Extra

One of the co-authors of [Councilmember Lori] Droste's Berkeleyside [opinion] article on housing, Karen Chapple, debunks the myth that creating more market-rate housing will produce any short term relief from the affordable housing crisis. 

In her paper [To download, click here.] she debunks the February 2016 California report “Perspectives on Helping Low-Income Californians Afford Housing” which “concluded that the most important solution to the housing crisis in California’s coastal communities is to build more market-rate housing.” Instead Dr. Chapple concluded that the “report neglects the many challenges of using market-rate housing development as the main mechanism for pro­viding housing for low-income households, in particular the timing and quality of the “filtered” housing stock. The filtering process can take generations, meaning that units may not filter at a rate that meets needs at the market’s peak, and the property may deteriorate too much to be habitable.” 

She states “it would take approximately 15 years before those units filtered down to people at 80% of the median income and closer to 50 years for households earning 50% of the median income.” 

Basically her study debunked the myth that building more market-rate housing is going to help our low and moderate income citizens find local affordable housing, concluding “market-rate production is associated with higher hous­ing cost burden for low-income households” and that it takes decades before that market-rate housing filters down to lower housing costs. Therefore if we wish so solve the lack of affordable housing today, we need to build that affordable housing today, not wait decades for it to trickle down. 

The best way to accomplish this is to have higher required affordable housing requirements in all new construction – well above the current 10% -- and to make buy-out fees high enough so that developers choose to build that housing into multi-family buildings. The 2015 nexus study concluded $34k in fees, with up to $75k for condos, would provide more than adequate rate of return for new construction. But that study was completed before the recent boom in housing prices suggesting much higher buy-outs could be profitably accommodated. 

I would rather see the Council increase those fees to the $45k-$50k range, and increase the required affordable housing to at least 30% to incentivize the developers to build affordable housing into all new structures today. We need greater than the proposed 20% (from the nexus study) to make up for the lack of affordable housing construction during the last decade. For any luxury condo construction, where gated community exclusion of affordable housing will increase the selling price, the developer can afford to pay the higher fees. These fees can then be leveraged into public affordable housing for essential members of the community like teachers and nurses. 

Lastly, when a politician wants to avoid taking a position on policy, the first thing you hear is “we need another study” or “the evidence is not in.” We heard this from the tobacco shills, we continue to hear it from climate change deniers. It is an old trick and I hope the Berkeley public does not fall for it. In the Berkeleyside article, Droste says we should wait “unless a new nexus study or an updated feasibility study is completed and recommends higher fees.” (This is agenda item 51 for June 13 Council meeting.) 

A new Nexus study? We just had one that recommended higher fees. The previous study was suppressed by Mayor Tom Bates and Councilmembers Droste (and Maio, Wengraf, Capitelli, Moore) to create a sweet deal for developers and to shaft the public. In the case of Harold Way, that backroom deal included an additional reduction in the buy-out fees. That deal will cost the city at least 4.2 million dollars if the building is ever constructed. Now we get Droste shilling for developers once again. This time she wants to suppress that recent Nexus study until another study is completed – a stalling tactic to extend the developer give-a-way. 

Please vote NO on Agenda item 51.