Zoning Adjustments Board (ZAB) members and planning commissioners both wrestled with the same subject last week, the incentives that let builders create larger structures in Berkeley than would otherwise be allowed.
Neither group came to any firm conclusions, beyond one: Something has to be done to make sense of what now amounts to legislative chaos.
ZAB members confronted a controversial incentive that allows apartment and condominium builders to add extra height to make up for losses caused by building “inclusionary” units priced to make them affordable for lower-income tenants.
The issue they faced Thursday was the proposed condo complex at 1698 University Ave., the site of the old Tune-Up Masters franchise.
Having once approved the project, it was back in ZAB’s lap after the City Council refused to supply its endorsement and handed it back to ZAB because of an appeal of the project over the inclusionary bonus.
The day before ZAB met, the Planning Commission pondered the creation of a new incentive that would clear the way for construction of the David Brower Center complex, a pair of eco-friendly buildings proposed for Fulton Street between Allston Way and Kittredge Street.
Both those structures are taller than allowed under the city’s Downtown Plan, even with existing incentives added. The commission mulled the notion of creating yet another incentive that would grant additional extra height in exchange for building “green.”
Thus, buildings that included environmentally friendly building materials and technology that reduced consumption of gas and electricity would be allowed to add height above plan standards.
In the Tune-Up Masters case, city planning staff originally awarded the project a 25 percent size increase bonus for including condominium units to be sold at a price affordable to people making at or below 125 percent of the Oakland Metropolitan average median income.
That ruling was shot down four months ago after planning staff agreed with former Planning Commissioner Gene Poschman that the correct interpretation allowed only 10 percent.
However, city staff Thursday pointed to another section of state law that mandates that builders who add state-mandated inclusionary units must be allowed a margin of profitability that would be equivalent to what the project would have made without the mandatory inclusionary units.
The city staff calculated that for the 1698 University project to be made whole for the inclusionary units, the only solution was a building the same size as previously rejected, namely 25 percent larger.
Poschman was on hand to argue against the bonus, while Principal Planner Deborah Sanderson and David Baar, an attorney on the city housing staff, upheld the numbers as meeting the legal requirements of state inclusionary law.
All sides agreed that the state legislation was murky and ill-organized.
“It’s definitely a problem,” said ZAB Chair Andy Katz.
“An analytical solution is not possible with what the law gives us,” said Rick Judd, a land use attorney and the board’s newest member. “We were given a deck with 37 cards, and two or three of some of them seem to be alike. I’m not comfortable that we’re forced to give a developer what he’d have if there was no inclusionary bonus at all.”
ZAB member David Blake said, “There’s a long history of changes in the way we look at density bonuses. When we had Seagate, staff told us they would be entitled to two-and-a-half times the bonus they sought.”
In the case of the recently approved Seagate condominium project at 2941-67 Center St. in downtown Berkeley, Housing Director Tim Stroshane calculated that the developer was entitled to a 14-story building to make good for the inclusionary units, in spite of a city plan and codes that allow for half that figure—a maximum of five floors and two additional floors as bonus space.
Stroshane’s calculations were based on plans that called for minimal returns and massive construction costs based in large part on a unique and highly expensive seismic reinforcement system well above that required by city and state codes—a level of construction that developer representative Darrel de Tienne later conceded might not even be implemented.
In the case of the University Avenue project, Judd noted that “this project wasn’t very realistic economically based on the price of the land with or without the density bonus.”
Blake repeatedly questioned city staff with his concerns, at one point remarking, “It stretches credibility that the staff analysis of this project gives us a number that exactly matches state law.”
“I don’t agree with the staff interpretation,” said member Chris Tiedeman. “The state law is a complicated and messy statute.”
“Until the City Council has reached a decision about how this law should be applied, we’re going to be seeing it again and again,” said member Dean Metzger.
“ZAB is very much at fault,” said Poschman. “Two of the five votes that originally approved this project were made under protest by members who said they felt obliged to vote that way.”
Eric Cress appeared for Pacific Bay Investments, the firm behind the University Avenue project, to answer questions about the project.
Cress noted that because of neighbor objections, the project’s height had been reduced from 38 units to 25 and the height had been cut by 14 feet to the current 50 feet.
“When we changed the project from apartments to condos at the request of the neighbors, we didn’t know it would reduce the density bonuses,” he said. “I can’t help but feel it backfired on us in some respects.”
State law mandates a maximum of 25 percent for inclusionary apartments but only 10 percent for condos.
“We’re in a terrible, terrible bind,” said Blake.
In the end, ZAB postponed a decision until April 14, to give staff sufficient time to analyze the proposal along with the state and city inclusionary law and policy.