Our Backyard: A Boost for Housing

Oakland’s new housing impact fee plan hasn’t hurt housing development. It’s helped it.


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Libby Schaaf

When Mayor Libby Schaaf announced earlier this year that she would push hard to establish impact fees on new market-rate housing projects in Oakland to help fund more affordable housing in the city, some developers predicted doom. They argued that the fees would discourage development at a time when the city desperately needs new housing. A top official with Madison Park Financial, which is owned by Oakland housing developer John Protopappas, even went so far as to say that the company would stop building in the city. It was a shot at Schaaf, considering that Protopappas is her good friend and was her campaign chairman in the 2014 mayor’s race.

But the developers were wrong—at least in the short term. In the month after the city council approved the housing impact fee in April, a half-dozen developers moved forward with housing projects that would add a total of more than 1,100 market-rate units in downtown, Uptown, West Oakland, and the Broadway-Valdez neighborhoods.

Why? Because the mayor and the council’s plan phases in the impact fee over time and the city does not begin assessing it until September. That provision prompted developers to act quickly to either avoid paying the fee, or at least only pay the lower initial one of $5,000 per unit. In three years, the fee will go up to $24,000 per unit.

In short, the plan appears to have goosed development at precisely the moment when we need housing the most—right now.

In an interview, Schaaf said she hoped that fee phase-in would have this desired effect, but wasn’t 100 percent sure it would. She also said developers are jumping into the red-hot market now for fear it might cool off.

Regardless, it’s good news for Oakland, a city losing too many longtime residents to displacement from skyrocketing rents because there simply is not enough housing.

But Oakland needs more help. A $580 million countywide bond scheduled for the November ballot should boost affordable housing construction—as would Gov. Jerry Brown’s plan to greenlight housing projects that include affordable units. Both proposals are ones that Oakland residents and elected officials should wholeheartedly embrace.

Our Backyard is an occasional opinion column by senior editor Robert Gammon.

Published online on July 6, 2016 at 5:46 a.m.

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