Eight housing developments are under construction within a few blocks of the Center Street parking garage in downtown Berkeley, so rush hour gets underway early.
The steady stream of workers in hard hats and bright orange vests who descend on the garage each weekday after 2 p.m. is one more sign of a building boom that has Berkeley adding housing at the fastest rate in decades, according to data analyzed by Berkeleyside.
The city approved plans for nearly 900 homes in 2022 — the most housing Berkeley has permitted in any year since at least 2001, which was the farthest back planning staff could dig up data.
Another 828 newly built units were added to the city’s housing market last year, more homes than Berkeley has added in at least the last 32 years, according to housing supply data tracked by two state agencies — the departments of Finance and Housing and Community Development — that go back as far as the early 1990s.
It stands to reason that the last time Berkeley built housing at this rate was even farther in the past.
“It probably is the biggest boom we’ve seen since the ’60s,” Mayor Jesse Arreguín said in an interview.
Berkeley historian Charles Wollenberg agreed, saying the city has only seen this much housing construction during a handful of other chapters in its history, including the years after World War II, the recovery from the destructive 1923 wildfire and as displaced San Franciscans swelled the East Bay’s population after the earthquake and fire of 1906.
And city officials are planning for the building surge to accelerate: State mandates call for Berkeley to approve nearly 9,000 homes over the next eight years, or about 1,100 units annually.
Several factors have fueled Berkeley’s boom, perhaps most importantly the massive demand for student housing. New development has been concentrated around downtown Berkeley and the Southside neighborhood near the UC Berkeley campus, and many of the projects cater to student renters.
High interest rates and soaring construction costs have slowed housing production in other cities, but did little to dampen interest in building in Berkeley: The 828 homes completed in 2022 more than doubled the 295 units finished in 2021. Meanwhile, San Francisco added 2,910 units last year, down from 5,600 in 2021.
Housing production data from the first half of 2023 was not available, Planning Director Jordan Klein said.
But Arreguín said developers still appear to be interested in Berkeley despite economic headwinds.
“There is a huge need in Berkeley for new housing, particularly to serve the UC Berkeley campus,” Arreguín said. “I haven’t seen a real slowdown.”
State housing laws have also sped up the approval process for new developments and limited cities’ authority to block or delay projects, from backyard cottages to high-rise apartments.
And Arreguín pointed to Berkeley’s changing approach to housing — the city cracked down on construction after the 1960s, practically banning apartments and drawing national attention for its efforts to block development over the ensuing decades. More recently, though, Berkeley has adopted plans that called for denser development downtown, streamlined approvals for accessory units and launched efforts to rewrite zoning rules for every residential neighborhood of the city to encourage more housing.
Arreguín, who is running for state Senate in part by touting a shift toward embracing housing that matches Berkeley’s, said the city is seeing the fruits of those efforts.
“The policies that we have been working on over the past decade — from the Downtown Plan to what we’re doing to rezone parts of our city for greater density — [are] making an impact,” he said.
Affordable housing production falling short
Berkeley exceeded its state mandate for housing production from 2015 to 2022, approving permits for 4,631 homes over that eight-year period compared with a target of 2,959.
But while state mandates call for cities to approve homes at a mix of income levels, the overwhelming majority of the housing approved in Berkeley was for wealthy renters — those making over 120% of area median income, which now stands at about $100,000 per year.
The city approved permits for 691 homes between 2015 and 2022 that were affordable to renters who are considered moderate-, low- or very-low income, representing just 15% of new approvals and less than half of the state target for affordable housing. Berkeley is far from alone in this trend, as cities such as Oakland also fell well short of their affordable housing goals.
Ian Winters of the Northern California Land Trust, a nonprofit working to build an affordable housing project in South Berkeley, said the shortfall is a funding problem. Affordable housing developers face the same increases in materials costs as better-financed market-rate builders, Winters noted, who are their competition when potential housing sites come on the market.
“The scale of subsidy hasn’t kept up with the increase in costs,” Winters said. “Everyone has made meaningful investments, but it’s not enough to bridge the gap between the huge increase in construction costs and land costs.”
Arreguín said Berkeley has worked to produce more affordable housing, pointing to efforts such as the $135 million bond Measure O that helped finance the affordable Berkeley Way and Jordan Court apartments, which opened last year, as well as the 87-unit Maudelle Miller Shirek Community now under construction at Adeline Street and Ashby Avenue. And there have been efforts to raise more money at the local level: Berkeley voters rejected a bond measure last November that would have generated $200 million for affordable housing, and Arreguín is now campaigning for a Bay Area-wide housing bond planned for the 2024 ballot.
But Arreguín said cities will continue to fall short of state affordable housing targets — which are even more ambitious over the next eight years, calling for Berkeley to approve more than 5,000 affordable units by 2031 — unless they get help from Sacramento.
“We need more funding,” Arreguín said. “If the state is serious about requiring local jurisdictions to approve more affordable housing, then they need to put their money where their mouth is — otherwise we’re setting up cities to fail, and that’s not what we want.”
