““Without inclusiveness policies, the more density you create—especially linked to transit—the more displacement you’ll get.” ”
“Three years ago, advocates and the City Council took a major step to ensure market-rate developers pay their fair share. The impact fee adopted in 2016 simply required developers who want to build in our beautiful city to contribute to affordable housing. So why are 93% of the apartments permitted in the last few years market-rate and totally out of reach for most Oaklanders? The impact fee is supposed to address this imbalance, but tens of millions of dollars that could be committed to affordable housing projects have not yet been made available. The city must act now to track, budget and commit these funds.”
1. Affordability
Oakland needs more affordable housing – including mid- to high-rise structures — but we need planned, smart growth. By the end of 2019 of the 9,304 units granted building permits in Oakland, less than 7% (a total of 628) are subsidized affordable projects. Oakland has exceeded building its quota of luxury/market rate units— but has fallen far behind on its stated goals for affordable and below market rate units. For every 1 affordable unit there have been 8 market-rate built and the only housing category that has surpassed its quota is market rate housing.
City of Oakland Affordable Housing construction 2015-2019
Studies have shown that the ‘trickle-down’ or ‘filtering’ theory of housing—the theory that more market rate units will result in more affordability in the housing stock at large—is a myth:
- The “filtering” theory works in suburbs where land is cheaper, but not in crowded cities with expensive land and extremely high demand from both outsiders and existing residents;
- In fact, a plethora of “market rate” rentals actually pushes working and lower middle-class people further and further out to the suburbs;
- With vacancy decontrol, rents that were once affordable become unaffordable when rent-controlled tenants move away.
- And as higher paying jobs come to the city, median income is pushed up, which in turn pushes up what is designated as “low income” in comparison, shutting out renters who previously would have qualified.
(See articles and research on this topic and affordable housing on our RESOURCES page.)
Oakland City Councilmember Nikki Fortunato Bas (District 2) called the filter down theory into question at the Nov. 5, 2019 City Council meeting. “Over the last four years we have approved over 9,000 units of luxury housing,” Bas said, “in that same time our homeless population has doubled. Luxury housing is not working in terms of fixing our housing affordability and displacement crisis.” (SJ Mercury News, Nov. 15, 2019.)
San Francisco currently requires new multi-unit construction to include 20% affordable units. Why can’t Oakland do the same — or better?
Impact fees are committed to projects in the pipeline, so the City says. But where will these projects be built? Building affordable housing only in less affluent districts where land is cheaper further isolates communities. Rockridge and neighboring Temescal started out as diverse, mixed income areas. New housing here should be affordable and provide for residents at all income levels instead of further gentrifying the area.
Average rent for units of all sizes completed from 2016 to 2019 is $3,915, about 20% higher than units in buildings completed before 2016. They did not dip substantially to more affordable rates during the Covid crisis.
Displacement due to rising rents from yet more luxury units could be another unintended consequence of this largely market rate project at the CCA site. The City’s report, “A Roadmap Toward Equity: Housing Solutions for Oakland, California” (2015) states that, “Oakland could adopt and apply a consistent set of evaluative criteria to make informed land use decisions and to understand a project’s potential to displace residents as a result of increasing surrounding rents and sales prices. As public health research has demonstrated, there are also individual and community-health impacts from such displacement.”
The developer is proposing 5%-10% affordable units, much lower than Oakland Mayor Libby Schaaf’s stated city-wide goal of 28%. All the remaining units in the new construction will be market rate or luxury, particularly the higher floors.
UBA advocates for a significantly higher percentage of affordability as the best way for Rockridge to do its part to make a dent in Oakland’s affordable housing crisis.