City Council to focus on creation of more housing

For Rent signs on Spruce Street. Photo by Melati Citrawireja — A person must now earn $143,360 to afford a median-rent apartment in Berkeley. Photo: Melati Citrawireja

In the past five years, the population of Berkeley has grown 5.5%, but its housing supply has only increased 1.2%.

That discrepancy, coupled with an economic boom that has pushed highly paid tech workers out of San Francisco and into the East Bay, has sent housing prices higher than ever before. Berkeley’s median rent grew $400, or 12%, to $3,584 in 2015, according to a February 2016 Berkeley city staff report. That means a person must earn $143,360 to afford a median rent apartment, according to Mayor Tom Bates. The median price of a house to buy grew even more – up 15% – to $974,000, according to staff reports.

This housing crisis is prompting the Berkeley City Council to consider about a dozen separate housing-related items on Tuesday’s agenda, including one far-reaching item put forward by Bates that includes 13 separate sections.

“Our ethnic and cultural diversity is being eroded as low- to moderate-income households are displaced or priced out,” Bates wrote in his proposal.

While the City Council’s actions show that its members are very concerned about affordability in Berkeley, not everyone agrees about what should be done. Numerous groups are encouraging residents to attend the council meeting and make their views known, adding political pressure to the decisions council is expected to make. Others have already decided to go straight to the ballot.

The Berkeley Rental Coalition, an affiliate of the Berkeley Property Owners’ Association, announced last week that it is collecting signatures for a ballot measure that will increase the business license tax on rental properties – but at a much lower rate than city officials and housing activists had been pondering. The group wants to raise the tax from 1.018% per $1,000 in gross receipts to 1.5%, an increase the group contends would make $5.3 million available for affordable-housing programs. The group’s action may mean there are dueling ballot measures about the tax on the November ballot, since some council members had been considering an even higher tax, perhaps tripling it to as high as 3.88%, according to the group.

The Berkeley Neighborhoods Council, a group that often states the council majority is going in the wrong direction, has expressed concern about the proposals and is encouraging members to oppose Bates’ proposals.

“This proposal by Mayor Bates is a blueprint for expanding the gentrification of Berkeley,” reads one of BCN’s unsigned emails. “Although couched in terms of providing more affordable housing, and expressing concerns over the impacts of high-rise buildings on nearby residential neighborhoods, in reality, it promotes lining the pockets of for-profit developers at the expense of nurturing a livable city.”

In contrast, the Berkeley Progressive Alliance, formed last November, says that the measures do not go far enough because they are short-term fixes. The group argues that the various ideas will not substantially increase the funds in the Housing Trust Fund, which non-profit developers rely on to help seed affordable housing projects. The Alliance is circulating a petition on Change.org that has garnered 351 signatures. It suggests numerous ways to increase the HTF to $10 million, such as sending taxes on short-term rentals, as well as a portion of property transfer taxes, to the HTF. Some of these suggestions are included in the myriad proposals before council. (Read the Berkeley Progressive Alliance housing platform).

Livable Berkeley, a group that is generally supportive of the council majority and its emphasis on transit-oriented development, has collected 189 signatures on its petition that calls for the creation of more housing. The group believes Berkeley must reduce some of the barriers to building housing, as only an increase in supply will alleviate the shortage and spiraling prices.

“A growing body of evidence supports the idea that solving this crisis demands that we build more housing for all income levels,” Eric Panzer, who works for Livable Berkeley, wrote in an op-ed published on Berkeleyside. … “Perhaps most importantly, analysis of data from the Bay Area has shown that neighborhoods that built more housing — even market-rate housing — were less prone to displacement than those that built less housing or none at all. This held true even when new housing developments were not required to include affordable units. These findings led the non-partisan California Legislative Analyst’s Office to state, “construction of market-rate housing reduces housing costs for low-income households and, consequently, helps to mitigate displacement in many cases.”

In an interview with Berkeleyside, Bates said Monday he was sensitive to the sheer number of proposals on the agenda and is not sure council can tackle them all at once. In addition, he stated that he expects to see the proposals change with community input.

Mayor Tom Bates. Photo- Frances Dinkelspiel — Mayor Tom Bates: “It is not like this is the end of the process,” said Bates. “It is the beginning.” Photo: Frances Dinkelspiel

“It is not like this is the end of the process,” said Bates. “It is the beginning.”

Bates has already removed one of his most controversial suggestions: the idea to give “by-right” (or automatic) approval to multi-family developments proposed along “Priority Development Areas.” The PDAs in Berkeley are along major transit corridors and include University Avenue, San Pablo Avenue, Shattuck Avenue south of Dwight Way, and MLK/Adeline south of Dwight Way. Bates said he needed to iron out the details more before council considers it. He intends to reintroduce the measure in the future.

While there are currently at least 1,400 or more market rate apartments being planned or under construction in Berkeley, most of it will rent at the high end of the market. There have not been many affordable units created. In the past 14 years, only 427 units of below-market-rate housing have been constructed in Berkeley, according to Eric Angstadt, the city’s former planning director. The vast majority of those were built before 2012. Only 31 affordable units have been built in the past four years, he said. There are another 175 in the pipeline. In February, Berkeley broke ground for one of those projects, Harper Crossing, 42 affordable homes for low-income seniors at 3132 Martin Luther King Jr. Way (between Woolsey and Fairview) in the heart of the Lorin District.

In February, council held a special session on creating more housing. The city invited for-profit and non-profit developers to address the current economic and political climates for building housing. Economists at the Association of Bay Area Governments (ABAG), UC Berkeley professors specializing in housing and gentrification, consultants, Berkeley planning staff, and people involved with government subsidized housing all addressed the issue. Many of the ideas presented that night are showing up as items on tonight’s council agenda.

Here are some of the measures council is scheduled to consider, with the most controversial at the top:

Council ordered a new study in 2015 to look at the amount the city should charge developers if they don’t put affordable housing in existing projects, but it has not yet considered its recommendations, much to the ire of some progressives. Currently, Berkeley charges $28,000 per unit and had previously discounted the fee to $20,000. Developers must make 10% of the number of market rate units in a project affordable, or else pay the in-lieu fee. Bates is proposing that the fee go up to $34,000 a unit. If developers pay the fee at the time the building permit is issued, it would drop to $28,000 per unit. Bates is also doubling the amount of affordable housing required to 20% of the market rate units built. He also wants to expand the definition of affordable to include more residents with moderate, not just low or very-low incomes. Councilman Kriss Worthington has an item on the agenda that would eliminate developers’ option to pay the lower fee. Rob Wrenn, a former planning commissioner and member of the Berkeley Progressive Alliance, wants council to increase the number of affordable units required to about 25% of market-rate housing.
Bates wants to establish a “buffer zone” around Priority Development Areas along University, San Pablo and Telegraph Avenues. Currently, zoning along those streets allows for buildings 45 to 50 feet high (or 65 feet with a density bonus). Single-family homes often sit directly behind those tall buildings. They are usually 28 to 35 feet high. Bates wants to create a new intermediate level of zoning (35 to 40 feet high) for the properties abutting the taller buildings, which he says would “lessen impacts of abutting residential neighborhoods.” This could create a stepped-down feeling, he said. However, critics argue that this proposal could lead to the widespread demolition of single-family housing because developers would be eager to buy an existing family home, demolish it, and build a structure with the intermediate level of zoning in its place. Steve Finacom, writing on the Daily Planet website, estimated that the creation of the buffer zone might affect 1,800 houses along 120 blocks and would “destroy the flatlands.” “Demolition of existing housing is almost never a good idea,” said Wrenn. Bates did not disagree that the small houses abutting large multi-family buildings might get torn down, but he said there would still be the street creating a buffer zone between the taller buildings and residential area.
Create a new city density bonus in the downtown area. Bates wants to allow developers to add a 15% bonus on top of the state-allowed 35% bonus for building extra affordable housing. That could make some buildings 50% taller than current zoning laws allow. The way to get the extra density bonus would be for developers to build units affordable to moderate-income residents or paying a fee into a city fund for moderate-income housing. Current laws help people with very low incomes but do little to help teachers and restaurant workers and others with more moderate incomes. People like Wrenn have expressed concern that opening up subsidized housing to people with more moderate incomes may mean that people with low or very low incomes lose out on that housing.
Bates is proposing a number of other initiatives, including increasing the height limit on the Southside; modifying the height limit on residential buildings with ground-floor retail; and re-examining the zoning at the West Berkeley Service Center at Sixth Street and Hearst to allow the creation of senior housing. He wants to explore the impact of transferring air rights. Bates also wants the city manager to examine the fees Berkeley charges for development. An analysis done by Emeryville shows that Berkeley charges $919,560 in permit fees for a 100-unit structure. Oakland, in contrast, charges $512,858 and Albany charges $102,279. Bates wants to know if the higher fees are hindering the construction of housing in Berkeley.
In another housing item, Worthington wants to prioritize pre-development funding to jumpstart affordable housing projects. He also wants to consider amendments to the Housing Emergency proposal to make it more comprehensive. He and Councilman Jesse Arreguín are calling for Berkeley to make an immediate $1 million loan to the Housing Trust Fud.
Councilwoman Susan Wengraf wants the city manager to examine all city-owned properties for their potential to hold affordable housing.
Council members Laurie Capitelli, Darryl Moore and Lori Droste want to examine using eminent domain to seize blighted and vacant property to use for affordable housing, public open space, or providing city services for the homeless.
Council members Arreguín, Capitelli and Worthington want the Homeless Commission to examine the feasibility of building “tiny houses” for Berkeley.

Council will meet at its temporary meeting place in the BUSD headquarters at 2020 Bonar St. at 7:30 p.m. to discuss the housing issues. Council will hold a special meeting at 5:30 p.m. to consider the results of a recent community survey, among other issues.

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Frances Dinkelspiel