The corner of MacArthur Boulevard and 90th Avenue was once a gas station. Today, it’s a vacant lot with weeds sprouting up from the ground and bits of trash strewn about. But in a few years, it could give rise to a seven-story building with 83 affordable apartments and a shop.
If this structure gets built, it will stand out. All around it, for blocks, are mostly one-story homes and small stores, many closed and boarded up long ago.
But it won’t be the first project in the Eastmont area for Santa Cruz-based nonprofit developer New Way Homes or its affiliated design-build firm Workbench, which is opening an office in Oakland.
The company recently worked with nearby Genesis Worship Center to open a transitional housing program on church property. And they’re working with Center of Hope Church, also on MacArthur, to try and convert an old charter school into low-income housing.
“Our mission is to build more affordable housing at different levels, and to partner with other nonprofits, and in particular churches, building on their under-utilized land,” said Serena Collins, development manager for New Way Homes. “This allows projects to be built more affordably than typical models of acquisition.”
It also helps the organization avoid the perception of out-of-town developers coming in to change and profit off of East Oakland, where residents are sensitive to the dual forces of systemic neglect and displacement.
“Gentrification is something everyone sees as a bad thing, but when you come alongside a church or an organization that’s worked in the community for a long time, what comes out of that is revitalization,” Collins said. The developers said they made their foray into Oakland at the urging of Pastor Raymond Lankford, who started the organization Healthy Communities and holds the title of “community liaison” at New Way Homes.
The proposed project at 8930 MacArthur strays from the developer’s typical model, however. New Way Homes is not directly partnering with a local group for this one, and purchased the land itself in 2021.
The former gas station turned out to be a brownfield, meaning it’s environmentally contaminated. Collins said they spent the past two and a half years testing soil and are now pulling together funding for remediation.
Previously, New Way Homes submitted an application with Oakland for a 35-unit building at the site, the maximum size allowed at the time on that part of MacArthur, under city and state law. It would have had a range of apartment sizes from studios to four-bedrooms. But the company couldn’t make an affordable housing development of that size financially feasible, said Sibley Simon, president of New Way Homes and principal at Workbench.
“We were really scratching our heads saying, ‘What can we do here?’” he said. Then Oakland passed a law allowing more apartments in a building if they’re “efficiency units,” which are like studio apartments in that everything is in the same room except the bathroom. They’re also small, 400 square feet at maximum.
“We believe that project can work out,” Simon said, though he conceded the seven-story building is “significantly taller than other things around it, which is not always comfortable for a neighborhood.”
The developers said they’ve met with local organizations like the Black Cultural Zone and the Toler Heights Homeowners Association to figure out how to approach the project in a way that will be welcomed by the surrounding community.
“We heard from all these parties that no redevelopment is not an option—there’s been a lot of decay,” Simon said. But “we don’t see ourselves as the one that should answer this question”—the question of how to achieve development without displacement. “We’re working with half a dozen churches in East Oakland and taking all the lessons we hear from them,” he said.
A significant portion of the apartments at 8930 MacArthur will likely be at the upper end of what’s considered “affordable,” priced for people making 80% of the area median income, what Simon and other developers and policymakers call “workforce housing.”
“There’s schools right down the block,” said Simon. “The teachers and staff, that’s a whole constituency struggling to afford housing where they work.” The parcel is located within a few blocks of Castlemont High School, multiple charter schools, and Bishop O’Dowd High School.
A lot of the longtime homeowners who spoke with the developer “were focused on having folks with disposable income in this area. This is a major street with very little commercial activity,” Simon said. “Then there may be some very-low-income housing as well, for people struggling to continue living in the area.”
When Anthony Williams, who grew up in the neighborhood, heard about the proposal for affordable housing at 8930 MacArthur, he said, “Hell yeah.” Williams and his sister spoke to The Oaklandside on Wednesday afternoon, while hanging out at Mike’s Mini Mart across the street from the project site.
Williams said he was priced out of Oakland, and now lives in San Leandro. “Accessibility for the people matters, and cost of living matters,” he said.
But he’s skeptical that anyone will want to move to the corner of MacArthur and 90th, where “shootings and sideshows” are not uncommon, unless the building is “gated and protected.”
Williams’ sister, who didn’t want to be named in this story, said she’d have to see the finished project and, more importantly, the prices on the apartments, before drawing a conclusion on whether it will serve the community or extract from it.
“This is not a rich neighborhood,” she said. “You go to work eight hours, plus you got bills, car notes, kids. That’s how you get behind on rent. Everything is set up for us to fail. If people are going to put stuff here, it’s got to be to help people out, not take away from them.” She suggested housing for homeless mothers.
She has stayed in the Eastmont area because it’s home.
“This is all I know,” she said.
New Way Homes will have a unique role in selecting who lives at their future building. The company has an unusual method of funding its housing projects. While the vast majority of affordable housing relies on government subsidy, New Way Homes supports its developments entirely through private investment.
“There isn’t close to enough government funding to meet the growing affordable housing need, and what there is doesn’t work for many project types,” its website says.
The developer recruits investors—companies like Common Spirit (formerly Dignity Health), Facebook, and Santa Cruz County Bank, as well as 200 individuals, according to New Way Homes—who are interested in supporting their “mission-driven” projects, at a fixed rate of return, usually between 3% to 4.5%, said Simon.
This is a departure from the typical “higher risk, higher return” model of investment, said Simon, a former tech founder.
Public funding also comes with rules around selecting residents for the buildings, many designed to prevent discrimination and favor those on long waitlists. But by using only private money, New Way Homes has more leeway, for example reserving the apartments in a previous project for people recently released from prison, Simon said.
Both the siblings at Mike’s Mini Mart and the developers said housing is just a piece of a livable neighborhood.
“There’s many other parts, like figuring out transportation and mobility, and commercial development is needed as well,” said Simon, who promised that the required ground-floor retail space in the building would be rented to a “local entrepreneur.”
Williams and his sister said they’d love to see the sort of block parties and community celebrations they’ve come across in San Leandro or Alameda.
“We need to fit multiple projects into a vision for redevelopment that reduces displacement,” said Simon. “But there’s no question that affordable housing is a centerpiece.”