Editorials

Subsidized housing plan at Acton and University avenues moves forward 

Despite the fiscal shortfall facing city government this year, City Council decided to swallow $157,433 on behalf of a local developer who has already received land valued at nearly $1 million in the University Avenue corridor. 

The vote to bypass the money won by a narrow 5-4 margin, with four council members voting against the waiver on the principle that they are contributing too much to the residential project.  

The latest victory for the developer consists of a combination of waived and deferred fees on the development project, which will consist of 71 residential units and some storefront businesses at the corner of Acton and University avenues. 

The gift of state surplus land at the corner of 2002 Acton and University avenues was awarded by City Council in 1999 to a partnership between Panoramic Interests, a private developer, and Jubilee Restoration, a local church-based non-profit. The partnership is charged with developing the land with the caveat they meet affordable housing requirements. 

With 20 units out of 71 slated for affordable housing, the project plans exceed the 25 percent requirement to qualify for subsidies and waivers, but some consider the latest round of benefits excessive since the developer was granted the land in the first place.  

“If the city didn’t give anything to the developer, they still would have been required to provide affordable housing,” said Councilmember Kriss Worthington. 

“And in this case, we managed to get an additional six units priced below market value. That is what we accomplished by giving away over $1 million. Is that a great deal for affordable housing? No. We have had other projects where that amount of money has resulted in a larger amount of affordable units,” he said. 

The council vote waived $78,000 in building permit fees, and deferred the rest of the amount until a year after project completion. Groundbreaking is scheduled for the first week of June, with a targeted completion of August, 2003, so the city should recoup the remainder from the for-profit developer late 2004.  

The developers did have to pay the state $40,000 for the land based on reimbursement fees -- a small amount by local real estate standards — but were asked to pay an additional $78,000 in building permits when the state learned of the commercial element.  

“The state added $78,000 because they didn’t want commercial development, just housing,” said a city Planning Department spokesperson. “So they calculated that amount as the purchase price for the commercial component of the building.” The addition of storefront use is backed by the city, which encourages mixed-use development, particularly along transit corridors such as University Avenue. 

The developer requested the waiver because the fee was unanticipated, and claimed that cost of construction has exceeded what they had originally planned for. 

To make up for the waiver, the city’s Permit Center will have to be compensated through the city’s Public Liability Fund. 

Contact reporter Jamie Luck at jamie@berkeleydailyplanet.com