Can We Solve the Housing Crisis?

Oakland’s core is on the verge of a makeover, heightening fears about rising housing costs and gentrification in a city celebrated for its racial and ethnic diversity. Where will the new workers live in an area so short on housing?


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Few East Bay cities have done as good a job of building new housing as tiny Emeryville.

Photo by Pat Mazzera

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Uber Technologies’ September purchase of the massive old Sears Building in Uptown Oakland was like the clanging of a bell announcing that the Bay Area’s tech-led economic boom was finally spilling into the East Bay.

Other tech firms had previously discovered Oakland and its neighbors, and commercial developers had been speculatively renovating older buildings to suit prospective tech clients, such as downtown’s Latham Square building at the foot of Telegraph Avenue. But Uber, the world’s most highly valued private venture-capital-backed company, will be in a league of its own with up to 3,000 well-paid employees.

For many, the news was a welcome sign that Oakland’s long-dilapidated core could be on the verge of a makeover, with residential and office towers replacing vacant lots and low-slung industrial buildings. Talk of such growth has the urban planning group SPUR salivating at the possibility that Oakland could more than double its downtown population to 45,000 over the next 25 years, while adding 50,000 new jobs.

Yet for others—including civic boosters who have longed for investors to finally warm to Oakland’s charms—Uber’s mad-money move stoked already heightened fears about fast-rising housing costs and gentrification in a city celebrated for its racial and ethnic diversity.

Where will this flood of highly paid tech workers live? And how will the East Bay also accommodate the 1,800 employees who could be hired when the former Oakland Army Base is reborn as a giant logistics center serving the Port of Oakland?

The Bay Area’s ballooning cost of living is already producing displacement, anxiety, and poverty. All across the region, people are scrimping on luxuries and even basic needs to cover the ever-increasing share of their income dedicated to rents or mortgage payments. In San Leandro, more than 17,000 people recently expressed interest in leasing one of just 115 new below-market-rate apartments. In Alameda, concern over rising rents led to bloodshed during a recent protest at a city council meeting. Meanwhile, Bay Area business leaders worry about how the housing shortage is making it harder for them to recruit new employees.

 

 

While the San Francisco Bay Area has the state’s strongest economy and housing market, Oakland and its neighbors have historically lagged behind. But the changes that have gained Oakland a reputation as “the new Brooklyn” have sent median prices for a two-bedroom home surging from $288,400 in January 2010 to $486,700 in December, according to the real estate information site Trulia.com. Average rents for a two-bedroom Oakland apartment rose from $1,608 to $3,732 over the same period, according to RentJungle.com. Because Oakland remains a relative bargain compared to San Francisco and Silicon Valley, Trulia chief economist Ralph McLaughlin expects East Bay housing prices to keep rising as long as the economy stays strong and tech companies continue locating here.

And it’s not just Oakland; these same trends hold true from Richmond to Hayward, and beyond. Companies priced out of San Francisco or Silicon Valley are relocating to the East Bay. And renters and homeowners from all walks of life are simultaneously flocking to neighborhoods that real estate agents might once have steered them away from—particularly along the corridor served by BART, which is experiencing record ridership.

It’s a regional conundrum that has local policy makers grasping for solutions. Cities as disparate as Alameda, Lafayette, and Richmond are contemplating rent control. San Francisco voters in November rejected a housing development moratorium in the Mission and approved a $310 million affordable housing bond. Oakland Mayor Libby Schaaf has convened a public-private housing cabinet charged with increasing housing production and preventing the displacement of current residents.

At stake for many is the soul of the Bay Area.

“We are in a deep, deep moment of change here,” said Oakland housing cabinet co-chair Claudia Cappio, Oakland’s assistant city administrator in charge of development. “Some people would call it a crisis. I think that is an accurate characterization.”

The anxiety and anger associated with rising housing costs was dramatically on display at an October rally called Speak Out to Stay Put.

Held at a youth center amid crumbling houses and industrial buildings near the intersection of Market Street and San Pablo Avenue in West Oakland, the event drew hundreds of people from a wide range of activist groups.

“We’ve been in a housing crisis, but it’s just beginning to get worse,” said Robbie Clark, a housing rights organizer with the group Causa Justa: Just Cause, which wants to penalize real estate speculators and empower tenants. “It’s snowballing right now.”

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