Senate Bill 50 is back… again… for the third time. It is controversial, with opponents arguing that it takes away local control while supporters argue that it is designed to increase housing production by increasing density near public transportation and job centers.
Under SB 50, cities will not be able to limit density near job or transit centers and will be required to allow small and mid-size apartment buildings.
When Senator Scott Wiener held a press conference in Oakland this week, they were besieged by protesters. The senator agrees that California has a 3.5 million housing shortage. That is something that the protesters last week undoubtedly agreed on.
As Oakland Mayor Libby Schaaf put it, “[E]veryone agrees on one thing, and that’s that there’s a housing crisis in California.”
The protesters here are not the people we see in suburban communities worrying about the impacts of zoning changes on their property values or quality of life. Instead, they are vulnerable renters and their advocates, pushing back against SB 50 based on concerns that the measure would exacerbate gentrification in cities like Oakland.
Senator Wiener believes that his bill has long included safeguards against the displacement of existing affordable housing.
After the event, he said that he respected the protesters and said, “It’s a moral failure of our society that we have mothers with children who are homeless. It’s a moral failure that we have anyone who is homeless. … SB50 will help.”
While the protesters here have significant and legitimate concerns, Senator Wiener would also point out that the fierce opposition to the bill is mostly coming from local officials in wealthy enclaves such as Palo Alto, Cupertino, and Beverly Hills. As the Chronicle points out in an editorial, their opposition is due to the 
fact that “it would force them to allow higher-density development in exclusively zoned neighborhoods near mass transit and jobs.”
The Chronicle argues: “It’s the lack of housing production in such areas that forces a disproportionate share of construction, speculation and gentrification into Oakland.”
The Chronicle points out that the amendments which will allow cities to have up to two years to develop their own plans to allow new housing before its provisions would take effect should “answer the frequent objection that the measure usurps cherished ‘local control’ of how and where development takes place.”
However, they note that “in many cases… it won’t.” They write: “That’s because those calling for local control of residential construction are often more interested in preventing it altogether. Their success in doing so is what gave California the worst housing shortage on the U.S. mainland and a quarter of the nation’s homeless population.”
Producing Affordable Housing Locally
Locally some of the bigger debates we are likely to have is where to put the housing and whether Measure R and its impending renewal are likely to prevent new housing. It is worth noting, however, that even in places like Davis there has been a sea change in views on the need for housing – with polling showing the public sees the lack of housing and lack of affordable housing (both big “A” and small “a”) as the biggest issues facing this community.
Critics will naturally call for more affordable housing – which is clearly a huge need for this community. The problem is that in the post-redevelopment era, how do you get that affordable housing?
Without money coming from the state, it is likely to have to be attached to market-rate housing.
Under redevelopment, the city was able to have a 35 percent requirement for affordable housing. In post-redevelopment, the city has reduced its requirements to 15 percent – in line with state requirements.
At a recent social services commission meeting, Brett Lee explained that in order to go above 15 percent, the city would be required to explain in great detail their justification. The problem as he explained, to “have a high requirement means nothing got built” and he used the Marin County example of many communities that used the high measure to ensure that nothing actually got built.
Sherri Metzker noted that the change in the percentage “had to do with the loss of redevelopment funds.”
The impact of the loss of RDA should not be discounted. I saw an article which noted that in 2011 San Francisco generated 207 affordable housing units which accounted for 59 percent of all housing built that year. That was toward the tail end of the real estate crash.
In 2014, three years later, the market rebounded with 3454 housing units built in the city – 490 were affordable housing units. That was 14 percent of the total.
What happened? What happened is rather simple – in 2011, the only housing that could be built, just about, was built with redevelopment money. In 2014, the market generated the bulk of the housing, but the result was that they were only able to produce 14 percent of the units subsidized.
Can we do better as the social services commission attempted to argue for? I think we can. But it’s going to take funding – or possibly land – to do so.
First, we need the state to fund affordable housing at levels they did prior to the loss of RDA funding. The state has passed a lot of bills about housing and affordable housing, but without providing a steady revenue stream, this seems like a losing battle.
Second, we need to re-examine the ability to do land dedication sites. We learned again that land dedication sites work.
Earlier this week, we saw this illustrated quite clearly as Mutual Housing is announcing that they have been awarded over $20 million for two projects – one of which is on the 5th Street project in Davis, the affordable housing portion of Sterling.
That site will provide 38 apartments, 17 of which will be set aside for youth who are transitioning out of the foster care system yet still offered transitional supports through the Yolo County Health and Human Services Agency. The other 21 apartments will house working families with incomes ranging from 30 percent to 40 percent of the area median.
This follows around a $2 million commitment from the market-rate housing complex at the same location.
This is an affordable housing formula that still works.
Last year, we covered the story of Creekside, the last parcel of affordable housing within the Mace Ranch Development.
After a competitive process, Neighborhood Partners, partnering with a number of groups including Davis Community Meals, won the project bid in 2015.
Creekside, according to David Thompson of Neighborhood Partners, was able to secure $34 million in funding by November. That funding included a $11.8 million grant from the state’s Affordable Housing and Sustainable Communities program, which uses revenue from the Cap-and-Trade Greenhouse Gas Reduction Fund to support affordable housing.
The same developers are hoping to follow a similar formula to success at the affordable portion of the West Davis Active Adult Community, which is expected to become the largest affordable housing project in the city – serving low-income seniors.
While redevelopment is gone, David Thompson continually pointed out during the Measure R process that land dedication remained a viable route to fund the building of affordable housing.
The catch, of course, is you have to have a large enough project to be able to dedicate the land for it. With land dedication sites and the re-establishment of funding streams, it seems more likely we can meet our affordable housing needs in this community – and perhaps across the state.
—David M. Greenwald reporting
Seems like we could add to “hate speech” proposed for the term NIMBY, “Gentrification”… a term often meant as an epithet… guess one person’s ‘gentrification’ could be seen by others as ‘redevelopment’, ‘improvement/blight removal’, or, ‘racial/economically biased displacement’.
Guess I’m seeing SB 50 as a ‘tool’, not a ‘solution’… to be used appropriately… like you shouldn’t use a hammer to drive a screw, nor a crescent wrench to drive a nail.
In my view, good to have appropriate tools… knowing when and how to use them is a different matter.
The second question in the article head, how can we increase affordable housing…
One is lower expectations for the housing as to size and amenities… I grew up in a 2 bdrm, 1 ba, one car garage, 850 SF house. Worked fine for me and my parents for 22 years, and for my parents for another 25 years. Few amenities. Basic.
“basic” is the key word…
And I’m not convinced “affordable housing” has to be ‘ownership units’… for ~ 7 years, lived in ‘apartments’, and always had a roommate or 3 (w/2 bdrm apt)… few amenities, but good, comfortable housing. No regrets.
Only did the ownership thing when I had a good job/salary and could ‘afford’ it. I had no great expectations when I was ‘struggling’.
I also chose not to have spouse or dependents, until I knew could I could find housing that I could afford.
That debate is likely to become particularly acute when/if Aggie Research Campus (ARC) puts forward its Affordable Housing plan. With the Planning Commission and City Council on record in the EIR certification process that a minimum of 60% of the housing units at ARC must have at least one person who is employed by an ARC-resident company, how the affordables will be handled will be interesting to unfold. Questions like, “Will any of the 60% of the units also be part of the Affordable plan?” come to mind. Much will become clear in the coming weeks.
How ARC handles affordable housing as well as the 60% requirement will also be a significant factor in the presentation of the updated fiscal/economic analysis by EPS and the developer at the Monday, February 10th FBC meeting.
I agree with David Thompson’s assessment, but would change the word “remained” to “can be.” During the Creekside approval process the applicants presented to Council a 14-step sequential timeline that land dedication sites go through. I’ve reproduced that timeline below. A Fatal Flaw in any of the steps can result in the death of the applying project. The Fatal Flaw can be subsequently be remedied by the applicant, but time is added to the process.
If we look at two (relatively) recent Affordable projects, New Harmony and Creekside, and note the date of the land dedication and the date of the first occupancy of the project, the timeline is well over a decade in each case.
Matt, how is a fiscal/economic analysis even being performed, in the absence of an affordable housing plan (which would impact that analysis)?
As noted on another blog, the developer apparently prefers the Affordable units to be built “elsewhere”, in ADDITION to the 850 market-rate units. As such, how would the fiscal impact of those off-site Affordable units be included in an ARC fiscal analysis? (Not to mention the lack of inclusion of those units in the ARC EIR.)
“Matt, how is a fiscal/economic analysis even being performed, in the absence of an affordable housing plan (which would impact that analysis)?”
Why do you think the choice of the affordable housing plan is going great impact the fiscal analysis?
Because the choice will impact the city’s ongoing costs. Do you actually not understand that?
For example, I understand that Affordable housing is exempt from property taxes, although I’m not sure to what degree. But, even “regular” housing has an impact.
How will the choice impact the city’s ongoing costs?
Housing is generally a long-term money-loser, for cities. Probably even more so, for Affordable housing – depending upon how much property taxes are expected.
I’m pretty sure that you understand this, already.
In any case, it should be something that’s included in a fiscal analysis. The problem is that there is no plan to examine.
We know that the developer’s “preference” is for the Affordable housing to be located off-site. I asked if that was going to be included in the fiscal analysis, but again – there’s no specific plan to examine. Which makes me wonder why a fiscal analysis is even being performed, at this point.
That didn’t answer my question – you made a general statement about housing, not why the specifics of the affordable housing plan will impact the city’s ongoing costs.
One point I do agree with you on – there are going to be a lot more unknowns on this project than other projects and therefore there will be more uncertainty about any fiscal model.
I’m not presenting an “analysis”. I asked if the Affordable housing component (which has yet to be defined) would be included in the fiscal analysis that Matt mentioned.
The total amount of housing, as well as the breakdown (e.g., market-rate vs. Affordable) will impact the amount of property taxes expected. Which in turn, impacts the fiscal analysis.
Again, the amount of property taxes that would be expected from the total amount of housing, the various types of housing, the location of such housing (e.g, off-site vs. onsite) and resulting long-term costs would impact the analysis. And yet, NONE of those things have been defined.
Stay on topic please
And, there is a corollary question, “should there be”? If the employers @ ARC are paying high-end salaries/compensation, why would the 60% units not be ‘market rate’?
I see the 60% # to be related to trip gen/traffic, not “affordability” as the term is generally used… but, I can also see that there might be a Venn diagram sort of ‘overlap’. Perhaps, Matt, that is your point/question. (?)
“why would the 60% units not be ‘market rate’?”
Probably 85% give or take will be market rate. Not sure you question?
Factually incorrect, if the developer’s preference to situate Affordable housing off-site is approved. In that case, 100% of the 850 on-site units would be market-rate, with a yet-to-be-determined number of Affordable housing units situated off-site.
In other words, possibly two separate peripheral developments. Which undermines your argument that approving a large-scale, freeway-oriented peripheral development ensures an onsite dedication of an Affordable housing site.
Ok
It’s not “O.K.” that you have somehow failed to mention what the developer has proposed (some time ago) regarding off-site Affordable housing, in ADDITION to the 850 market-rate units.
Is that some kind of political “strategy”, for you (in regard to your support for this proposal)?
I strongly suspect that you were already aware of the developer’s proposal, regarding off-site housing. Also, your article above might provide additional evidence of your strategy to generate support without acknowledging what’s actually been proposed.
Re-read my post… I acknowledged that some might be “affordable”… please stop ‘cherry-picking’.
I think Matt got my point… the person to which I was responding… his phrasing was slightly awkward, as he used the 60% and affordable in the same phrase. I pointed out that the 60% was not equal to, nor necessarily correlated with ‘affordable’… I also allowed as how some of that 60% might be “affordable”.
So, here is a point directed to you… should there be an “affordable housing” (as generally defined) requirement for those making $60 k – $100+ k per year? Perhaps 15-30 % of those making $100k/yr should get “affordable housing”… gift, charity, social justice (perhaps only minorities making $100k/yr be eligible?), whatever.
You brought it up.
“Affordable” is a squishy term… some folk define it as “I just can’t do it” (and I support providing housing opportunities to them)… others, as, “that means I have to give up things .I’d rather spend $$ on” (not so sympathetic). Am also not so sympathetic to those who insist on ownership units that they ‘choose’ even when their resources (and/or, priorities) preclude that. I’ve had to “stretch” (scary at times)… chose to. Worked out well.
Nope. There’s actual income numbers assigned to it, at various ranges. Those are legal requirements to qualify as Affordable housing.
Nothing “squishy” about that, at all.
A different term, than what an individual might view as “affordable”. (Which is probably what you’re referring to.)
Ron… your 3:42 post…
Do you think that the metrics for “affordable” came on stone tablets from a mountain in the mid-east, or did it come from from “individuals”?
I’m glad to see that my questions provoked some thoughtful dialogue, which for the most part did not lapse into the polarized sniping that has characterized the comments section of the Vanguard over the recent months.
First, if my wording was “slightly awkward” that was on purpose, because the issues (at this stage of the process) are themselves either awkward, or as David put it, characterized by “a lot more unknowns” and “more uncertainty.”
Second, Bill you indeed did get my point that there might be a Venn diagram sort of ‘overlap’ … with particular emphasis on “might be.” Our unknowns now currently outnumber our knowns.
Third, Ron I have no clue as to how the fiscal/economic analysis is being performed. I suspect that the answer to that question will remain a mystery until the FBC meeting on February 11th.
Fourth, David, you really can’t be serious when you asked, “Why do you think the choice of the affordable housing plan is going [to have] great impact the fiscal analysis?” For the sake of simplicity let’s look at three possible options for an affordable housing plan. (1) on-site units equal to or greater than 15% of the 850 total units. (2) a land dedication to the city for Affordable unit creation some time in the future. (3) a cash contribution to the Affordable Housing Trust Fund similar to the one proposed by 3820 Chiles Road. If you can’t see the differences in upfront and ongoing City costs in those three alternatives then you need to have your eyesight checked. Bill will also tell you that the City’s costs will be further increased when you consider the simultaneous complexities of the interaction and/or overlap of the Affordable program with the 60% employee occupancy requirement.
Fifth, David, when you say “… there are going to be a lot more unknowns on this project than other projects and therefore there will be more uncertainty about any fiscal model,” are you saying that we should simply accept those unknowns and that uncertainty? If you are saying that, then I would argue that you are putting the City and the community into much the same position as a woman is in when her amorous partner says “Trust me” followed by his declaration that he won’t be using a condom. To torture the metaphor, I believe ARC needs to provide rather certain information about both the strength and reliability of its condom.
Matt… with all due respect (and you know I generally have it for you)…
ARC reminds me of University Research Park… approved in early 80’s… without the proposal including Greystone… or I-Hop… or Kaiser… or motels/hotels… or Carls’s Jr… and still not fully built out.
Innovation/research, etc., parks do not spring from the head of Zeus… they try to, but then, reality intervenes…
How many of us turned out exactly like our parents were thinking when we were conceived? Assuming of course, that they were “thinking” at that moment… stuff happens… we take our best intentions, best efforts, and “roll the dice”… famous quote… “If you want to hear God laugh, tell Him your plans”… URP is over 30 years old. ARC build-out, possible time frame is 15-30+ years.
We can only go with what we know and envision… there is no “Great Carnac” in the real world.
As to the subject matter, same… MF apts can be turned into SF ownership units… enforcement on “affordability” long term? You’d have to believe in Unicorns, Santa, or the Easter Bunny to say that would be a ‘stasis’ thing. We have very few local examples of “affordable housing” that remained so long term [20+ years].
All excellent points Bill … but remember, one highly-respected (but possibly overused) definition of insanity is is doing the same thing over and over and expecting a different result.
With that said, are you saying that when Dan Ramos gets up before any group of Davis citizens and says “Trust me” that those citizens should accede to his wishes?
You were around during the Mace Ranch build-out, which was agreed to be a parsed year-by-year controlled/limited build out. How did that one turn out?
When it comes to “Trust me” I am of the Ronald Reagan school of thinking “Trust, but Verify”
Short answer to,
First, the “apples”… residential, quite well… helped make the Developer CFD, City CFD, and the two DSUSD CFD’s actually be do-able. [Although the CFD’s were wrong, but once you do a bad, it’s good to make lemonade out of lemons. Call it ‘mitigation’.
Second, as to the “oranges”… mixed… some of the Industrial/Light Industrial laid within or near (close proximity) a “brownfields”… DMG/Mori Seki and Target have been the only “successes to date”.
The “neighborhood commercial” became medium density ‘residential’. Other uses “morphed”… Konditerei, Carlton, DMTC, Trokanski dance studio, the Spafford properties, all required GP/SP changes… “office” near the intersection of Alhambra/Mace, morphed into Church/quasi-public and Commercial. Near the intersection of Fifth and Alhambra, MF morphed into SF.
To summarize, I really like my Mace Ranch neighborhood. But the differences from the original are very significant. Time does that.
The Cannery might have been a better example, or a “push” as to timing (phasing) of development, according to the original approvals…
We can discuss nuances off-line.
Matt – I was largely being facetious on point four. On point five, if the applicants want to pass this project they need to fill in as many unknowns as possible prior to getting it to the voters. But assuming a November vote, that gives them until June or July to do so.
Greenwald said of his statement “Why do you think the choice of the affordable housing plan is going [to have] great impact the fiscal analysis?”: “ I was largely being facetious…”
Considering he then followed up “How will the choice impact the city’s ongoing costs?” It’s clearly a lie that he was being “facetious.” This is irresponsible. The only thing “facetious” is the “journalism.”