This week a prominent supporter of Covell Village told me that he did not see that parcel being built in the next twenty years. The efforts to mobilize the senior community through the creation of the Astroturf group, Choices for Healthy Aging (CHA), has appeared to have failed. It would appear that over six years after the public resoundingly defeated Measure X, in a pre-foreclosure era vote, that the prospects for development of that parcel are dead for the foreseeable future.That turns the focus to the Cannery property, on which the council gave the go-ahead to begin an environmental impact report, which is expected to take a year to complete.
The Cannery property becomes the new battleground, and perhaps the last battleground, for development. But it is a different battle than the one that occurred for Covell Village.
Covell Village was the last sprawl project proposal Davis is going to see for the next few decades. While its proponents saw it as an innovative project, for its detractors it could never get past the limitations of the existing road network and other infrastructure problems.
Measure J was first passed in 2000 and represented an epic battle that was ultimately narrowly won against the giant sprawl projects that expanded the city greatly in the previous decade.
By 2010, even as Davis City Councils were loaded with pro-development forces, the battle had been won. Measure R was renewed with nary a shot being fired.
Is it possible to get a project approved under Measure J/R? Probably, under the right circumstance. After all, while Wildhorse did not require a Measure J vote in the pre-Measure J era, it ended up being approved after voters approved a referendum.
In the Measure J era, only two projects have come forward – the sprawling 2000-unit Covell Village and the relatively small Wildhorse Ranch. Both went down resoundingly, with Measure P occurring during the heart of the real estate meltdown, Covell Village a few years before it.
That leaves us with one large parcel that requires no vote of the people – at least under Measure J, and that is the former Cannery site. The site is currently zoned for industrial uses, but the owners, ConAgra, wish to develop it as a mixed-use neighborhood.
This time the debate is over two city needs – the need for residential development suitable for young families and senior citizens against the need for Davis to develop commercially through high-tech business parks that can utilize the proximity of the university.
On Tuesday the battle lines were drawn. Councilmember Sue Greenwald has long argued for business park development on the site.
On Tuesday she argued: “”If we are as business-friendly as we say we are, then we would preserve more of this land than is in this plan for neighborhood-compatible mixed use, business park, offices and high-tech.”
She added: “We need that land and anybody who says that there’s no market for it doesn’t know what they’re talking about.”
Councilmember Dan Wolk has governed in his first year with an eye toward his own demographic group – young families, a declining resource in Davis.
“I think we do need to plan for housing and we need to plan for it in a very smart and measured and environmentally sound way,” Councilmember Wolk said. “What I like about this project is that it’s oriented toward two demographic groups whom I think … we need to be concerned about.”
It turns out the property may not be ideal for either use. ConAgra is serious about developing this parcel as mixed-use, and has admittedly spent considerable time and energy improving the project.
The ConAgra dilemma is just this one – if we give the property for one use, we deprive the other use. There is but one property and while we can call it mixed-use, mixed-use does not fully split the proverbial baby.
I have consistently questioned the need for housing development, during a time when the housing market is flat and all we have are hopes that at a later point in time things will improve.
The property is not ideal for a business park – detractors can point toward the lack of proximity to the highway and other problems.
But where else do you go? Any other large parcel of land requires a Measure J vote.
The ideas on alternative sites are not alluring to those who have fought to protect farmland and open space.
Nishi is an inviting target, but it is a problem as well. First, even if you do develop it, it is a small property. Second, you have serious access issues. Richards Blvd is already impacted by traffic concerns and because it is nestled against the railroad tracks, there are access issues even if it spills onto campus.
But even if it does get developed – which would take some innovation and a Measure J vote – it does not solve the city’s problem for lack of contiguous business park space.
The other ideas are probably non-starters – the northwest quadrant and east of Mace, both which would be seen by many to be sprawl-inducing development.
So, developing Cannery as a mixed-use project would create a lack of business park space and everyone, on all sides of the Davis political divide, probably agrees on one thing – Davis should focus on becoming a high-tech, university spin-off destination.
So would it not be ironic if the first step toward doing that involves taking 100 acres that are currently zoned for industrial uses and building a mixed-use housing development?
And yet that is where we are headed.
At least one issue is off the table – no one needs to worry about Covell Village being developed any time soon. You do not need to support the Cannery Project because you think it will reduce the need for Covell Village and you conversely do not need to oppose the Cannery Project because it will hasten the development of Covell Village.
Covell Village is dead, to paraphrase an earlier conversation; it is a corpse that will likely lie vacant for decades. The new battle is whether Cannery should become a business park or a housing development.
There will be unintended consequences no matter what is decided, but it will have more to do with the direction of high-tech development in Davis, rather than any housing development at Covell.
—David M. Greenwald reporting
“Davis should focus on becoming a high-tech, university spin-off destination.”
You are so right David. The whole Cannery site should stay zoned for business. The best thing you can do for a city is to bring in good paying jobs and what better community than one with a world class university. First import high tech businesses with good jobs which will create the need for more housing then the new developments will happen.
Why the City Council is primarily headed in the direction of housing for this site is beyond me. We don’t need more housing; but what we do need is land for a business park and economic development. Or is this really about the needs of Davis residents at all? Is the idea more about “build it and they shall come”?
I tend to agree with Matt Williams outlook, which is economic development and jobs in Davis first, then will come the rationale for building new houses…
Spoken with a smile…..it is a cold day in Davis when rusty49 and I agree on anything. We are together on this one. I am reluctantly in opposition to the current ConAgre plan for several reasons.
1) I believe that the need for projects that will provide jobs which dovetail with the mission of the university outweighs the need for the type of single family housing that is prominent in this proposal.
2) The project as most recently proposed is still too heavily weighted towards the more affluent members of our community.
3) I have a safety concern about the current design of the project which has effectively only one means of rapid exit from the development should there be a catastrophic event
4) Despite reassurances about easy access to public transportation,and bike and car sharing, I still see this as a primarily private car dependent development which I do not believe our city needs.
“The whole Cannery site should stay zoned for business.” Rusty49, I attend 1-2 business policy meetings, conferences, workshops per week. I have not heard a single business owner, commercial real estate developer, commercial broker, university hightech related-official share this view, not one.
“We need that land and anybody who says that there’s no market for it doesn’t know what they’re talking about.” Of course Sue has many years of commercial development, leasing, sales, and business ownership experience to rely upon. She also probably has a long list of buyers with security deposits in her brokerage account which gives her so much confidence in her assertions.
If ConAgra had reasonable confidence in the commercial demand and absorption rate, there wouldn’t be nearly as much tension with staff over the size of the commercial component. Staff is clearly holding out hope sufficient demand will somehow materialize over the next 10 or 15 years. Perhaps it will, perhaps it won’t.
Based on my knowledge of the market, projected hightech demand is pretty soft for that location, the site limitations, and at Davis development prices. Perhaps I have it wrong, but as I’ve said previously, I have yet to hear a contrary position from buyers (who ultimately have the final say).
My guess is there would be moderate demand for small and mid-sized retail, neighborhood support service providers, and small office users. Such a development would theoretically put pressure on existing neighborhood shopping centers, the downtown, and other office projects.
There would no doubt be strong demand for the residential component.
Disclaimer: I have no direct stake in the ConAgra project although I’d likely benefit professionally if all or part of the project were developed commercially.
DT Businessman (aka Michael Bisch, Davis Commercial Properties owner, DDBA Co-Prez re-elected for another term)
“There would no doubt be strong demand for the residential component.”
Not what I’ve been hearing from my sources.
Perhaps the correct course of action would be to re-zone the property to Ag, de-annex it from the city, and hope that the Covell Village parcel and the Cannery parcel become one. This would open up the resulting land to some future project that could have access at J, L, Picasso & Donner (after appropriate discussions re: land use, annexation, etc.). With the opportunity to develop a more grid-like transportation system, all transportation modes (ped, bike, auto, transit) would become more feasible.
“Not what I’ve been hearing from my sources.” Then what’s the concern? Let ConAgra entitle the property and watch it lay fallow for lack of a homebuilder AND lender stupid enough to build/lend on a project with no buyer demand. At some point, the market will figure it out and attempt to rezone it to hightech.
So Rusty, your sources are telling you there’s strong hightech demand? If so, please contact me because I need buyers for a small project one of my clients currently has underway on Cantrill.
DT Businessman (aka Michael Bisch, Davis Commercial Properties owner, DDBA Co-Prez re-elected for another term)
Furthermore, Rusty, with the residential rental vacancy rate at or below 2%, the market is screaming that demand is strong.
DT Businessman (aka Michael Bisch, Davis Commercial Properties owner, DDBA Co-Prez re-elected for another term)
[quote]There would no doubt be strong demand for the residential component. [/quote]
Strong demand from Davis residents, or from folks outside Davis? If mostly the latter, then who is being served by this development? Certainly not the citizens of Davis. And note that staff admits this development will be fiscally net neutral to net negative. If this project is at all net negative, we have an added fiscal problem the city doesn’t need right now…
[quote]I attend 1-2 business policy meetings, conferences, workshops per week. I have not heard a single business owner, commercial real estate developer, commercial broker, university hightech related-official share this view, not one. [/quote]
Perhaps businessmen in Davis see this potential business park as competition, and is the real reason they don’t think it is “viable” as a business park? On the other hand I cannot ignore the fact that there is lots of commercial space in Davis that is vacant. So if this is to be a business park, city staff would have to really get cracking on making it an attractive prospect. My feeling, which is admittedly from a layperson’s perspective, is that not that much concerted an effort has been made to market this parcel as a business park, whereas lots of effort is being made to market it as residential, bc that will make the developer in this case a lot more money. Where am I going wrong in my thinking, if you do not agree, from a business perspective?
“Perhaps businessmen in Davis see this potential business park as competition, and is the real reason they don’t think it is “viable” as a business park?” About the only forums I hear the subject come up at are council meetings or the Vanguard. It does not come-up much at all in meetings I attend. Trust me, if there were demand, we’d be hearing about it. The reverse of course is true of Nishi where there is non-stop discussion and buzz. It’s astoundingly ironic that the market is abuzz about Nishi, muted on ConAgra, and our fearless councilwoman takes a contrarian view.
But again, develop ConAgra, don’t develop ConAgra, I don’t really care. I’m not a residential guy.
DT Businessman (aka Michael Bisch, Davis Commercial Properties owner, DDBA Co-Prez re-elected for another term)
“But again, develop ConAgra, don’t develop ConAgra, I don’t really care. I’m not a residential guy.”
Boy, you wouldn’t know it from all the posts you put up whenever the Vanguard has an article about it.
[quote]rust me, if there were demand, we’d be hearing about it. The reverse of course is true of Nishi where there is non-stop discussion and buzz.[/quote]
Perhaps the reason you don’t hear much about Conagra at business meetings is bc city staff is really marketing this parcel as residential, whereas the Nishi parcel is being marketed as a great place for UCD start-ups…
Rusty49, my concern is a wider one. How does one go about making sound public policy based on incorrect facts? Two aspects of the ConAgra project are glaring. 1) We know there is a massive undersupply of rental housing based on the current and projected vacancy rate. 2) We know that current and projected hightech demand and absorption rates are fraught with uncertainty given what the market is signaling (again the opposite is true at Nishi). How often can one simply stand silently by as a number of individuals insist on making public policy based on the sun setting in the east?
By the way, Rusty, you failed to respond to my point that the market is signaling strong residential rental demand with a 2% vacancy rate. This is a direct counter to a claim you made earlier.
DT Businessman (aka Michael Bisch, Davis Commercial Properties owner, DDBA Co-Prez re-elected for another term)
“…while Wildhorse did not require a Measure J vote in the pre-Measure J era, it ended up being approved after voters approved a referendum.”
The Wildhorse referendum was put to the voters in order to cancel the development agreement and address serious problems that it contained. The referendum was not approved.Then-Mayor Lois Wolk(mother of current candidate Dan Wolk) declared, under the authority of her office right before the balloting, that if the referendum was approved, the Wildhorse developers would be able to build whatever kind of project they wanted WITHOUT city input/control. This “mushroom cloud misinformation” was quickly determined to be bogus but not before the voters cast their votes. FWIW,the local political cadre of then-Mayor Wolk appears to now reside in the political camp of her son, Dan Wolk.
[i]Perhaps businessmen in Davis see this potential business park as competition, and is the real reason they don’t think it is “viable” as a business park?[/i]
ERM – I think you are on to something here, but I’m not sure it applies to local businessmen. If the site is appealing to prospective companies which wish to own or lease space at rates that make sense, then the project will get built, and soon. Most developer owners would take a dollar today instead of two dollars 20 or 30 years from now.
I think the more accurate way to make your point would be with the following statement “Perhaps HOMEOWNERS in Davis see this potential RESIDENTTIAL DEVELOPMENT as competition with THEIR HOMES, and is the real reason they don’t think it SHOULD BE DEVELOPED as HOUSING.
If Cannery could be developed and homes sold with prices 5% below comparably sized homes in Davis, there would be significant demand. But then, that wouldn’t make Davis homeowner equivalent of the landed gentry too happy, now would it?
Finally, can anyone refute DT Businessman’s point about rental properties? It would seem that multifamily housing is the most clearly out of balance sector in Davis. Why not build it there?
“….is that not that much concerted an effort has been made to market this parcel as a business park, whereas lots of effort is being made to market it as residential”
Even without factual confirmation, one can assume that this is true based upon the fact that marketing the site for a business park takes a lot of time, energy, creativity and effort whereas Davis residential development does not. Residential development also brings in more short-term gain to the city coffers which helps reduce pressures on city budget staffing considerations.
The housing for which there is demand (rental) is not the housing that is proposed for ConAgra. As to the demand for any sort of business property right now or in the near future, I urge readers to consider Jim Gray’s report to the Peripheral Task Force, May 12, 2011:
City staff introduced Jim Gray and Nahz Anvary, Commercial Brokers with Cassidy Turley BT,
Commercial. Mr. Gray with over 30 years and Ms. Anvary with over 10 years experience assisting
commercial businesses and technology companies in Davis and Sacramento Region. Mr. Gray
and Ms. Anvary provided background about the current context for regional office space and
shared following points, with Task Force members and public members present contributing
questions and comments:
[b]80 million square feet of office space in entire Sacramento region, 85 million sf with Solano
County, with 20 percent vacancy rate.
There is also shadow space to be absorbed, vacant space not on market or fully utilized.
Existing warehouse space built to support construction sector deeply depressed.
80% of housing sold in Sacramento region sold as distressed.
Result is decimation of local economy.
Need to find economic engine to renew our economy.
Talking about new business park now is questionable, especially if existing property owners
are looking at relocation.
Discussion about absorption rates of Mace Ranch and Vacaville business park. Vacaville
still 50% vacant to day.
Difficult to forecast absorption rates that make sense, infrastructure will not be driven
speculatively for 15-20 yrs.[/b]
For Davis to compete need to be strategic about what leads to success, think intermediate
and short term, id infill sites available (e.g. area north of Sutter Hospital, contact Sutter CEO
to discuss) and increase incentives to enhance and be creative: waive fees, defer fees,
defer impact fees, do creative investments and long term low interest loans.
Achieve public recognition of need to create environment where we can create jobs.
Need to make bold community statements “if you are user of ______technologies, bring it
on.”
Still need for space to keep people here.
Innovation cannot wait, need strong leadership and champions to make community
understand to get approval of Measure R
Leverage smart people in Davis who believe and can contribute to this effort (local CEOs),
Land doesn’t create growth, need to do business with those with right knowledge and
experience
Need to identify all infrastructure issues (major sewer & water).
Effort needs to be development driven, need “right” skilled team, has capital and will to take
risk.
Traditional developers are gone; now need wealthy individuals willing to tie up capital for a
long time.
Avoid retail – need job creating, R & D and office space and minimal design review.
City needs to be more collaborative in marketing and branding, there is no consistent
database of information – need to look at how communities brand themselves and say “we
are open” – What is the welcome mat for Davis?
Get testimonials on website – People want to be in Davis but it has horrible reputation,
despite many who think city has best city staff and city council.
“If Cannery could be developed and homes sold with prices 5% below comparably sized homes in Davis, there would be significant demand”
On what do you base this? Woodland and Dixon have provided home buyers with a flood of homes waaaaay more than 5% below Davis pricing. Try nearly 50% below at this point. You want a cheap house? Five minutes up Road 102, Spring Lake has many, many, many homes available. And what makes you think the home developers who eventually build on this site would price them 5% below comparably sized homes?
There is zero reason to rezone this land for ConAgra. The only benficiaries would be the landowners. Not the city, not the school district, not the 50%+ of Davis residents who pay a premium for their rental housing because of the historically low vacancy rates.
ConAgra’s owners aren’t homebuilders. If the city wants to approve residential and simultaneously deal with the issues of rental housing shortage and affordable housing in Davis, they can rezone a portion of the site to the two highest density housing categories only, and tell ConAgra that is the only type of housing they can build there. Then they could get their 600+ units on the site and still have half left over for a business park, which someday somebody might build.
Dan Wolk: “[i]What I like about this project is that it’s oriented toward two demographic groups whom I think … we need to be concerned about.”[/i]
Dan, you realize that the homes in this subdivision will require annual income well over $100K to buy? That isn’t the demographic I’m most concerned about in terms of housing availability.
davisite2, why the heck would any broker or developer spend a lot of effort and money marketing a product where initial outreach is indicating a lack of enthusiam? If there was significant pent-up or projected demand, brokers would be all over the project. Contrary to a popular assumption on this blog, time really is money. A broker is going to invest his/her time in endeavors that likely lead to a payday. We’re not entirely stupid (perhaps a little stupid, but not entirely stupid). You can go on insisting the sun sets in the east, but your assertion alone doesn’t make it so.
DT Businessman (aka Michael Bisch, Davis Commercial Properties owner, DDBA Co-Prez re-elected for another term)
Michael:
While I appreciate your perspective, if Cannery goes for mixed use, how and where are you planning to get a major business park in Davis?
A couple of years ago, during another discussion on housing, I did a quick calculation and concluded that Davis would need about 1000 – 2000 beds (500 – 1000 housing units) of rental housing beyond what West Village provides in order to accommodate the backlog of increased enrollment and the projected UCD increase in enrollment for the next decade. Since then we’ve learned that UCD plans to increase enrollment by 5000 more students. If they were to achieve the UC’s stated goal of housing 40% of those, we still would need another couple of thousand beds for that enrollment increase. Round numbers: we need at least a thousand, probably more like 2 – 3 thousand more rental housing units.
When was the last time an apartment building was built?
I will say again: the way for the city to provide affordable housing is not through affordable housing projects. It is by changing the density zonings on residential properties to reflect the urgent priority of building more rental housing. Davis is over 50% rental population. [i]At least [/i]50% of any housing built should be high-density rental units.
Brian: [i]”if Cannery goes for mixed use, how and where are you planning to get a major business park in Davis?”[/i]
You should be aware that there is a task force charged with assessing the peripheral sites suitable for such development, and that property on Mace, and (I believe) west of Stonegate have been discussed in the past, among others. Among the concerns, of course, is the Measure J/R requirement. You will find discussion in the minutes of possibly getting Measure J/R amended so a vote is not required for “job-creating” projects. That should all be considered as the city council reviews rezoning of the last large business site that is within city limits.
You can read minutes of the Peripheral Innovation Park Task Force online at the city web site.
Brian, I’ve been struggling with your question for 4 years. The traditional business park in Davis is problematic for a variety of reasons, so much so that I suspect that’s not our future. Low density sprawl is not the way to go. We need to develop a Davis-style model, small footprint / high economic output in close proximity and/or mixed with high-density residential. What is being considered for Nishi and Solano Park is on the right track.
DT Businessman (aka Michael Bisch, Davis Commercial Properties owner, DDBA Co-Prez re-elected for another term)
Don: The Measure J/R requirement is exactly where I was going with the question.
Michael: That’s at least the first honest assessment and answer I have seen on this. I’m intrigued. Though I tend to agree with those who question Nishi’s viability, I agree that’s ultimately the way we need to go.
Hold-off pressure for peripheral development by increasing land use productivity in the Core and let future generations grapple with what to do next once the potential in the Core has been tapped out.
DT Businessman (aka Michael Bisch, Davis Commercial Properties owner, DDBA Co-Prez re-elected for another term)
University-related high-tech does not need to be near a freeway, nor do non-profits like DISC which we just lost to Woodland or David Diamonds which required a rezone of auto mall land.
Here is a link to a map of high-tech businesses in Cambridge, M.A. [url]http://www2.cambridgema.gov/cdd/ed/pubs/ed_company_map.pdf[/url] This is one of the most successful high-tech areas in the world. High-tech clusters are spread throughout the city of Cambridge. None are on freeways. One major cluster is in an old industrial site in a built-out area.
A larger high-tech/non-profit component would be an asset to the surrounding neighborhood and to the city. The last council held out for an EIR which included a larger high-tech/non-profit component.
Is this council holding out for a peripheral business park? That is a very iffy proposition because of much higher infrastructure costs and political hurdles.
A few years ago I did a lot of outreach to succesful local high-tech business entrepeneurs who wanted to expand. They all said that they would be very interested in the Hunt-Wesson site. As I pointed out, one look at the map of Cambridge, MA will show you that high-tech does not need to be near a freeway. That is a dated concept.
I think there are a lot of agendas going on here. There is Con-Agra that wants to develop this for higher profit residential, and there are people who own agricultural parcels at Nishi, the Northwest Quadrant and across Mace near I-80 who would like to get a foot in the door for urban-usage zoning.
I suspect that if any of these peripheral parcels is re-zoned for industrial, their developers will come back crying that they can’t possibly afford the infrastructure without housing, just as Con-Ag has. And they would have a far better case, because their infrastructure will be far, far more expensive.
Over and over again, the same basic cries:
1. Developers can’t sell houses in Davis because there’s no demand, and
2. Davis needs to provide business developments because there’s need, and
3. Davis résidents want to have business park development, not housing developments.
Yet:
1. Developers are here ready, willing and able to build homes which they wouldn’t build if they didn’t expect to sell them, and
2. Nobody’s lined up to build more business parks or business that cannot be accommodated her already, and
3. If Davis residents want business parks, why are we so confident that they’d vote them down if offered the chance?
If one approaches Davis heading west on I-80, we’d think it’s a town of auto mall strip development. From the other direction, one would get the idea that UC-Davis is Davis. We all know the secret, however, that in the middle is a nice little town with house prices kept outrageously high and apartment rental vacancies outrageously low by the refusal to allow housing construction in recent years.
And, apparently, it’ll go on….
I don’t know where Michael Bisch thinks that high-tech would fit “in the core” without completely destroying the character of the downtown. The character of our downtown is what leads to its success.
I watched all of the vitality in downtown Berkeley spin out to the neighborhood centers like Solano Avenue, Rockridge, 4th Street, Walnut Square, Elmwood, etc. I think one cause was the over-densification.
People are attracted to a human-scale downtown where they can see the sky and feel the breeze. Our downtown lots are very small and the sidewalks narrower than those of Berkeley, so I think the effect of overdensification would be even more off-putting.
Additionally, overdensification of the commercial core would displace retail tenants and drive up ground-floor rents. We would probably end up with more chains and fewer unique independent businesses.
“Michael Bisch” doesn’t say this. The General Plan, the Core Area Specific Plan, and the Downtown and Traditional Neighborhood Design Guidlines say these things. All these documents call for greater densification instead of peripheral development. This is not Michael Bisch vs. Sue Greenwald. This is Sue Greenwald vs. the community’s planning documents. Sue, you are misleading the Vanguardians by framing this as a “Michael Bisch” issue.
A bit over a year ago, the city council moved to create an innovation district consisting of the Downtown, Gateway Area, and Nishi/Solano Park. The council took action on this plan again last Tuesday. Downtown is intended to house hitech firms not requiring a great deal of space. Wetlab and lower density uses is intended for Nishi. This plan coincides with the Chancellor’s plan. Again, this is not the Michael Bisch plan. This is “the” plan and it absolutely conforms with the details and spirit of the community planning documents.
DT Businessman (aka Michael Bisch, Davis Commercial Properties owner, DDBA Co-Prez re-elected for another term)
Any developer would salivate over cowbell, whr or the cannery. The economics are such that developers make money on housing while the city loses, unless we build mcmansions.
Mr will has more campaign contributions than any other city coouncil candidate and he supports the cannery. Coincidence? But shucks he supports small families.
Sue is right yet again.
Whoops cowbell. And mr wolk. Mahalo
Covell. iPhone. Issue
JustSaying: “[i]Developers are here ready, willing and able to build homes which they wouldn’t build if they didn’t expect to sell them, and….”[/i]
Actually, this is something I’m curious about in this whole discussion. I don’t think ConAgra plans to build any houses. As far as I know, they are just land developers. But I could be wrong. When would they expect construction on this site to begin?
We do not need Conagra land for housing; certainly not for 10+ years at the rate the economy is going.
David G: Covell Village dead? Maybe you know that, but the owners do not. THey have a new community group (Davis Neighbors, I think) and are still hanging around City Planning, trying to get some traction.
If Conagra went to housing, it would almost certainly be designed so this roads can feed into the CV site to the east.
City staff for many years have wanted to master plan both sites.
Of course, this project is probably paying for 25% of the overhad of planning staff at the moment, so heck yes, staff think this needs to go forward. Then the voters have to stop it, and we will.
“Of course, this project is probably paying for 25% of the overhad of planning staff at the moment, so heck yes, staff think this needs to go forward. Then the voters have to stop it, and we will.”
Another referendum…..I’m in
“If Conagra went to housing, it would almost certainly be designed so this roads can feed into the CV site to the east.’
City staff for many years have wanted to master plan both sites.”
Of course that would be the most logical way to proceed providing for both housing and work.
“If Cannery could be developed and homes sold with prices 5% below comparably sized homes in Davis, there would be significant demand”
“On what do you base this? Woodland and Dixon have provided home buyers with a flood of homes waaaaay more than 5% below Davis pricing. Try nearly 50% below at this point. You want a cheap house? Five minutes up Road 102, Spring Lake has many, many, many homes available. And what makes you think the home developers who eventually build on this site would price them 5% below comparably sized homes? “
He bases it on the laws of economics that say prices are set on the margin. Those nearby communities aren’t in the Davis school district so their prices may not be relevant to someone with a young family interested in the schools here. Back out the value of a public education in Davis or a private one in Woodland and the prices are more equalized.
The Wealth of Nations author rightly is pointing out that those who charge that business people might have a conflict of interest in opposing business development at the cannery just might have their own conflict of interest in opposing housing development on the site.
Current average price, Davis home: $508,000
Average sale price, Davis home: $405,000.
Looks like they’d have to reduce the price a little more than 5%.
Current average price, Woodland: $251,000
Average sale price, Woodland: $205,000
I know you really, really want to develop housing in Davis, Mr. Toad. But the economics certainly don’t seem to be there right now, next year, or anytime in the next 5 – 10 years. Maybe you know something I don’t know about the state of the housing market, and projections for when it is likely to turn around.
Anyone buying a home in Woodland or Dixon can apply for an interdistrict transfer to Davis schools.
I am a business owner who does not oppose business development at the cannery, by the way. But I couldn’t quite parse your sentence.
[quote]He bases it on the laws of economics that say prices are set on the margin. Those nearby communities aren’t in the Davis school district so their prices may not be relevant to someone with a young family interested in the schools here.–[b]Mr.Toad[/b][/quote]Like Don, I know that you really, really want more houses built so that the price will come down and you can buy one. But the problem is that the demand is very elastic for housing — much more so, I strongly suspect, than for high tech/non-profit. There are just too high-income people who work in other areas who are ready to move to Davis.
Most of my friends who live in the newer subdivisions commute out. They work elsewhere. That is why jobs/housing numbers are irrelevant.
I still believe that prices in Davis are higher than prices in Woodland because, as you yourself point out, people perceive Davis more desirable, whether it be for schools, proximity to a major university, etc.
I don’t think that building more (as in Hunt-Wesson or Covell Village) will change that significantly.
I don’t seem much here about cooperating with the university to develop business park opportunities in conjunction with their long term planning. Is our big cannery site supported by UCD leadership for the initiatives they’ve announced?
So what Adam Smith is saying is that if you could build something people would buy for 5% less than they are paying now, something you could easily do on the Cannery site, it would lower the price all around town by 5%. This basic fact of economics should not be that hard to understand.
If housing can be built profitably at Verona asking $450,000 or at Willowbank asking $779,000 housing can profitably be built at the Cannery.
I really don’t get why you are fixated on the price in nearby school districts. Maybe because you live in one of them and don’t understand why others don’t want to take advantage of the marginal price advantage of living in a nearby jurisdiction. But the reality is that there is a premium to housing in Davis and only by increasing the supply in Davis, most likely because of the value of going to the schools here, will you significantly effect the price in Davis. By the way I am not opposed to additional multifamily housing in Davis especially in Downtown. I just don’t see it as the only option.
Mr. Toad: Davis is seen as a desirable place to live, and we simply cannot build our way out of high housing prices. Remember the 1986 movie, Field of Dreams? You build it, and they will come …. from Sacramento Region, Bay Area, and all over. As someone said, you can buy a $200K house in Woodland, and if you work or go to school in Davis, apply for the transfer on that basis. Get the best of all worlds: cheap housing, and great schools!
Mike you are wrong about housing not being subject to supply and demand you have to look no farther than Woodland to see what unlimited addition of housing does to prices. Now Adam Smith spoke of a 5% marginal decrease something quite achievable through increased supply. Besides if you are not worried about supply and demand than there is no reason to worry about developing the Cannery.
I agree with Don. What will be done by Con Agra, land developers. Why can’t we have any approval be for a maximum amt of time. If not developed to the plan approved, it expires.
Of course it is subject to supply and demand, Mr. Toad. We know that. The question is: how many houses would Davis have to build to even out the price differential and make Davis housing ‘affordable’? A 5% marginal decrease wouldn’t make housing affordable here. I suppose if they built as many homes in Davis as Woodland has added in the last few years, the prices would even out some. But Spring Lake is barely filling up, way behind their build-out, and there are hundreds of foreclosed homes there. Davis is part of the greater real estate market. Having hundreds of foreclosed homes in Dixon, Woodland, and West Sac affects the Davis market.
You do the math: what annual income is required to buy a $500,000 home?
This project focuses on high end homes, with the bare minimum allotment of affordable homes. Once again, it is a trickle-down approach to getting affordable housing. The way to get affordable housing is to [i]build[/i] affordable housing, not try to flood the market to reduce the overall cost of housing.
@ SODA: if the council majority is serious about going forward with this project, there should definitely be a performance clause in the development agreement. But I still think ConAgra should do a 50% EIR as the past council majority approved for Lewis Homes. It’s basically the same project.
“Most of my friends who live in the newer subdivisions commute out. They work elsewhere. That is why jobs/housing numbers are irrelevant.”
So what? Why shouldn’t people live where they want to live for whatever reason.If more people who work in say Sacramento want to live here what is the problem? We should welcome them and provide better regional transit.
But as you say if jobs/housing numbers are irrelevant, which of course is not true, why not build houses that people want instead of business parks that people don’t want. Why have failed affordable housing programs instead of adding supply until housing is affordable for anyone who wants to be here so that we only need programs to shelter the poor instead of the middle?
Don, I’m absolutely on board with you on this one. But I don’t follow you at all on your support for another Sue Greenwald term on the council. It is incumbent for a political leader to achieve the objectives setforth in the community’s planning documents, not undermine them. If a political leader determines at some point that the plan is no longer in the best interest of the community, then it is incumbent upon the leader to advocate for new objectives and a new plan for achieving said objectives, and to bring the community along with her. That’s leadership. Sue Greenwald has done none of these things. She simply pretends the General Plan, Core Area Specifice Plan, and Design Guidelines don’t exist. How can a ship ever reach it’s destination if the captain of the ship sails in a direction entirely at odds with the agreed upon destination despite the best efforts of the crew?
DT Businessman (aka Michael Bisch, Davis Commercial Properties, and DDBA Co-Prez)
[i]adding supply until housing is affordable for anyone who wants to be here[/i]
So, how many homes do you think that would take?
You didn’t answer my question. Try doing the math. What annual income does it take to buy a $500,000 home?
But you said the average price is $405,000. But in response to your question it depends on how much you put down and what interest rate you are paying. Adding supply helps keep prices lower than not adding supply that is what I know. Why do you ask about the arbitrary $500,000 value?
I said the average price of a home recently sold in Davis is $405,000. That isn’t what’s being proposed for this site. Average home on the market in Davis right now is priced at $500,000. Annual income to buy that is $100,000+, using a typical online mortgage calculator. Nice of you, Mr. Toad, to carry water for people who want to build homes for folks in that income bracket. But it isn’t the income bracket I’m concerned about. I’m concerned about the ones who are renting.
Oh I didn’t see your previous post. I agree by the way that it is better to build what you need. The problem is that there is pent up demand from years of restricted supply so developers will build what they think will give them the greatest return. We are stuck with trickle down until that market is saturated and since land is limited by the arbitrary restrictions on annexation. If it were up to me we would build until it was no longer profitable to do so. By the way i am not in the real estate business. I just don’t fear having more people here.
Just anticipating the next remark. We are not going to be Elk Grove because we have the train.
Mr Toad
I see two problems with your build until any one can afford philosophy.
First is that as Don has pointed out, building higher end homes will not help to provide housing for people of lower income.
Secondly, it is not true that flooding the market would not hurt existing homeowners. If you were to saturate the market with $400,000 to
$ 500,000 dollar houses older people who have planned to sell their homes and use the equity as part of their retirement strategy will definitely be harmed. I fail to see how favoring those who want to move to Davis over those who have raised their children here are contributed for years to the community is productive for our community. There comes a point when you cannot grow your way to increased prosperity by building more homes affordable only to the already well off. I would say that point has already been reached in DVis.
JustSaying said . . .
[i]”I don’t see much here about cooperating with the university to develop business park opportunities in conjunction with their long term planning. Is our big cannery site supported by UCD leadership for the initiatives they’ve announced?”[/i]
That’s a very good question JS. Sue Greenwald surely can give us some insight into what the answer to that question is.
Sue, do you care to enlighten us?
Lots of people with two incomes of $50,000 or more can afford that. Its a little insulting that you suggest I’m carrying water for anybody. By the way why would you not want people who can earn that amount of money to live here? This is not to say that we shouldn’t build housing for people with less income. We should do both.
At some point, and, I think it is sooner than you think, when I see how many houses in the $500,000 range are languishing on MLS, builders will move on to building what is profitable after saturating that market if they are allowed. Now if the council would like to be proactive and either allow more appropriate housing through planning or the community opens more land to development we could provide all sorts of options that meet the needs of different groups; seniors, families, students and singles and by increasing the supply we could reduce price pressure for everyone giving everyone a better quality of life. Even those that might have reduced equity would be okay.
The only one’s who would really be hurt are those that would be pushed underwater who need to get out and are not already upside down. I don’t really have an answer for that, I will admit that, but, shutting down the construction industry isn’t a good solution either. i remember a young person who bought a house right at the top saying that the loss of Covell Village was going to protect her investment. Although I am sympathetic to those who made poor investment decisions I wonder how long the rest of society should subsidize those decisions and at what costs to the rest of us.
Last Tuesday I attended the city council meeting and spoke out against the Cannery Project.
While I do like the proposed urban farm component and the senior housing aspect, I do not think the overall project is up to Davis standards.
If we are to maximize our negotiating leverage with the developer, it is better to negotiate upfront before we agree to move it forward.
It was striking that the developer’s spokesperson even said that the proposal was a work in progress and that they would be making changes (even the developer recognizes this isn’t up our standards). However, vague promises of non-specific improvements to the project are insufficient in my opinion to make this project worthy of our community.
The bottom line on the project is this:
If this project as proposed were put to a community wide vote, we as a community would vote it down by a large margin.
Why the city council voted 4-1 to move it forward is troubling to me.
We do expect our council members to take leadership roles in guiding our community, but at the same time we do expect them at some level to represent our interests.
[i] Now if the council would like to be proactive and either allow more appropriate housing through planning or the community opens more land to development[/i]
Again: all they have to do is mandate denser zoning. For example, if the council majority wants affordable housing, they can just tell ConAgra that they will only allow the two highest-density zonings on that property.
Davis needs a housing policy (vs a growth policy) that addresses the lack of housing for residents and employees making less than median income.
[quote]Don, I’m absolutely on board with you on this one. But I don’t follow you at all on your support for another Sue Greenwald term on the council.—[b]DT Businessman (aka Michael Bisch, Davis Commercial Properties, and DDBA Co-Prez)[/b][/quote]Yes, we have a co-president of the DDBA who is a commercial real estate broker and who told me quite openly that he was working on putting together a deal to build on a significant downtown private parking lot — a deal involving moving the Bicycle Museum from its perfectly adequate location in Central Park to his new development, regardless of the wishes of the Bicycle Museum board — and that he wanted to use RDA money to do so.
And who has also pushed proposals to build on our surface parking lots (that people prefer for parking), and move the cars into expensive new parking structures paid for by the city.
A wee bit of self-interest here, perhaps?
“If you were to saturate the market with $400,000 to
$ 500,000 dollar houses older people who have planned to sell their homes and use the equity as part of their retirement strategy will definitely be harmed.”
So then we should only build enough so that prices never come down so that we protect the investment decisions of people near retirement? Shouldn’t these people who have had careers and were likely to have bought their homes when they were much cheaper or leveraged up over time have lots of equity? I know it sucks when you need to sell something when it is no longer worth what it once was worth when prices were higher but how long should we subsidize these people by instituting policies that make it harder on others. my only concern is for those pushed under water as supply increases not those for whom their profit is reduced.
[quote]I don’t see much here about cooperating with the university to develop business park opportunities in conjunction with their long term planning. Is our big cannery site supported by UCD leadership for the initiatives they’ve announced? — [b]Matt Williams[/b][/quote]The last time I talked with the Chancellor, she was enthusiastic about seeing any high-tech zoned land. We have had much more luck getting our Mace Ranch high-tech going then the University has had with their business park, which never materialized after over a decade of planning.
[quote][quote]”Most of my friends who live in the newer subdivisions commute out. They work elsewhere. That is why jobs/housing numbers are irrelevant.” [b]–Sue Greenwald[/b][/quote]So what? Why shouldn’t people live where they want to live for whatever reason.If more people who work in say Sacramento want to live here what is the problem? We should welcome them and provide better regional transit.-[b]-Mr. Toad[/b] [/quote]This doesn’t make much sense, Mr. Toad. How could we possibly build enough homes for everyone who worked elsewhere in the region but wants to enjoy inexpensive housing and Davis schools? And if we did, who would be left to live in these communities where people work? For example, if everyone who worked in Woodland moved to Davis, including the Woodland teachers, then the schools where the commuting teachers work would be closed, and the teacher might be out of a job.
“Yes, we have a co-president of the DDBA who is a commercial real estate broker and who told me quite openly that he was working on putting together a deal to build on a significant downtown private parking lot — a deal involving moving the Bicycle Museum from its perfectly adequate location in Central Park to his new development, regardless of the wishes of the Bicycle Museum board — and that he wanted to use RDA money to do so.”
Yes, a diabolical scheme by a cunning commercial real estate broker. Sue seems not to know what she is doing up on the dais. What she is painting as the DDBA co-prez scenario is actually the scenario that was described in the city proposal to bring the USBHOF to Davis in the first place. Furthermore, the USBHOF is in its current location on a temporary basis, again at the direction of the CC (that said, I haven’t been following this matter for quite some time so this status may have changed since the conversation that Sue is describing.
“And who has also pushed proposals to build on our surface parking lots (that people prefer for parking), and move the cars into expensive new parking structures paid for by the city.
A wee bit of self-interest here, perhaps?”
Yes, again the cunning, self-interested commercial real estate broker at work. Again Sue seems not to know what she is doing on the dais and she seems to be completely oblivious to the General Plan, the Core Area Specific Plan, the Downtown 2000 Strategy Report, Design Guidelines, and every other city planning document pertaining to the downtown. All of these documents call for significant densification, which is not possible with surface parking lots, and are discouraged according to these planning documents. In many instances, these planning documents specifically call for the city-owned parking lots to be developed and they also specifically call for parking structures. During the entire time that Sue was on the council she was calling for a parking structure up until she flip flopped in July. What is her problem, total amnesia? How can she be so ignorant of the planning documents and her own voting record? She acts like this is all a DDBA conspiracy when the only thing the DDBA is advocating for is for the council to ACTUALLY DO WHAT IT HAS BEEN PLANNING TO DO FOR DECADES!
My first time using caps. I feel much better.
DT Businessman (aka Michael Bisch, Davis Commercial Properties, DDBA Co-Prez)
Sue and Michael, there doesn’t seem to be any alternative other than for one of you to be wrong. So, rather than having you yammer back and forth at one another, let me ask a simple series of questions that should be easy for you to answer.
[b][i]Is Michael correct in his assertion that the General Plan, the Core Area Specific Plan, the Downtown 2000 Strategy Report, Design Guidelines, and every other city planning document pertaining to the downtown call for significant densification?
If the answer to that question is “Yes,” then is Michael correct in his assertion that such planed densification is not possible with surface parking lots, which are discouraged according to the referenced planning documents?
Finally, is Michael correct or incorrect in his assertion that in many instances, these planning documents specifically call for the city-owned parking lots to be developed and they also specifically call for parking structures?[/i][/b]
Sue Greenwald said . . .
[i]”I don’t see much here about cooperating with the university to develop business park opportunities in conjunction with their long term planning. Is our big cannery site supported by UCD leadership for the initiatives they’ve announced? — Matt Williams
The last time I talked with the Chancellor, she was enthusiastic about seeing any high-tech zoned land. We have had much more luck getting our Mace Ranch high-tech going then the University has had with their business park, which never materialized after over a decade of planning.”[/i]
Sue, in fairness JustSaying should get credit for asking that question, not me. I agreed that it was a good question, but he asked it.
Regarding your answer, what I hear you saying is that other than some individual personal conversations, there is no tangible, formal cooperation with the university to develop business park opportunities in conjunction with their long term planning. Is that correct? If your answer is “Yes, that is correct,” can you help us understand why not?
Thank you.
[quote]During the entire time that Sue was on the council she was calling for a parking structure up until she flip flopped in July.–[b]DT Businessman (aka Michael Bisch, Davis Commercial Properties, DDBA Co-Prez)[/b][/quote]Michael, you know very well that the parking structure project that I supported was a completely different project. You were in the audience when I explained why I voted against the proposal that was before us, and the difference between prior proposals and the proposal before us. I laid out my reasons at the council meeting.
If you want to hear my reasons again, I will reiterate them tonight, but only if you ask nicely and promise to stop attacking me.
Sue, you’re flip flopping again. First you condemn me for advocating for constructing a parking structure, any parking structure, with RDA funds. I point out that you yourself were advocating for the very same thing until you flip flopped. Now your saying “No, no, I still like parking structures, just not the 4-story parking structure at 3/4/E/F”. I’m pleased to hear that you’re back on track supporting the construction of another downtown parking structure exactly as is contemplated in ALL the planning documents. I will hold you to it and expect you not to run away from your on/off/on position during the course of the council campaign.
DT Businessman (aka Michael Bisch, Davis Commercial Properties, DDBA Co-Prez)
“This doesn’t make much sense, Mr. Toad. How could we possibly build enough homes for everyone who worked elsewhere in the region but wants to enjoy inexpensive housing and Davis schools? And if we did, who would be left to live in these communities where people work?”
Its pretty simple Sue. First you have people get out of the way then you have a surveyor lay out the plots. Some guys make frames and you pour the concrete. Next you get some wood, nails, hammers and saws. Are you getting the idea yet?
At some point the economics reach equilibrium. This is called price discovery where people are willing to build what people are willing to buy at a price that is agreeable to both.
I once heard Yale economist Robert Shiller on the radio during the boom but near the end when he was predicting a bust. He said as long as houses were selling for more than it cost to build them people would continue to build. As long as there is pent up demand from growth restrictions preventing the market from reaching equilibrium there will be builders ready to build in Davis and they will make a nice profit while providing jobs and shelter. Relaxing restrictions will result in more housing options at lower prices. Why would anyone object to that?
Davis is a separate real estate market from Woodland, Vacaville, Dixon etc. The supply/demand in those markets has some limited impact on Davis but not much. How do I know this? Don Shor’s statistics regarding the average price of homes in Davis vs those in Woodland. The two cities are proximate so that there shouldn’t be a doubling of price between the two. Absent extraneous factors, the supply and price of housing in Woodland etc, should be a significant issue for Davis housing, but it isn’t. Therefore, it is misleading to argue that the inventory and price in those cities means that we don’t need or couldn’t absorb new construction in Davis. We could and would absorb significant new housing, at a price much greater than the average price in Woodland.
So, what causes this – my belief is that it is primarily the school systems. It is a general truth, nationwide, that homes in very good school districts sell at higher prices than similar homes in poor school districts. There are also be other factors like limited supply of homes, and sellers who are not desperate to sell.
In any event, the point I made earlier regarding the 5% was this – If Davis allowed a supply of lets say 200 new construction homes that met the basic needs of families and the developer chose to price the new homes so as to appear to be a “good value” (I picked 5%, but maybe its 10% lower)- I believe those homes would sell very quickly. (A developer could do this with higher density development, or if they had a low cost basis in the land). It would also, over time, cause the housing prices in Davis to decrease, at least until the new construction was absorbed.
Now, all this is moot if the school parcel tax doesn’t pass. The “moat” around the Davis market will dry up, and slowly, the towns int he region will move toward pricing parity.
[quote]Now, all this is moot if the school parcel tax doesn’t pass. The “moat” around the Davis market will dry up, and slowly, the towns int he region will move toward pricing parity.–[b]Adam Smith[/b][/quote]Agreed. We could build a lot of new housing without seeing any increase in affordability as long as our schools and our quality of life remain higher than that of the surrounding area (it isn’t just schools; we have a lot of affluent retired folks from all over the country bidding on our homes). The only way to significantly lower our housing prices relative to those in the region is either lower our quality of life and the quality of our schools, to wait and see of surrounding cities raise the quality of their schools and their quality of life.
I’d love to live in Beverly Hills CA. Unfortunately I can’t afford a house there as the prices are all up in the millions of dollars. But darn it, I want to live there. I think Hillsborough should have to flood their market with tons of new affordable housing and bring down all the existing real estate prices so I can move there.
Sorry Rusty, I wish you could live there too but the cost of housing in Davis has different dynamics. Our costs are higher than they need to be because of self imposed restrictions not because of geographical dynamics. I agree with Adam Smith its the schools, but , even if it were some other factors as Sue suggests that attract seniors we could easily build housing for them as they take up less space per person. It seems to me from my experience that the seniors that live in the neighborhoods are mostly empty nesters. Those coming here from outside want to be near their children or grand children or are retired academics from elsewhere. Why wouldn’t we want to make room for them to come here or downsize? Of course maybe they just want somewhere warm and flat. That there are barriers thrown up to providing room for them is shameful!
“So then we should only build enough so that prices never come down so that we protect the investment decisions of people near retirement? Shouldn’t these people who have had careers and were likely to have bought their homes when they were much cheaper or leveraged up over time have lots of equity? I know it sucks when you need to sell something when it is no longer worth what it once was worth when prices were higher but how long should we subsidize these people by instituting policies that make it harder on others. my only concern is for those pushed under water as supply increases not those for whom their profit is reduced.
If that were the only issue, your argument would be stronger. There are other issues also. Many of us who chose to live in Davis did so for its particular small city ambiance as well as its schools and proximity to UCD. While I do not ” fear ” the presence of more people ( also read more congestion, more cars, more big box) it is not what I would choose. People who want to live in larger communities have no lack of choice in this area. Those who wish to live in a larger, more urban or suburban setting have every right to choose to do so. I feel it is also my right to choose not to promote that we turn Davis into yet another sprawling characterless series of bedroom communities and protect what is unique about our community. And I am willing to put my money where my mouth is in terms of supporting what I see as a desirable lifestyle in the form of increased taxes, additional support for our schools and volunteer work. I felt that way when I was just starting out financially almost 30 years ago, and I feel that way now.
As far as subsidizing one group by making it harder on others, is that not exactly what you are proposing by allowing a free for all on building which would in effect subsidize newcomers at the cost of those already established who do not favor growth ?
“Agreed. We could build a lot of new housing without seeing any increase in affordability…”
Who are you agreeing with Sue? Certainly not Adam Smith, who, clearly understands the economics of housing. You need to drink some coffee and re-read his post or maybe pick up a primer on supply and demand.
Mr.Toad said . . .
[i]
“Sorry Rusty, I wish you could live there too but the cost of housing in Davis has different dynamics. Our costs are higher than they need to be because of self imposed restrictions not because of geographical dynamics.”[/i]
Your argument doesn’t hold water Toad. The geographical dynamics of Beverly Hills are not the primary restriction on the cost of housing in Beverly Hills . . . or Pasadena . . . or Montecito. In all those cases there is a clear avenue for overcoming the geographical dynamics and creating lots of additional housing. Just look at Manhattan for an example where geographical dynamics were no impediment.
Further, the geographical dynamics of Yolo County are very much in play in determining how Davis grows. The Storey Index confirms that simple reality.
Toad, there are tens of thousands of homeowners in Davis. Do you expect them to all take more of a hit, real estate in Davis is down 25% from the highs of 2005, just so you can buy a cheaper house? Instead of complaining, go get a second job and start saving your money. That’s what I did in order to buy my first house in San Mateo, talk about high real estate prices.
Mr.Toad said . . .
[i]”Who are you agreeing with Sue? Certainly not Adam Smith, who, clearly understands the economics of housing. [b]You need to drink some coffee and re-read his post or maybe pick up a primer on supply and demand.[/b]”[/i]
You and I have had this discussion in many forms and on many occasions here in the Vanguard. If local Microeconomics were the only factor in play, your simple primer on supply and demand would indeed carry the day. However, local Microeconomics is not the only factor at play in the Davis Housing market. Regional microeconomics is another key factor you are failing to consider, and its effect on Davis’ housing demand is substantial . . . without adding even a single housing unit to Davis’ housing supply.
In addition there are Macroeconomic factors that further (and substantially) distort the local Microeconomics of the Davis housing market. Bottom-line, the supply/demand relationships described in your primer are overwhelmed by the many non-local complexities of the Davis housing market.
DT Businessman: What exactly is your point concerning Councilperson Greenwald’s positions that are not supportive of some some parts of the current General plan? I assume that you must also believe that any existing government policy is sacrosanct, and should never be publicly challenged by our elected representatives. As to motive, it is almost universally held, by respected political sages,that personal economic gain is ALWAYS a part of the equation in policy advocacy and the degree that it plays is DIRECTLY proportional to the level of personal gain that the policy will bring and any belief system that the party holds that would override personal gain in favor of principle. This,of course, excludes sainthood,for which,I assume, you are not currently up for consideration.
Rusty you are going to lower the cost of housing 25% with your no votes on measure C as Adam Smith pointed out using the thesis from Elizabeth Warren’s book “The two income trap” that it is good schools that drive up the price of real estate.
Matt, as both Adam and I could see from Don’s housing price numbers posted earlier on the previous page prices in nearby communities are not dragging down Davis prices as much as you would expect. We both conclude it is the schools and pent up demand that has kept the Davis market from falling more.
Now I’m not sure why people keep thinking I want to build to collapse. Maybe its because I have taken extreme positions in the past but let me be clear I did that mostly to challenge the wrongheaded notion that we couldn’t add enough supply to effect the market. Now that clearly those who said that have been shown to be wrong since even the Davis market has dropped considerably since the real estate bubble burst it is only the extremists on the other side who still cling to this notion that Davis housing economics defy the laws of supply and demand. By the way, just because there are lots of you doesn’t mean that your position is not both wrong and extreme.
What I would like to see is an opening at a rate that would allow people who want to live here move here providing additional supply as needed to absorb the growth. This should cause the dynamics of supply and demand to stabilize maybe at the same or a little lower level.
Just because Davis has gone through a bubble exacerbated by growth controls on the way up doesn’t mean we should now protect those gains through the continued adherence to a wrongheaded policy of restricted growth after the bursting of the bubble. Still we do need to be sensitive to the damage we have done with restricted supply and gradually open the gates giving people time to adjust their finances. What I find odd is that some of you argue that we shouldn’t build until prices are forced down while others argue that we could never build enough to drive prices down. Let me suggest that for many of you, who, I assume have lots of equity in your homes like Sue, Matt, Rusty and Mike, it isn’t really about price but some other irrational fear of letting new people into your territory. More people that own homes or rent are not the problem they are the solution to keeping Davis a vibrant wonderful place to live. Cast off your fear of newcomers open your arms and welcome them you may find that they are nice people just like you.
Sorry last paragraph sentence 3 should read: some of you argue we shouldn’t build because it will force down prices while others …
Toad, you’re more than welcome to buy a house in Davis, I welcome you with open arms. Have you even thought about those that bought houses here in the last 6 or 7 years. They are under water, do you want to hurt them even more just so you might be able to afford a home here? In my opinion you come off as very selfish.
Good post Mr.Toad. Rather than having an iterative discussion of scenario details her, lets get together over a cup of coffee and bounce our individual and collective ideas around with the benefit of paper and pencil. I’m sure we won’t completely agree, but there is a whole lot of valuable sharing that I believe we can do.
With the above said, there are a couple of points you made above that warrant comment.
[i]”Matt, as both Adam and I could see from Don’s housing price numbers posted earlier on the previous page prices in nearby communities are not dragging down Davis prices as much as you would expect.”[/i]
My primary concern isn’t the “dragging down of Davis prices.” My primary concern is that adding housing to Davis should benefit the people who currently contribute to Davis’ sustainability. In that context, I strongly believe that the vast majority of the pent up demand for housing in Davis is [u]not[/u] from people who currently either work in Davis or live in Davis. Further, in the current Davis jobs market, I fully expect that the vast majority of people who make up that pent up demand will not be converting their place of work from its current non-Davis location.
Said another way, if we were to build 1,000 new homes in Davis upwards of 900 of them would be purchased by “outside” demand and income sources. If my belief is borne out, then very few of the people who currently contribute to Davis’ sustainability will actually benefit from the increase in housing supply . . . and we will become even more of a “bedroom community” than we already are.
I am absolutely not opposed to additional housing supply in Davis, but I strongly believe that additional supply needs to be focused on:
1) providing housing for people who are currently working or living in Davis,
2) serving the people who currently are squeezed out of the Davis housing market much more than any other group … the people who work in the service businesses and contribute so much to the quality of life we all enjoy in Davis, and
3) addressing the biggest looming economic factor Davis currently faces, UCD’s plan to add 5,000 more students who will need apartment housing.
rusty49 . . .
[i]”Toad, you’re more than welcome to buy a house in Davis, I welcome you with open arms. Have you even thought about those that bought houses here in the last 6 or 7 years. They are under water, do you want to hurt them even more just so you might be able to afford a home here? [b]In my opinion you come off as very selfish.[/b]”[/i]
rusty, your bolded comment is a two-way street.
From Don’s post:
Average sale price, Davis home: $405,000.
Average sale price, Woodland: $205,000
Anyone buying a home in Woodland or Dixon can apply for an interdistrict transfer to Davis schools.
It takes about the same time to drive from one side of Davis to the other as it takes to drive from the cannery site along Rd. 102 to the new houses in Woodland (9 minutes, 3.52 miles vs. 5.98 miles).
So, it’s been argued nobody needs or wants cannery house building when folks can buy a place just down the road at half the price and have access to the major benefit that keeps Davis house prices so high, our schools.
The price differential doesn’t make common sense, but it’s hard to argue undisputable facts. Even if the economics theories about the reasons for this price disparity are confusing, facts is facts. House sales prices are right there for all of us to see.
And, there’s no doubt that our school district has opened its doors in order to expand class sizes and suck in some state school funds fron neighboring communities.
Now that these conditions have evolved from open market buying and selling of houses, why not apply the results to our affordable housing program? In fact, why do we even have an affordable housing program if it just gets people nine minutes closer to our schools?
We could have a more effective affordable housing program for the price of a stack of Yolobus passes. Establishing our project in east Woodland also would provide quality housing to the needy low-to-moderate income demographic and reduce the pressure our affordable ownership program places on Davis’ rental inventory.
Matt, if I sound selfish because I don’t want Davis home values to further decline putting many underwater and into foreclosures and quick sales then yes, I’m proud to wear that label. Who in their right mind would want their city’s home values to go down when they own homes there?
rusty, I don’t disagree with your logic. I have similar thoughts. However, that doesn’t change the fact that there is a selfish element to those thoughts.
JustSaying said . . .
[i]”So, it’s been argued nobody needs or wants cannery house building when folks can buy a place just down the road at half the price and have access to the major benefit that keeps Davis house prices so high, our schools.
The price differential doesn’t make common sense, but it’s hard to argue undisputable facts. Even if the economics theories about the reasons for this price disparity are confusing, facts is facts. House sales prices are right there for all of us to see.”[/i]
Great post JS. The price differential does actually make common sense when you step away from a purely local supply/demand perspective and look at the drivers of regional demand for Davis’ local housing supply. A simple question that illustrates this is as follows, “How many people in your life have ever told you that they are a graduate of UC Woodland?”
JustSaying said . . .
[i]”And, there’s no doubt that our school district has opened its doors in order to expand class sizes and suck in some state school funds from neighboring communities.
Now that these conditions have evolved from open market buying and selling of houses, why not apply the results to our affordable housing program? In fact, why do we even have an affordable housing program if it just gets people nine minutes closer to our schools?
We could have a more effective affordable housing program for the price of a stack of Yolobus passes. Establishing our project in east Woodland also would provide quality housing to the needy low-to-moderate income demographic and reduce the pressure our affordable ownership program places on Davis’ rental inventory.”[/i]
Your argument fails to include the most important overriding characteristic of the Davis housing market. Specifically, over 55% of Davis’ residents live in apartments. Therefore, the place to start the affordability discussion is in the apartment sector.
Correction: my final two sentences above should read:
Specifically, over 55% of Davis’ residents live in attached structures. Therefore, the place to start the affordability discussion is in the apartment sector.
Matt, while I appreciate and agree with your observations about how Davis would benefit by having more service workers living here, I’d osserve that we long ago lost the battle for increased diversity. Without having Rich’s data at hand and relying just on personal observation over more than 40 years, I’d guess we’ve grown from a well-to-do community of mostly white family people and students to a well-to-do community of mostly white people getting more Asiany (as UCD changes) and getting older.
I’m not sure what planning decisions we could make that would change this trajectory. A lot of our situation is dependent on what happens at the university. And, what could we do that would change our family age demographic trend that doesn’t get more than offset by the DJUSD decision–how long before hundreds of young families realize that they don’t need to buy here in order to have their kids attend school here?
I think it’ll take something big to have much effect on who gets to live in Davis. Fiddling around at the edges (infill, affordable programs, etc.) won’t have much impact by itself over 10 or 20 years.
“Specifically, over 55% of Davis’ residents live in attached structures. Therefore, the place to start the affordability discussion is in the apartment sector.”
Okay, so nitpick my modest proposal. I’ll bet that all of the factors being discussed would apply to apartment buildings and duplexes to a significant degree as well as they do to house construction and pricing in Davis vs. Woodland. Send some of our development pass though funds over there to subsidize apartment building. This should do as much to protect our borders from development as the $1-million a year to the county has done.
JS, I don’t disagree with the points you are making. The two most important keys for me are 1) your [i]”A lot of our situation is dependent on what happens at the university.”[/i] and 2) how successful Davis is in bringing additional jobs like Mori Seiki to Davis.
If we don’t succeed in 2) then the realities of 1) are that UCD intitiatives like “5,000 additional students” are going to mean that we need upwards of 4,000 additional apartment beds to support all those added students since UCD only provides 23% of its current students with on-campus housing.
If we are addressing those 4,000 additional apartment beds, there is no reason why we can’t include even more apartment beds to support people who currently work in Davis. That isn’t a diversity battle . . . its a synergy effect.
JustSaying said . . .
[i]”Okay, so nitpick my modest proposal. I’ll bet that all of the factors being discussed would apply to apartment buildings and duplexes to a significant degree as well as they do to house construction and pricing in Davis vs. Woodland. Send some of our development pass though funds over there to subsidize apartment building. This should do as much to protect our borders from development as the $1-million a year to the county has done.”[/i]
I hope I am not only nitpicking. With respect to your excellent question, I don’t think it is either/or, but rather both/and. If the students didn’t need to be close to campus then I would agree with your point. However, the students do need to be close to campus, so we will have to deal with the apartment shortage regardless.
[i]I’m not sure what planning decisions we could make that would change this trajectory.[/i]
Change zoning, specifically density. Eliminate the affordable housing requirement. Instead, mandate a certain percentage of any new project to be the highest-density zonings. I would make that requirement 75% until the vacancty rate gets to 5%. But I’d settle for a percentage that is close to our current rent/own ratio. Problem is, all the projects that have come before the council and the voters have been high-end, single-family residential, or expensive condominiums.
Matt and Don, I think you’re on the right track. Figure out what we really need, build those things into the system (planning and zoning) and cooperate more with the other forces that can make a difference. I don’t see a lot of evidence of the city aggressively working with UCD and developers, for example, to encourage whatever it is we see as a vision for the town.
Instead, we end up fighting with the very entities that have the wherewithal to help us accomplish what we probably want to to. What if we took the initiative to get the land and developers together, aimed at building developments that meet the needs of the city and its future? Instead, we end up fighting developers because they just can’t seem to come up with plans that we like.
Our RDA program and funds could be (have been) a tool for this too. We seem to charge forward with projects [u]in spite[/u] of what UCD sees for their future.
It’s kind of like a computer simulation game with Davis officials trying as hard a possible to force their individual pet ideas on other people’s money, property and visions. Not too successfully, either. And it’s not going to get any easier with shortages of investment funds, public and private.
[quote]”However, the students do need to be close to campus, so we will have to deal with the apartment shortage regardless.”[/quote]Maybe, but are you sure students need to be near the campus? I guess Woodland doesn’t work, but there are lots of apartments on the east side of town packed with students.
With the right amenities (hot tubs, free wi-fi, free Friday barbecue, walking distance to Target, etc.) that could make student housing away from the university attractive and less expensive. Maybe UCD could help make this work, but I’m not sure how. It’d be in their interest. Plus, Unitrans already has routes out there, routes that we subsidize I might add.
With appropriate mass transit options (and lots of bicycles) the east side of town can work. If the students are indeed on bicycles then they would have to pass through Downtown, which would no doubt mean more discretionary spending by students with downtown merchants. Not exactly a bad byproduct.
“Said another way, if we were to build 1,000 new homes in Davis upwards of 900 of them would be purchased by “outside” demand and income sources.”
I don’t think there is much you can do about who lives where and I just don’t think its productive to try.
“Have you even thought about those that bought houses here in the last 6 or 7 years. They are under water, do you want to hurt them even more just so you might be able to afford a home here? In my opinion you come off as very selfish. “
I have thought about them quite a bit although your time frame is a little off. Several of my friends are struggling with the fact that out of foolishness or necessity they bought homes during the boom that they now are working hard to pay off, refinance or come to grips with the reality they could never afford the house they bought in the first place. I have one friend who lost an investment house to foreclosure, he paid $550,000. It is still on the market for under $400,000. I don’t feel sorry for him and he doesn’t feel sorry for himself. He made a bad investment and walked away. I know someone else who had to sell a house they bought that they could never afford but didn’t want to leave. Its sad but should we feel sorry for their imprudence? Another friend and his wife, both had lots of equity in houses when they got together, sold their homes and bought a huge home that is now under water and is in foreclosure because one of them got sick. I do feel sorry for them. I also feel sorry for people who have never been able to save enough to afford a home. I have several friends who bought over priced houses and are stuck honoring their contract because they have the earnings power and like where they live and I feel sorry for them because they need to work so hard. So i guess my point is that I have thought a great deal about this stuff. Oh one other friend bought a house sold it for a huge profit and then lost the profit on the second home but is still ahead overall. Oh yes finally my neighbor bought his house in the 60’s and has lived there ever since has the place payed off and has a low property tax base too. I don’t feel sorry for him that he is only $400,000 ahead on his house instead of $500,000.
Still stopping all real estate activity so these people can work out their problems is unrealistic. Does that mean I am insensitive to their situations, no it does not.
Mr.Toad said . . .
[i]”I don’t think there is much you can do about who lives where and [b]I just don’t think its productive to try.[/b]”[/i]
We will have to agree to disagree about the bolded part of your statement. I think we have no choice. That is what planning is all about.
Mr.Toad said . . .
[i]”Still stopping all real estate activity so these people can work out their problems is unrealistic. Does that mean I am insensitive to their situations, no it does not.”[/i]
I can only speak for myself, but I don’t see you as the least bit insensitive. The conundrum we are discussing here is complex enough that some people are going to get hurt no matter which way we turn. I see your thoughts as trying to wrestle with the tradeoffs.
With that said, is it fair to say that the people you are looking to “help” are those who already have a real connection to Davis either as their place of residence or as their place of work?
Toad, being that Davis real estate is down 25% from it’s highs of 2005 isn’t that enough of a discount for new people to buy? Or do you want a 50% haircut plus 5% off? I mean how much does Davis real estate have to devalue before you are satisfied?
[quote]Wetlab and lower density uses is intended for Nishi.[b]DT Businessman (aka Michael Bisch, Davis Commercial Properties owner, DDBA Co-Prez re-elected for another term)[/b] [/quote]Michael, I have been around biotech my entire life, and I have some idea of what it takes. High tech takes space — the kind of space that we don’t have in the commercial core, even if we wanted to destroy the character and our small businesses by redeveloping our existing older buildings that have lower rent for merchants and restaurants.
“Wet lab and lower density uses” would be great at the Nishi, but it will never happen because it doesn’t pencil out. Just like the Cannery, the land owner will hold old for higher prices than “wet lab and lower density uses” can support. But the problem is far worse for the Nishi, because the infrastructure costs for developing the parcel are about highest in the whole area due to the fact that it is both undeveloped and landlocked between the railroad tracks with a tall fence running the entire length and the freeway.
A business park on the Nishi, unfortunately doesn’t pencil out.
“Toad, being that Davis real estate is down 25% from it’s highs of 2005 isn’t that enough of a discount for new people to buy? Or do you want a 50% haircut plus 5% off? I mean how much does Davis real estate have to devalue before you are satisfied?”
Rusty if you go back and read everything I have written here you will not see that I have quantified any percentages. What I have said is we should add housing at a rate at which more or less that we can absorb it but that we should do so over the long haul. On the other hand it seems you are all free market until it effects your own interests.
“Michael, I have been around biotech my entire life, and I have some idea of what it takes. High tech takes space — the kind of space that we don’t have in the commercial core, even if we wanted to destroy the character and our small businesses by redeveloping our existing older buildings that have lower rent for merchants and restaurants.”
Sue, apparently you don’t get around the downtown much. There are a number of high tech related firms in the downtown already. I have 2 in my building alone. One of them, Eco-Interactive, has a very large illuminated sign directly on 2nd Street. One of the two guest speakers at the Chancellor’s last convocation ceremony (with innovation the theme), a game software firm, is based in Midtown, an area quite similar to our downtown. The Chancellor has stated on any number of occassions that she would like to see our downtown develop into an environment more suitable for entrepreneurs. She even responded in the positive to a question about backfilling downtown office space currently occupied by UCD with campus spin-offs.
And as I stated earlier, the council has already included the downtown in an innovation district, and it took affirmative action yet again last week.
How do you square all of the foregoing with your comments? What do you have against the downtown? And why do you consistently undermine the oobjectives of all the downtown planning documents?
DT Businessman (aka Michael Bisch, Davis Commercial Properties, DDBA Co-Prez)
“Michael, I have been around biotech my entire life, and I have some idea of what it takes. High tech takes space — the kind of space that we don’t have in the commercial core, even if we wanted to destroy the character and our small businesses by redeveloping our existing older buildings that have lower rent for merchants and restaurants.”
Wow Sue, you really seem to be losing it. I thought you were older than Watson and Crick’s model of the double helix. Oh yeah you and Rosilind Franklin parties every night. But anyway here in reality you obviously have no idea what it takes to start a business in downtown. If you did you would see to it that new businesses aren’t treated like dirt by city inspectors who practically bankrupt new businesses while they wait for the inspectors to get off their asses and do their jobs.
[b]@Mr. Toad:[/b] I’ve actually taken the time to ask new downtown businesses how the planning and building department have treated them.
Not that anyone likes dealing with building inspectors but I have been told that planning and building have been very helpful, and a number of new businesses who have dealt with other cities have said that Davis was the easiest and most efficient process they have experienced.
Obviously we aren’t talking to the same people my bankrupt line above was a paraphrase from a friend who was put through hell through no fault of their own but instead of the mendacious actions of the city inspectors!
[quote]Not that anyone likes dealing with building inspectors but I have been told that planning and building have been very helpful, and a number of new businesses who have dealt with other cities have said that Davis was the easiest and most efficient process they have experienced.[/quote]
What I seem to be hearing is that publicly new businesses will claim everything went smoothly to locate here in town, and then privately will tell you about the hell they went through to locate here in town. This is only anecdotal, but it happens way too often to make me feel comfortable that the city processes for locating a business are smooth or fair…