Public Comment

Rob Wrenn commendably advocates that a proposed high-rise project in downtown Berkeley should offer quite substantial, rather than quite pathetic community benefits in exchange for the exceptional zoning permissions it seeks.

Upzoning greatly increases the economic value of effected real property. Berkeley, like many cities, offers limited upzoning options on the condition that a substantial portion of the added value is turned over the public in the form of "public benefits". This is called "value recapture" zoning.

The developers proposing a luxury housing high rise at 2211 Harold way have openly mocked the city's rules. They've offered such community "benefits" as hiring union workers (they have little choice anyway); opening the roof top as "public space" (a joke that has utterly failed in San Francisco); and even buying a cheap sign to project public transit arrival times on to the sidewalk (for some reason).

In short the developers propose that the city should settle for nothing more than very slight mediations of the project's overall hostility to the public interest.

In my opinion Rob has the right idea by demanding more from these developers but he errs by emphasizing direct cash transfers to the so-called affordable housing fund and to theoretical city projects like converting Center Street to a plaza.

There are two problems: One problem concerns the disposition of the physical structure proposed by developers; the other is the inefficiency and corruptability of cash transfers. 

First the built environment: The most direct and tangible form of public benefit from development of real property is public use. 

When upzoning allows more housing units to be built, a large percentage of those units should be handed over to the City to use as affordable housing, in perpetuity. In this way the city doesn't have to guess how many affordable units it might theoretically gain from a contribution to the housing trust fund. Instead, it will gain a definite number of units exactly where they are most needed. 

When upzoning encourages a developer to shutter a popular cinema for years on end, the City should gain control over the cinemas built as a replacement. The City can not bind Landmark theaters or any other company to lease and operate cinemas in the future. What the city can do is insist that the city itself is free to use the cinema, subleasing it to an operator below so-called "market rates" if necessary to ensure that the public benefit of an eclectic arts cinema is preserved in the theater district and is able to offer affordable ticket prices. 

Policies based on recapturing public use, not just a nominal equivalent in cash, will in the long run help the City to insulate vital economic activity downtown from extreme volatility in the real estate market brought on by the ongoing crises of the global financial system. 

Second, any cash payment from developers should be heavily discounted. 

Cash put into the Housing Trust Fund immediately loses value to substantial transaction costs before it ever turns into actual affordable housing that people can live in. It is very hard, arguably impossible for the city to say that if it is given X million dollars today, this will mean some Y number of housing units later. On the contrary, staff time, consultant time, inflation and other factors all conspire to erode the real purchasing power of those X million dollars. (Not to mention that, in the end, when the fund is used to provide favorable financing to private developers and enhance their profits, the city is giving up value which is rightfully its own.) 

Finally, by insisting on more actual public use of upzoned property -- not merely some cash pay-off -- the City can gain a finer degree of control and say over the form the built environment takes downtown and elsewhere in Berkeley.