Blogging Bayport Alameda

January 18, 2018

“Love the project to death”

Filed under: Alameda — Lauren Do @ 6:08 am

The North Housing second reading happened on Tuesday night with a few last ditch efforts by some City Councilmembers to sway the 3-2 vote and come up with a different outcome than last time. Specifically City Council Frank Matarrese asked why the City Council couldn’t consider reinstating the cap for the Carmel Partners parcel while keeping the eliminated cap on the affordable housing parcel.

Because, as Malia Vella stated, she already asked that question and was given the answer of, it would be very complicated do attempt that on what was a whole unified parcel.

It was also great to hear someone — in response to the City Council always attempting to extract more concessions from developers like a kid in a candy store — point out that those concessions almost always make building the development less feasible. So what if the City Council is able to wrest a commitment of 30% inclusionary housing units from the developer or a pony for all Alameda residents named Stan? If the project is not buildable then the 30% inclusionary units will never get built either.

And perhaps that’s the point of why folks like Frank Matarrese are so hell bent on squeezing everything out of the developer, because he — as a purported businessman — understands that if it doesn’t pencil out, it won’t get built. That way he doesn’t sound like the bold faced obstructionist in the vein of ACT or a Trish Spencer, but the result ends up being the same.

Anyway video here, the vote was — once again 3 – 2 — when the City Council looked to get back into the weeds, Malia Vella called the question to force a vote without extraneous discussion.

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36 Comments »

  1. This highlights the central problem with funding for so called “affordable housing” which is better described as subsidized housing. The inclusionary portion is typically paid for by the other owners in the development in the form of higher prices. All that accomplishes is crowding out a number of market price buyers and worsen the problem of affordability for would-be middle class residents. Not unlike rent control, it exacerbates the problem that it purports to solve.

    PS My brother Stan is thrilled to be getting a pony.

    Comment by dave — January 18, 2018 @ 6:45 am

  2. I am so looking forward to this development of much needed affordable and work force housing. Let’s make sure we don’t repeat the mistakes of the past, and create a well thought out model community that includes job training, and after school programs, etc.

    Comment by Karen — January 18, 2018 @ 7:36 am

  3. I agree with Dave that forcing developers to bear a majority of the costs of financing affordable housing results in fewer housing units being built. Still, building market rate units without at least an offsetting number of affordable housing units only makes the affordable housing shortage worse, as shown by UC Berkeley’s urban displacement studies in urban areas like San Francisco.

    For those having trouble affording housing in an urban core [but not necessarily on the suburban fringe or in rural areas], building no housing at all is better than building market rate housing with insufficient numbers of affordable housing units. It’s likely that residents of 85 units that cost over 1 million dollars each will generate more than 15 local jobs that pay wages insufficient to rent 15 units of affordable housing. 15 units is the State minimum requirement for inclusionary affordable housing in a 100 unit housing development. Where will the additional teachers, wait staff, clerks, small business owners, and garbage collectors needed to service those 85 units live?

    In addition to developers, we must raise capital to fiance affordable housing from other sources. Another source is the businesses that employ the workers and for whom high housing costs make it more difficult for them to recruit workers at salaries competitive with the rest of the country.

    One option to collect more money for housing from employers is to close a loophole in California’s tax system that allows large corporations like Disney and Chevron to pay property taxes based on property value assessments from the 1970s when Proposition 13 passed. Local governments (not the State) could then fund housing from increased tax revenues from the businesses that provide the jobs that create the housing demand.

    In December California Calls [http://www.cacalls.org/] filed an initiative, “The California Schools and Local Communities Funding Act of 2018,” to split the property tax role into two: one for residential property and the other for commercial and industrial property. Simply by reassessing commercial and industrial [not residential] property every three years, the State could collect an additional 11 billion dollars annually for schools, community colleges and local governments. Commercial and industrial businesses as well as low and middle income citizens would benefit if part of the increased revenue was dedicated to financing affordable schools as proposed for schools.

    More funding from a broader base than developers is a better approach to financing the affordable housing needed to preserve our communities and our economy.

    Comment by William Smith — January 18, 2018 @ 7:43 am

    • For those having trouble affording housing in an urban core [but not necessarily on the suburban fringe or in rural areas], building no housing at all is better than building market rate housing with insufficient numbers of affordable housing units.

      How sway?

      Comment by Lauren Do — January 18, 2018 @ 8:57 am

      • FYI the report said this, not that no housing is better:

        Locals are likely to benefit from improved mobility, neighborhood revitalization, lower transportation costs, and other amenities that spill over from the new development (Cervero 2004). However, more disadvantaged communities may fail to benefit if the new development does not bring appropriate housing and job opportunities, or if there is gentrification that displaces low-income and/or minority residents.

        But is telling that you interpreted that as such.

        Comment by Lauren Do — January 18, 2018 @ 9:21 am

  4. Malia certainly hit the nail on the head and spoke forthrightly on the end game of Frank Matarrese and ACT which is to stall, obfuscate and create as many obstacles as possible on the pretense of getting more when the effect is to hamper the ability of developers to move forward, get financing and get us housing. It’s amazing that Jim Oddie actually buys into this argument and starts blaming the developers for failing. He plays right into ACT’s insidious game.

    Comment by Laura Thomas — January 18, 2018 @ 9:15 am

  5. Seems to me that voters need to elect people who will realistically look at Alameda and change the requirements for additional housing for an island with huge transportation problems.
    Oakland is adding thousands of units, 3,000 alone at the Basin. Good freeway access, good BART access, good freeway acces, none of which Alameda enjoys.

    Comment by Tawney — January 18, 2018 @ 11:16 am

    • Alameda has robust ferry systems and bus lines. Under any definition of adequate public transit those two alone fit and if Scott Weiner’s legislation is successful the existence of those two transportation systems would remove Alameda’s elected officials from making any decisions about the appropriateness of housing developments in certain areas.

      Comment by Lauren Do — January 18, 2018 @ 11:44 am

      • Robust. 25 years ago, I could get a free bus to the ferry terminal, and a free bus home. I had 5 am to 7 am transbay service 2 blocks from my home.

        Union bus drivers.

        Comment by Gerard L. — January 18, 2018 @ 3:08 pm

      • Robust. A word people use when they don’t know what they’re talking about, but want to sound like they do. Otherwise known as a weasel word.

        Comment by vigi — January 19, 2018 @ 9:16 am

      • Sorry, but the buses are anything but robust. One hour between buses in the rain is not robust. And one of the ferry lines, I believe, does not even run outside of ‘commute’ hours.

        Comment by Ajm — January 23, 2018 @ 6:27 am

        • The 51A has 10 – 15 minute headways during commute time. That’s a fairly robust. Should it be better? Absolutely.

          Comment by Lauren Do — January 23, 2018 @ 6:39 am

        • Alameda’s public transit is reasonably good for going to downtown SF or downtown OAK. Not robust but reasonable.

          But it’s weak and of little utility for getting anywhere else.

          Comment by dave — January 23, 2018 @ 6:57 am

        • Commute time. There’s the rub. Better get you dr appt and job during ‘commute times’. And better live near the 51 and not need to carry a lot. And mom, if you fall, it will take me a minimum of two hours to go the 22 miles, but please don’t fall at night because then it will be ten. I wish I were kidding.

          Comment by Ajm — January 24, 2018 @ 3:01 pm

  6. The state doesn’t believe that traffic is a good enough reason to block housing. We would be sued if we changed the requirements. Every city in the state needs to do its part and Alameda has a lot of potential in adding more ferries and possibly even a BART station in the coming decades. We are an essential part of the solution. Efforts to stymie housing are classist and racist and limit our housing market, which has as a result more directly impacted those with low incomes, disabilities and people of color. It’s time to stop the charade of using affordable housing needs to stymie all housing development.

    The jobs are here, they’re growing. If you want to live in a sleepy suburb where you can drive and park to your heart’s content, I’m afraid those days are numbered in the Bay Area.

    Comment by Angela — January 18, 2018 @ 11:42 am

  7. This is absolutely hilarious. Berkeley Activists are now attacking the overwhelmingly pro-housing White ARC members and YIMBYs and accusing them of being White Supremacists. Yes, affordable housing advocates are Racists. I love it. Here’s the best part, Lauren (Rule of thumb: If your plan to lower housing costs depends on overthrowing the laws of capitalism, it’s not a plan at all.)

    First, the Lefties ban all new housing. Then they freak out when housing costs skyrocket. Then they try to take over and control Rental Housing. Now they are advocating for all zoning laws to be thrown out in the name of new housing. You can’t make this stuff up. They are racists and White Supremacists. Heh. Read it and enjoy.

    http://www.bostonglobe.com/opinion/2018/01/14/california-blow-your-lousy-zoning-laws/AcT0vOJCdArOJp3cBH9zmJ/story.html?p1=Article_Recommended_ReadMore_Pos4

    Comment by Alameda Landlord — January 18, 2018 @ 10:29 pm

    • Alameda Landlord,

      Thanks for posting the Boston Globe article on blowing up California zoning.

      I agree with you that capitalism, which could make more money available for housing than the government ever could, is the most promising approach to building needed housing. Housing, however, is not a free market. Governments restrict growth at the behest of existing homeowners and even many renters.

      Until government restrictions on growth are eased and the housing market comes closer to balance (decades in the best scenario) rent control and affordable housing requirements are, regrettably, one of the best alternatives for providing at least a portion of our lower and middle income citizens with secure housing. As you point out, these restrictions on the free market also pass some of the pain caused by our dysfunctional housing laws up the economic ladder. These people are in a better position to change zoning laws and to tap new sources of capital for housing than renters.

      Comment by William Smith — January 19, 2018 @ 6:35 am

      • Where you stand on this depends on whose ox is being gored. What I appreciate is that these so-called do-gooders, fierce advocates of rent control in the name of the homeless poor, are now being called out as tools for the corporate interest as well as being racists. The fact that many of them are white interlopers, and not from Alameda is just sauce for the goose.

        As you drive by the tent cities in Oakland, along High Street and San Leandro Street en route to our fair Island City, see what Rent Control has wrought on Oakland.

        “Like the Colonizers before them, YIMBYs claim the ‘Hood as Theirs!
        “SB827 is backed by pro-housing groups that call themselves YIMBYs, which stands for “Yes in my backyard.” Like the colonizers whose agenda they seek to replicate, it takes a certain entitlement/supremacist mindset to call a community they didn’t grow up in, don’t live in or are new to as “theirs.” It’s NOT their backyard – it’s ours. And we’re not about to give it up. WE SHALL NOT BE MOVED!

        Read the details yourself, with pictures of ARC dancing in your head.

        http://www.berkeleydailyplanet.com/issue/2018-01-06/article/46357?headline=SB-827-Skinner-D-Berkeley-will-destroy-local-land-use-control–Becky-O-Malley

        Comment by Alameda Landlord — January 19, 2018 @ 10:13 am

        • Alameda Landlord,

          Thanks for the post detailing concerns about an extreme YIMBY approach to housing – build, build, build anything anywhere!

          As we are learning, currently, building anything usually means building primarily market rate, as in Alameda and as the article documents in Berkeley. This build anything approach works fitfully when housing demand and supply are near equilibrium, as on the fringes of suburban areas and in rural areas. UC Berkeley’s Urban Displacement studies have documented that, in dense urban areas with a severe shortage of affordable housing, the build anything approach can lead locally to an increase in the imbalance between AFFORDABLE housing supply and demand. At a minimum, new housing developments must include sufficient affordable housing units to meet the local demand for low income housing created by the market rate units in the development.

          Estimating how many units of affordable housing are needed just to offset the demand created by the market rate units in a new development in an urban area is currently a guessing game. The one guideline that I think most can agree on is that, for our urban cores, the number is significantly greater than required by the State’s 15% minimum inclusionary housing requirement. Thus the dilemma of the current status quo – build less expensive market rate housing with too few affordable units to meet the increased demand for them, or build more expensive market rate units to finance the necessary number of more affordable housing units. Perhaps we need a building moratorium on housing construction in urban cores like SF and Oakland. Such a moratorium could end up putting fewer people out of their homes while we develop viable financing mechanisms for financing developments that house all segments of our population.

          The tech industry, big backers of YIMBY groups (e.g. California YIMBY has $500,000 from tech bigwigs like Microsoft executive Nat Friedman and Pantheon CEO Zack Rosen) is concerned about housing their workers, and less so with housing others. For more, see https://therealdeal.com/la/2017/07/20/california-yimby-brian-hanlon-on-what-real-estate-insiders-can-do-to-fight-nimbyism/. They are largely oblivious to the fate of those who make less than the six figure or more salaries of their key workers and are driven in ever increasing numbers into substandard housing, out of our communities and onto the streets.

          Yesterday I went to a meeting of a prominent Bay Area housing umbrella group. They are concerned that Wiener’s transit bonus bill and similar bills as written, may, at least in the short (a few years) and medium terms (a few decades), exacerbate the shortage of affordable housing. Unless these bills do more to guarantee construction of affordable housing, I expect most affordable housing groups will insist on major amendments before they would support them.

          Comment by William Smith — January 19, 2018 @ 11:26 am

        • Market rate housing IS affordable housing, by definition. If you want to bring down market prices, keep building it.

          But continuing with subsidized housing, which is the correct term for what you call affordable housing, will just perpetuate the issue we have now.

          Comment by dave — January 19, 2018 @ 11:46 am

        • Explain the economics of this: “They are concerned that Wiener’s transit bonus bill and similar bills as written, may, at least in the short (a few years) and medium terms (a few decades), exacerbate the shortage of affordable housing.”

          I’m a mere economist, and don’t understand it.

          Comment by BC — January 19, 2018 @ 11:49 am

        • BC,

          Granted, the statement that building more housing could make the housing shortage worse for some does violate the laws of economics as applied to a free or lightly regulated market near balance – which the housing market is NOT. The housing market in the inner Bay Area is far out of balance and so tightly restricted by zoning laws that a Boston Globe opinion writer has encouraged California to blow the zoning laws up ASAP.

          Wiener’s transportation bonus bill contains no provisions that would require more affordable housing near transit than in other neighborhoods. Many low income residents liver near the major BART stops (West Oakland, Fruitvale, Coliseum, 16th and 24th street BART stations in SF) and along transit corridors like San Pablo Avenue and International Boulevard. The concern is that without requiring a larger proportion of affordable requirements than current laws do, developments complying with the transit bonus will not provide enough housing affordable to both residents displaced to make room for new housing and for the new service and other workers filling the jobs in the neighborhood created by the new market rate residents.

          I find it frustrating that our housing market balance is so out of balance that simply unleashing the animal spirits of the free market won’t solve our housing problem without causing irreparable harm to many segments of our population – and lead those segments to support demagogues who will advocate for short sighted, draconian and fake solutions [Heard of any politicians like that?].

          Glad to provide further clarification of the reasons that unrestricted build, build, build in the urban core could do more harm than good, as its benefits would take decades to trickle down, and then only after a balance between housing and jobs was reestablished.

          Comment by William Smith — January 19, 2018 @ 12:58 pm

        • “Market rate housing is affordable housing, by definition.” Sorry, this is just a tautology. That someone afforded something does not make it affordable in any non-tautological sense.

          Comment by BC — January 19, 2018 @ 11:52 am

        • It will take some real pretzel like logical hoops to explain how not building any housing makes the housing crisis better.

          Comment by Lauren Do — January 19, 2018 @ 11:54 am

        • BC:

          Market price is where supply and demand meet and transactions occur. How could housing sell if it was not affordable?

          One man’s tautology is another’s objective reality.

          Comment by dave — January 19, 2018 @ 12:24 pm

        • I get that. I have spent decades in economics. But that’s not a meaningful definition of affordable. Affordable isn’t the same as afforded, which is how you’re using it.

          I’m not a linguist, however, and so checked Merriam-Webster. Here’s their definition. I promise I didn’t cherry-pick the example!

          Affordable

          able to be afforded : having a cost that is not too high ·products sold at affordable prices
          ·an affordable purchase
          ·affordable housing [=housing that is not too expensive for people of limited means]

          Comment by BC — January 19, 2018 @ 3:50 pm

        • The way you’re using the term “affordable” is really better expressed as “subsidized.” What is produced and sold by market demand is affordable, ipso facto. What you’re calling “affordable” which means affordable by anyone only happens if it’s subsidized, either by neighbors who are forced to overpay or by public subsidy.

          Call it what it is and the conversation will be more productive.

          Comment by dave — January 19, 2018 @ 4:25 pm

        • I agree that subsidized is a more accurate term than affordable. I’ll use subsidized more often when I am discussing construction financing. For marketing purposes, I’ll continue to use the term affordable when talking about who can access the housing. In some areas affordable housing (not the Bay area) does not require subsidies.

          Comment by William Smith — January 19, 2018 @ 7:59 pm

        • Terminology matters.

          Your tautology is more than a logical hiccup that would get you a fail in Philosophy 1. It allows you to say there is no housing problem because housing is affordable. QED.

          This is like saying there’s no problem with the country’s lack of physical activity because a running a four-minute mile is acheivable.

          You are mangling language and economics to fit a political position.

          Comment by BC — January 21, 2018 @ 10:50 am

    • Mike,

      Thanks for the posting to the NY Times article describing how much more difficult it will be to fund affordable housing now that lower corporate taxes have significantly reduced the value of housing tax credits. It will become even more difficult now to find funding for affordable housing in dense urban cores.

      Lauren,
      The loss of tax credits as a mechanism for funding affordable housing is one more reason to block the construction of market rate housing unaccompanied by sufficient affordable housing until we make fundamental changes in zoning and financing. Extreme pressure on economic interests, government institutions and even neighborhoods will be required to make those changes.

      Comment by William Smith — January 19, 2018 @ 1:15 pm

  8. https://www.theatlantic.com/business/archive/2017/10/geographic-mobility-and-housing/542439/

    Indeed, the average rent for a two-bedroom apartment in Merced, in California’s Central Valley, is $750. In Los Angeles, it’s $2,710.

    Force new tech into the Central Valley. Put jobs where people can afford to live.

    Comment by vigi — January 19, 2018 @ 1:44 pm

    • Vigi,

      Yes, relocating jobs out of the Bay area is one humane change economic interests could make to help with the housing problem .

      Convincing chambers of commerce and City governments to encourage businesses to locate, or especially relocate, to the Central Valley, may be difficult. Your suggestion to “Force” new tech into the Central Valley is apt. Redefining civic boosterism to mean discouraging businesses from locating or staying in Alameda will be difficult.

      Are you volunteering to call on Alameda’s Chamber of Commerce to suggest that Peet’s Coffee and Tea or VF Outdoor move to Merced? I would expect a chilly reception from friends in the Sierra Club if advocated a policy that would lead Bay Area development to sprawl into the agricultural and wildlife habitat around Merced.

      Comment by William Smith — January 19, 2018 @ 2:13 pm

    • The article you cited from the Atlantic, “The Barriers Stopping Poor People From Moving to Better Jobs,” had one interesting factoid in it it:

      “According to Enrico Moretti, a Berkeley economist, every new high-paying job in the “innovation sector,” as he calls it, creates five new jobs in other industries, many of which are for low-skilled workers.”

      This factoid suggests that the inclusionary requirement for affordable housing in the Bay area needs to be at least 50%, and perhaps as high as 5 out of 6 new units, or more than 80%.

      Comment by William Smith — January 19, 2018 @ 2:33 pm

      • Each new job that creates demand for new, more expensive housing is also freeing up demand for less expensive housing. If 1000 market rate units priced for software engineer salaries hit the market tomorrow, in a short time there would be 1000 units freed up for other buyers. If thousands more units are built for higher budgets, the same thing happens and starts to bring down overall prices.

        Also note that the 5 new jobs created (and that is a very optimistic estimate, suggesting an unrealistically robust multiplier effect) are not all going to be in the immediate area. A newly hired engineer in Mountain View can create a support position in Austin, for example.

        In any case, the idea that limiting supply benefits lower wage workers is myopic & wrong headed (and it took me a minute to come up with those polite terms).

        Comment by dave — January 19, 2018 @ 4:33 pm

        • Dave,

          Below are some key points from UC Berkeley’s study of urban displacement. Note that more housing of any kind reduces housing price pressures at the REGIONAL level, but not necessarily at the local level, e.g. in San Francisco ( and perhaps Alameda, too) market rate housing INCREASES the cost burden on low-income households for years, but decades later may help lower rents.

          I agree that we need to increase the production of both market rate and subsidized housing, but we need to pay attention to the proportions of each in LOCAL areas to avoid creating additional financial stresses on low income households.

          =============================================================================================

          http://www.urbandisplacement.org/research#section-84

          Research Brief on Housing Production and Displacement

          Debate over the relative importance of subsidized and market-rate housing production in alleviating the current housing crisis continues to preoccupy policy makers, developers and advocates. This research brief adds to the discussion by providing a nuanced analysis of the relationship between housing production, affordability and displacement in the San Francisco Bay Area, finding that:

          At the regional level, both market-rate and subsidized housing reduce displacement pressures, but subsidized housing has over double the impact of market-rate units.

          Market-rate production is associated with higher housing cost burden for low-income households, but lower median rents in subsequent decades.

          At the local, block group level in San Francisco, neither market-rate nor subsidized housing production has the protective power they do at the regional scale, likely due to the extreme mismatch between demand and supply.

          Although more detailed analysis is needed to clarify the complex relationship between development, affordability and displacement at the local scale, this research implies the importance of not only increasing production of subsidized and market-rate housing in California’s coastal communities, but also investing in the preservation of housing affordability and stabilizing vulnerable communities.

          Comment by William Smith — January 19, 2018 @ 8:18 pm


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