picture.
To answer your first question, Crilly, I think any city has an obligation to ensure the market is treating its customers fairly — and in the case of Davis, fair treatment has gone out the window.
I think the question is whether even moderate-income people can afford to live in Davis. One of the major problems with this city is that the real estate market is grossly inflated and moderate income folks like policemen, firemen, schoolteachers and virtually any other public servant or blue-collar worker can barely afford to rent here, let alone buy. Many blue-collar folks like myself who work in Davis have to commute here because of this fact.
I think the regular voters in Davis recognize this problem, hence their voting down of Measure X (Covell Village) and Measure P (Wildhorse Extension). I was heavily involved with the “No on Covell Village” campaign and I remember that the sentiment I heard from other No on Xers was not against growth in Davis, but against more McMansions and other unaffordable housing.
All the major developments to come up for a vote in the past year have suffered from serious cases of “greenwashing” — developers tack on a few pseudo-green features to their developments to pander to the “hippies” in Davis without making any real concessions. I attended a conference on architecture & environmental design where Sacramento-area developers discussed this very strategy in regard to Davis quite openly and cynically. With the exception of the tiny number of units they’re forced by the city to build (and then build shoddily, I might add), the developers focus on McMansions that are grossly large and expensive. The working class is virtually excluded.
The only equivalent I can come up with is the automobile market. Davis housing can be described as offering buyers the choice between a Geo Metro and a Bentley sedan — or in the case of downtown, a Ford Taurus at the *price* of a Bentley sedan. There is no mid-range, and sadly the city hasn’t done much to encourage developers to build anything in the mid-range. Any mention of “affordable housing” gets misinterpreted to mean “low-income housing” — which is absolutely not the same thing. But developers love to conflate these two because doing so raises the specter of projects, tenements & crack houses — and allows them to go on building mansions.
With regard to the rental market here, I’m frankly tired of watching cynical realtors and property managers tying increases in rental rates to increases in UC tuition. When tuition goes up, so does the price of a rental unit — all the better to squeeze the rich kids’ trust funds. Again, this isn’t a “conspiracy theory”, this is stuff I heard come straight out of the mouths of developers at the conference I attended.
I — and virtually all other folks I know in the low- to middle-income brackets get the feeling we’re being told again and again that if you make less than $100,000 a year, Davis doesn’t want you. We’re tired of being the subjects of economic bigotry and financial elitism. There’s a middle class here, guys, and we just want an affordable place to live.
David: [i]That’s the other question I’ve been trying to get at, but have not come up with the answer yet.[/i]
What I really don’t like is the showcase mentality, where no one does want to answer this question. With projects like DACHA, the city puts together really expensive affordable housing which, however, is only available to a few people.
Ethan: [i]I’m frankly tired of watching cynical realtors and property managers tying increases in rental rates to increases in UC tuition.[/i]
You’re never going to win this if you’re too far to the left to accept the law of supply and demand. Renting below the market rate is charity. I have nothing against charity, and I’m not a landlord. But if I had the choice, I’d rather pay for birth control for 1000 families in India than subsidize one student apartment in Davis. I do think that it’s a shame that the state has cut the UC student subsidy so dramatically, but charity is not the reason that it’s bad.
If rents in Davis are too high, the only solution is to build more apartments and trailer parks. Instead of blaming property managers who supply what you want, you should look to the voters who cut off the supply.
Does a city have an obligation to provide affordable housing to anyone?
How do we track and project vacancy rates for rentals? It would seem that this is the only reasonable thing to manage to. What is a healthy vacancy rate, 10%?
Is there something inherently wrong with people working in one city and living in another nearby city?
Absolutely not… especially home ownership. Look what social engineering through home ownership got us when applied across the nation. West Sacramento, Woodland, Dixon, Winters… all good places to live within easy driving distances. We should have no moral obligation to provide more affordable housing when these alternatives exist. What do San Francisco blue-collar workers do for housing? As long as we have a reasonable vacancy rate for rentals, we are doing as much as we should do.
It’s also gotten us a society where we have a transportation crisis in part because we do not live where we work. Part of that of course is global warming, but even if global warming were a non-issue we have a problem with transportation, infrastructure, and reliable energy–all of which at least partially emanate from our culture that has spawned the single occupant vehicle commute.
Greg,
You mischaracterize my comments. Great isolation of one sentence to take way out of context. If you’d read my post, you’d have seen I’m not talking about “subsidizing student housing”, and it’s disingenuous of you to make that claim. Not everyone who rents in Davis is a student — and its the perpetuation of this myth that keeps rents out of reach of the regular working-class folks who are the beating heart of the city. Folks who don’t have rich mommies & daddies or a trust fund to subsidize their housing.
Furthermore, supply and demand is one thing; market “fixing” is something else entirely. Folks on the right talk all about the “invisible hand” as if prices are the immutable and inexorable will of God, when in fact the “invisible hand” is frequently quite visible — as it is in this case. Realtors & developers have been quite obviously manipulating this market for years. The Davis market has been manipulated out of the range of affordability, plain and simple. It is this manipulation I refuse to accept, not basic economics.
You say “build more apartments and trailer parks”. Your statement only goes to serve my point: you’re offering a few token Geo Metros to offset an overabundance of Bentleys. I’m going to say this again: in Davis, there is no middle ground! What about the house equivalent of a Ford Escort or a Chevy Cavalier? How about a decent, mid-range, utilitarian product that gets the job done without all the frills and bells and whistles? Not all new houses built in Davis need to be in excess of 2,500 square feet, with a minimum of five bedrooms and a $650,000 price tag. Whatever happened to the single-family home? The townhouse? It doesn’t have to be one extreme or the other. There’s a demand for median-income housing that is not being addressed because it’s not convenient to address, nor is it as profitable as making McMansions and manipulating the market to drive the median home price and median income level higher and higher by telling middle- and working-class folks “if you don’t like it, move.” Ever hear of the term “gentrification”?
In my experience, voters haven’t been saying “no” to supply; nor have they been saying “no” to growth – they’ve been saying “no” to more tracts of McMansions. Granted, they’re tracts of McMansions with solar cells on, some creative landscaping, and a few token low-income units, but they’re still tracts of McMansions. Don’t blame the voters if that’s all the developers have been willing to offer Davis. It’s the developers who have refused to acknowledge the existence of the middle and working classes; the existence of a demand for mid-range housing. The market in Davis is broken, and all the self-congratulatory back-patting in the world does nothing to fix it.
[i]”The city until this year also had a provision to set aside housing for middle income, however for a variety of reasons [u]that requirement has been removed[/u] by the city council.”[/i]
Katherine Hess told me the middle-income requirement [i]has been suspended,[/i] but not as yet removed.
[quote]Realtors & developers have been quite obviously manipulating this market for years. The Davis market has been manipulated out of the range of affordability, plain and simple. It is this manipulation I refuse to accept, not basic economics. [/quote]Ethan, I don’t doubt that landlords in Davis are doing everything they can to rip off renters. However, I suspect you are misdirecting your venom. The blame lies in our very low (almost zero) rental apartment vacancy rate.
If the free market had been allowed to function, Davis would have a lot more apartment buildings which would have absorbed the demand and given apartment renters far more choice in where to live and under what conditions. But the free market has not been at work. The city council (and by way of Measure J the voters) have restricted how much housing is built. And part of that restriction has been to limit the supply of apartments.
Because government planning for housing (as opposed to the market operating) is the accepted philosophy of the City of Davis and the people of Davis, we need to plan for more large scale apartment rental housing moving forward.
The fact that UC Davis is building about 1,000 new student housing units in West Village (and the fact that the student population is not likely to increase for a few more years) should alleviate some of the market power that the oligopolists who own and manage most apartments in Davis now have. But make no mistake — the reason the landlords in Davis have so much power is because demand exceeds supply and the market has not been permitted to function.
[i]If you’d read my post, you’d have seen I’m not talking about “subsidizing student housing”, and it’s disingenuous of you to make that claim.[/i]
I put that forward as part of the question and I didn’t say that it’s the only type of rent that you’re talking about. In any case it doesn’t matter whether it’s students or anyone else. If any landlord charges below-market rent to anyone, it’s charity. Again, charity is a fine thing, but no one who has a job in Davis will ever be first in line. And instead of pressing landlords specifically to subsidize their tenants, we should instead look broadly at progressive taxes.
Of course, if an employer such as UC Davis is also a landlord, then below-market rent to its employees isn’t charity, it’s compensation.
[i]Furthermore, supply and demand is one thing; market “fixing” is something else entirely.[/i]
There is no evidence that any property manager in Davis has fixed or otherwise manipulated the market. The voters have manipulated the market and the city council has manipulated the market. But landlords? Well, when people don’t like the price, they sometimes take that by itself as strong evidence of a conspiracy.
[i]You say “build more apartments and trailer parks”. Your statement only goes to serve my point: you’re offering a few token Geo Metros to offset an overabundance of Bentleys.[/i]
The smallest free-standing houses in Davis still sell for maybe $300K, anywhere in Davis. Yes, Davis could build more of them and maybe it should, and the price would drop, but only so much. Duplexes and things like that might be somewhat cheaper, but still expensive. So where do you go from there, if not apartments and trailer parks?
It sounds like you want the type of ordinary house as most homeowners in Davis, but not at the price that anyone has paid for one recently. I agree that they have a McMansion price, but not because they are McMansions and not because anyone has fixed any prices.
[quote][quote]I’ve heard rumors that, when everything is accounted for, there is something on the order of $50,000 to $100,000 of exactions per new dwelling unit in Davis. This would include affordable housing, open space, ag and Swainson hawk mitigation, a whole host of fees, etc.[/quote]How do you calculate exaction? Ag land is cheap. It appears that the 25 acre Wildhorse Ranch cost less then $2.5 million. Thus, the market rate lots would be about $15,400 apiece. The rest of the on-site open space and affordable housing land is free. The Covell site was even less per acre. Hence, the cost of the land for the affordable housing and on-site open space is free. The other costs for the affordable housing are subsidized by federal, state or city affordable housing set-aside funds.
Most of the fees are not “exactions”, they are just the cost of fair share of infrastructure. Our fees are lower than many cities where the housing prices are far less than those in Davis. Hence, profit margins should be much higher in Davis.
One of the things I am planning to do is to ask the city to start doing some real, independent estimates of the profit rates for our peripheral ag sites when development proposals come in. My feeling is that the public is conferring the added value on the cheap ag sites by signing the piece of paper that turns them into valuable housing sites, that the profits are far higher when these sites are developed than when similar sites in other cites are developed due to our investment in this community, and that the developers should be sharing some of their windfall profits to keep the city as nice as it is when they sell their expensive Davis homes.[/quote]
[quote]What is a healthy vacancy rate, 10%? [/quote]From my past experience as a commercial developer and landlord (in the Bay Area) I would say 4-5% is healthy over the long run. Keep in mind that is about 5-6 times as high as we have in Davis for apartment rentals, where the vacancy rate (last time it was published) was like 0.8%.
The reason you don’t want a vacancy rate terribly low — as we see in Davis — is that tenants tend to get screwed. Not all landlords will jack up the rent every chance they get, but many will; and the ones who don’t are poorer for it.
The reason you don’t want a vacancy rate which is too high — 10% is very high over the long-run — is because you will push marginal landlords* into bankruptcy. Very commonly, these properties are highly leveraged. Most of the money they generate in rents goes into paying interest on the loans, property taxes, common area maintenance and utilities and often site management/personnel costs. The way they generate cash for the investors is often by way of refinancing, which in effect keeps the loan-to-value ratio high (as high as 90% in normal times), even when rents are accelerating).
When landlords go bust, they will often allow their properties in the interim to deteriorate, and the tenants and neighbors suffer for that. And that is not a good thing for the larger community, though it would be good for renters in search of an apartment.
*Marginal landlords are not necessarily “poor” by landlord or investor standards. They might be very wealthy. But the “owners” of many of these complexes are partnerships or REITs; and the partnership itself might not have much capital, even if the investors separately do. So when vacancy rates start going up beyond an expected level and rents start falling in value, the partnerships can become insolvent.
“…developers should be sharing some of their windfall profits”
The impact fees that Davis developers negotiate in their development agreements( behind closed doors with the very Council members whose campaigns they bankrolled) are,more often than not, quite low compared to what other communities are able to obtain when they approve a development. Our Council and city staff should be extracting “every last nickel” that they can from the developers for granting them the opportunity to make multimillions in profits. The argument that developers are entitled to such obscene profits because of the tremendous risks that they take is historically bogus. I would like to hear of one instance in the past 30 years where land speculation and residential development on Davis’ periphery brought the developer to financial ruin.
Sue, you’ve put your finger right on it — developers have much higher profit margins in Davis due to the reasons you state, hence they’re much more inclined to build tracts of McMansions & turn a ridiculous profit. I’ll tell you what I’d like to see: I’d like to see a developer come to the City with a proposal to build tracts of middle-income housing. It’s not like they won’t turn a profit building those, just not the insane, inflated profits they’d get by selling McMansions.
Greg, you skimmed straight over my point about virtually all the NEW tracts of houses built or proposed in Davis over the past decade have been McMansions. You’re right, Davis should build more duplexes and single-family homes, and they COULD indeed be cheaper… if anyone could be bothered to actually build enough of them to meet the demand. But wait… That could cause prices to go down. And rental rates to lower. And we couldn’t have that now could we? This is some of what I mean when I say developers & realtors have manipulated the market: their steadfast refusal to actually meet a demand and keep prices, both for buying and renting, artificially high.
As far as evidence goes, naturally people who are engaged in price-fixing and market manipulation are going to conceal their activities. They’re going to do their best to create plausible deniability — they’d go to prison if they were caught. As far as “evidence of a conspiracy”, I’m going to go with what I heard come out of people’s mouths, thank you. I heard some pretty cynical and greedy statements in regards to Davis from Sacramento-area developers at the architecture & environmental design conference I attended — stuff like “…Hey, if I can’t make over 100% profit, I’m not going to bother.”
Sure, blame the voters and blame the city council but GOD FORBID we blame the businessmen in the banking and real estate industries. Heaven knows they’re really just poor innocents lambs just trying to make an honest buck. Allow me to point out that all the predatory lending that’s been occurring over most of the past decade was denied to have been happening until the market took a dump because of it. The Davis housing market is the national market in miniature.
Yes. There is a middle class. Hello? We exist, thank you. We want housing we can afford. We don’t want McMansions and we don’t want trailer parks, we want regular houses. We definitely don’t want to hear some multi-millionaire banker or developer — or their shills — telling us to “trust in the free market”, because the “free” market has been sticking it to us pretty hard.
[i]You’re right, Davis should build more duplexes and single-family homes, and they COULD indeed be cheaper… if anyone could be bothered to actually build enough of them to meet the demand.[/i]
If the city of Davis simply gave developers permission to build smaller duplexes and sell them at market rate, they would do it. If they gave permission to build apartments, they would build apartments. They would do it because it would be profitable and they wouldn’t have more profitable options. It’s the city that is blocking these types of development, because it would crowd the city and it wouldn’t bring in enough tax revenue. The only kind of affordable free-standing houses that interest the city right now are the small, dysfunctional showcase known as DACHA.
[i]I heard some pretty cynical and greedy statements[/i]
The way that market economics works is that it doesn’t matter how cynical or greedy you are, as long as you don’t manipulate the market. There is one slam-dunk case for manipulation of the city’s real estate market, and that is the city’s permits and Measure J. You’re looking past all that and supposing that there is a lot of market manipulation by developers in the shadows. You could just call a spade a spade.
[i]We definitely don’t want to hear some multi-millionaire banker or developer telling us to “trust in the free market”[/i]
I’m not a banker, a developer, or a multi-millionaire. All I am is a UC Davis professor and a joint owner (with my spouse) of a regular house in Davis. That’s all. I’m not telling you that you should “trust” the free market, only that you should understand it. I’m not even saying, necessarily, that the bankers and developers are anything more than greedy SOBs. I don’t particularly admire the rich.
All I’m saying is, if you want to cast blame, go by facts and economics; don’t just go by whether people wear pin stripes or tie dyes.
The fact is that there are developers who willing to build small houses or large houses in Davis. The city insists that plenty is getting built. Didn’t you see the slogan? “2,000 homes are enough!” That isn’t a developer’s slogan, that’s from the voters.
The profit margin increases with the size of the house. The land, home infrastructure and basic construction costs remain about the same for a medium-size home and one quite a bit larger. As long as there is a market for the larger homes, that’s what the developer will build for maximum profit. This was an issue in the Covell Village campaign. While talk of smaller, affordable housing was being bandied about, K. Hesse admitted in open Council that the lots that Whitcombe would be selling to builders would allow maximum size(minimum setback) and therefore it was likely that the home size built would be the maximum allowable as long as there were buyers for them.
[i]The profit margin increases with the size of the house.[/i]
A profit margin for a house that isn’t approved is irrelevant. If the city gave developers a choice between large and small houses, then probably they would build larger houses. If they gave developers the choice between smaller houses and nothing, they would build smaller houses.
However, after Measure J and these two Measure J votes, the city has no intention of giving developers any profitable choices. Again, the people have spoken: 2,000 homes are enough.
I haven’t looked into other communities enough, but one thing that appears striking to me is that the market rate apartments are remarkably renting right around the 30% median income for the county. That suggests that supply and demand are not the only forces driving rental prices and that extra-market means are probably needed to provide housing for lower income renters if we have an interest in them living in this town.
The other option is that Davis just continues to become a more and more elite and affluent community with even middle income people being priced out of the market in the future.
Yes. There is a middle class. Hello? We exist, thank you. We want housing we can afford. We don’t want McMansions and we don’t want trailer parks, we want regular houses.
Please define regular house and what “affordable” means. For me, it is an 1800 sq. ft. 3 BR, 2 BR single-family structures with a 2-car garage on a lot large enough for a backyard deck and small lawn. Assuming move-in quality, this is your basic $500k house in Davis. It is a $325k house in West Sacramento. The price difference is less a supply issue, and more a demand issue. It is the buyer perception of higher value that drives up the price of the Davis home.
Build a large quantity of $500k Davis homes and you might eventually lower costs. However, for the big residential projects, developers and realtors invest quite a bit on advertising to drive up demand. New developments create a buzz that brings in people from outside the local market. Also, there is a bit of pent-up demand for families to locate in Davis.
The only surefire way to make single-family housing more affordable in Davis is to reduce the perceived value. That means we need more crime, more traffic, lower quality schools and a general decline in the things that attract buyers to Davis in the first place.
David: I applaud you. This is exactly one of the points I feel needs to be made to City Council, especially the part about the Davis’ increasing elitism and affluence. There’s a definite feeling in this town, especially lately, that if you don’t make at least $100k a year, Davis doesn’t want you.
Greg: With regard to your point about cynicism, greed and their bearing on market manipulation, I would like to point out that price fixing and market manipulation are and have been extremely difficult to prove, let alone obtain a conviction on such charges. Case in point: Archer Daniels Midland’s price-fixing of the lysine market during the mid ’90s. Even the FBI had a hard time making the charges stick. A feature film was even made about it that just came out – “The Informant”. Even Michael Milken, architect of the junk bond / S&L scandal during the ’80s got off with a slap on the wrist, doing a couple of years in a minimum security prison/resort and is right back to doing the same thing. Considering that the benefits far, far outweigh the risks of being caught or even the punishments if they are caught, why wouldn’t developers, realtors & mortgage banks manipulate the Davis market? Mind you, of course, this is operating under the assumption that I had *not* already personally heard people talking about manipulating the Davis market in exactly the way I described.
With regard to DACHA, I would like to state that I cannot comment on DACHA beyond stating that I am a member, one of their newly-appointed board, and that the situation in DACHA is not as may appear. I can say that DACHA members aren’t interested in swindling the city out of a bunch of funds to end up in houses they don’t deserve, despite recent characterizations to the contrary. The ongoing litigation prevents me from making any other comments in this regard.
I acknowledge that you’re a professor at UC Davis, not a millionaire or a developer, though I would like to point out that I know enough about the “free” market to know that big businesses & banks fear it and would rather control it and wave away scrutiny by claiming the results of their manipulations are simply manifestations of “the invisible hand”. I would think the various & sundry autopsies of the credit crunch / housing bubble / mortgage crisis / whatever would serve as evidence of that point. My aggravation comes being sick to death of apologists for these swindlers and the constant bleating about “deregulation” and reliance on the “free” market is the cure for everything — including herpes and eczema (yes, I’m being sarcastic here). Hence my reflexive acrimony.
With regard to the “2,000 homes are enough!” rallying cry, I wasn’t involved with Measure P. I only know that the people I was involved with on the Measure X campaign weren’t against building more houses or growth in Davis, they were opposed to yet another elite-class housing development packaged in a phony green wrapper.
[quote]the people I was involved with on the Measure X campaign weren’t against building more houses or growth in Davis, they were opposed to yet another elite-class housing development packaged in a phony green wrapper. [/quote]How would that have hurt the people you were involved with?
David–You wrote: “It became a huge scandal in the early part of this decade as city staffers would purchase the property for family members and other relations and then make a killing in two years when the property could go on the open market.”
I’ve heard for so long that developers’ relatives would end up with the affordable housing that I began to believe it. After your claim, I’m now wondering if either story has any basis. Were there arrests, trials, firings, etc. after investigations into these allegations? Either practice must have been illegal or contrary to city employee ethics, or both.
In any case, I don’t see that the current city policy has provided any better results.
[i]”city staffers would purchase the property for family members and other relations and then make a killing in two years when the property could go on the open market.” [/i]
[b]”I’ve heard for so long that developers’ relatives would end up with the affordable housing”[/b]
It’s funny. I’ve heard the same story, only all the residents were insiders from the Freedonian Mafia ([url]http://www.freedoniagroup.com/Industry.aspx?IndustryId=CHEM[/url]) which of course controls the Davis trade in illicit solar panels used to power the pumps sucking the toxic waste out of the ground under Target.
I don’t make $100K annually, but have never felt unwelcome in Davis. I doubt many of my friends make that kind of money either. We choose to live here because, despite higher housing costs, we value what Davis offers more than the opportunity to get more floor space and the amenities of Dixon or Natomas.
Most of us realize we live not just in Davis, but the USA, which brings a bigger economic context to our lives, including our housing budgets. So we don’t whine, but enjoy the Farmers’ Market, our kids schools, and the view of the sun setting behind Blue Ridge.
If I did my arithmatic right, it would take a full time job of $18.75 hourly to make the minimum $30K that’d qualify someone for the workforce housing our city’s policies require. How many of our town’s new jobs pay that? Not the one my friend’s son just got at Target. What is the City and U’s plan to produce new jobs that will pay folks the most minimum salary needed to live here? That might be an equally productive discussion as beating up the crumbs Davis’ housing policies leave for or town’s low wage workers.
David: [i]I haven’t looked into other communities enough, but one thing that appears striking to me is that the market rate apartments are remarkably renting right around the 30% median income for the county. That suggests that supply and demand are not the only forces driving rental prices and that extra-market means are probably needed to provide housing for lower income renters if we have an interest in them living in this town.[/i]
You’re standing the issue of market manipulation on its head. A high price alone does not suggest non-market forces at play, except for entirely obvious forces. The demand for apartments is unusually large for the region because of UC Davis. The polity has done everything it can since Measure J to choke the supply. Naturally, unusual conditions lead to unusual prices. Now, Measure J clearly is a major act of market manipulation. There is no need to look in the shadows for yet other market manipulation.
Ethan: [i]I would like to point out that price fixing and market manipulation are and have been extremely difficult to prove,[/i]
So therefore, let’s make wild accusations? I am an evidence-minded person.
[i]I would like to state that I cannot comment on DACHA beyond stating that I am a member, one of their newly-appointed board, and that the situation in DACHA is not as may appear.[/i]
I read your open letter to David Thompson posted here. Frankly, it made DACHA look bad. The tone implied that DACHA just doesn’t care much about property rights. Again, I’m not a kingpin of the big bad corporation. Even so, I take property rights very seriously: what’s yours isn’t mine and what’s mine isn’t yours.
Greg: The point I was attempting to make is that part of the component for cost is not just what the market can bear but what the people can afford.
I also happen to agree with the person above who suggested that as long as Davis is desirable to live in, the cost will be high. That is true probably regardless of vacancy rate. After all, if I am a renter and go to school or work in Davis, I am not locked into accepting the high rents here, I can choose to live in Dixon, Woodland, even Sacramento for cheaper if I am willing to travel and live in a less nice area. I choose to live here and bite the bullet on rent in part because of the desirability of living in Davis rather than another adjacent community. As long as that is the case, it is unlikely rent will fall.
For that reason if we want a community that is not merely a large number of wealthy people, then we need to provide some places off-market.
[i]The point I was attempting to make is that part of the component for cost is not just what the market can bear but what the people can afford.[/i]
In a way, I agree with you — in the opposite way of what several commenters have been saying. If the vacancy rate is pinned at zero, then that is good evidence that Davis rents are slightly below market. I suspect that Davis landlords keep rents on the low side, compared to what renters are really willing to pay, in order to stay on good terms politically.
Certainly, when people are standing in line for apartments in Davis, that’s just not a good time to declare that they can’t afford it. When I stand in line to buy something and I might not even get a chance, I get annoyed by the suggestion that what I want should be cheaper. I used to stand in line a lot at Fuji Chef, and I always thought: Please raise your prices.
[i]I also happen to agree with the person above who suggested that as long as Davis is desirable to live in, the cost will be high. That is true probably regardless of vacancy rate.[/i]
That may be true, but the awful vacancy rate makes things worse. There is no sense in adding injury to injury.
[i]After all, if I am a renter and go to school or work in Davis, I am not locked into accepting the high rents here, I can choose to live in Dixon, Woodland, even Sacramento for cheaper if I am willing to travel[/i]
That’s way too dismissive. For undergraduates, commuting from out of town is a massive hit to the quality of education.
[i]For that reason if we want a community that is not merely a large number of wealthy people, then we need to provide some places off-market.[/i]
Actually I don’t object to that, provided that off-market housing is at the bottom. Frankly it is outrageous to leap clear over apartments and trailer parks and subsidize free-standing houses. What an insult to the people who are willing to make do with less.
[quote] Most of us realize we live not just in Davis, but the USA, which brings a bigger economic context to our lives, including our housing budgets. … the (job) my friend’s son just got at Target. [/quote] Wait. Your friend’s son lives in Davis and works at Target? I’m blown away. I had no idea. The Vanguard of the Pro Let Harriet wrote assuredly about how all of Target’s employees would be commuting here in coal-fired Pontiacs from Oregon and parts beyond.
Thank you all for commenting. I have enjoyed reading the 30 comments, as well as David’s article. This is an issue that I have worked on for my entire 24 year career, so I have sat in a lot of long meetings in Davis dealing with it.
David’s conclusion in comment #29 that what is really needed is “places off-market” is the bottom line truth of this story. It is the only way to create a permanent stock of housing for our lower wage work force, that does not disappear over time. This is what David Thompson, myself and others have been promoting for nearly three decades.
Originally, the city’s efforts to provide “affordable housing” began in the late 70s when Councilmember Tom Tomasi noted that if a modest house could be built in Woodland for $x, then the city of Davis should require that a portion (1/3) of all single family homes be required to sell for that same price. In the next decade or so, developers produced modest homes that sold at those “market-rate” prices by building duplexes and 1,000 square foot units for 1/3 of their subdivision units. For example in 1987, it was possible to build a house that sold for the designated price ($80,000) but was only appraised for about $8,000 more than that (which is also common for more expensive market rate housing).
This policy did nothing to meet the need of the “extremely low-income” families that David refers to in his article above. There was no city requirement that a percentage of units in new apartment complexes be affordable at a below market rent level. The city was trying to help provide some entry-level ownership only.
In the 1987 General Plan Update, the city council majority was composed of David Rosenberg, Ann Evans and Mike Corbett. I served on the planning commission at the time. One of our goals was to incorporate affordable housing opportunities for very low-income households within all new developments. The Housing Element revision required that 25% of single family units be affordable to low and moderate income households (80% to 120% of the area median income). And that 35% of apartments be affordable to very low-income and lower income households (50% to 80% of the area median income).
One of the most successful components of that policy was to require that single family subdivision developers must meet a portion of their requirement by dedicating multifamily zoned land within their single family subdivisions to the city or its designated nonprofit developer for the development of “nonprofit owned” rental housing for low and very low-income families. In other words, we were trying to get what David refers to above as “off-market” units.
Greg: “The demand for apartments is unusually large for the region because of UC Davis. The polity has done everything it can since Measure J to choke the supply.”
Development in Davis, as in Dixon, Woodland, and West Sac is developer-driven in the sense that they propose what they want to build and staff and city council respond to their proposals. I don’t know of any developer that has proposed apartments, duplexes, quadplexes, or mobile home projects in quite a while. No project with significant amounts of affordable housing has been put before the voters.
“I suspect that Davis landlords keep rents on the low side, compared to what renters are really willing to pay, in order to stay on good terms politically.”
Davis is the only city locally where rents have been going up in 2009.
Obviously Davis rents are high because there is a shortage of rental units. The vacancy rate has been below 1% since the 1970’s, during times of high growth and low growth alike, because the UCD student population has grown faster than growth in that part of the housing market. By my estimate a few months ago, we need a couple of thousand housing units just to cover the increased student population of the past decade, and West Village will cover about half of that — probably not enough to get the vacancy rate up to the healthy 5% level.
Somewhere a significant number of apartments and other high-density housing will need to be built. That would free up some of the houses and duplexes that students are renting in town right now, which presently crowds out the only housing that is available for non-student lower-income Davis residents.
The only places I know of for that amount of housing are on campus, on problematic sites such as Ricci and PG&E, or in a new peripheral development.
But to blame all this shortage on the voters and Measure J is a stretch, since no such development has ever been proposed. When the voters reject an apartment complex on the edge of town, you’ll have a case.
“For undergraduates, commuting from out of town is a massive hit to the quality of education.”
That’s an interesting assumption. I commuted from Dixon when I was a student here. It didn’t affect the quality of my education, so far as I can tell. But it would have been nice if there had been transit available from Dixon to Davis. There still isn’t.
Rich: “If the free market had been allowed to function, Davis would have a lot more apartment buildings which would have absorbed the demand and given apartment renters far more choice in where to live and under what conditions. But the free market has not been at work. The city council (and by way of Measure J the voters) have restricted how much housing is built. And part of that restriction has been to limit the supply of apartments.”
You and I agree that more rental housing is needed in Davis. I’m curious about your assertion here. How has the city limited the supply of apartments? Has any developer proposed a significant number of apartments anywhere in the last decade?
To continue my comment, the land dedication policy has allowed local nonprofit organizations like CHOC, Yolo Mutual Housing Association, Davis Senior Housing Communities and others to obtain a site in one of Davis’ new “McMansion” neighborhoods and build rental units for “working class” Davis families and seniors. Every one of the single family subdivisions (for the most part) built since 1987 has had to have low-income rental housing included in the neighborhood. Without the land dedication policy, there is no way that any of those sites could have been obtained (at even the market price for the land), because what??? market-rate developer is eager to have low-income housing built in the middle of their custom home subdivision.
Since the affordable housing developers were nonprofit organizations with an affordable housing mission, they all strove to seek as much government subsidy funds as possible, in order to push the rents as low as possible. As a result rents in most of the projects are much lower than required by the city’s housing element policy.
David mentions in his article that 51 units have been produced in Davis for “extremely low-income” households (less than 30% ami). I am proud to say that my firm Neighborhood Partners has been responsible for the production of all of those 51 units. We produced five units at 30% ami in the Owendale Community in 2003, 6 units at 30% ami in Moore Village in 2004, 21 units at 25% ami in Eleanor Roosevelt Circle in 2006 and 19 units at 25% ami in Cesar Chavez Plaza in 2007. Those units would never have happened without the land dedication policy.
In 1988 and thru the next few years, when the city affordable housing ordinance was drafted to implement the housing element policy adopted in 1987, we tried to put more emphasis on the land dedication option. But the political compromise was to continue to develop a portion of the single family requirement as single family for-sale affordable units. Personally I wish that we had won that fight and had managed to change city policy to meet all of the affordable housing requirement by land dedication. But we lost that battle.
The for-sale single family affordable housing program has been problematic to administer. As housing values climbed in the 1990s, the gap between the designated affordable price of these units and the market value of the units expanded greatly. Instead of an $8,000 gap, like I described in 1987, the gap grew to more like $200,000 per unit. And even though there are a variety of ways to prevent that windfall from going to the first buyer, there has been a continuous argument about how much of that equity to let the buyer take with them upon re-sale. In the Wildhorse development the city “forgot” to put re-sale controls on 52 units that sold for about $170,000 each. The only requirement was that the initial owner had to live in their unit for two years; they did not even have to be a first time homeowner; they could rent their current home in Davis, buy one of the Wildhorse units and then sell two years later for the $400,000 market value.
The Davis Area Cooperative Housing Association (DACHA) was an effort to prevent another Wildhorse fiasco. The city council gave permission to Neighborhood Partners to create a citywide limited equity co-op to buy the single family affordable units from the subdivision developers and put them in a co-op that would make them affordable forever. The appreciation for each member would be limited to 10% on an annual basis of the initial share price (set at 10% of the below market acquisition cost of the unit). The intent was to grow the co-op to at least 60 units, so that it would have enough economy of scale to operate efficiently. Unfortunately after the first 20 units were acquired, city staff gave the DACHA members an indication that they could legally dissolve the co-op (which was not true) and convert the units to a more lucrative ownership model. Four years and about $500,000 in legal fees later (between NP, DACHA and the city attorney), we have a mess.
That’s way too dismissive. For undergraduates, commuting from out of town is a massive hit to the quality of education.
Greg, do you mean it is a “massive hit to their quality of life”? I don’t see how living in Dixon or Woodland is going to impact their education as a 2nd, 3rd or 4th year. A student’s education may actually improve living away from all the non-academic distractions.
Thank you David for highlighting housing recently! The topic fits into many parts of life for those who live and those who work in Davis. Many excellent comments have been made about and on your blog today.
For those interested in this topic please watch the Council meeting tomorrow night when they discuss allowing Mace Ranche to be changed.
You can see the staff report at http://cityofdavis.org/meetings/councilpackets/20091110/04-CC & 03-RDA Mace Parke Final Funding-2990 Fifth Street.pdf
The recommended package is full of huge subsidies, excessive developer fees, major forgiven loans of taxpayer funds all part of a five year journey that CHOC now wants to be something else for which the city is paying a lot.
If approved as recommended by staff, Mace Ranche will be the talk of the town for years to come.
I urge people to look this project over and urge that the whole thing be looked at again and the site put out for competition as was promised in the staff report last year.
My next post will address the issues of today’s blog. However, spotting the Mace Ranche project made me think how relevant it is to many of the valuable critiques made today. So please take a look at Mace Ranche.
[quote]I’m curious about your assertion here. How has the city limited the supply of apartments? Has any developer proposed a significant number of apartments anywhere in the last decade? [/quote] That’s a fair point. I don’t think any developer has exclusively. Covell Village included hundreds of apartment units, but that was a minority of the total housing stock. Lewis Homes also had hundreds of apartment units. But your general point that most of the land development proposals are for SFHs holds; and the apartments have been a small component. So it’s possible I was just wrong. (By the way, the apartment shortage goes back to at least the 1950s.)
What I wonder, though, is that if the zoning process, where land very little land gets zoned R-HD, but a lot gets zoned R-1 and R-2 affects the apartment supply? If the rents from apartments are very profitable and the development is “developer driven” (and not driven by the general plan process), then developers should be asking for more land to be designated R-HD. If they aren’t, it might be that owning apartments is not so profitable, even with the low vacancy rates. That seems very unlikely. So I suspect the reason developers are not proposing new large apartment complexes is because the planning process is inhibiting them somehow. Certainly, when pushed up against an established neighborhood, the homeowners (like those on Caravaggio or near Chiles Ranch) would complain bitterly about the impacts from High Density housing near them. Thus, it falls apart as infill. And if a developer wanted to build peripheral apartment complexes, all the NOSPRAWLEVER-NOTEVER-NONEATALL-INMYEFFING-LIFETIME-NOSPRAWLERS would have a fit if a developer wanted to turn a farm into apartments. So they are a hard sell anywhere.
There is a lot that could be addressed about the many issues that David covers. Allow me to focus on just one element at this time. It relates to David’s reference to “off market” units and it relates most importantly to people in Davis who do not own homes.
I helped to develop Dos Pinos as a limited equity housing cooperative over 20 years ago. It is one of the most successful housing communities in Davis. It needed no subsidy from any source, it has needed no city oversight, and unlike DACHA its’ board has fully complied with the law.
For over 20 years I have been continuing a long term study of how Dos Pinos works in comparison to Sequoia Apartments (a nearby market rate rental built at the same time) and the Annual UCD Housing Rental Study. The rents at Sequoia and UCD have almost always been interchangeable so I will use the UCD Study which is the most readily available.
From 1986 to 2009 the rent for the average three bedroom market rate apartment in Davis went up from $735 to $1,791 an increase of $1,056.
From 1986 to 2009 the rent for a three bedroom apartment at Dos Pinos went up from $798 to $1,076 an increase of $278.
In 2004-05 I studied all 60 of the Dos Pinos apartments (1, 2 & 3 bedroom units) and compared their housing costs to Sequoia. The co-op was saving the 60 families at Dos Pinos $336,000 dollars a year. I recently measured the difference again and it came to $400,000 in annual savings.
If one co-op can save $400,000 a year for its members (remember they must all be member occupied (no rentals at Dos Pinos) what could ten more do or a hundred do. A renter in Davis cannot hope to become a home owner because there is no disposable income at the end of each month.
We truly need more Dos Pinos models which are the only units of its kind in Davis that become more affordable over time.
For ordinary working people who live or work in Davis the apartment supply problem is the biggest problem we need to solve.
Through Neighborhood Partners, Luke and I are proud of what we have accomplished but there is a lot about affordable housing in Davis that needs to be cleaned up rather than covered up.
For the detailed study go to http://www.community.coop/ryca and click on Article “Dos Pinos Housing Cooperative
Don: [i]Development in Davis, as in Dixon, Woodland, and West Sac is developer-driven in the sense that they propose what they want to build and staff and city council respond to their proposals.[/i]
They’re not going to waste their time with proposals that have zero chance of approval. A development agreement is a two-way street, even if formally the developers make the first move. Except that in Davis, of course, it’s a three-way street.
Right now, presumably, developers wouldn’t waste their time with any peripheral development proposal in Davis. But before the Measure P vote, their thinking was that the best chance to appease the city was with (1) relatively more tax revenue, (2) a relatively high initial payment, and (3) millions of dollars in solar panels. I’ll concede that they would also want something relatively profitable for them, to mitigate the up-front cost of a Measure J vote and a low chance of success. All of that together doesn’t square with a trailer park or an apartment building.
Anyway, it defies logic to say, developers are greedy for A which they won’t get, so therefore they don’t want to propose B which is also profitable. Good money from apartment rents is good money, so if they could do it, they would.
[i]Somewhere a significant number of apartments and other high-density housing will need to be built.[/i]
Let’s have some clarity with the word “need”. As you calculated, even with West Village, future UC Davis students need more apartments. But Davis voters do not need and do not want more apartments. As Sue said, student apartments count as homes, and 2,000 homes are enough.
Jeff: [i]Greg, do you mean it is a “massive hit to their quality of life”? I don’t see how living in Dixon or Woodland is going to impact their education as a 2nd, 3rd or 4th year.[/i]
The whole point of a good college education is personal access to knowledgeable, capable people. It isn’t just shuffling into class, taking notes from the chalkboard, and shuffling back out again. If that’s all it were, it would be better to take an on-line course and never show up. The extra that you get from college is the study groups, the team projects, the office hours, the spontaneous conversations in dining halls, the intellectual friends, and just generally being around people who seek a deeper understanding of things.
If you commute to UC Davis from Citrus Heights, you’re stuck at home or stuck on the road for a lot of that time. I always have students who commute from out of town in my classes, and I can tell the difference. They’re more distant from the experience, and by implication from the material, than students who live in town.
“They’re more distant from the experience, and by implication from the material, than students who live in town. “
One can make an equally strong argument that living away from college campus offers real-life experience which is just, if not more, important than the campus/college town “reality”.
[i]One can make an equally strong argument that living away from college campus offers real-life experience which is just, if not more, important than the campus/college town “reality”.[/i]
That’s fine, but if that’s what is missing in your life, then is it the right time to be in college? By the same token, Army deployment and windsurfing are both great experiences for some people, just not at the same time.
Besides, since I actually see students who commute from out of town, I can tell you what they think of their life experience. Many of them think of life as a big slog. They don’t see it as a big favor that they can’t afford to live in Davis.
The whole point of a good college education is personal access to knowledgeable, capable people. It isn’t just shuffling into class, taking notes from the chalkboard, and shuffling back out again. If that’s all it were, it would be better to take an on-line course and never show up. The extra that you get from college is the study groups, the team projects, the office hours, the spontaneous conversations in dining halls, the intellectual friends, and just generally being around people who seek a deeper understanding of things.
Greg: although possibly a bit idealistic since many kids are working part-time jobs and lack the time for some of this activity, I think your points are valid and I understand your perspective. Mine may be different because I completed my college education while working a full-time job and going to evening classes. I believe I received a better education because of the practical application in the workplace of what I was learning in the classroom. However, I did not get the campus experience. My regret, although a very small one, is that I missed the free social experience of college… not that I missed any extra academic value.
Unless you work in higher learning, real life begins after college, and that the “slog” you mention is actually the valid humanistic struggle that many kids have been led to believe they won’t have to experience. I want my kids to struggle like I had to struggle… both because I believe humans, like all animals, are designed and evolved to do so; and because they will be more happy, whole, adjusted and complete adults learning how to do so successfully.
There is a disturbing entitlement undertone in the debate about affordable housing in Davis. I agree that we need development plans to ensure reasonable rental vacancy rates, but beyond that I think too many people have developed a mindset of legislated fairness. We want some institution to step in and make things easier… to eliminate the existence of differentiation based on economic capability. This view seems to cement a Postrel stasis versus dynamistic societal model which is unnatural and destructive to the great American experiment. It is a migration toward less and less self preservation and advancement skills and more toward progress-stifling government co-dependency.
When these kids graduate, they will need to find a job. Some will pay more than others, and their compensation will be a factor for where they live and how they live. Unless and until the socialists or communists take over, they will leave the nest of Davis and find they can only live where and in what they can afford. Better make it real for them now, otherwise they may come back and live with mom and dad.
“That’s fine, but if that’s what is missing in your life, then is it the right time to be in college?”
It’s a long time ago since I went to college but unless USA college-age kids have changed, most do not begin to grasp what their college years had offering them(besides the obvious, i.e., not having to go out work and lots of “socializing” opportunities, until perhaps their last year.
“I think the question is whether even moderate-income people can afford to live in Davis.”
There are a lot of moderate-income people living in Davis. They are those who purchased their homes many, many years ago and still live in the town then love. The old Streng homes from the 70s were probably purchased for $20K or so (anyone know the real amounts?) With Prop-13 limits on property tax increases, these homeowners are probably doing just fine, possibly living mortgage free, even on fixed incomes. The real question is, “Can new moderate-income people afford to purchase a home in Davis now?” and I think the answer is “Probably not.” The reason is basically one of supply and demand. Because we want Davis to remain Davis and not become Elk Grove, Davis voters have consistently spoken out against runaway sprawl. I think it’s naive to attribute this solely to people wanting to inflate their homes’ values. As I mentioned before, I DON’T WANT my home’s value to increase, since that only jacks up my property taxes. I intend to spend the rest of my years here, and so any increase in the value of my home works against me, not for me. So preserving the small-town, community feel, with a strong core downtown, bicycle paths that lead everywhere, neighborhood supermarkets, and all the other things we love about Davis both decreases supply and increases demand (at least for people who love this kind of town!)
However, I greatly value diversity and though Davis has a certain amount, possibly due mostly to the UCD student population, I know that the quality of life here suffers from the absence of the richness of cultures, languages and ideas that can make other cities so vibrant. Has any town or small city solved this problem?