Developer’s Claims
Yes on P False Claims
The Yes on P Campaign has made a number of false and misleading claims in its ballot statement, campaign literature, and statements made in public.
False Claim: The Yes on P ballot statement claims that the Wildhorse Ranch project will generate $4 million in benefits.
Reality: This false claim is based on a nonexistent $3.2 million savings attributed to the fact that the project will not rely on the city’s dedicated affordable housing trust fund. There is, of course, no such savings. The affordable housing trust fund is a fund that, by law, cannot be used to fund anything except dedicated affordable housing.
Affordable housing is a social benefit, but it is a fiscal drain since it uses city services but usually pays no property tax. The council merely chose to require the developer to use state and federal subsidies to build the required low-income rental units, which is one of the two standard methods prescribed in our affordable housing ordinance.
According to staff analysis, the project barely breaks even for the first 15 years, (using very rosy assumptions, including that our temporary parks and sales tax are both renewed by voters, and that there is no increase in our employee retirement contributions), and runs a significant and ever-increasing deficit starting in year 16.
False Claim: The developer and his representatives have publicly stated at City Council meetings that the neighbors support this project, and their more recent brochure highlights the “collaborative” relationship with the neighbors.
Reality: The Wildhorse East Neighborhood Association (WENA), which constitutes the immediate neighbors, have felt that the developer has not done enough to soften the impact of the project, and hence have publicly opposed the project. Other neighbors in Wildhorse, Slide Hill and Mace Ranch were generally left out of the process.
Misleading Claim: The project is “really affordable and will help “working familes in Davis.”
Reality: The project contains no affordable for-sale housing. The least expensive for sale units are 78 attached townhouses which will sell for an average of $451,000 when the first units are planned to come on the market the year after next.
Even most of the 40 rental apartments available for low and very low income families are not all that affordable. According to City staff, 23 of the 40 units designated for low income familes will be rented at a “near market” rate. For example, City staff estimated $1200 for a two bedroom apartment.
False Claim: Parlin claims on its ballot statement that the Wildhorse Ranch project will pay for itself.
Reality: The reality is that the Wildhorse Ranch project breaks even for the first 15 years, according to the city’s developer-friendly fiscal model (which assumes, among other things, that both our temporary parcel tax and our temporary sales tax are renewed, and ignores our major unfunded liabilities), and it runs an increasingly large deficit thereafter.
To give a little background: Most housing developments do not generate enough yearly revenue to the city to pay the annual cost of providing city services. But this project is on a particularly unhappy piece of land from a city fiscal perspective. Due to differing tax-sharing agreements with the county, different parcels of land in Davis return varying amounts of property tax to the city.
While, on the average, the city retains 17.5 percent of the property tax collected, on this piece of land the city retains only 11.79 percent. Thus, the city would retain about one-third less property tax revenue than average from this parcel.
To make up some of the difference, the developer shifted costs to the new residents in the form of an additional yearly Community Facilities District (similar to Mello-Roos) payment. But a deficit still remained.
So the city accepted a one-time $1,500 fee per market-rate unit to account for an annual recurring deficit – a payment that will be spent down in only 15 years. Since city staffers used a 15-year fiscal forecast, they claim the project breaks even. But after 15 years, the deficit suddenly reappears, and grows ever larger.
The Wildhorse Ranch project is much worse fiscally for the City than other recently approved projects.
To give you and example, Wildhorse Ranch is only contributing a onetime fee of $1,500 per market rate unit, and nothing for the affordable. By way of comparison, the recently approved Verona project in Mace Ranch, which had a much stronger fiscal balance to begin with, provided a one-time payment of $12,000 per market-rate unit and $6,000 per affordable unit. Wildhorse Ranch is a far worse fiscal deal for the city.
Misleading Claim: The project is “infill” development.
Fact: The project is on the outskirts of town and was designated as agricultural land (for a horse farm) when the Wildhorse project was developed. The City of Davis has many other areas which are true infill. The City’s Housing and Economic Steering Committee ranked the Wildhorse Ranch project 27 out of 36 possible sites, mostly due to its peripheral location and the fact that it is Ag land—why was this site moved up? Why was an analysis prepared by the City ignored?
Misleading Claim: The project is “pedestrian friendly” and represents a contribution to the “new urbanism.”
Fact: The “New Urbanism” is generally characterized by locating residences near work and downtown/shopping. The project is over three miles from downtown, and is not located anywhere near major job sites. It is walking distance to nothing.
Misleading Claim: Davis citizens should support this project because supporting this project will help continue Measure J and help defeat Covell Village.
Fact: This line of reasoning, put forth by the Yes on P campaign, makes no sense to us. According to City staff, the City and UC Davis already have plans or entitlements for 2000 units, which represents an increase in population of over 5000 people. We are already meeting our State issued growth targets without this project and approving this project will likely lead to higher targets in the future.