How should Oakland divvy up Measure U’s $350 million in affordable housing bond funds?

The Oakland City Council is expected to vote today to commit $50 million in funds from November’s Measure U—along with $13 million from other sources—for the construction of affordable housing.

A separate item on the council’s agenda would commit an additional $18 million in Measure U funds to a specific housing development, the Mandela Station project at West Oakland BART.

The proposals are the first allocations of the massive $850 million infrastructure bond measure passed by voters in the fall. Out of that amount, $350 million is dedicated to creating or preserving affordable housing, the largest single allotment of money for that purpose in Oakland’s history.

“We are putting that money to work,” said Mayor Sheng Thao at a press conference Monday announcing the plan to spend $63 million on yet-to-be-determined affordable housing projects. She said it’s enough to support the creation of 400 housing units. Developers often need funding commitments from the city in order to be eligible for additional state support.

The city is currently accepting requests for funding from “shovel-ready” development projects, and this commitment from council would enable the city administration to dole out money to projects that meet the city’s equity, sustainability, and affordability guidelines, including those passed over in previous awards rounds, said city housing staff in a report.

“We stand united—Oakland City Council members, our mayor, our city staff, and administrative team, together, taking action on what voters have said is the number one essential issue facing our community: the lack of affordable housing,” said Councilmember Rebecca Kaplan at the press conference. In a room at City Hall, she stood alongside Thao and councilmembers Nikki Fortunato Bas, Carroll Fife, and Kevin Jenkins. 

But the proposal to spend $63 million of Measure U funding is a product of recent arguments between the elected officials and city staff over the best way to distribute bond money, and how to prioritize projects.

Should the Mandela Station development get priority?

Also on the City Council agenda Tuesday is a proposal from Fife and Kaplan to dedicate $18 million in Measure U funds to the affordable housing portion of the Mandela Station project at 7th Street and Mandela Parkway.

In the works for years, the proposed complex will include 240 units of affordable housing for residents making between 35-60% of the area median income. The project also includes 520 market-rate apartments, along with significant office space, life science and biotech research labs, and public plazas.

Fife and Kaplan’s report calls it a “visionary mixed-use, mixed-income, transit-oriented development…at the heart of the most visible and accessible historic Black commercial corridor of the Bay Area.”

Fife, speaking at a meeting of the council’s Community and Economic Development Committee last week, said she’s “concerned about how the process has gone between members of the city staff and our City Council offices.”

The developer behind the project, Alan Dones of Oakland-based SUDA, told the committee that in discussions with the city administration, “every single time this project has been told how much it’s loved, but for process purposes has been disqualified from going forward.” He said Mandela Station has received promises of millions in state and federal subsidies that require speedy support from the city. Several other developers and West Oakland residents urged the committee to fund the project.

But city staff and other members of the public—including housing advocates who are typically politically aligned with Fife and Kaplan—questioned why the Mandela project was getting pulled out and prioritized over any number of other projects that are also in the “pipeline” for city funding and hoping for Measure U support.

Delores Tejada of East Bay Housing Organizations cautioned that the one-off support for Mandela would “set a precedent that the city’s well-established funding processes should be bypassed.”

Typically the city releases a “notice of funding availability” (like the one active currently), soliciting proposals that are then vetted and ranked according to city criteria, a process meant to offer equal opportunity and avoid favoritism and bias. Tejada said Mandela was just one of many projects passed over last time, “not for lack of merit but lack of funds.” According to the city, last year’s solicitation yielded 13 requests for $88.5 million total, but there was only $37.5 million available. 

At the committee meeting, staff from the city’s finance and housing departments said part of the issue was a lack of certainty around when the bond funds will be available.

Once the city has the money, “then we can work backwards,” applying those funds to projects that have gone through Oakland’s longstanding competitive process, said Christina Mun, the interim housing director. She said the idea with this current “notice of funding availability” was to line up projects for the Measure U money expected down the line, and encourage last year’s applicants to resubmit. Mun recently left her position with the city for a job with LeSar Development Consultants.

Kaplan responded that the Mandela proposal wasn’t asking to change when the bonds were issued—only to commit future funds to the development.

Mun ultimately made a “pitch” to the committee. She asked the council to preallocate a chunk of Measure U funds to cover the rest of the pipeline as well as other projects vetted by the city during this round, allowing city staff to issue awards to projects without coming back to council for approval. 

That idea was well-received and led to the resolution on Tuesday’s council agenda.

“We agree on something, woo!” said Councilmember Dan Kalb, joking at the committee meeting last week.

A spending plan is in the works for the rest of Measure U

While the allocations proposed this week are large amounts of money, they represent a fraction of the entire $350 million raised by Measure U for affordable housing in the coming years.

“We will be putting together a draft spending plan for all of those funds later this spring,” said Emily Weinstein, Oakland’s new interim director of housing, at Monday’s press conference.

Measure U is also meant to support other methods of preserving or creating affordable housing, such as the city buying and converting old hotels or giving loans to community land trusts to renovate single-family homes and rent them affordably. Previous city plans have promoted these preservation strategies because they’re cheaper than building apartments from scratch.

City staff and councilmembers will hold “housing conversations” in each district, gathering input from residents for the Measure U spending plan, Weinstein said. The city’s new Housing Element also lays out strategies for creating the 26,000 affordable units the state has said Oakland must plan for by 2031.

At Monday’s press conference, Jenkins said his own family benefited from previous city investments in affordable housing after his mother was laid off and their house was foreclosed on.

“I remember as a child feeling the burden of, where are we going to live?” he said. “Without stable shelter, everything else falls apart.”