By Jeff Levin---Last week’s Oakland Conduit reported that just six percent of housing units currently under construction in Oakland are affordable to low- and moderate-income families, and just seven percent of units approved or in the pipeline are affordable.
These numbers underscore that while the city has often focused on stimulating the market to increase supply, it faces a critical problem of housing balance that can only be rectified with a strong and explicit emphasis on building affordable housing. Simply building more high-end market-rate units will not make housing affordable for the tens of thousands of Oaklanders–- most of them low income and communities of color—who pay more than 30 percent and often more than 50 percent of their limited incomes on housing that is frequently overcrowded or in poor condition, and who are at greatest risk of displacement.
While the city continues to act as if Oakland’s market is too weak, and that we must do more to attract private developers, the market is booming, but in a completely unbalanced way.
In 2015, the city issued building permits for 771 units, of which 129 were affordable. In 2016, this had increased to 2,121 units, but just 39 affordable. And in just the first three months of 2017, the city issued permits for 1,243 units; none of these units were affordable.
Let’s put this in perspective. Oakland’s Housing Element for 2015-2023 indicates a need for 14,765 units; 53 percent of this need is for market-rate housing for above-moderate income households, and 47 percent is for housing affordable to very low, low and moderate-income households. But in the first 27 months of this Housing Element cycle, out of a total of 4,135 units permitted, only four percent were affordable.
As noted above, two weeks ago the Mayor’s Office released a progress report on efforts to implement its adopted strategy: A Roadmap for Equity: Housing Solutions for Oakland, California. Out of 2,781 units actively under construction, just six percent are affordable. The outlook for the future is no better–out of 18,793 units that have received planning approvals or are under consideration, just seven percent are affordable.
Oakland cannot afford to continue on this track. Building apartments affordable only to people making in excess of $100,000 will not solve the housing problems for existing Oakland renters, of whom more than half make less than $50,000 a year. New construction will take decades to “filter” (trickle down) to affordable levels. In the meantime, the concentration of development in certain areas changes the character of those neighborhoods, attracting even more high-income residents and making the displacement crisis even more severe.
Oakland’s leaders cite the challenges of securing enough funding for affordable housing, and without question the loss of redevelopment has made that problem far worse. In response, the city has sought to create new funding resources. This includes an impact fee on new development that many projects will be exempt from, while others will pay only a small fee as the policy is phased in over a period of years. In 2016, voters approved bond funds to acquire and preserve existing housing that is currently relatively affordable. But this is not enough. The city must use new tools and strategies to ensure that we are meeting the needs of current residents and not just highly paid workers seeking to relocate to Oakland.
Here are a few policies that need to be pursued:
- Prioritize city-owned land for development of affordable housing. Private developers have shown that they can secure private land and develop on it; the city needs to use its resources for housing that the market will not produce.
- Incorporate affordable housing requirements into specific plans, such as the Downtown Plan that is currently underway. Modifications to zoning and development standards should be explicitly conditioned on provision of affordable housing. When the city makes these changes, it is increasing the value of land. It is only fair that the community receive a portion of this newly created value in the form of community benefits such as affordable housing.
- Similarly, when major developments are pursued–like the Oak Knoll development–the city should negotiate to ensure that affordable housing is part of the mix so that we get new neighborhoods that are economically and racially integrated.
- The city should implement new tools for financing affordable housing, including real estate transfer taxes or an increase in business taxes for landlords who have received windfall returns as a result of skyrocketing rents.
The time to act is now. If Oakland continues to pursue unbalanced development, we will lose our much-valued racial and economic diversity, and tens of thousands of long-term residents may be pushed out of Oakland.
Jeff Levin is Policy Director for East Bay Housing Organizations, a nonprofit affordable housing advocacy group.