Our Backyard: Oakland’s Real Estate Is Red Hot
But not everyone is benefiting.
Oakland’s real estate market is as hot now as it’s ever been. Not only are home prices and rents soaring to record heights, but the city’s office market is on fire as well. Uber is selling the old Sears building in Uptown for $175 million—about 40 percent more than what it paid just two years ago.
Plus, Carmel Partners is building a 40-story housing tower at 13th and Franklin streets, and developer Pinnacle Red plans to construct Oakland’s tallest high-rise—a 460-foot, mixed-use tower on Harrison Street between 12th and 13th streets. In all, there are 15,000 to 20,000 units of housing either proposed or under construction in Oakland.
These developments, if they actually come to fruition, promise to boost the city’s economy. But to what extent will they help low-income residents who are increasingly being priced out?
To be sure, all that new housing should help relieve some of the pressure on the tight housing market. An overwhelming majority of real estate experts and economists say that out-of-control housing costs are a direct result of the region’s severe housing shortage. Oakland also has impact fees that should help generate some funds for affordable housing.
But Oakland, unlike many other cities, still has no inclusionary zoning requirement for condo developments. Inclusionary zoning mandates that a percentage—typically, 10 to 20 percent—of new condos be below market rate. Adopting such a law would help Oakland increase its for-sale affordable housing stock.
In recent years, Oakland has also been viewed as ground zero for gentrification. But gentrification doesn’t have to be a bad thing. The lives of low-income homeowners, for example, improve when their neighborhoods improve—when shops, restaurants, and cafes open in previously vacant storefronts. But for renters, gentrification and rising housing costs can be serious threats if they live in non-rent-controlled units.
That’s why Oakland leaders should also be pushing hard to reform Costa Hawkins, the state’s anti-rent control law. Costa Hawkins bans rent control on multiunit housing built after 1983 in Oakland. As of the 2010 Census, 58 percent of Oaklanders were renters, and that percentage has likely increased since then. One obvious reform is to allow rent control on housing about 15 to 20 years after it’s constructed, so as not to stifle new development.
Our Backyard is an occasional column by news editor Robert Gammon.