By Nancy Price
On Sunday, April 10, Alan Pryor wrote an Op-Ed in the Enterprise in which he claimed that the City Council’s actions to exempt the proposed Nishi project from all low income housing requirements were a direct violation of the Davis Affordable Housing Ordinance and illegal. In a rebuttal Op-Ed on Friday, April 15, Robb Davis offered a spirited legal defense of the City Council’s decision. Ultimately, these claims will be decided in a court of law.
Both these articles also appeared as Guest Commentary on the Davis Vanguard: Alan Pryor’s on March 30 and Council Member Robb Davis’ on April 17, each followed by spirited discussion on the blog.
This article below appeared in the Sunday, April 24 Davis Enterprise, page B7.
As a former member of the city’s Planning Commission, I believe the more important question for voters to decide is whether this exclusive affordable housing exemption for Nishi is morally right or wrong and makes any economic sense for the City.
I believe it’s fundamentally wrong for the City to completely waive the requirement for any developer to build 154 units of affordable housing as is minimally required at Nishi by the Davis Affordable Housing Ordinance based on the project’s massive size. Nor are the multi-millionaire developers otherwise required to pay equivalent in-lieu fees of $11,550,000 ($75,000/Unit x 154 Units).
And what also bothers me is the complete lack of proper public process by which this categorical and complete exemption was granted by the City to the developers. For instance, this exemption was not given on the basis on any extensive independent economic analysis showing the project was not otherwise economically viable. Nor was there even a written request and justification provided to the City by the developer in an Affordability Plan as is specifically required by the Affordable Housing Ordinance. The City Council granted this exemption solely because the developers just told them they needed it or the project could not be built.
Then the City attempted to justify this exemption for Nishi and move the project forward by claiming that the project is going to be “affordable by design” with “small units…designed for students.” And the City touts that the developer has graciously agreed to otherwise donate $1,000,000 to the City’s Affordable Housing Trust Fund.
Well, as is often the case in new developments, the reality is quite a bit different than the rosy picture presented to the public. As it turns out, the rental units at Nishi will be even larger and more expensive than those at West Village which are all rented to well-to-do students – mostly from out-of-state and other countries (just look at all the new BMWs and Lexus in the student parking lots). So much for providing truly affordable housing “by design” for average or low-income students.
And what about that $1,000,000 donation to the Affordable Housing Trust Fund? Well, it turns out that is actually only going to be paid proportionately when each of the parcels (including the commercial buildings) are actually “occupied.” The earliest any construction will start is in 4-5 years and it could take 10 years to build out all the commercial space. That means the City will receive only about $100,000 per year for the Affordable Housing Trust Fund starting in year 5 and continuing through year 15.
And what do the developers get in return for this comparatively modest donation? They get a complete exemption from all affordable housing requirements for which Nishi would otherwise have to build 154 low-income units or, alternatively, pay equivalent in-lieu fees of $11,550,000 to the City’s Affordable Housing Trust Fund. Donate $1 million to save $11.5 million in in-lieu fees? That sounds like a pretty good deal for the developer to me…but not so good for the low income residents in Davis.
Another fact is that while the City has exempted this one single project from the low-income housing requirements, they have never, ever done that for any other large development project in the City. This includes 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 both the proposed Sterling Apts. on 5th St. and the new apartment proposal for East Olive Dr. have affordable housing included in their proposed plans.
So just to conclude – the courts will determine whether or not the exemption of Nishi from the City’s Affordable Housing Ordinance is legal or illegal. But I think all the other evidence points to the fact that is an economically bad deal for the City. And it just seems morally wrong to me that our supposedly cash-strapped City is making a $11.5 million give-away of affordable housing money to multi-millionaire developers so they can construct luxury rental housing. Does this really reflect our Davis values?
What is morally wrong is people who have a home doing everything they can to restrict the supply of housing for others. The shortage of housing in California and its subsequent high price is one of the main causes of California’s high poverty rate. Actions or inaction that helps keep people in poverty is immoral. The answer in Davis is to build. Davis needs all sorts of housing. We have a growing demand but because of anti-housing sentiments we are a generation behind in adding supply. Adding supply until demand is saturated would eventually cause housing to become more affordable. Opposing projects doesn’t solve the problem of high prices and that, in my opinion, is what I find immoral and reprehensible about your opposition.That the opponents of Measure A would raise this issue of morality now is especially gauling because I have never heard you or any of your friends champion either big A or small a affordable housing until you could use it not to increase housing supply but instead to restrict it.
Misanthrop
“The answer in Davis is to build. Davis needs all sorts of housing.”
I agree with the first sentence. I disagree with the second. Yes, Davis is in need of more housing…. more affordable housing. I do not believe in “trickle down housing”. I do not believe that providing special deals to developers ( see changes being considered for The Cannery if you doubt this happens) which constitutes support for the developers, but not for those actually in need of affordable housing. What is morally objectionable to me is our willingness to help out developers by cutting special deals for them while claiming that we are helping people who actually need help to find housing.
“I have never heard you or any of your friends champion either big A or small a affordable housing until you could use it not to increase housing supply but instead to restrict it.”
Perhaps you are not including me in this group. But you have most certainly heard me make exactly this point with regard to small a affordable housing which I certainly champion. There truly exists a group in our community that are very vocal against developments that stand to provide large profits to developers by making exceptions to pre existing agreements while not honoring any provision of affordable housing or respecting the point of view of the existing neighbors. You are perhaps inadvertently, or perhaps deliberately, choosing to not acknowledge our existence.
Tia, To make sure I understand what you are saying, do you agree with Price and Harrinton’s view that voting for Nishi is immoral and is in direct violation of Davis’ values? Do you support their lawsuit?
ryankelly
“Tia, To make sure I understand what you are saying, do you agree with Price and Harrinton’s view that voting for Nishi is immoral and is in direct violation of Davis’ values? Do you support their lawsuit?”
No. I am likely to vote for Nishi so I obviously don’t consider it immoral.
No. I do not support the lawsuit. But then due to my dislike of the litigious nature of our society, I rarely support lawsuits feeling that there are other and better ways for people to resolve their differences.
I am not including you about affordable housing. I am including the no on A campaign principals.
Tia wrote:
> I do not believe in “trickle down housing”
You may not “believe” in “trickle down housing” (or gravity) but can you name a single town anywhere in America that has ever increased the housing stock faster than the population grew that did not see a drop in housing prices (or a time when you dropped something and it didn’t fall to the ground)?
South of Davis
I do not know if any such community exists. But even if it did, it would be irrelevant to my point. The amount of housing stock that would even be foreseeable in Davis even to the “grow as fast as we can crowd” is not going to drop the housing price to a level that I think we need to be addressing if we are going to accommodate those that actually need help with housing as opposed to merely providing housing for those who are already affluent. I have a great deal of interest in helping those who need help. I have no interest in asking those who have existing homes to compromise their living standards so that other wealthy people can have homes in their preferred locations.
Back to the question that I asked before that was met with silence. I would like to live on the coast preferably in Carmel. Should we mandate that someone who already owns property sacrifice their preferred lifestyle that they worked their whole life to achieve so that I can have my dream home ?
Tia wrote:
> I would like to live on the coast preferably in Carmel.
If you really want to live Carmel why don’t you move there? I just went to realtor.com and you can get a nice Carmel condo for less than the price of an average Davis home.
> Should we mandate that someone who already owns
> property sacrifice their preferred lifestyle that they worked
> their whole life to achieve so that I can have my dream home ?
What do you mean by “sacrifice their preferred lifestyle”?
P.S. If this project gets built would you still want to move to Carmel or would it “sacrifice your preferred lifestyle”?
http://www.montereyherald.com/article/NF/20160422/NEWS/160429927
Not any more, SOD, the new $15 an hour people will be putting cash down soon, right?
“Another fact is that while the City has exempted this one single project from the low-income housing requirements, they have never, ever done that for any other large development project in the City.”
Projects like the Cannery are residential projects. Nishi is an innovation park with housing – a whole different animal.
Actually Cannery has both commercial and retail space also. The only real difference is that the promoters of Nishi has the foresight to name it an “Innovation Center” to trick the easily fooled sheep. Can you say “Baaaaaaa…”?
Can you have a civil conversation without being snarky? The amount of commercial at the Cannery is very small relative to Nishi, and Nishi is providing R&D space, for startups – which is not the same type of commercial as what is at the Cannery.
The Yes on Measure A is describing it as a LiveWork Project.
The developer’s job is to make money. The City’s job is to to build community while preserving shared values- a whole different animal.
MidCentury
“The developer’s job is to make money. The City’s job is to to build community while preserving shared values- a whole different animal.”
And what a shame it is that we always chose a “winner takes all mentality” with all sides trying to “get as much as we can”. Why is there no room in our mentality for a win-win situation in which each side profits but perhaps not to the absolute maximum that they can wring……. or in the current case of The Cannery…. finagle out of the deal ?
Nancy expresses doubt about the validity of the basis of her lawsuit against the City and so Nancy Price is now attempting to make a Yes on Measure A an immoral act. I don’t think that this is right.
Nancy is being a good client and letting her attorneys deal with the legal arguments.
Talking about your client in the media is really weird, Mike. Whether you think that she is a well-behaved client is here nor there.
As Councilmember Davis explained in his thorough rebuttal to Mr. Pryor, the City Council decided to exempt Nishi from the affordable housing requirement “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.” This is not a moral issue so much as it is a pecuniary one; that is, the project was exempted because the City Council understands that there are higher costs associated with building in this particular location, and that the nature of Nishi as an innovation center (i.e. its mixed R&D component) introduces more risk and financial uncertainty for the property owners. Both the City Council and UC Davis have identified the construction of additional R&D space as a top priority in order to facilitate tech transfer from the world-class research being conducted at UC Davis. Therefore, in order to encourage the construction and incorporation of R&D space at Nishi, the City Council understood that compromises needed to be made in order to make it feasible.
It is our opinion at Yes on Measure A, and one of my personal guiding beliefs in general, that it is important to not reduce things into simple black and white schisms. One should try to analyze something like Nishi holistically. A compromise was effected with regards to Affordable Housing to ensure the project’s financial viability–even then, the City Council negotiated for the property owners to contribute $1 million. I must say that I do not particularly understand why Mrs. Price is surprised or even felt it necessary to mention that the contributions to the Affordable Housing Fund will begin five years after the project has been voted upon. This, to me, seems quite intuitive. In the first five years of the project, the property owners will be expending enormous outlays with regard to the project’s infrastructure since it is written in the project baseline features that no construction can take place at Nishi until the railroad undercrossing connection to UC Davis’ campus and the improvements to Olive Drive are completed. Once housing is constructed and begins to go online, it seems appropriate that contributions to the Affordable Housing Fund would start as well. To return to my original statement in this paragraph, however, I think it is important to understand what Nishi does as a whole for the community and to not make decisions insisting on your own personal satisfaction with every aspect of each distinct element that makes up this project.
To begin, Nishi provides much-needed student housing in a community and a region that is already severely impacted by UC Davis’ robust student population and which we know will face even more challenges as the University increases its enrollment by another 5,000 students. Nishi will provide market-rate housing which will help reduce the spread of mini-dorms into Davis’ neighborhoods as well as the proliferation of housing in Woodland, Dixon, and West Sac (and the commuters clogging up I-80 to get to school). This is particularly important as it becomes increasingly difficult for young families to find homes here in Davis. I think Mrs. Price may be confused as to how Nishi will fit in with the housing market in general. Nishi is going to build brand-new centralized, highly efficient housing which will allow its residents to forego having a car. The student housing will be slightly larger than that on campus, and thus will be slightly more expensive. By increasing the available housing stock, Nishi will free up housing throughout Davis by providing options which some students will choose. Expecting Nishi to be priced below market-price does not really seem a well-reasoned or tenable position. What’s more, if students choose to double up, Nishi can cost as little as $450 per month. That number may seem high to people who haven’t had to rent in a while, but it reflects the reality of the Davis housing market.
Furthermore, Nishi will create 325,000 square feet of R&D space to facilitate tech transfer from campus. As I previously mentioned, this is a fairly risky proposition (one of the reasons why a shortage of such space exists), so I would hope that Davis residents and voters will recognize what a significant contribution this makes to fostering the Davis entrepreneurial scene and supporting both the research being done at the University as well as creating organic revenue for the City.
Nishi also invests millions into traffic solutions, and, most importantly, creates another access point to and from campus so that Richards will not be so overburdened. We know that 80% of the trips taken from Nishi will be by bike or on foot–the first project to ever exceed the Beyond Platinum Bicycle Action Plan. Nishi will generate an estimated $1.4 million for the City’s general fund, as well as $400,000 annually for DJUSD–both entities which can put this money to good use. There are plenty of other great things Nishi accomplishes for Davis which I have previously written about, and if you are curious to find out more, come talk to us at our Yes on Measure A booth at the farmer’s market, or come to our campaign office out by Rocknasium. Although I recognize the limitations I face in being able to persuade people, I do hope that the readers and voters of the Vanguard will examine the project in toto. If so, I am quite confident they will come to the conclusion that Nishi addresses some of the most pressing issues confronting Davis today, as well as makes some exciting contributions which will improve our community for decades to come.
Very well stated! (who ever you are). You have functionally admitted what the Measure A opponents have claimed all along; that is, the illegal exemption of the project from the City’s Affordable Housing Ordinance was a back-office deal negotiated in secret to help the developer pay for infrastructure costs of this project.
The City’s Affordable Housing Ordinance which would otherwise require the developer to put in 154 of the 440 rental units as Section 8 affordable housing or, if approved by the City, to pay $11,550,000 in in-lieu fees (at $75,000/unit) to the the City’s Affordable Housing Trust Fund. Interesting that this $11.55 million affordable housing exemption was supposedly agreed to by the City four years ago just as it was realized the new tunnel under the railroad tracks to the University from the project would cost between $11 million and $12 million dollars. H’mmm…I am sure that is just a coincidence.
But nevertheless, I agree that exemption of the developer from the Affordable Housing Ordinance to allow them to pay for infrastructure costs is an immoral trade-off .
“You have functionally admitted what the Measure A opponents have claimed all along; that is, the illegal exemption of the project from the City’s Affordable Housing Ordinance was a back-office deal negotiated in secret to help the developer pay for infrastructure costs of this project.”
I think you’ve taken a huge leap – particularly when you have been nonresponsive to several people on here who have offered legal objections to your claim.
What a hoot…So what DavisforNishiGateway is functionally saying is, “If you ignorant residents would only just look at the big picture and quit insisting that all of these pesky little details be worked out in advance, then everything will be fine…and just trust us.”
But that strategy didn’t work out so well for the City on the Cannery project, did it?
The problem with Cannery wasn’t the details, it was the lack of ability or mechanism to enforce those details and keep the building from moving the goalposts. None of which can be problems with a Measure R project.
Mr. Pryor, what I am functionally saying is that the mixed-use nature of the Nishi means that it is exempt from Affordable Housing requirements which is clearly stated in the city municipal code in Article 18.05.080 in sections b and c. Here is the link: http://qcode.us/codes/davis/view.php?topic=18-18_05-18_05_080&frames=off Furthermore, I am saying that I think that you are not reconciling yourself to the fact that Davis is better off with Nishi than without it. With Nishi, Davis receives $1 million for affordable housing, substantial funds go to the City, Davis schools, and the city’s infrastructure. It builds much-needed student housing and R&D space and creates opportunities for people to live in Davis instead of commuting and creating more traffic. It creates all of this, and many other great things. Without Nishi, Davis gets none of these. I am of the opinion that these details are also important to consider.
I recall a recent quote (on the Vanguard) attributed to a Nishi developer representative who stated that Nishi would “obviously” allow residential uses within the ground floor commercial space (e.g., laundry rooms apparently intended for upstairs tenants), in violation of city code defining “mixed use”:
http://qcode.us/codes/davis/view.php?topic=18-18_05-18_05_020&frames=off
Is the developer planning to ignore or challenge this code, if the development is approved?
Ron wrote:
> Is the developer planning to ignore or challenge
> this code, if the development is approved?
We have gone over this before, but Ron seems to think that despite his (admitted) lack of a law degree and despite the fact that what he thinks the code says is impossible he will post yet another time, that “he thinks” “mixed-use” means that 100% of the ground floor must be unrelated to the apartments. The developer will not have to “challenge the code” since they will be fine as long as “some” of the ground floor is “unrelated” to the apartments above (just like EVERY other “mixed-use” apartments over commercial property in America)…
Indeed we have! Let’s not do it again. Looking forward to the developer’s response, this time.
It doesn’t take a law degree to read a city code. (If it did, I assume you wouldn’t be able to read it, either.)
Ron, Nishi will be and is compliant with all applicable laws and ordinances regarding its designation as a vertical mixed-use development.
Other things that are immoral:
1. Measure R
2. “Affordable Housing”
3. Davis Rents if minimis increased stock.
4. UCD massive more students without corresponding housing
5. Believing in the co-existence of “affordable” housing, limited stock & the Easter Bunny
Nancy wrote:
> the courts will determine whether or not the exemption of Nishi
> from the City’s Affordable Housing Ordinance is legal or illegal.
> But I think all the other evidence points to the fact that is an
> economically bad deal for the City. And it just seems morally
> wrong to me that our supposedly cash-strapped City is making a
> $11.5 million give-away of affordable housing money to multi-millionaire
> developers so they can construct luxury rental housing.
> Does this really reflect our Davis values?
Why not write: “the courts will determine whether or not the exemption of single family homes in town from the City’s Affordable Housing Ordinance is legal or illegal. But I think all the other evidence points to the fact that is an economically bad deal for the City. And it just seems morally wrong to me that our supposedly cash-strapped City is making a $13 million ($1,000 x 13,000 homes) give-away of affordable housing money to Davis homeowners who don’t let a low income person live with them in their mostly nicer than average sometimes luxury single family homes. Does this really reflect our Davis values?”
P.S. To Nancy have you seen the developers personal financial statements so you can say for a fact that they are all “multi-millionaire developers”?
P.P.S. To Tia, there is a big difference from saying someone is a “multi-millionaire developer” (where you would need to see a personal financial statement) vs. saying they “own real estate worth millions” (where you could verify by looking at the tax rolls that are public and available in Woodland).
South of Davis
Since I have made no comments about the finances of anyone other than myself, I fail to see why you have seen it necessary to bring me into this discussion in this manner.
Tia wrote:
You seem to have a hard time understanding the difference between being a “millionaire” and “owning a million dollars worth of real estate” and even posted the I have a “fabricated narrative” while we all are still waiting for you to show us how a 4 bedroom home in Northstar and a home in East Davis is worth LESS than $1 million (when there has not been a sale of a 4×3 home in Northstar under $789K in two years).
P.S. Bonus hypocrisy points for Tia for never missing a chance to deny that the slow growth people care at all about their home and rental property values, while saying the developers are tying to get as much as they can…
South of Davis
“Bonus hypocrisy points for Tia for never missing a chance to deny that the slow growth people care at all about their home and rental property values”
Please note that I have never posted a single word about what any other slow growth advocate values. I have stated that some have worked hard to attain a desired lifestyle. Does anyone doubt this is true ? I also have stated, as have many rapid growth advocates, that developers and investors do what they do to make a profit. Does anyone doubt that this is true ?
I have also stated that I believe that everyone has the right to advocate for their own point of view. And yet it would seem that some would favor silencing, or deriding those who think differently from them. I do not see one iota of difference between Nancy Price opining that Nishi is immoral, and you opining that I am hypocritical. It seems to me that moral judgements and name calling are the resorts of those who have nothing more substantive left to say.
Since when did the amount of money that one has make them honest or dishonest ? What amount of money would I have to have ( or not have) before my statements could be held as sincere as your own. If I owned property totaling $50,ooo ? $100,ooo ? $250,000? Where is your cut off for honesty ? When I first arrived in Davis with about $ 1000.00 to my name and was a slow growth advocate because I loved the town the way it was, would you have believed me then ?
Reposting from yesterday since no one (Mike, Nancy, Alan) answered it: Why do the opponents keep repeating the $11 million figure on the give away? That might be the figure if the units were full sized houses, but they aren’t. It’s a made up number.
Funny how when people don’t like facts they just claim the numbers are “made-up”. It’s what all the climate change deniers also do. Ok, well let’s just see how we made up the $11 million .
The Affordable Housing Ordinance specifies that 35% of units (of developments greater than 20 units) will be reserved for Affordable housing. There are 440 rental units proposed for Nishi. So 440 units x 35% = 154 units that should be reserved as “Affordable”.
$75,000/unit is the figure on the City’s schedule for alternative in-lieu fee payments if affordable rental units are not otherwise installed. So 154 units x $75,000/unit = $11.55 million.
Gee, this is fun making up numbers!
Except for one tremendously huge problem – it doesn’t cost $75,000 to build an apartment unit. You are using the number for single family homes and jamming it into the calculation for apartments.
According to the city, “A study commissioned by the city last year determined a fee of $50,000-$55,000 per unit would be best for current costs, and that fee, while not formally adopted or agreed on at this point, has been used in the negotiations for recent development projects.”
So your $75,000 is to high even for a house. How much is an apartment?
You’re quite right. It costs far MORE than $75,000 per unit (probably closer to $250,000/unit or more) to build an apartment complex with 2+ bedrooms per unit. You are mixing up numbers again. The $75,000 number is the current in-lieu fee NOT the cost of construction. The in-lieu fee attempts to capture the difference in rental income between market rate housing and Section 8 affordable housing rent (including administrative costs) so the developer does not have an economic advantage in avoiding affordable housing obligations just by paying an in-lieu fee.
While I wait for someone to post the correct costs, I am confused by your claim that it costs more than the city is charging in lieu (by three or four times) and yet at the same they want to charge in-lieu enough to incentive building the units. Your numbers don’t add up to common sense.
Alan wrote:
> You’re quite right. It costs far MORE than $75,000 per unit
> (probably closer to $250,000/unit or more) to build an
> apartment complex with 2+ bedrooms per unit.
It costs more than $75K to build a typical 2+ bedroom unit, but it costs less than $250K (you can buy a new single family home in Sacramento for under $300K).
The cost is closer to $75K/unit if you just include the cost to “build” the unit and it is closer to $200K/unit if you add in the cost of paying off politicians for decades, buying the land, getting voters to approve a change in zoning, building roads and sidewalks and maybe putting a tunnel under the railroad tracks…
Bingo.
And don’t forget Alan Pryor’s climate alarmist demands to make every new development energy neutral.
I am working on a business start that needs commercial space and there is very limited supply. I asked my CRE broker and a number of developers and property owners why they don’t work to build more (not in Davis, because we know that is impossible). Their answer is that at the same time the Great Recession knocked the crap out of values and reduced rents on existing property, the libs took power and started punishing banks with over-the-top regulatory largess… started their “climate sky is falling” chants and layered on more “green” requirements and more building code regulations, and then the “we need to increase taxes to pay for all the out of work people and give free healthcare to everyone” business looting… all of it has pushed the cost of new development costs to beyond what they could charge for rents.
And here we have Alan Prior and the puckered-up, old no-growers trying to torpedo this development because it does not deliver enough free housing.
The reason there is little affordable housing has more to do with the Alan Pryors, Mike Harringtons and Nancy Prices than it does anything else.
Define “puckered up”.
http://i.huffpost.com/gen/1781110/images/o-GRUMPY-OLD-MEN-facebook.jpg
Thank you.
No such thing as illegal, just ‘undocumented’.
TBD
“No such thing as illegal, just ‘undocumented’.”
No such thing as xenophobic, just “patriotic”.
No such thing as greedy, just “profit oriented”.
No such thing as discriminatory, just “traditional”.
This is fun. We could do this all day !
Let’s play…..
No such thing as identifying with the gender you were born with, just ‘cisprivilege’.
No such thing as a white person working hard and succeeding, just ‘white privilege’.
No such thing being uneasy with using a restroom with the opposite sex, just ‘homophobia’.
No such thing as calling out transgressions of people of color, just ‘racism’.