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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Michele Byrd, director of the city’s Department of Housing and Community Development, agreed with Clark that pressure has increased on the poor. She described a “phenomenal rise” of complaints from tenants about evictions and rent increases, in particular from senior tenants who are on fixed incomes.
Take Paula Sims, an elderly black woman at the Causa Justa rally who lost her West Oakland home to foreclosure several years ago. She moved to a one-bedroom apartment on the east of Lake Merritt that cost $900 a month. Using a cane to walk, Sims finds the stairs to her home burdensome, but she feels stuck.
“I want to move, because I have to go up all of these steps, but every time I try to move, I see I am way better off, because everything else is way higher,” she said.
Sims said she lived in fear that her rent will go up, because others in the neighborhood had seen their rents rise. About 59 percent of Oakland residents rent their homes. In Berkeley, just over 58 percent of households are rentals, while in Alameda, which in 2012 modified but retained its nearly four-decade-old ban on new apartments, the number of renters is 49 percent.
“We need to make sure that our most vulnerable populations are protected first, before we invest in higher-income folks, because what happens is that when you invest in our higher-income people first, then our most vulnerable populations end up getting pushed out,” argued Clark of Causa Justa.
Lukas Brekke-Miesner said he and his wife both have jobs, but a real estate agent said they would have a hard time buying a home in East Oakland, where his family goes back three generations. “I wouldn’t say that either of our jobs pay great given the cost of living in the Bay Area, but both are full-time salaried positions,” said Brekke-Miesner, 30, the director of youth programs at the nonprofit Oakland Kids First, who was wearing an “Oakland Against Gentrification” hoodie. “If we are struggling to find an affordable home, how are folks who are struggling financially going to attain any stability?”
Meanwhile, Oakland rents—among the fastest-increasing in the nation—are getting so high that it’s difficult to save any money for a down payment, he said. “If none of us who grew up here can stay here,” he said, “then over time, Oakland will suffer the same colonized fate as San Francisco.”
The root of the problem, most agree, is that too little Bay Area housing has been built for too long, especially for middle-income earners.
The problem is much bigger than any one city and is mirrored up and down the California coast, according to a 2015 state Legislative Analyst report that pointed to community resistance to housing, environmental policies, lack of fiscal incentives for local governments to approve housing, and limited land as factors limiting housing construction.
In August, a white paper from the Association of Bay Area Governments similarly found that today’s displacement is taking place throughout the region rather than just in a handful of core urban neighborhoods. The paper also observed that people with more resources have increased demand for housing in transitioning low-income neighborhoods that are close to transit and cultural amenities, and it called for better tracking of such displacement.
That dynamic reflects the larger trend of people moving back into cities. It also stems from the nature of the current Bay Area tech boom—with its emphasis on social media and the sharing economy—which has attracted a different type of worker than those lured by earlier Bay Area booms in semiconductors, personal computers, or software. City life is more appealing to these latest immigrants.
This demographic transformation picked up steam right as the 2008 recession greatly constricted financing for home purchases and housing construction. In later years, federal housing budget cuts, California’s elimination of city redevelopment agencies, and the exhaustion of a 2006 state housing bond all contributed to a shortage of the funds that cities had historically used to spur new housing construction. And even if construction financing had been equal to the demand, even in the best of times, the Bay Area is a very hard place for housing developers to operate.
Between 2010 and 2014 the Bay Area only produced 38,300 units of housing, while population increased by 270,000, according to ABAG’s displacement report. That was a lower building rate than in previous decades. And of what was built between 2007 and 2014, about three-quarters targeted people with above-moderate incomes in hot locations like downtown Redwood City, Uptown Oakland, Palo Alto, and San Francisco’s Rincon Hill, the agency said.
This pattern of underdevelopment held true in Oakland, Berkeley, and Alameda.
From 2007 to 2014, Oakland issued 4,031 residential building permits, covering only 28 percent of its regional housing production goals, which state law requires local governments to adopt to try to meet existing and projected housing needs of people at all income levels based on population.
Berkeley hit 51 percent of its goal, with 1,248 building permits issued. Alameda fell dramatically short with just 8 percent of its goal achieved and 165 building permits issued. Only one other Alameda County city, Newark, was lower at 2 percent, with just 14 building permits issued. Just two cities in Alameda County exceeded their targets: Dublin at 112 percent with 3,737 permits issued, and Piedmont at 115 percent with 46 permits.
For the period from 2014 to 2022, the state Department of Housing and Community Development says the Bay Area must plan for 187,990 new housing units. Oakland’s share of that goal is 14,765 new housing units, Alameda’s is 1,723 and Berkeley’s is 2,959.
How likely is it those goals will be met? If the past is prologue, the prospects are hazy at best.
Last year, the Metropolitan Transportation Commission published a map showing the years that specific Bay Area jurisdictions were likely to have enough housing to meet 2040 population projections, based on past performance, and the results were dramatically varied.
San Francisco and San Jose were roughly on target; Brentwood, Milpitas, San Bruno, Antioch, San Ramon, and Vacaville were ahead of schedule; but others were far behind, notably Oakland (2174), Alameda (2174), Concord (2143), Fremont (2143), Berkeley (2067), and San Mateo (2053). Richmond and San Rafael were projected to never meet their goals.
Oakland has been producing new housing at a rate of about 600 new units per year since 2012, although construction that will wrap up in 2016 is expected to add 750 units. Most of the development has been multifamily rental housing, and a large amount of it has been publicly subsidized affordable housing. In fact, since 2000 about 30 percent of the multifamily housing constructed in Oakland has been publicly assisted rental housing for lower-income households.
Private sector activity more recently has been on the rise, but not on a large scale. Of the 715 units built in Oakland in 2014, 82 percent were publicly subsidized affordable units. Of the 574 units built in 2015, 51 percent were affordable units. About 17 percent of the 1,343 units now under construction are affordable, indicating a more robust private market.