It was the mother of all housing bubbles, fueled by a lending industry gone mad. For years I warned members of the Berkeley City Council and Zoning Adjustments Board (ZAB)—in e-mails, hand-delivered letters and colorful flyers—to stop approving every turkey of a housing project that came before them. I was completely ignored.
The only reply I recall receiving was from former Councilmember Betty Olds about three years ago, asking if any project had gone belly-up so far. I replied that the ones they were currently approving were the ones in danger.
Belly-up and bank-owned
Now they are failing. The five-story condo block at 2700 San Pablo Ave. is the first. Its developer, who arrogantly dismissed neighbors’ concerns, has presumably lost her shirt. The bank, it appears, has lost millions, and subcontractors who worked on the project have filed dozens of liens against the property due to nonpayment.
The neighbors lost enormously. They valiantly opposed approval of this sky-darkening hulk. They beseeched the developer to scale it down. One neighbor warned her about the condo market, but she was determined to build this grim stucco box.
Condos, condos, everywhere
Condo projects are failing wherever they have sprouted, locally and across the nation. Nearby Oakland is ahead of us in the failed-edifice trend. A project that has been stalled for over 18 months can be seen at 14th Street and MLK Jr. Way, its half-completed shell moldering in the rain. In late January the Oakland Tribune reported on three condo projects freshly in default, with a total of 297 units among them.
The spin in Berkeley is that while condos may be dead, the demand for rentals is limitless. Mayor Tom Bates enthused, in his famous (private—only developers were invited) 2008 State of the City address, that the University of California labs were a “job magnet.” I fear that he may be personally encouraging his developer friends to keep building, given his fanatical belief in growth.
The website for the mayor’s office minces no words: “Berkeley is proud to foster a welcome environment for market development, innovation, creativity and smart growth.” It then touts with enthusiasm several of the dumb-growth projects presently befouling Berkeley.
Rental banners, the festoon of the future
Now every single large apartment complex is frantically advertising vacant units. And there are plenty more in the pipeline to provide future competition. Here are some—by no means all—of the projects in progress:
• The “Trader Joe’s” building at MLK Jr. Way and Berkeley Way (like the
theaterless “Fine Arts” building, will it become another amenity in name only?): This project will put 148 additional rental units into Berkeley’s surplus. Right before the ZAB voted on the project, Councilmember Gordon Wozniak canned Dean Metzger, the most knowledgeable and neighborhood-friendly ZAB member, to ensure its approval. The approval is under litigation by neighbors, but, sadly, construction is proceeding.
• 700 University Ave.: The Brennan’s building, Berkeley’s last American Vernacular corner bar, was recently demolished for this big hunk (171 units) of housing in a uniquely ridiculous location—right square next to the railroad tracks. One study for the project’s environmental impact report said that for auditory habitability, there could be no windows facing the tracks (due to the train whistle blasts, at 100-110 decibels). I believe this study was simply ignored by the builders, although future potential renters might not be similarly inclined.
• 1800 San Pablo Ave.: The owner of this five-story project didn’t have sufficient funds to pay his permit fees in late 2007, so Councilmembers Linda Maio and Laurie Capitelli recommended a fee deferral “until point of sale of the condo units.” Despite warnings about the condo market, and the fact that a lovely 1930s Art-Deco building would be destroyed, the City Council voted to “defer” $315,588 for a project that will probably sell no condos but end up wearing its own rental banners.
• The “Arpeggio” at 2055 Center St.: This will be nine and a half stories of shockingly dinky units. If you look at the plans, it appears to be mostly one-bedroom apartments with the bedroom somehow embedded in the living room (not exactly most people’s idea of luxury accommodations). The City Council sold city-owned air rights next to the project, originally appraised at $1 million, for $200,000 (what’s a trifling $800,000 between friends?).
Finally, developers are losing money rather than profiting. Foreclosures are rampant. The economy is in deep, deep trouble. And for every big hunk of needless stucco that mushrooms out of Berkeley soil, neighbors lose the chance to see the hills or watch the sun set.
Mayor Bates and his coterie of council yes-persons have packed city commissions with architects, developers and their wives, all promoting Bates’ goal to “get Berkeley developed.” They seem without shame about the needless destruction they cause.
The funny-money lending binge is over—it’s downhill for development now.
For those seeking to understand the tragic aftermath of the biggest bubble in history, see the rich reading material at www. Patrick.net.
Gale Garcia is a Berkeley resident.