Guest Commentary: City Did Not Violate Affordable Housing Requirements on Nishi

Affordable Apartments, Davis CA Davis Vanguard
Robb Davis speaks in February on Final Nishi Approval
Robb Davis speaks in February on Final Nishi Approval

by Robb Davis

In his Sunday, April 10, Op-Ed Alan Pryor stated that the City had violated its own affordable housing ordinance in approving the Nishi project.  In what follows I describe why I believe that is not the case and provide some background on the decision to exempt the project from affordable housing requirements.

Section 207.7 and Exhibit G section 1 of the Nishi Development Agreement addresses the affordable housing obligations. These sections state:

The anticipated deal points in the Pre-Development and Cost-Sharing Agreement approved by the City Council on November 27, 2012 assumed that there would be no affordable housing obligation for housing with densities exceeding 30 units per acre. In recognition of project location supportive of reduced costs for vehicle ownership and use, high-density housing including small ownership and rental units, and energy-efficiency features reducing resident energy costs, the Project is not required to provide price- and income-restricted rental or ownership housing.

Section 65866 of the State of California Government Code allows a city to approve deviations from otherwise-applicable regulations and policies through a Development Agreement.

The City Council considered the anticipated type and cost of housing on the Nishi property as it deliberated on the fiscal and policy implications of the proposal, and approved the project for presentation to the voters in June without formal income restricted affordable housing. That decision was placed within the Development Agreement. In addition, as discussed below, the housing types in the Nishi project are exempt from the Affordable Housing Ordinance under the existing Ordinance provisions.

Thus, there is no violation of city ordinances in the decision we made.

However, there was a clear policy decision made to exclude the project from the Affordable Housing Ordinance requirements. I acknowledge it is a policy decision with which citizens might disagree.  Whether that means they should vote against the project is up to them as they weigh all its advantages and disadvantages.

To understand this policy decision requires digging into the changing nature of our affordable housing requirements in recent years.  The city ordinance related to affordable housing has evolved as we have moved away from large, single-family-residence developments to infill projects that seek greater land-use efficiency through densification. Such projects are costlier and have been considered riskier in an environment in which they are not the norm. They are also riskier because community members more often oppose them. (We have learned that density is a good idea as long as it is “somewhere else.”)

As a result, the City Council in 2013 allowed for affordable housing exemptions for denser types of housing—including so-called “stacked flat” condominiums and vertical mixed use housing. Even before these ordinance changes, in 2012 when the City Council passed a resolution committing (reimbursable) resources to help fund Nishi project development costs, it included in its deliberations a statement about its intent to exempt the Nishi project from affordable housing requirements.  While this statement of intent was not binding on the current City Council, it did set the stage for project planning and created the clear expectation that there would be no affordable housing requirement.

This was done to encourage a very dense mixed use project that faced (and faces) many challenges including its “land-locked” status between the freeway and the rail line, the need to negotiate access through the UC Davis campus, and the uncertainty of creating commercial spaces in that area.

The clear policy decision made then and affirmed by the current City Council within the development agreement was that the project would be exempted from an affordable housing requirement.

Any complex and large project has trade offs, and this one involved agreeing to this exemption.  There was nothing nefarious in the intent and the City Council debated it deliberately in open session twice in the lead up to the final vote on Nishi in February.

This background illustrates that affordable housing goals must be viewed in light of a variety of policy priorities before the city.  The competing nature of these policies has been discussed in detail in numerous meetings before the City Council and the Social Services Commission, most recently on February 23, 2016.  And while the City Council continues to consider partially or fully removing the stacked flat and vertical mixed use exemptions from the Ordinance, it has not yet done so (the recommendations we are currently considering would have affordability requirements in the 5-10% range for such projects versus 25-35% in other housing projects).  Though we have sought public input via the Social Service Commission, in public workshops, and in City Council meetings, very few members of the public have expressed any opinion—for or against.

I will note that the proposed housing on Nishi includes stacked flats (exempted by the current Affordable Housing Ordinance) and mixed use rental apartments.  There is no requirement in the Development Agreement that these rental apartments be “vertical mixed use” and thus there is no automatic affordable exemption for them.  However, the current city Ordinance notes that the City cannot, unilaterally, force a developer to include an affordable component in apartments such as those proposed at Nishi.  This is due to the case of Palmer/Sixth Street Properties L.P. v City of Los Angeles, which is included in our Ordinance.  This case prohibited jurisdictions from requiring affordable housing for private rental housing unless the jurisdiction has provided for financial assistance or other considerations to the developer, something the City has not done in this case (see Davis City Ordinance 18.05.060)

The foregoing supports the fact that the City Council, in its decision on Nishi, explicitly exempted the project from affordable requirements in the Development Agreement.

We send this project to the voters having fully discussed these issues in public meetings.  We also send it to the voters having obtained in negotiations a $1 million community enhancement contribution from the developer to our affordable housing trust fund—though none was required.

Reasonable people can disagree as to whether we made the right decision. We weighed many trade offs in approving this project but sent it to the ballot because we feel it meets critical community needs: a considerable number of dense, energy efficient, housing units near the University and downtown; great transit access and connectivity that encourages biking and walking; and new commercial space near the University and the core.

We may not have gotten the balance of tradeoffs exactly right. We did not, however, violate any City ordinances.

A final word: The City is being sued by a number of citizens over this project.  I want to make it clear that this lawsuit in no way changes the right of citizens to vote on the project.  Indeed, those suing the city had the opportunity to seek an injunction to halt the vote.  They chose not to go this route for reasons known only to them.  What is certain is that if they had chosen to seek an injunction their arguments would have been held up to much closer inspection before the vote.  Instead, lacking a clear legal determination before the vote, they are free to say anything they want about the project.  Unlike the City, they are not required to provide objective information and can willfully sow confusion, make vague accusations, and mislead.  Evidence to date suggests they will do all of these.

Please inform yourself about the project and vote based on what you feel is best for the City.  That is the path that the City Council members took in placing it on the ballot for your consideration.

Robb Davis is Mayor Pro Tempore.  He welcomes questions and comments about this issue or any concerning the City. Write him at rdavis@cityofdavis.org. He is solely responsible for the contents of this article.

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48 comments

  1. Robb – thank you for explaining the CC’s thought process and reasoning on this matter.      The City appears to be standing on pretty firm legal ground, and this explains why the group filing the lawsuit did not seek an injunction — namely, that they would likely lose an injunction.  They have a much better chance to confuse the electorate with a mishmash of  irrelevant technical details than winning in a fact-based court situation.

  2. Thank you Robb for this clear explanation of how and why the Council made the decisions that it did.  You sum up the issue very well in the following two paragraphs:

    This was done to encourage a very dense mixed use project that faced (and faces) many challenges including its “land-locked” status between the freeway and the rail line, the need to negotiate access through the UC Davis campus, and the uncertainty of creating commercial spaces in that area.

    The clear policy decision made then and affirmed by the current City Council within the development agreement was that the project would be exempted from an affordable housing requirement.

    As is unfortunately often the case, the citizens either were not aware of that Council decision or did not understand the impact of the decision.
    Also unfortunately, UCD still has not come to the table with clear commitments regarding the challenges you describe.  That puts all the citizens/voters in a position where when they cast their vote on Measure A, they will have to “guess” about how those challenges are going to be resolved.

  3. Robb, I really appreciate you stepping up to help us understand how this came about.  It is hard to keep good track of everything that goes on. Thanks!

    Unfortunately, I do not think the sizes and thereby prices of the housing units here lend themselves to helping students (or anyone else who is not wealthy) find housing, and that is a BIG issue.

    1. dlemongello

      Agreed on both points. For me this building for the benefit of the wealthy is the single biggest problem with this project…..and I still have not made any decision on Nishi !  But I join in with your thanks to Robb for his clarification of events and his view from his city council seat.

        1. Matt, do you have (or does anyone else have) confirmed information about the rental rates?  I remember reading speculation about this in comments, and the only numbers I can find are here (caveat: it’s entirely possible I missed something posted that I didn’t read):

          https://davisvanguard.org/2016/03/tuesday-morning-thoughts-affordable-housing-surprise-issue-nishi/

          Alan Pryor posted this:

          Nishi Residential Square Footage
          Unit Type Sq. Ft./Unit No. of Units
          Studio 580 44
          1 Bdrm – 1 Bath 780 132
          2 Bdrm – 2 Bath 1,100 88
          3 Bdrm – 3 Bath 1,320 44
          4 Bdrm – 4 Bath 1,600 132

          The projected residential rent for the project is given in Table 2 (2nd Page) of the memo to Mike Webb on January 8, 2016 from Goodwin Consulting Group entitled Preliminary Analysis of Infrastructure Funding Alternatives – Nishi Property Development Plan.

          “Rent per Square Foot/Month $2.20 per square foot (average)”

          Thus, 1,100 sq. ft x $2.20 per sq ft = $2,420

          South of Davis responded:

          Thanks for the data, do you know that using the “average” rent per sf is a bad way to find the rent of a 2-bedroom apartment (unless you are trying to make the rent seem higher)?

          At the Colleges of La Rue the rent per SF is $2.17/sf for the 1br units but only $1.76/sf for the 2-br units.

          I’d add that $1.76/sf would be $1936/month for a 1100 sq ft apartment.  1100 sq ft is larger than a fair number of older 3-bedroom houses in Davis.

          I don’t know the developer’s intent, but the 2br / 1100 sq ft apartments are clearly not optimized for widespread student use.  You could put two people in each room, but for $600/month per person, 4 students could rent a detached house.  Students from richer families could clearly live in Nishi, but my point is that the overall student market for those apartments will be limited. However, the relative affluence of the people living in Nishi specifically seems less important to me than the overall effect of increasing housing supply in the city as a whole.

        2. KJW, no I do not have confirmation of those rates, and based on my observations of the discussions at the Yes On A tabling at the Farmers Market yesterday, the Yes On A representatives talking to the public do not have those rates either.

          I suggest you direct your question to Tim Ruff.  He posts here occasionally.  Perhaps he will respond to your question.

        3. The rents for the apartments at Nishi will be market rate. That means they will be within the bounds outlined in the table Mr. Williams helpfully provided. In addition, it is important to note that 30% of the units will be below 850 square feet. Furthermore, Nishi will save students about $7,000 per year by allowing them to live without a car.

    2. dlemongello wrote:

      > Unfortunately, I do not think the sizes and thereby prices of the housing

      > units here lend themselves to helping students (or anyone else who is

      > not wealthy) find housing, and that is a BIG issue.

      When new expensive apartment is built a rich person moves in opening up a space in their older less expensive apartment for a person that is in an even older less expensive apartment who moves leaving his affordable apartment available.

      Just like when a new expensive Lexus is sold to a rich person they trade in their old Lexus so a guy with an older less expensive Toyota can buy it and trade in his Toyota to become an affordable used car for someone.

    3. Hi dlemongello et al.,

      I wanted to clarify some concerns that have been floated during the discussions around Nishi’s affordable housing. To begin, the number claimed by Mr. Pryor and others ($2400/month) is not accurate. This number was calculated from an estimate done by a consultant hired by the City who made some rough approximations concerning potential property values in order for the City to have a ballpark idea of what sort of revenue it could expect. The price per square foot given by the consultant was derived without any consultation of the project owners–which is fine given the fact that this number was always meant to represent an upper bound of the estimate and was also never meant to be either definitive or precise. The reality is that this project’s rent will be within the market price helpfully provided by Mr. Williams below. Although it is perfectly understandable how Mr. Pryor and others could arrive at their projected number, the truth is that this number is much higher than the actual rents will be.

  4. As a result, the City Council in 2013 allowed for affordable housing exemptions for denser types of housing—including so-called “stacked flat” condominiums and vertical mixed use housing. Even before these ordinance changes, in 2012 when the City Council passed a resolution committing (reimbursable) resources to help fund Nishi project development costs, it included in its deliberations a statement about its intent to exempt the Nishi project from affordable housing requirements.  

    So, if I understand–the Council adopted a resolution in 2012 to accommodate the Nishi project and then codified this policy in an ordinance that would apply across the board, thereby watering down the affordable housing requirement for future projects. That’s unfortunate. Stacked flat condominiums, as opposed to multi-story townhouses, for example, are a means of achieving accessibility in high density infill projects. The exemption means the needs of many people with disabilities and seniors for affordable and accessible housing options will continue to go unmet.

    1. The paragraph before the one you quoted explains the reasoning for the “exemptions for denser types of housing”:

      To understand this policy decision requires digging into the changing nature of our affordable housing requirements in recent years.  The city ordinance related to affordable housing has evolved as we have moved away from large, single-family-residence developments to infill projects that seek greater land-use efficiency through densification. Such projects are costlier and have been considered riskier in an environment in which they are not the norm. They are also riskier because community members more often oppose them. (We have learned that density is a good idea as long as it is “somewhere else.”)

      Assuming I’m understanding this paragraph correctly, the city of Davis’s affordable housing ordinance was written with the intention of applying to SFR developments — because those were the kinds of developments being built when the ordinance was written.

      It’s for this reason that the AHO requires developers either to build a certain number of affordable units or to contribute to an AHO development fund: were this ordinance not in place, a developer could theoretically build a bunch of big houses on big lots, which wouldn’t do anything to help affordability.

      The implication in the paragraph I quoted seems to be that “infill projects that seek greater land-use efficiency” promote affordability by the intrinsic nature of their land-use efficiency.  While the Nishi apartments will likely be on the expensive side for the city because they’ll be new, shiny, and centrally located, they’ll increase the overall supply of housing units, as others have pointed out.

      Efficient infill increasing affordability is likely one of the two main reasons the city council allowed for “exemptions for denser types of housing”.  The other main reason, as Robb Davis states directly, is to increase the likelihood of such projects being built at all.

      1. KJW – As you note, the exemption for Nishi will not result in affordability. Moreover, there’s a range of options between 25%/10% affordability requirements and a complete  exemption–i.e., 0%. The threat that such projects won’t be built at all if affordable units must be included is likely an empty one. There was a stare-down contest and the Council blinked.

        1. Nishi will contribute $1 million to the City’s Affordable Housing Fund in addition to generating $1.4 million per year in revenue the City can use to pursue critical priorities and to fund services for the most vulnerable. I don’t think that can be described as losing a stare-down contest. That seems more like a great opportunity for Davis to generate organic revenue and replenish the waning coffers of the Affordable Housing Fund.

        2. In fairness, I noted that the Nishi exemption won’t result in affordability for the Nishi project specifically, but will increase the supply of housing units for the city as a whole by a significant number.

          The idea that denser infill projects won’t be built at all I see as much more an issue of winning an election than an issue of developers threatening not to build the projects whatsoever if affordability requirements were included.

          In other words, based on Robb Davis’s statement, city housing policy seems to be shifting towards:

          1. a realization that infill projects are desirable both because of land-use efficiency and because of a lack of realistic opportunities to build other kinds of projects;

          2. a greater understanding of how strong, some might say unreasonably strong, the anti-growth sentiment is in this city, and consequently

          3. a recognition that infill projects which probably have more pluses than minuses should be encouraged by city planning.

          You can see that as a stare-down contest if you want.  You may be correct, since I don’t know how the discussions between city staff and developers played out.

          From the evidence available to me, it sounds like city staff and developers mutually recognizing the calculated risk involved in putting any building project up for vote and negotiating a way to at least partially mitigate that risk for the developers while still ending up with numbers letting the city benefit from the project.

        3. DavisforNishiGateway said:

          Nishi will contribute $1 million to the City’s Affordable Housing Fund in addition to generating $1.4 million per year in revenue the City can use to pursue critical priorities and to fund services for the most vulnerable.

          $1 million is reportedly approximately $10 million less than would be paid in in-lieu fees but for the exemption. And the $1.4 million annual revenue is not targeted to affordable housing. Bottom line is, affordable housing has been deprioritized to enable this project to go forward. The project will do virtually nothing–directly or indirectly–to address that need. That’s not such a bargain for those residents in need of affordable and accessible housing no matter how it’s rationalized.

        4. Bottom line is, affordable housing has been deprioritized to enable this project to go forward. The project will do virtually nothing–directly or indirectly–to address that need.

          It will provide 1012 bedrooms of housing units.

          (Numbers taken from the table posted above: number of bedrooms multiplied by number of apartments of that type to be constructed.)

          If you disagree that an additional 1012 bedrooms of housing directly adjacent to campus and the downtown doesn’t address the need for affordable housing by significantly increasing overall housing supply, you’re welcome to hold that opinion.  As I’ve elaborated, I don’t think it’s a particularly well-thought-through one, but beyond a certain point, additional back-and-forth is wasted.

        5. KJW wrote:

          If you disagree that an additional 1012 bedrooms of housing directly adjacent to campus and the downtown doesn’t address the need for affordable housing by significantly increasing overall housing supply, you’re welcome to hold that opinion. 

          By by your argument, we might as well do away with an affordable housing ordinance altogether. Just keep building housing and the problem is solved.

        6. By by your argument, we might as well do away with an affordable housing ordinance altogether. Just keep building housing and the problem is solved.

          No.  My argument, extrapolated from the detailed, nuanced analysis in the post we’re commenting on, is that an affordable housing ordinance which was written to apply to single-family residence developments is poorly applicable to infill projects, especially infill projects which require intelligent infrastructure buildout to integrate them well into the city.

          Imagine that a developer proposed an El Macero-like development somewhere on the city outskirts.  Further imagine that there was somehow enough voter approval to get that development built (for the record, I’d be opposed to something like this).  The intent of the AHO, at the time it was originally written, was to require such a developer to include some smaller, affordable houses, rather than populate an entire development with large houses on large lots to maximize profit.

          The AHO was not handed down from on high etched in stone tablets.  It came about at a particular time in city history in response to particular circumstances.  Those circumstances don’t pertain to this project, which is of a completely different type.

          I note that your argument is prone to loaded language: “Just keep building housing.”  “There was a stare-down contest.”

          However, I also note a lack of actual detail in your argument.  I’ve stated what effect I think those 1012 bedrooms will have on city housing supply.  What effect do you think they’ll have?

          Similarly, how would you alternatively propose to help housing affordability?  I’m quite willing to take in other possibilities, as well as specific criticisms of this particular project.  Thus far, you haven’t provided anything other than relying on the narrow letter of the AHO rather than considering what “affordable” means in different contexts and circumstances.

          Give me something else to consider and I’m happy to acknowledge counterpoints.

    2. But my understanding was the City Council is considering changing the ordinance for future projects, to wit: “And while the City Council continues to consider partially or fully removing the stacked flat and vertical mixed use exemptions from the Ordinance, it has not yet done so (the recommendations we are currently considering would have affordability requirements in the 5-10% range for such projects versus 25-35% in other housing projects).  Though we have sought public input via the Social Service Commission, in public workshops, and in City Council meetings, very few members of the public have expressed any opinion—for or against.”  If you want change, let the City Council know.

      1. That’s a good point, especially given the open statement that the CC has received very little input so far.  From what I understand, I obviously would be for keeping the exemptions in place.

    3. I’d add that while I agree with your desire for accessibility for seniors and the disabled, I have significant doubts that the 2013 affordable housing exemptions will end up “watering down the affordable housing requirement for future projects”.

      Davis’s AHO as it currently exists seems to be a hindrance, not an aid, to actual affordability when it comes to the infill developments in this city.

      The AHO may have served a useful purpose with regard to SFR developments in this city in decades past — I can’t comment intelligently on that.  But today, it likely decreases, not increases, the chances that affordable infill will be built.

      The 2013 “exemptions” do have the effect that each individual infill project granted those exemptions needs to be examined by the city to see whether the numbers, types, and density of the housing units involved would be beneficial.  I see this as a plus rather than a minus.

  5. Robb Davis:  “Unlike the City, they are not required to provide objective information and can willfully sow confusion, make vague accusations, and mislead.  Evidence to date suggests they will do all of these.”

    This statement is not becoming of an elected official, who presumably represents all citizens.  Negative assumptions are made, regarding the underlying motivations of those with legitimate concerns.

    This is the only comment I will make, today.  (Not done with my taxes.)

     

    1. Ron wrote:

      > Negative assumptions are made, regarding the underlying

      > motivations of those with legitimate concerns.

      I don’t see Robb making any assumptions about the motivation of people trying to stop Nishi, he is just stating the fact that they are willfully sowing confusion, making vague accusations, and misleading people.

      1. South of Davis:  “. . . he is just stating the fact that they are willfully sowing confusion, making vague accusations, and misleading people.”

        One last comment for today (can’t resist taking a break from taxes):  If you can’t see the “loaded” nature of Robb’s statement (disguised as “fact”), then I don’t know what else to say.  It’s a conclusion (and not a very professional one for an elected official).  I find it insulting.  The actual facts are apparently in dispute.  (I’ll leave it to others to debate that. Don’t have time, today.)

         

        1. Ron, I find it insulting to be met with a barrage of inaccurate and, at times, blatantly false information specifically designed to sow confusion and mislead me as a voter.  I don’t see anything insulting about pointing out that this is being done.  I would say that this is good leadership to warn voters when people are using this sort of strategy in their political campaigns.

  6. …the City cannot, unilaterally, force a developer to include an affordable component in apartments such as those proposed at Nishi.  This is due to the case of Palmer/Sixth Street Properties L.P. v City of Los Angeles, which is included in our Ordinance.  This case prohibited jurisdictions from requiring affordable housing for private rental housing unless the jurisdiction has provided for financial assistance or other considerations to the developer, something the City has not done in this case

    If only this were true. However, the City did in fact provide and will provide financial assistance to the developer in a number of ways as Mr. Davis is well aware of but chooses to ignore.

    1) The Pre-Development Agreement itself provides for cost-sharing of pre-development costs between the City and the Developer to the tune of $350,000. Clearly this is a form of financial assistance to the developer.

    2) Of the approximate $4,775,464 of roadway impact fees to be paid to the City by the developer, only about about $3,000,000 will actually be paid because the developer will receive a credit of up to $1,775,462 for “construction of the Olive Drive and Richards Boulevard Intersection improvements and the bridge over the Putah Creek Parkway”. In other words, the developer is being paid $1,775,462 for widening Olive Dr. and putting in the bridge to the Nishi property from Olive Dr which improvements are only needed as a direct result of the project itself. Clearly this is a form of financial assistance to the developer.

  7. Section 65866 of the State of California Government Code allows a city to approve deviations from otherwise-applicable regulations and policies through a Development Agreement.

    Section 65866 is a huge section of the Government Code that generally pertains to Development Agreements between government entities and a developer. I find absolutely no references in 65866 that “allows a city to approve deviations from otherwise-applicable regulations and policies through a Development Agreement”. Perhaps Mr. Davis will provide a reference more specific within that document that is 100s of pages long to justify his statement. In that absence, I think City Attorney, Harriet Steiner, is just blowing smoke and is flat out wrong. It sure wouldn’t be the first time the City has found itself with its legal foot in its mouth.

    Although I have published my findings alleging legal improprieties on the part of the City and the developer with respect to the exemption of the Affordable Housing Ordinance, I am not a party to the lawsuit. But I do find it interesting that if, as Robb Davis claims, the City cannot impose Affordable Housing requirements on Nishi because of Palmer vs LA and Section 65866 of the State of California Government Code, then why has the City Council also not waived the requirements of this ordinance for any other recent and planned residential developments in Davis including the Cannery Lofts (providing extremely low to low income rental units), Grande (providing low-moderate and middle income ownership units), the Villages at Willowcreek (providing low-moderate ownership units), and Chiles Ranch (pending discussion of paying in-lieu fees or providing low-moderate ownership units). And I notice that both the proposed Sterling Apts. on 5th and the new apartment proposal for East Olive both have included affordable housing in their proposed plans.

    Hmm…strange…very strange

    1. But I do find it interesting that if, as Robb Davis claims, the City cannot impose Affordable Housing requirements on Nishi because of Palmer vs LA and Section 65866 of the State of California Government Code, then why has the City Council also not waived the requirements of this ordinance for any other recent and planned residential developments in Davis including the Cannery Lofts (providing extremely low to low income rental units), Grande (providing low-moderate and middle income ownership units), the Villages at Willowcreek (providing low-moderate ownership units), and Chiles Ranch (pending discussion of paying in-lieu fees or providing low-moderate ownership units). And I notice that both the proposed Sterling Apts. on 5th and the new apartment proposal for East Olive both have included affordable housing in their proposed plans.

      You are comparing apples to oranges.  The Cannery Lofts, Grande, Villages at Willowcreek, Chiles Ranch, Sterling Apts. are not infill developments.

  8. Ron wrote (quoting me first):

    “Unlike the City, they are not required to provide objective information and can willfully sow confusion, make vague accusations, and mislead.  Evidence to date suggests they will do all of these.”This statement is not becoming of an elected official, who presumably represents all citizens.  Negative assumptions are made, regarding the underlying motivations of those with legitimate concerns.

    Then Alan Pryor wrote:

    1) The Pre-Development Agreement itself provides for cost-sharing of pre-development costs between the City and the Developer to the tune of $350,000. Clearly this is a form of financial assistance to the developer.

    The Nishi Development Agreement states in Article 2/b/4

    Predevelopment Contribution. Developer shall repay predevelopment expenses incurred by City in accordance with the Pre-Development and Cost-Sharing Agreement approved by the City Council on November 27, 2012. Repayment will be allocated per parcel, on a basis such parcel size, parcel use, and/or anticipated as on a building square footage basis, at the time of approval of the first Tentative Subdivision Map for the project. Payment for each parcel shall be made with Certificate of Occupancy for the first building on that parcel.

    In addition, an analysis of DAs done in this City over time shows that credits for impact fees are common.  Alan, I assume, knows that Palmer refers to direct support to a housing program.  No City housing trust fund money or other is going to support affordable housing on this site.

    Today I demonstrated that claims that we violated our affordable housing ordinance are incorrect. Further inaccurate statements have been made concerning the LEED ND certification process and the idea that PV electricity generated on site will be sold to a CCE leading to residents paying more for electricity.  Unverifiable but clearly inflammatory comments have been made about “gifts” made to the developer.

    If I have offended anyone with my comments I am truly sorry.  But I made them on the basis of what I have observed.

     

  9. In his posting above, Robb offers a spirited defense of the City Council’s decision to exempt the Nishi project from the City’s Affordable Housing Ordinance.  This missive was a rebuttal to my earlier article in which I claimed that Council’s actions were a direct violation of that ordinance.

    Mr Davis’ primary defense was that there were legal loopholes by which the City could override the City’s Affordable Housing Ordinace by direct Council action. I completely disagree with his opinions, for reasons state above, and ultimately a court of law will decide whether the City’s actions were legal or illegal

    But I believe the real question for voters to decide is not whether the exemption by the City Council of the Nishi project developers from the City’s Affordable Housing Ordinance is legal or illegal.

    The question is whether it is right or wrong!

    I believe it is fundamentally and morally wrong for the City to give away the equivalent of 154 units of affordable  housing or $11,550,000 in equivalent in-lieu fees to multi-millionaire developers on a whim. The fact is that this exemption was not given on the basis on an extensive independent economic analysis showing the project was not otherwise economically viable. The City Council granted this exemption solely because the developers just told them they needed it. There was no other written justification otherwise provided to the City in an Affordability Plan as is specifically required by the Affordable Housing Ordinance.

    1. As Robb Davis noted, the city believed the developer was exempt for the affordable housing ordinance, but the developer gave $1,000,000 to the Affordable Housing Fund even though not required to.  If the courts find in favor of the city (and I believe they will), Robb Davis will be exactly right. Reminds me of the lawsuit against water rates that the judge ruled against. See: https://davisvanguard.org/2014/03/judge-backs-city-on-final-water-rate-ruling/

    2. Please read the Plescia pro forma analysis and then return and correct the assertions here.  I am assuming you read the Plescia analysis which is an “independent economic analysis.”

      You wrote:

      But I believe the real question for voters to decide is not whether the exemption by the City Council of the Nishi project developers from the City’s Affordable Housing Ordinance is legal or illegal.
      The question is whether it is right or wrong!

      Here we agree and that is essentially what I said in my article.  We made a policy decision so decide whether it was the right one given the totality of what the projects offers.
      However, it is interesting that you are saying that the real question is not whether the exemption was legal or illegal because that is EXACTLY how you have been framing it for weeks–stating unambiguously that it IS illegal (or, more accurately, violates our affordable housing ordinance).
      My article returns the discussion to where it should be: was it right or wrong and, if it was wrong is that sufficient reason to vote against the project?  That is the fair question but it should not be based on accusations or wrongdoing.
      Unfortunately our limited “duel a deux” will have to end here for the day.  I am off to participate in an event related to… housing.  More specifically, on programs that house homeless individuals–an areas we have quietly made some progress on this year.

  10. Alan wrote:

    > I believe it is fundamentally and morally wrong for the City to give

    > away the equivalent of 154 units of affordable  housing or $11,550,000

    > in equivalent in-lieu fees to multi-millionaire developers

    I believe it is mortally wrong to keep telling people that the city is “giving away” $11.5 million by not making a developer pay a fee that they are not required to pay.

    Would UC Davis be “giving away” $2 million a year if they don’t make the developers pay the tuition for 154 of the apartment residents (yet another thing the developers are not required to pay)?

  11. OK, I’ll ask the stupid questions… what is a “stacked flat”?  How does a “stacked flat” differ from a condominium unit?  An apartment unit?

    1. From the Tampa Bay Times …

      If the constant up-and-down-the-stairs of a townhome lacks appeal, here’s an alternative design: the stacked flat, also known as the carriage home.

      These are multifamily dwellings with one unit at ground level, one above. Typically they’re built with six or eight units per building. Each home has a direct-access ground-level garage for one or two cars. The occupants of the second-floor units have to climb a flight of stairs to get to their homes, but once they’re there, no more stairs.

      “For all intents and purposes it’s an active-adult plan,” said Bob Boyd, an architect with BSB Design in Tampa, which has designed many of these stacked-flat projects. He predicts we’ll see more.

      “The product is what buyers told us they wanted,” said Reed Williams, vice president for sales and marketing at Pulte Homes’ Tampa division, which has a stacked-flat project at Coachman Reserve, a144-unit development off Belcher Road in Clearwater.

      “Empty-nesters want a maintenance-free lifestyle. They don’t like a townhome where they have to go up and down the stairs all the time. In a stacked flat, once you go up, all the living is on one floor.” Or if you buy the ground-floor unit, you face no steps at all.

      Said another way, a stacked flat is a condominium that does not have internal stairs between floors of the condominium, because the condominium is all on one floor.   Alternatively, a stacked flat is an apartment that isn’t for rent, but rather for sale.

  12. I said

    The fact is that this exemption was not given on the basis on an extensive independent economic analysis showing the project was not otherwise economically viable.

    Robb Davis said

    Please read the Plescia pro forma analysis and then return and correct the assertions here.  I am assuming you read the Plescia analysis which is an “independent economic analysis.”

    Yes, I read the Plescia Economic Analysis. This was the initial report that stated the most likely economic outcome to the City was going to be a negative $78,000. It was in this analysis where I found out that projected rents were going to be $2.20 per sq foot or over $2,400 for an 1,100 sq ft  2-bedroom, 2-bath apartment.

    I still stand by my assertion and challenge you to cite where in that report there are facts “showing the project was not otherwise economically viable” without the exemption from the Affordable Housing Ordinance.

    It is also interesting to note that, according to Robb and the City, the decision was made to exempt the project back in November, 2012 in the Pre-Development Agreement. Yet, this was almost 3 years before the ink on Plescia report was dried. So you are claiming the decision was made to exempt the project in 2012 and then a report was prepared at the City’s request in 2015 showing the exemption was justified. Does this not smell fishy to anyone other than me?

     

  13. I just want to say that this discussion has been refreshing, informative, and without some of the hysterical/outrageous commentary that unfortunately is found on the Vanguard. Thank you all for the civility, patience with each other, and the efforts to inform about this project and the vote to come.

  14.  
    It’s Bizarro World!  Someone says Grande is not infill, but it is!  The same person claims that Nishi is infill, but it isn’t!  Nishi is not in the City and it is not in the City General Plan.  This same person asserts being present at the public hearing for the Sterling project, and that citizens were not shouted down.  Does that mean that they were shouted down? 
     
    Next we are told that the rationale for a Nishi predevelopment understanding established in 2012 is to be found in a document that was provided in 2015.  So, the City Council could see into the future and read this report that projected a net negative cash flow to the City.  Hence, in Bizarro World, that’s a positive cash flow, and they proceeded with the project.  I can hear John Kasich now, “jeez, oh man.”
     

    1. skeptical: “The same person claims that Nishi is infill, but it isn’t!  Nishi is not in the City and it is not in the City General Plan.” 

      From the Davis Enterprise: “It began eight years ago, when the city’s Housing Element Steering Committee determined that Nishi was one of the top infill sites in Davis.”  Apparently the city’s Housing Element Steering Committee determined that Nishi was “infill”.  According to the Oxford Dictionary infill is: “Buildings constructed to occupy the space between existing ones.“, which also makes Nishi infill.

  15. skeptical wrote:

    > It’s Bizarro World!

    It’s not bizarro it is just the people that want to stop projects “willfully sowing confusion, making vague accusations, and misleading people”…

  16. Just like with oil or any other commodity the cure for high prices is high prices. An increasing price measures an imbalance between supply and demand that moves up  the price. As we saw with oil, high prices caused a spike in investment and output that lowered prices. We can do the same with housing but only if we build and add supply to accommodate growth in demand. As long as we restrict increasing supply while demand continues to grow we will never get lower prices. So complaining about high prices by arguing that we shouldn’t build are arguments that contradict basic economic principles.

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