Willow Grove team says 250 affordable units can be built without city loans; Davis commission forwards plan to planning panel

At a special meeting, the Davis Social Services Commission voted to forward the Willow Grove revised affordable housing plan to the planning commission after the applicant said a new development partner can deliver the project’s affordable units without city loans.

The commission’s recommendation came after Caleb Rup, chief executive officer of Pacific Companies, told commissioners the Pacific team and the project sponsor can “construct all 250 units in a single phase without any use of city loans or grants,” and that the project team has committed to put the city’s minimum inclusionary obligation into the baseline project features so permit triggers are tied to delivery of affordable units.

That commitment means the applicant is formally proposing to embed Davis’s baseline inclusionary requirement (141 units) as a development condition; the project team says it will build 250 deed‑restricted rental apartments on a 10.1‑acre affordable site, reserving at least 10 units for clients of the regional center that serves people with developmental disabilities. The applicant’s materials estimate roughly $71.8 million to build the affordable portion and show the larger project will include market‑rate and attainable ownership units outside the 10.1‑acre rental site.

Why it matters

If built as presented, Willow Grove would be the largest single‑phase affordable rental development in the city’s history and would expand units targeted to very low, low and extremely low incomes. Project proponents told commissioners they intend to rely on a three‑part capital stack — federal 4% tax credit equity, a permanent loan, and subordinate (series B/recycled) bonds and private gap investors — rather than on city housing trust fund loans. Pacific Companies said larger scale, vertical integration and simplified funding sources reduce time and compliance costs, making the pro forma work without local subsidies.

What commissioners and the public said

Commissioners pressed Pacific Companies on the financing details, including whether recycled subordinate bonds and federal tax‑credit pricing will be stable enough to close the deal. Rup acknowledged market risk — he said tax‑credit pricing has fallen in recent months and that continued weakening could create shortfalls — but described the current financing environment as favorable and said, based on recent rounds, the project’s funding probability is high.

Public commenters who spoke at the meeting supported the project’s commitments for people with developmental disabilities and for deeper affordability. Rhonda Phillips, identified in the record as a housing specialist with the regional center that has supported the project since 2023, told commissioners the reserved units “are essential” for clients who need integrated housing in the community. Jessica Guerreri, a Davis resident and special‑education teacher, described the long gap families face after children age out of school services and urged approval.

Commissioners also raised a separate but connected issue: several asked staff to ask the applicant and the negotiating subcommittee whether a subset of the project’s planned attainable ownership condos or townhomes (not the 250 deed‑restricted rental units) could be deed‑restricted as moderate‑income for‑sale units. Applicant counsel said the 10.1‑acre affordable parcel is optimized for rental development and that parceling for for‑sale units would create infrastructure and feasibility challenges; commissioners nonetheless asked staff to forward the question to the planning commission and the DA negotiating subcommittee so it can be considered there.

Vote and next steps

By voice vote the commission approved a recommendation that the planning commission consider the revised affordable housing plan; the meeting record says the motion passed unanimously. Staff and the applicant said the matter will move to the planning commission in early April and that development‑agreement negotiations will continue. Commissioners also requested that planning staff and the subcommittee examine whether deed‑restricted moderate for‑sale options could be included in the larger project through the DA process and that the city continue to evaluate housing‑trust‑fund strategies to support a broader range of affordable ownership and rental options.

What was not decided

The commission’s action was a recommendation to the planning commission and not a final entitlement. Several commissioners emphasized that the baseline baseline feature requiring the city‑code minimum is a critical protection if financing conditions change or if a different developer later acquires the entitlement. Commissioners and staff noted the baseline language and the development agreement will be the place to capture legal commitments. The planning commission and city council will see the full development‑agreement materials during the entitlement process.

Key figures and commitments

- Affordable units proposed: 250 deed‑restricted rental units (team says this equals ~177% of the city code requirement) - City baseline inclusionary requirement to be embedded as a permit trigger: 141 units - Reserved units for regional center clients: minimum 10 units - Applicant’s estimated construction cost for affordable portion: about $71.8 million - Parks contribution (applicant commitment in DA materials): $20.8 million (applicant said the affordable site will not carry park contribution costs)

The commission adjourned after the action and public testimony. The planning commission will consider the revised plan and the development agreement in its upcoming hearings; staff will forward the commission’s recommendation and the subcommittee’s questions about for‑sale options to planning commission members for their deliberations.