Berkeley's affordable housing crisis

From The Berkeley Daily Planet:

Bates Housing Plan Fails to Address Berkeley’s Affordability Crisis

by Rob Wrenn

March 25, 2016

Mayor Tom Bates has come up with a housing plan, with the dramatic heading “Addressing the Housing Emergency,” which unfortunately does little to address the city’s housing affordability crisis.

Most of its 13 recommendations would benefit for-profit developers of market rate housing, which is currently affordable only to people with incomes well above $100,000 a year.

It fails to advocate for a realistic funding plan that would actually result in the creation of more affordable housing.

Among the problems with the plan are: inadequate housing impact fees,“by-right” approval of housing in Priority Development Areas, an increased density bonus benefiting only those earning 120% of area median income, upzoning parts of neighborhoods near priority development areas, possible reduction of fees paid by developers, and accelerating conversion of rental units to condos.

His plan will be discussed by the City Council at its meeting on Tuesday, April 5. The agenda for that meeting with the mayor’s proposals can be found here.

What You Can Do

If you think the City should do more to fund affordable housing than what the mayor is proposing, I would encourage you to contact the City Council (council@cityofberkeley.info) to express support for the Berkeley Progressive Alliance’s affordable housing funding proposals. You can find these proposals, part of their housing platform, on BPA’s Web site here.

You could also comment on the other aspects of the Mayor’s housing plan discussed in more detail below. There are many important issues being discussed by the City Council on April 5, and you could also come to the meeting and speak your mind.

The meeting starts at 7 p.m. and takes place at the Council’s new meeting location, the School District Board Room, 1231 Addison St. (Please enter at 1222 University Ave.) 

Housing Impact Fees 

The consultants hired by the City to do the Affordable Housing Nexus Study recommended a year ago that developers be required to pay a housing impact fee of $34,000 a unit. 

They found that the City could legally charge a fee as high as $84,000 a unit for rental developments. $34,000 was recommended as an amount that would insure that the project would still be financially feasible and give developers a reasonable return. The consultants estimated a return on cost of 13.9% for developers with a $34,000 fee. 

The City currently has a fee of $28,000, but Mayor Bates and his allies voted to discount the fee to $20,000 just as the proposed 2211 Harold Way high rise project downtown was being considered last year. 

Mayor Bates now wants to set the fee below the recommended $34,000. He would charge only $28,000 if developers pay the fee before they get their building permit. San Francisco already requires developers to pay their housing fees up front and their fees work out to be substantially more than $34,000 a unit. 

There is no reason why the city can’t both require payment of the fees before construction begins and charge $34,000. What Bates is proposing is a giveaway to developers that will cost the Housing Trust Fund millions over time, just as the City lost $1.8 million when he and his allies voted to discount the existing fee. 

Mayor Bates is also proposing that for developers who prefer not to pay the fee, 16.7% of total project units have to be affordable. This is an improvement over the current 9%, but the Nexus Study justifies setting the percentage at 20% as 100 units of market rate housing creates demand for about 25 units of below market housing...

By-Right Approval of Housing 

Mayor Bates is recommending “By-Right” approval of multi-family housing developments in “priority development areas” (PDAs) in Berkeley. He wants the Planning Commission to draft an ordinance. 

By-Right means that a project would be approved by a member of the planning staff with no involvement of the Zoning Adjustments Board (ZAB), no public hearings and no opportunity for public input or comment. The project would not require a use permit. 

Project development areas include the Downtown, the Southside (south of the UC campus), San Pablo Avenue, University Avenue, Shattuck south of Dwight Way, and the Adeline Corridor. [See map above]. 

To qualify for by-right approval, a project would just have to meet certain criteria such as providing bike parking, spaces for car sharing, bus passes for residents, and meeting LEED Gold Green Building standards. 

And this interesting criterion: “minimum height equal to the maximum allowed under zoning for the property." This suggests that if you proposed to build something at less than maximum allowed height, you would still need a use permit. 

With the possible exception of undefined “Local hire requirements for construction workers,” all of these criteria are things that are already routinely done and provide no exceptional benefit to the City. 

There would also be some design requirements that the Design Review Committee (DRC) is supposed to come up with, but by-right approval means there would be no DRC review of individual projects. 

This proposal would constitute a radical change to City zoning. More information about types of City permits can be found here. 

Berkeley is a built-out city with relatively little vacant land. Development invariably has impacts on adjacent properties and neighborhoods. There can be issues related to design, setbacks and solar access, traffic impacts, etc. 

The use permit process results in better projects as, not infrequently, modifications are made and conditions are attached to project approval as a result of public input and ZAB and DRC review. 

How well the use permit process works, of course, depends on the caliber of people appointed to the ZAB. Are they conscientious in evaluating projects or do they tend to just rubber-stamp staff recommendations? 

There is no evidence that the City’s long-standing use permit requirement is impeding housing development. It’s obvious to anyone who travels around our city that we are in the midst of a market-rate housing boom. 

City Density Bonus 

The mayor proposes that staff and the Housing Advisory Commission draft a City Density Bonus ordinance that would reward developers by giving them an extra 15% of units on top of the current 35% bonus units that they get under the state of California’s density bonus law. 

Currently if a developer proposes to build 100 units, 11 of which are affordable to households with incomes up to 50% of the area median income, that developer gets the right to build 35 more units. 

What would developers have to do to qualify for Bates’ proposed extra 15%? They would have to add an unspecified number of units affordable to people at 120% of area median income or pay a fee for moderate income housing. 

For a family of four, 120% of median income in Alameda County is $112,200. In Berkeley, renter households have a median income of only $38,539 and 82% of renter households have incomes below $100,000. 

Giving a bonus that benefits people at 120% of median income is questionable. The City’s Affordable Housing Nexus Study concluded that “households earning 100 percent of AMI or less are typically unable to afford the average market rate unit in Berkeley.” 

When you get to 120%, rental housing becomes relatively affordable, though units in newly built market rate “luxury” developments remain beyond reach. 

Neighborhoods or Buffer Zones? 

In an amazing example of Orwellian newspeak, Mayor Bates tries to sell the idea of upzoning residential streets near [Priority Development Areas] PDAs as a solution to setback and shadowing issues created by development on commercial streets like Shattuck, University, etc. Stepping up of residential property is called stepping down. 

His plan is to have the Planning Commission draft an ordinance to upzone residential properties, that is, increase the allowable height and density, on blocks that include commercial property located in PDAs. 

What he is calling “buffer zones” would extend for one block or 200 feet in either direction from the primary commercial street. 

So, for instance, if you live on the north side of Addison Street, between MLK and Sacramento in a property currently zoned R-2, and that backs on to property that fronts on University, which is a PDA street, your property would be upzoned to R-3 which would allow reduced setbacks, higher density and taller buildings. 

Other streets that would presumably be affected, assuming a 200 foot limit, would include 10th Street, Kains, Byron and Wallace because of their proximity to San Pablo, along with segments of streets that cross San Pablo. 

Near University, one side of Berkeley Way would be upzoned along with segments of cross streets. Near Telegraph zoning changes would apply to streets like Dana, Halcyon, Florence and Regent and also cross streets. 

Some R-1 zoned areas of Southwest Berkeley in Council District 2 would be affected. 

This won’t reduce shadowing and setback concerns. It will, on the contrary, exacerbate them. Taller buildings and the reduced setbacks between properties that come with upzoning mean greater impacts on access to sunlight and more potential for conflict. 

There is little vacant land in these proposed so-called “buffer zones.” Building to take advantage of increased height limits would certainly often involve demolition. Demolishing existing housing is always problematic. 

It’s possible that some owners of small rental properties might try to take advantage of the greater permitted density to demolish their buildings to build something larger...

Read the whole thing here.