November 29, 2023

Housing Finance Development

It's Your Housing Finance Development

My View: DiSC Failed, Now What?

By David M. Greenwald
Executive Editor

Davis, CA – DiSC failed for a second time last week and, while the numbers aren’t all in, there is no way the outcome is changing.  Here’s the thing—”no” is not a long-term viable strategy.  Why?  Because the same problems that existed before still exist.  All “no” did was close off a path to solving the problem, it did not solve the problem.

That’s the real problem here.  The problems that this community face are at the same time acute and masked by the overall prosperity of the community.  Lack of revenue, lack of housing for families, lack of resources to continue to keep up our quality of life and our schools are all just below the surface, and for the last decade or two we have been able to survive because of our overall affluence—but just because we have survived, it does not mean we are currently prospering.

For UC Davis, they already were not counting on Davis.  That’s why they were only lukewarm toward this and the preceding project.  They have put most of their eggs into expanding into Sacramento where they have a supportive council and don’t have to contend with a hostile community and Measure J.

UC Davis is perhaps the UC best positioned to take off in the 21st Century.  They have room to grow, but I think what we are going to see is more student enrollment in Davis and more investment in Sacramento—the worst of both worlds if you are Davis, because we will have to contend with the impacts of enrollment growth without a lot of the benefits.

From Davis’ perspective, what is the alternative to DiSC?  Just as I don’t think we will infill our way out of our housing and affordable housing problems (to paraphrase City Manager Mike Webb), I also don’t see a viable strategy to infill our way out of our lack of innovation space.

All we have to do is read the Studio 30 report from a decade ago to realize why an internal strategy does not work.

The report concluded: “The current isolated and dispersed sites that are available and appropriately zoned are not adequate in terms of size, location, or configuration (and related constraints) to address the emerging market need of an Innovation Center.”

It explains, “With available reasonably priced land and effective marketing to innovative high tech companies, Studio 30 estimates Davis could absorb up to 10 percent or around 100,000 square feet of the 1-1.5 million industrial/office square footage absorbed annually in the Sacramento region. Because of this Studio 30 estimates Davis needs at least 200 acres for business development and expansion over a 20 +/- year time horizon.”

DISC 2020 provided that 200 acres.  DiSC 2022 would have provided half that.

The recommendation at that time: “Land Use Strategies Studio 30’s research suggests that the City pursue a broad strategy to attract innovative businesses that offers a number of sites that are scalable and range in size so the community can accommodate an incubator, startups and expanding businesses. Some should be directly in contact with the University. This mix of small and large sites allows the city the flexibility to successfully attract, grow and retain innovation businesses. External sites have the potential to support the most jobs because of their size and ability to accommodate a wider variety of both size and type of businesses.”

The study conducted at that time did not see sufficient space to pursue an internal strategy.  That has not changed in the ten years since the report has been released—if anything, it has gotten worse.

Some have been recommending we undertake a new economic development plan.  I have been extremely skeptical of that approach.

First, I have seen it largely as a delay tactic.  Look how long it has taken for us to do and approve the downtown plan.

Second, as noted above, it is not clear to me why we need to do another plan when the Studio 30 and Innovation Park Task Force report are all relatively recent and the basic facts on the ground remain the same.

Third, while it is noted that there has not been community consensus moving forward from the 2010-12 process, what makes anyone believe that will improve going forward?  The community remains just as divided and that probably will not change.

I have seen arguments that we don’t need a “massive” business park outside of town and the city has existed “this long without it.”

One of the big problems, I believe, is in fact the failure of leadership from the council on the issue of economic sustainability.  I remember a decade ago when the city polled the citizens ahead of a possible parcel tax and found that the vast majority of residents thought our fiscal situation was fair to good.

As much as a certain councilmember has been and will face blame for the demise of DiSC 2022, the bigger picture is that the council has never really made a long and concerted effort to educate the community on our fiscal challenges.

The result is that four ballot measures that aimed to address some of the ongoing financial shortfall have now failed—Nishi in 2016 with a small R&D component, the parcel tax in 2018, DISC in 2020 and now 2022.

Back in 2020, as he was leaving, City Manager Steve Pinkerton went to service organizations, neighborhood associations and community groups to present to them about the city’s faltering fiscal situation.

Since then, that has not happened.  In fact, since then, the message has been largely just the opposite.  While Robb Davis warned about the need for cost containment, the city council has steadily approved budgets for COLAs for city employees, and in recent years approved expensive spending projects—including the ladder truck—that are of questionable need.

Whether you can justify having such a truck or not, the message is clear—you are claiming that we need new revenue but you are spending money before it even comes in.

So what happens?  In the short term, nothing.  This is still a pot of boiling water that is being slowly heated.  It’s a bit like climate change.  The changes are at first imperceptible.  We have a population of voters who are largely homeowners from decades ago who didn’t have to purchase their homes for $800,000 and whose families are long since grown.

The next generation is more precarious.  Younger families do not have housing and cannot afford to move here.  Schools have declining enrollment.  The local economy other than the university lacks jobs and spinoff jobs are increasingly going elsewhere, not to Davis.  Our ability to pay for infrastructure is stretched thin.

The core of this community therefore is losing something, but slowly enough that people do not see the alarm.  We all like our small town, lack of traffic, lack of social problems, but that has changed dramatically even in the 25 years I have lived here, and that will change even more during the next decade.