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Who will really pay for the Affordable housing at Village Farms?

By Matt Williams

I learned something very interesting in the last few days that gave me an incredible sense of “Here we go again!” Specifically, where is the $6 million Affordable Housing contribution coming from?

Alan Pryor has said on the Vanguard that the $6 million is coming from the developer, but is it? Or is it actually going to be coming from the taxpayers?

The history of the Cannery tells us that there is a very good chance that the taxpayers will end up footing the bill for the $6 million. But because Village Farms is so sketchily defined/described, there is no way to know.

Cannery was much better and more completely described/defined, but one year after the documents had all been signed, they came back to the City saying they “needed” $12 million more cash. City Council negotiated the $12 million down to $8 million … and then imposed a 30-year Mello-Roos Tax on the Cannery residents, with the taxpayer total payments of which amounting to more than $21 million taken out of those taxpayers’ pockets.

There is nothing in the Baseline Features or the Development Agreement for Village Farms that tells Davis voters whether there will be a Mello-Roos levy (often called a CFD), and/or how large the Mello-Roos levy will be.

To add insult to injury at The Cannery, the City Council never asked the developer what value the City would be getting back in exchange for the $12 million being asked for, or the $8 million eventually given. Unfortunately, the City got zero dollars of value in that Cannery situation.

We have no way of knowing what might happen in the case over Village Farms. This is just one more way this project is not ready for prime time, and the only logical vote on Measure V is “No.”

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Comments

7 responses to “Who will really pay for the Affordable housing at Village Farms?”

  1. Colin Walsh

    I received a call from the yes on V telemarketers a couple days ago. When I asked about who will pay for the affordable housing, they boldly said “The City of Davis will pay for it.”
    I clarified do you mean Davis tax payers?
    They said, “No the City of Davis through the Trust Fund.”

    Reply
    1. Matt Williams

      Colin, they say “Ignorance is Bliss” and the Yes on V telemarketer was clearly very blissful.

      The Housing Trust Fund (according to the official City of Davis budget) has less than $1.7 million. The typical Affordable Single Family Residence costs in the vicinity of $500,000 to build, and the City’s own reports for Village Farms say an apartment unit on average costs $400,000 to build. So the construction costs of the 360 Affordable units at Village Farms would cost between $180 million and $135 million to build. The $1.7 million in the City’s Trust Fund is only 1% of what is needed.

      The truth regarding the 360 Affordable units is that the developer is doing their best Pontius Pilate imitation and washing their hands of any accountability for actually delivering those units.

      Reply
  2. Ron O

    I’ll go ahead and repeat a comment I made in the Vanguard, here:

    I’m not exactly sure “who” takes responsibility for CFDs/Mello Roos that fall short when a housing crash occurs, but I do know that something like this occurred during the housing crash of 2008-2011 in Spring Lake (and probably elsewhere).

    Most construction unexpectedly stopped during that period, but there were still CFD/Mello Roos bond payments that had to be made (to support infrastructure that was suddenly “oversized” compared to the unexpectedly few houses that were built).

    Pretty sure that the CFD/Mello Roos Ponzi scheme almost collapsed during that period. I do recall some concern from the city regarding all of that mess.

    In any case, you can be almost certain that any new development outside of a current city is going to include CFDs/Mello Roos (often times, more than one). This is true everywhere in California.

    This is one of the reasons that pre-existing housing is generally a much better deal for buyers. (Little or no Mello Roos.)

    I don’t think that non-homeowners, or those who purchased their homes a long time ago (or in an established neighborhood are that aware of this ongoing cost – which can also increase every year.

    Reply
  3. VL

    It almost seems moot, since ex-mayor Vaitla’s research indicated that those units will cost $150 million to build ($144 million from the City); so the $6 million was just a drop in the bucket anyway. It seems like a mistake to continue to allow “in lieu” fees etc that allow a developer to wiggle out of using their profits to actually build Affordable units.

    Reply
    1. Matt Williams

      VL, the $144 million won’t come from the City. It will come from the Feds and the State, but only if the City can successfully get its act together and compete with other cities and non- profits for a very limited pool of funds. For example, WDAAC was passed by the voters 8 years ago and the Affordable portion of the project has made zero progress in procuring any of those Federal and/or State funds.

      Is there any reason to believe the City will be more successful with Village Farms than they have been with WDAAC/Bretton Woods?

      Reply
  4. Marjorie Longo

    Thank you for posting this reality check!

    Reply
  5. Additional Articles – NO on V

    […] What are the guaranteed parts of the Village Farms project? The most recent Village Farms Affordable Housing Plan Letter: Why we need to talk about the word “may” Urging a No vote on the Village Farms PIP The most recent Village Farms Affordable Housing Plan Suggested changes to Ordinances for the Village Farms Project The ballot arguments in favor of Village Farms are extremely misleading about affordable-by-design housing Who will really pay for the Affordable housing at Village Farms? […]

    Reply

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