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Oakland is dismally behind in meeting its affordable housing goals, a trend exacerbated by an overall slowing of housing construction that began before, but was aggravated by, the COVID-19 pandemic.
Each year Oakland is required by state law to report its progress on carrying out programs outlined in its 2015-23 Housing Element, the city’s long-term plan for making housing more affordable and accessible to its residents. These yearly updates include data such as the number of new housing units that the state and regional governments say Oakland needs, and how many the city successfully issued building permits for. For the eight-year time period covered by the plan, regional authorities determined that Oakland needed to plan for 7,816 new market-rate units and 6,949 affordable.
In Oakland, a two person-household is considered “above-moderate income,” and thus able to afford a market-rate unit, if the pair makes more than $114,450 in a year. By contrast, a “very low-income” two-person household makes under $31,350.
With the 2015-23 cycle nearing an end, Oakland has blown past the market-rate construction targets, issuing permits for 13,616 units, but it’s only issued permits for 22% of the affordable housing it’s required to plan for, according to the annual progress report released last week.
“The main constraint,” the report says, “is the lack of funding resources to develop and operate [affordable] units.” Often the city can’t access state or federal funding unless it’s able to match the dollars with its own money.
Officials and members of the public weighed in at last week’s Oakland City Council meeting, calling the figures “depressing” and “disturbing.”
“It’s clear the city is not meeting its affordable housing goals,” said Cathy Leonard, who’s active in North Oakland and police accountability groups. “The number of unhoused people is increasing and the city is doing nothing but sitting here making reports.”
Staffers and officials alike said during the meeting that Oakland needs a new funding source for housing projects—potentially an affordable housing bond measure on an upcoming ballot.
Councilmember Carroll Fife, who represents West Oakland and downtown, took a step further, saying Oakland needs to “drastically” rethink its approach to housing production, which led to Council President Nikki Fortunato Bas, who represents Lake Merritt, Eastlake, and Chinatown, calling for a “day-long study session.”
“If we acknowledge that this system is flawed at its core, we can come up with a myriad of solutions to address this crisis,” Fife said.
Construction down overall, due to COVID-19 and costs
The disparities between new market-rate and affordable units were stark in 2020, at every stage of the process, from proposed projects to completed construction.
In Oakland, 2,855 market-rate units were completed last year, compared to 183 affordable, according to the Housing Element update. Of those 183 below-market units, all but 20 were for very low-income households. Notably, no units were built at a level deemed affordable for “moderate-income” residents—a two-person household making $83,551 to $114,450. In general, Oakland has only met 3% of its target in that category—housing for people who aren’t considered low-income, yet can’t afford apartments or condos in the new buildings going up.
Councilmember Dan Kalb, who represents North Oakland, noted that the shortage in moderate-income units can skew the overall data on affordable housing, whereas Oakland is actually closer to meeting the goals for lower-income people. “But there’s no question there’s tremendous need,” he said.
“This shows us that housing is not a human right—it is actually the opposite,” said Fife, who’s also a director of the housing advocacy organization ACCE. “It is the right of the people who have wealth and can afford those market-rate units, because that only seems to be what’s being constructed.”
But it’s not only affordable housing that’s slow to get proposed and built these days. Overall construction reached a peak in 2018, with Oakland issuing permits for 4,280 new market-rate housing units that year, compared to 865 in 2020.
City staffers attribute the plunge to initial shelter-in-place orders that prohibited, and then strictly limited, construction. However, by May 2020 the rules had mostly eased, allowing more building. Permits for new construction had already dropped significantly from 2018 to 2019, which the city has attributed to “competition among recently delivered residential projects” and difficulties getting new development financed.
“We really need to look at how we can get things through the pipeline,” removing barriers to proposing, permitting, and building projects, said William Gilchrist, director of the Planning and Building Department.
Money is also the primary cause of the city’s hold-up in facilitating more affordable construction, according to staff. Often state and federal grants—including California’s COVID-era Homekey program, which acquires buildings to house homeless people—require cities to be able to match or supplement the awards with local dollars.
“There’s a funding gap in our ability to leverage even the resources available,” said Shola Olatoye, Oakland’s housing director, at the council meeting. “There needs to be some form of local bond investment to support affordable housing production and preservation, and it needs to be significant.”
The city recently identified a whopping $329 million as the amount needed to meet its affordable housing goals. The 2016 bond measure KK generated $100 million for affordable housing but it’s all been allocated already, for some 600 units, according to the city. Olatoye called that measure an initial “down payment.”
Otherwise, “if anyone had the answers to this challenge, we’d solve it,” she said.
Later in the meeting, Councilmember Rebecca Kaplan, the at-large member, seemed to shoot back at that comment: “I think it’s important that we don’t just say, oh well, it’s not solvable.”
Kaplan said the council has repeatedly pushed the city to acquire more already-built properties like hotels to use as permanent housing. She said Oakland must also reevaluate the structure of its impact fees, which require developers to pay into an affordable housing fund if their project is market-rate, examining whether the fee amounts should be raised and the timing of when they’re collected and spent.
The city has placed a stronger emphasis recently on preserving cheap housing or buying and converting existing buildings, in order to create more units without the steep construction costs. Oakland preserved 383 units in 2020, according to staff.
Councilmembers seemed to agree that the shortfall in affordable housing production requires a deeper examination than a discussion at a single council meeting can provide.
Fife, who’s known for her role in the Moms 4 Housing movement, said Oakland should undergo a process to overhaul its approach to housing— similar to what the city is doing to “reimagine public safety” and policing.
Bas said the council will hold a full-day “study session” to understand the issue better and brainstorm how multiple departments can collaborate to create more affordable housing.
Meanwhile, Oakland’s “regional housing needs allocation”—the units the city is required to plan for over the next eight year period starting in 2023—is expected to almost double the city’s targets.
The city will need to adopt its next, 2023-2031 Housing Element by January 2023.