Public Comment

The Berkeley City Council "Hopes" for Housing

Steve Martinot
Thursday October 29, 2015 - 01:26:00 PM

At the Berkeley City Council meeting on Tuesday night, they considered a measure proposed by District 8 Councilmember Lori Droste to relieve developers of the necessity to put parking spaces in new buildings, hoping that the developer will use that space for more affordable housing. The word heard during the discussion from a number of councilmembers was indeed "hoping." The developer would still have the option to use the space for market rate housing (according to the law, i.e. the Palmer decision).

During public comment, I mentioned that since "affordable" housing is especially for working people of the city (among others), many of whom commute to their jobs, a place to keep a car is still necessary. Given the state of public transportation in Berkeley, as District 6 Councilmember Susan Wengraf pointed out, travel to jobs is most often very problematic. The impression I got from the stony-faced look of the councilmembers was, “well, those aren’t the kind of people we want in this town any more anyway.” 

Given the housing crisis (and some of the students pointed out that they have to squeeze six people into space for three in order to come up with the rent), if you build market rate housing or moderate income housing, that space doesn’t trickle down. You have to build low income or very low income housing, in order for the space to trickle up. Think of it this way. Those paying 80% of their income for rent will be the ones looking for housing at lower rent where they only pay 50% of their income. That will leave the higher rent apartments available. The look that got from the council said, “What you are saying is just totally beside the point.” 

It is beside the point because the economic structure this all happens in will result, from Droste’s proposal, in increased market rate housing without on-site parking. The proposal also assumes that if the developer chooses market rate units, that money will be contributed to the Housing Trust Fund. It forgets that the Fund contributions are non-enforceable, and developers have not been paying into it. 

In brief, Droste’s measure will free developers to put in housing rather than provide space for cars for tenants. When stated like that, it seems to be favoring housing, rather than cars. But because the type of housing (target income level) is not specified (and cannot legally be specified), it will mean market rate housing, which will not affect or correct the housing crisis, and not low income housing, which is what is needed. By not specifying the income level of the housing to be required by developers, the proposal, and the council’s sentiment in favor, are a sham. 

Why cannot developers be required to put in low income affordable housing units? There are several reasons, besides the Palmer decision of 2009, which made cities liable for loss of profit to developers from affordable housing. One reason is the mitigation fee, paid in lieu of building affordable housing. Its unenforceability makes it a joke. 

Another reason is that developers are corporations. This means that they will go for highest profitability, first of all. But it also implies that they must to be able to recapitalize their projects if real estate value ever take a dive. This requirement hinges on the use of the building itself as collateral for the loans necessary to build it. Without that ability, their financing will be in jeopardy. And they will face higher interest rates to compensate for the increased risk. Thus, they are caught in the debt structure that corporate operations mostly require. 

Though Droste’s measure seemed to focus on affordable housing, the council only spoke about "developers," and the council’s "hopes" that low income housing would be built. But the council also expressed the hope that this measure, which the proposal states only pertains to "inclusionary" housing (market rate buildings that "include" some affordable units), would close some of the loopholes that developers have. Those loopholes were not spelled out in the discussion. Neither are they spelled out in the proposal. 

What is borderline horrendous in the proposal is that its "theory" of the benefit of reducing parking space in new development is based on studies done in other cities, such as New York, Portland, Seattle, etc., not Berkeley, and not taking into account the predominant aspects of transportation in California. There are those who can live without a car, depending on their employment situation and location. But California society is based on the car. To simply impose a no-car paradigm on people is to greatly restrict them. Until a truly extensive public transportation system is developed, as the necessary infrastructure for Droste’s theory, her proposal has social misery written all over it. It is just another example of how city council thinking really amounts to imposition on neighborhoods, rather than taking the time to listen to them. 

Some comic relief was offered to this tragic spectacle by a proposal to "lend" the Housing Trust Fund a million dollars (ostensibly from the city’s General Fund, whose size is a carefully kept secret). A million dollars, these days, would be a drop in the bucket in terms of building new affordable housing. It won’t even buy a single family house in most sections of the city. It could be used to rent a whole lot of apartments, if the city wanted to do that for the homeless, for instance. But since that idea has been proposed at least five times to council people, and never made it to the agenda, it seems they are not interested in anything that "radical." 

We have a situation in which the council is useless, not because they don’t mean well (some of them mean well), but because they operate in an economic environment that makes it impossible for them to do the right thing. The only possibility they have, while doing the wrong thing (permitting the building of more market rate housing) is to make pleasant platitudes about how fewer cars will be good for the planet and how they hope that more housing will be available to the people without taking the time to really address the real need for housing, which would require specifying the income levels for that housing. 

If the neighborhoods of Berkeley are to survive, they are going to have to do it on their own, with some new alternate political structures, and some real political clout developed and manifest locally in those neighborhoods themselves. Otherwise, we’ll all be dislocated and relocated by the corporate whirlwind that is now gentrifying the bay area.