Blogging Bayport Alameda

October 5, 2015

Everywhere, USA

Filed under: Alameda, Alameda-ish, City Council, Development — Lauren Do @ 6:05 am

Just so folks don’t think it’s a strictly Alameda phenomenon of opposing development, recently the Planning Board in Berkeley approved a large downtown project that would bring 302 residential spaces to Berkeley.   That proposal met a fair amount of oppositions, but look at how the opposition and proponents were described:

Opponents cited the scale of the project, flaws in the approval process, concerns about earthquake safety and worries about the impact of construction on nearby Berkeley High School. Advocates called for more housing in Berkeley and for increased activity downtown. To a remarkable extent, the divide in opinion was generational: older commenters were opposed; younger ones approved.

“We have to stop letting the perfect be the enemy of the good and get housing built now,” said Eric Panzer, chair of Livable Berkeley. He said many opponents had secured housing in Berkeley years ago and wanted to “pull up the drawbridge.”

Also, check out some of the strong comments from the Board members:

Commissioner Denise Pinkston referred to a report on housing prepared by the California Legislative Analyst’s Office.

“Coastal California has been underproducing housing for generations,” she said. “I resent people coming up here and saying we’re not doing our duty unless we say no. I think our duty is to find a way to get to yes. I’d rather have housing in Berkeley that reflects our green values than housing in Antioch or Tracy which is largely single-family housing and forces people to commute.”

Prakash Pinto, board chair, compared Berkeley to Cambridge, Massachusetts, where he used to live. Cambridge, he said, had managed to build thousands of units of new housing in the last few years.

“I always thought Berkeley was a very progressive city,” Pinto said. “But [Cambridge] looked at themselves and said, ‘For us to be truly progressive, we need to build new housing.’… We have to move into the next century. We have to move forward. Cities build. That’s what has to happen.”

But what lead me to this article about this project was an Op-ed in the same publication from a young worker making, what should be, a good income completely priced out of the housing market attempting to appeal to the progressives of his city:

The Bay Area’s severe housing shortage, coupled with massive job growth, fuels skyrocketing rent prices. Everyone knows this. It is alarming that some opponents to the project seemed to insist that merely resisting the high demand—“we don’t want new people moving here”—would be enough to solve the issue. Clearly, they were not concerned with the plight of rent-burdened tenants, but with the charming small-town “character” of Berkeley. I contend that subjective aesthetic standards are not valid arguments in times of economic crisis.

The fact is, if high-income engineers or students from affluent families need a unit in Berkeley, they will find it, and if enough units aren’t around, they will price out lower-income workers competing for the same scarce housing. The idea that newcomers should simply look for somewhere else to live ignores the realities of job growth, especially when new jobs outnumber new housing at a 3-to-1 ratio in the region.

The problem is, much like some of the public statements from our City Councilmembers, there is this belief we should be working on the bigger problem of Prop 13 loopholes or tax credits, and while this is important the reality is that these elected officials have the ability to address issues locally in small ways in addition to trying to tackle global problems.  The problem is some of our elected officials are like these people who come to meetings and wax poetic about “small town charm” to oppose a housing project while a significant portion of its population is being displaced.  Speaking about the responsibilities of the State government to provide funding for affordable housing is cold comfort to a family who has received 60-days notice to vacate and have no other alternatives for housing.

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30 Comments

  1. Great post Lauren. It mirrors somewhat what I wrote last week, and it provides more detail. It’s nice to hear from neighboring cities about what they are doing to address the housing crisis. Here’s an interesting article on this issue from the City of Oakland:

    http://www.bizjournals.com/sanfrancisco/blog/real-estate/2015/10/oakland-housing-crisis-city-council-policy.html

    Comment by Karen Bey — October 5, 2015 @ 6:20 am

  2. The project did get approved, along with a “community benefits” package:

    It came with significant amendments to the developer’s proposed community benefits plan that allocate $4.5 million to affordable housing, in addition to the $6 million required by the housing mitigation fee.

    City of Berkeley Housing Mitigation Fee:
    On June 28, 2011, Berkeley’s City Council adopted an ordinance which enables the establishment of an affordable housing mitigation fee. Fees will be charged on new rental housing. Fees paid will go into the City’s Housing Trust Fund for affordable housing. Ordinance 7,192 specifies how the fee will be calculated and used. On October 16, 2012, the City Council adopted Resolution 65,920-NS setting the fee at $28,000 and establishing criteria for applying the fee.

    Comment by Karen Bey — October 5, 2015 @ 7:08 am

  3. $42K before taxes *was* a good starting salary for the bay area, prior to the recession. That this kid is spending nearly half his income on rent speaks volumes. Something’s gotta give.

    Comment by Kristen — October 5, 2015 @ 10:35 am

  4. I wonder what the average age of the Alameda Citizens Taskforce is.

    Comment by BC — October 5, 2015 @ 10:37 am

  5. BC thinking carefully, the average age may be around 70. Seriously.

    I am nostalgic for the Berkeley and Alameda of the past in many ways, though I don’t miss the absolutely dead Park Street of the 1990s. Berkeley of the 1960s and ’70s was such a blast,(but also a horribly confusing personal experience at the same time). The Co–Op bulletin board was the Craig’s List of the day, and you could meet anybody while posting a card. The same kids who loved Berkeley so much they never left are the same old people who are fighting change. It’s hard to accept that we can’t turn back time.

    Comment by MI — October 5, 2015 @ 11:43 am

  6. A few comments on the young worker’s op-ed:

    “I am a 23-year-old music data analyst making a $42,000 yearly salary before taxes; 46% of my income goes to rent. Nobody at my income level can afford median rent in Berkeley.”

    Since the byline says he is a new resident of Berkeley, it sounds like he CAN afford to live in Berkeley, albeit just scraping by.

    —————————————–
    “massive job growth, fuels skyrocketing rent prices”
    “subjective aesthetic standards are not valid arguments in times of economic crisis”

    Most people would think of “massive job growth” as a positive good rather than an “economic crisis.”

    ——————————————

    “Personally, I’m not a fan of private land ownership at all”

    Nor does he understand the concept.

    ———————————————————-

    “It was disappointing to see physics professors, philanthropists, and business owners resist growth in the face of such obvious need for it.”

    I’ll bet most of those “professors, philanthropists and business owners” lived like 23 year olds back when they were 23. They had roommates or lived in cheaper neighborhoods, or both. They probably have difficulty understanding why the op-ed writer can’t do same and live in Oakland or Emeryville and still be a short bus or bike ride away.

    ——————————————————–

    “To solve not just the housing crisis, but the global climate crisis, all suburbs must be urbanized full stop.”

    The writer demands that a long-established community completely remake itself to suit his demands. Hmmmm.

    Comment by dave — October 5, 2015 @ 11:59 am

  7. If you change the property taxes owners on Prop 13 won’t that just raise Rents Higher?

    Won’t these increases just be all be passed along to renters?

    Comment by Cobalt Black Keys Johnson — October 5, 2015 @ 8:06 pm

  8. Cobalt, the effects on rent of changing/repealing prop 13 are not quite that straightforward. If property taxes on olds go up, some will choose to sell and move somewhere cheaper rather than pay higher property taxes to live next to high paying jobs they are no longer interested in (retired.) This added supply would put downward pressure on home values. Cheaper homes means some renters would be able to by freeing up rental supply, putting some downward pressure on rents. Real estate investors also would face lower costs to purchase rental property, which could lower the required rent to cover their nut. etc. etc.

    Comment by BMac — October 6, 2015 @ 9:24 am

  9. #8 Your scenario really doesn’t make sense. Prop 13 passed in 1978 because people were being forced out of their houses who didn’t want to move. Each time there is a real estate boom (like now) in CA there are more people who support Prop 13. People who bought $400-500 K houses years ago who complained about Prop 13 now embrace it because their homes are worth $800K. Politicians know that to alter Prop 13 for homeowners is political suicide.

    Comment by frank m — October 6, 2015 @ 9:52 am

  10. I am a person who bought $400-500k house just a short time ago, and I support repealing Prop 13.

    It’s ridiculous that property taxes between two adjacent similar properties can vary as much as 4x, if not more. If long-time owners don’t want to pay the taxes on their properties they can move to smaller places, further away from job centers (where they will have the added benefit of less traffic and new development to complain about incessantly). This also would tend to move “empty-nesters” out of the housing stock that is better suited to families with kids.

    Don’t get me started on people who inherited property with low tax valuations – what a racket.

    On another note – I’d like to point out that landlords don’t set rents based on their costs (property taxes or otherwise). There is no “passing along” costs, unless possibly the tenant was getting below market rent before. Rents are determined by what the market will bear. Of course if a landlord’s costs are too high, s/he may go out of business, but as BMac points out, that just means the property goes on the market and adds to availability for other prospective owners/landlords.

    Comment by Brock — October 6, 2015 @ 10:29 am

  11. 9. I didn’t comment on the political prospects of repealing prop 13, just opined on its potential effects on the rental market that are not obvious to everyone, like Cobalt who can only see the fees and how they get passed on part of the picture.

    There are efforts to reform prop 13, and I’m not totally up on them but they center around commercial properties, I think. I do believe, that an honest analysis supports reforming prop 13 for everyone, and that if the change was phased in over 10-15 years it would accomplish the long term goals, without throwing granny out of her house tomorrow, and that could be palatable to CA voters. An increasing share of which are young, housing insecure and/or paying really high property taxes compared to their neighbors.
    Same goes for the mortgage interest deduction, biggest giveaway to wealthy people in the tax code, and should be phased out over a decade also.

    Comment by BMac — October 6, 2015 @ 10:48 am

  12. frank, we also bought a house awhile back and support repealing Prop 13. Our house will actually benefit this year for the first time because it went up in value by $500k the last 2 years, but I support it for the same reasons as comments 8 & 10. When we retire we will have this almost 4,000 sq ft house which will be paid off, and will have a relatively low tax basis so why downsize? It would only make more since to stay in it and pass it down to our family…who most likely sell it and pay minimal inheritance taxes on it.

    Comment by joelsf — October 6, 2015 @ 11:58 am

  13. I purchased my home several years ago, and enjoy a lower tax rate. I don’t support repealing Prop 13.

    Comment by Karen Bey — October 6, 2015 @ 1:10 pm

  14. I can see people don’t want to pay more taxes. What I’ve never heard is a convincing case for why Prop 13 is either just or economically efficient.

    Comment by BC — October 6, 2015 @ 1:18 pm

  15. Would the “people (i.e., little helpless old ladies) who would be forced out of their homes” if not for Prop 13 agree to the following? You can keep your low Prop 13 tax bill, but when you sell the property (or expire) any profits above your Prop 13 assessed value go back to the tax man. That way all the taxes that you skipped out on, but your newer neighbors have been paying, get somewhat paid back.

    They wouldn’t be so self serving as to want both the upside of artificially low property taxes and high property values, would they? How surprising!

    People always say that “altering Prop 13 for homeowners is political suicide” for politicians. Why not just hold the politicians directly accountable to keeping taxes low in the first place? For everyone equally, and not just those that decided to sit in the same spot for 30 years?

    Comment by Brock — October 6, 2015 @ 3:14 pm

  16. Potential Prop 13 change: http://www.latimes.com/local/politics/la-me-prop-13-20150610-story.html

    Comment by Mike McMahon — October 6, 2015 @ 5:34 pm

  17. 14. Prop 13 seems like a scam. I’ve heard that Jarvis owned a bunch of commercial real estate and used the boogie man of granny losing her home to get it passed. I’ve been following reform ( repeal) of commercial side of Prop 13 since I’ve been working on school parcel taxes and I’ve been sending money to people who are drafting changes and doing lobbying. After several false starts it looks like we may get some legislation.

    Initially, if you asked me if it was fair that we all be taxed at the same rate I would say, absolutely of course. But the reality of the rapidly appreciating real estate in CA, driven by market forces beyond anything I could imagine when I moved here, gives me pause.

    Our next door neighbors where here when we moved in, a window and her son. Years later she is retired and he is older but still working as a line chef. They are raising her grand daughter’s son who is about six. Long story. Far other end of the block are folks living in a home they bought or perhaps were raised there and inherited before we moved here. Their kids were in elementary when we moved here but are adults. Her brother lived in the back building but now it is her indigent mom and her adult kids. She works at Wallgreen’s and he lays carpet for local realtors. I assume that in the case of each of these neighbors that if they paid the same tax at current market value that they would be hard pressed.

    Meanwhile, a few houses on the block which were rentals have had their owners die so they have been put on the market. Ours was a probate back in 1991. We paid $225K, have paid down the mortgage and put kids through college. Our taxes are in the several of thousands, but we too might be stressed paying current taxes since our property has at least tripled in value. With the improvements I’ve made, for which we were reassessed and taxes bumped, it may be worth 4X or more.

    10 wrote “If long-time owners don’t want to pay the taxes on their properties they can move to smaller places, further away from job centers (where they will have the added benefit of less traffic and new development to complain about incessantly). This also would tend to move “empty-nesters” out of the housing stock that is better suited to families with kids. ”

    Really? Our empty nest may have to accommodate our son after he finishes college this December as he won’t have a job and will be looking at sky rocketing rents. Not just that, but we, who are not complaining incessantly about any of the above, have worked hard to make this our home and the idea that we should make room for legions of new wave six figure in come people and their kids doesn’t sit so well. I enjoy my old Alameda neighbors who have been here for years before my wife and I showed up with our babies. It’s fun to see young kids on the block, but if you think simply having the money to take over gives you that right, think again. Ever heard of the word “community”? It’s a bit elusive to some folks who feel money entitles them to rule the world, but it’s actually a real tangible thing and why we moved here.

    Comment by MI — October 7, 2015 @ 3:13 pm

  18. In September I was in Roseberg Or. of all places getting a tank of gas. They have no self serve gas in Oregon, but fuel is still cheaper. I was talking to the young attendant about differences between Ca and Or. and he commented that if every state had the no self serve rule that would create a ton of jobs. We got on to other taxes. They have NO sales tax ( sales taxes are regressive), but do have a hefty income tax which is progressive. I had been told that property taxes in Oregon are hefty but he was complaining about how he has to pay $700 a year on a house which sits on an acre of land. ??? My sister’s grandson graduated with a degree in business. The kid got a job in Portland, but decided to commute over the river from Washington because they have no state income tax. He learned well. I found this interesting chart which compares California , Oregon and Washington state. http://www.oregonlive.com/politics/index.ssf/2013/12/5_common_myths_about_oregon_ta.html

    Comment by MI — October 7, 2015 @ 4:06 pm

  19. #17. This is pure Alameda and Prop 13.

    People who own $900,000 houses & pay $4,000 a year in taxes <<< salt of the earth types, really bring out the "community" in Alameda
    People who own $500,000 houses & pay $7,500 a year in taxes <<< money-grubbing assholes who are ruining the "community".

    Comment by brock — October 7, 2015 @ 7:28 pm

  20. #18, And now the Kid can join the legions of people who make that commute every day who demand new bridges to get across the Columbia that will be paid for by the taxes that they are so ingeniously avoiding.

    Comment by jkw — October 7, 2015 @ 8:35 pm

  21. #20 So if we were to raise the minimum wage in Alameda that would cut down on people commuting to the higher minimum wage jobs in surrounding Cities.

    Comment by frank m — October 8, 2015 @ 5:09 am

  22. 19. you’re a real mench.

    Comment by MI — October 8, 2015 @ 7:15 pm

  23. somebody told me that people in West Oakland have been calling the cops on African American store front churches for disturbing their Sunday morning reverie. “I can’t read my Sunday New York Times with all that infernal holy rolling!” Darwinian Capitalism on the march.

    Comment by MI — October 8, 2015 @ 7:35 pm

  24. 20. yeah, the Kid pretty much fits traditional of money grubbing millennials with no social consciousness being cranked out by business school. There was an article in the Sunday Times about wave of suicides among twenty something interns on Wall Street. Wonder what that’s about?

    Altruistic millennials who eschew cars and pay taxes live in Portland and we hear they will be flocking to Alameda soon!

    Comment by MI — October 9, 2015 @ 10:53 am

  25. Brock, To calrify: I’m not defending Prop 13 as fair, ( “life’s not fair” right?) just saying after almost 40 years to wipe it away would have worse effect for those it was supposed to help stay in their homes than if it had never passed. Granny losing her home may have been opportunistic boogieman of commercial real estate interests who foisted Prop 13, but it’s also legit. Ever more so today. And yeah, my neighbors are pretty much salt of the earth and old guard was much more prevalent when we moved here, which was part of the appeal, or we might have scrimped and saved to wheedle into bland Orinda while it was still possible.

    Your 15 seemed to herald wiping the slate clean for hipsters and six figure professionals with kids who are entitled to the spoils of changing economic landscape. Even if it was for hyperbolic effect it was offensive to people who aspired to the Dream, but are reduced to so much meat to be pushed aside in the name of the tsunami of new tech economics.

    Alameda Pre-Uber economy 1999 2010 2020

    Median household income (dollars) 56,285 74,221
    Median family income (dollars) 68,625 92,746
    Per capita income (dollars) 30,982 38,434 $150,000???

    Your 19. didn’t point out that young people with families who can muster $900K for newly purchased home will be rewarded with $15K in taxes while long time residents like my neighbors are paying less than $4000. Maybe having granny’s heirs should fork over back taxes when she’s gone. I’ll be lucky to get $12K a year from Social Security. Would like to leave something for my kids. Thank God for Air BNB and cat food.

    Comment by MI — October 9, 2015 @ 11:20 am

  26. 25. We are mostly in agreement, and I am indeed being hyperbolic for effect. I think hyperbolic statements are sometimes required with respect to P13, because so many people seem to think it is an unalloyed “good” and don’t recognize how it favors the old and established, and and puts the burden on the young and struggling. The old and established may say “good, we got here first!”, but I think some of them forget that the “young and struggling” group may include their children (like your son) if they ever hope to strike out on their own.

    Wiping out P13 immediately would indeed be tragic, but I’d be interested in proposals to phase it out slowly and include exemptions or loopholes so people don’t lose their homes.

    Comment by Brock — October 9, 2015 @ 12:04 pm

  27. Saint: Anyone with same or less wealth as MI

    Sinner: Anyone with a nickel more than MI

    Comment by Ambrose Bierce — October 9, 2015 @ 12:25 pm

  28. #28…good point. Poor me…I saved and saved and finally bought a house…after living with roommates for years to save money and my reward is that I pay more in property taxes than someone else does for the same property…with the same use of public infrastructure, fire and police departments, and all the other services my taxes support just because someone could afford it earlier. Please…totally unfair tax and hurts new first time homeowners, and new families. I pay more in property taxes then I use to pay in rent, but now rents have gone up and my mortgage is the same…and my property taxes hardly go up…MI I feel for your kid unless you can help him with a down payment with your low tax bill…his first house he will be paying the high cost when he is just starting out.

    Comment by Jake — October 10, 2015 @ 10:35 am

  29. 28. yes really. Don’t get too close or you’ll be blinded by my halo. Seriously, you have any suggestions for reform or just not so witty snark?

    BTW- the county board of supes are voting support for Hancock bill on consent calendar:

    Agenda item 33. PAL Board Committee Recommends: Approval of legislative items referred to the full Board of Supervisors:Support for SCA 5 (Hancock and Mitchell) Property Tax Fairness Amendment

    Comment by MI — October 12, 2015 @ 6:29 pm


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