Questions the candidates won’t want to answer (Part II)

The next four years are likely to see more development activity in the City of Alameda than at any time since the 1970’s.

Just take a look at the map prepared by Michele Ellson at The Alamedan:  We count 21 separate projects in the works ranging from a new Walgreens on Park Street to 1,425 homes, 5.5 million square feet of commercial space and 258 acres of parks at Alameda Point.

The next Mayor and Council will be responsible for managing this development.  During the last four years, the preferred approach at City Hall has been to defer to City staff and the Planning Board to call the shots.  Leading from behind, we believe the President calls it.

City Manager John Russo (and maybe even Planning Board member John Knox White) undoubtedly would be delighted to continue down the same path, with Mayor Marie Gilmore ready and willing to stand on the sidelines and lead the applause.  But there may be candidates running for Mayor or Council who want to influence, not just endorse, future decisions.  Today’s column is directed toward them.

The Merry-Go-Round is confident that organizations like the League of Women Voters will ask the usual questions about development (Do you favor repealing Measure A?  What’s your “vision” for Alameda Point?).  So we’ve tried to come up with three development-related questions phrased a little more provocatively:

  • Does the City really need any more housing?
  • Is the middle class being shut out of Alameda?
  •  Should the City have a “Plan B” for preventing traffic congestion?

Here goes.

Question One:  Does the City really need any more housing?

Every few years, the Association of Bay Area Governments issues its “Regional Housing Needs Allocation” in which it tells each city in the Bay Area how many housing units it needs to “make available” over the next eight years.  The allocation is broken down into four income categories, ranging from very low (up to 50 per cent of area median income) to above moderate (above 120 per cent of area median income).  According to ABAG, the RHNA quotas are meant to “increase[e] the supply, diversity and affordability of housing; promot[e] infill development and a more efficient land use pattern; promot[e] an improved intraregional relationship between jobs and housing; protect[] environmental resources; and promot[e] socioeconomic equity.”

For the City of Alameda, the RHNA for the period from 2014 through 2022 is:

  • Very low (0-50% of median income):    444
  • Low (51-80%):    248
  • Moderate (81-120%):    283
  • Above Moderate (120%+):    748
  • Total: 1,723

(We know ABAG has its critics in Alameda.  But they seldom claim that the RHNA quotas are too low; it’s that they’re unreasonably high.  For present purposes, we’ll take ABAG’s assessment at face value).

Now, take a look at a table of residential development projects that already have been proposed and/or approved by the Planning Board:

Project Total number
of units
Number of very low, low, and moderate income units
Alameda Landing              284 L: 6; VL: 25
Alameda Point*              800 200 estimated (25%)
Boatworks              182 M: 8; VL: 13
Del Monte              414 M: 24; L:14; VL: 17
Encinal Terminals              505 66 estimated (15%)
Marina Cove II                89 M: 6; L: 7; VL: 3
Mapes Ranch                11 M: 1; L: 1
TOTAL           2,285

*  “Site A” only.

(This chart doesn’t include Tim Lewis Communities’ proposal to build 48 single-family homes at “Neptune Pointe,” which (we hope) was killed by the re-zoning ordinance Council recently adopted to fend off a citizen-sponsored initiative.  Nor does it include any housing units built on the North Housing property across from Alameda Point, to which the recently adopted Housing Element assigns 182 units of M/AM and 624 units of VL/L housing).

Yet even without these two projects, it’s readily apparent that the total number of housing units already proposed and/or approved exceeds the total number of units the City “needs” – according to ABAG – to “make available” in the next eight years.

Now let’s consider the four income categories.  Since the majority of the new housing consists of market-rate units, the City easily should satisfy the RHNA quota for “above moderate” housing.  But look at the third column.  The new projects won’t provide nearly enough units to enable the City to meet its RHNA quota in the other three income categories.

Here’s where the policy choices come in.  Start with the projects proposed but not yet approved.  If it’s true, as it appears, that the City can meet its RHNA quota for total housing units with only minimal new housing at Alameda Point, should the City pull the plug on the currently ongoing ENA negotiations with residential developers and focus instead on commercial development?  Likewise, if it’s true, as it appears, that the City doesn’t need any more “above moderate” housing, should Council refuse to approve a project – like the Del Monte warehouse – unless the developer revises its master plan to include more units affordable by middle- and low-income households?  Should it then place a moratorium on construction of any additional new “market rate” housing?

If a candidate is not inclined to take one or more of these steps, we’d like her to explain why the City should authorize building more housing units, especially “above moderate” units, than the ABAG planners deem necessary.

On the opposite end of the spectrum, the policy choice involves what the City can, and should, do to increase the supply of housing in the three lowest RHNA categories.

As we see it, the options are limited.  The City isn’t going to build low-income housing itself:  It doesn’t have the funds available, and it can’t get them from the federal or state governments.  Nor is a profit-minded developer going to undertake a low-income housing project if it won’t make any money.

The City, of course, can adopt legal mandates and incentives designed to require or encourage developers to build low-income housing units – but it’s already done so.  The “inclusionary housing” ordinance requires that 15% of new units be restricted for occupancy by very low-, low-, or moderate-income households.  The density-bonus ordinance encourages a developer to build more than the required minimum number of “affordable units” by allowing additional market-rate units in exchange.  The settlement agreement in the Renewed Hope/Arc Ecology litigation requires that 25% of new units at Alameda Point be made “permanently affordable” for low-income households.  Yet even with all of these laws, the planned or approved residential projects still fall short of the RHNA low-income quotas.

Among certain housing advocates, it’s fashionable to say that all it will take to solve the problem is to repeal Measure A – as if that charter provision, and not economics, is the primary barrier to development of low-income housing.  We’d like to hear if any of the candidates has any more sensible ideas.

Question Two:  Is the middle class being shut out of Alameda?

Now let’s go back to those “above-moderate” housing units and turn the focus to demographics.  If you look at the details of the planned or approved residential projects, and at the adopted or proposed methods for funding the infrastructure they’ll require, you’ll quickly conclude that the target market for the new housing now in the works isn’t the butcher, the baker, and the candlestick maker – and it’s surely not the average Alamedan.

Start with price.  According to a press release issued by Tri Pointe Homes, the residential developer for Alameda Landing, the sizes of the condos, townhomes, and single-family homes planned for the project “will range from 1,000 square feet to 3,700 square feet, with prices anticipated to start in the mid $900,000s.”  You read that right:  The least expensive home will cost nearly a million dollars.

We haven’t seen any price chart for any of the other residential projects, but we can’t imagine those housing units are going to be cheap, either.  For one thing, the developer will want to recoup the fees it has to pay to the City for the privilege of building housing.  Council recently adopted a Development Impact Fee schedule calling for fees of $16,601 per unit for single-family homes and $13,140 per unit for multi-family buildings for projects outside Alameda Point.  For residential development at the Point itself, the infrastructure cost to be borne by the developer (and/or home buyers) – either through direct payment of a DIF or other means – is $1,107,121 per acre.

And then there are property taxes.  For both Alameda Landing and Marina Cove II, homeowners will pay special taxes – in addition to the basic ad valorem tax rate – to fund infrastructure costs.  At Alameda Landing, the additional property taxes required to pay off bonds issued to build the infrastructure range from $1,408 for the smallest apartment to $4,498 for the largest single-family home.  On top of this will be an additional $960 or $1,200 per unit for annual maintenance costs.  At Marina Cove II, the additional yearly tax bill for infrastructure maintenance is $1,735 or $2,169 per unit.

It’s highly likely that Alameda Point homeowners will face a similar fate.  According to Assistant City Manager Liz Warmerdam, the City is considering establishing community facilities districts, like the one at Alameda Landing, to issue bonds to fund infrastructure costs at the Point.  Since the infrastructure needs there are far greater than they are along the northern waterfront, the additional tax burden may well be higher, too.

With these kinds of prices and taxes, not a lot of folks in Alameda will be able to afford to live in one of the new residential developments.  According to the American Community Survey published by the U.S. Census Bureau, the median household income in Alameda in 2012 was $77,249.  More than 80 per cent of Alameda households earned less than $150,000 per year.  If you take the old rule of thumb that the maximum affordable price for a house is 2.5 times annual gross income, that means that more than 80 per cent of Alamedans cannot afford to pay more than $375,000 for a home.  And there ain’t gonna be any deals in that price range among the projects now being planned.  Even households earning $200,000 per year will be shut out of the market.

Nor should middle-income Alamedans, already aggrieved by rising rents, look to the new residential projects for relief.  The plans made public so far include apartments only in the Alameda Landing project, and then only 22 “flats.”  (Apparently, Tim Lewis hasn’t made a final decision about whether the Del Monte warehouse will offer for-sale units exclusively).  And we suspect that these units will be marketed to the sort of renter who thinks she’s getting a deal if the apartment costs less than one available south of Market in San Francisco.

The inevitable conclusion is that the City is headed for a significant demographic change.  As we put it in a column earlier this year, the island faces an influx of “Those People” – by which we mean, rich people – into the new residential developments.  A middle-income family will have to look elsewhere.

Now, there may be some who will find this shift to be refreshing.  But others may cringe at the notion of Alameda becoming Blackhawk-by-the-Bay.  We’d like to hear which camp a candidate falls into.  And if it’s the latter, the candidate will need to tell us what the City can and should do about it.  For example, should the existing requirements to provide “moderate” housing be expanded and the definition updated to reflect economic reality? Should the City impose – economists, close your ears — some kind of rent control for new apartments?

Question Three:   Should the City have a “Plan B” for preventing traffic                                                congestion?

Finally, no discussion of development issues would be complete without addressing the No. 1 objection cited by people to building more housing on the Island:  traffic congestion.

The table below, compiled from environmental impact reports and similar studies, shows the “peak hour” vehicle trips generated by the already planned or approved development projects:

Project Morning Peak
Hour Trips
Evening Peak
Hour Trips
Alameda Landing           1,315           2,349
Alameda Point           2,928           3,294
Marina Cove II                49                65
Boatworks*              136                90
Del Monte Warehouse              215              302
Encinal Terminals              290              428
TOTAL           4,933           6,528

*  The Boatworks numbers are for a 242-unit project.

It’s impossible to say how many of these trips are headed off or onto the Island.  But even with a conservative estimate, the risk of gridlock is real.  It will come as no surprise to commuters that, according to a study done for the City in 2012, the Posey/Webster tube already is operating at full capacity (3,000 vehicles in-bound and 2,900 vehicles out-bound) during both morning and evening peak hours.  The additional traffic generated by the new residential developments either will create longer lines heading to the tube, back up traffic on the streets feeding the Park Street, Fruitvale Avenue and High Street bridges, or both.

None of this is news to City planners.  They realize full well that, unless the potential traffic impacts are “mitigated,” further development will lead to disaster.  But they think they’ve got the problem licked.

Marketing efforts, especially for Alameda Point, will focus on the auto-averse — i.e., people who simply don’t like or want to drive.  City Planner Andrew Thomas has been remarkably candid in expressing his view of the ideal demographic for the Point.  As he told the Planning Board last September,

We have to attract families and residents to Alameda who go, “Oh my goodness, this home or this rental apartment comes with shuttle service.  That’s fantastic.  I can get rid of one of my cars.  I work near a BART station.  That’s awesome.  I can get there, I don’t need a car.”  If we can bring those kind of families to Alameda Point we’ll have gone a long way.

As much as we respect Mr. Thomas, statements like these strike us as a tad self-righteous. It’s one thing to scorn those who engage in socially unacceptable behavior (like, we guess, driving a car); it’s another to suggest that they’re not welcome to live or work in our enlightened community.  We wonder whether any of the candidates feels the same way.

In any event, once new residents or employees – saints as well as sinners – arrive at the Point, they’ll fall under the regime of what the planners call “Transportation Demand Management,” or TDM for short.  As explained by Mr. Thomas, a TDM plan relies on a carrot-and-stick approach.  On the one hand, it attempts to encourage people to take public transit by providing shuttles to BART and EZ Passes for buses and by offering car and bicycle ride-sharing and “guaranteed ride home” programs.  On the other hand, it attempts to discourage automobile use by making on-site parking scarce and expensive.

The City has gone all in on TDM.  The TDM plan for Alameda Landing – adopted in May 2007 – just went into effect.  TDM plans for Alameda Point and Marina Cove II have been approved.  And the master plan for the Del Monte warehouse project contemplates yet another TDM plan.

City planners describe TDM as the “primary” tool for mitigating traffic impacts from new development.  But the key word is “mitigating.”  The TDM plans approved by the City are intended only to reduce the number of additional vehicle trips generated by new development, not eliminate them.  (The goal is a 10% reduction from the EIR estimate for residential development and 30% for commercial development).  TDM won’t make the risk of gridlock go away.

Achieving even this modest goal is not a sure thing.  TDM advocates like Mr. Thomas and Mr. Knox White point out that TDM plans have succeeded elsewhere in the country, and their assurances are good enough for Mayor Gilmore.  “The things that are being proposed can work and will work,” she told her colleagues last February.  “[W]e are not the test case.  We can look at other cities and see that these ideas have worked in those cities.”

But skeptics – who usually consist of public commenters and, occasionally, a Planning Board member – argue that anecdotes about successful TDM plans in college towns like Boulder, Cambridge, and Palo Alto don’t necessarily portend a similar result in Alameda.  Except maybe in an academic sense, none of these towns is an island.

We aren’t looking for any of the candidates to offer an expert opinion on this topic.  But we would like to know whether they, like the Mayor, are true believers in TDM.

There is an even harder question to answer.  It’s the one Councilman (and candidate) Stewart Chen, D.C. asked at the February Council meeting.  “Since we are putting all of our eggs in one basket,” he wanted to know, “what if it doesn’t work?”

In response, Mr. Russo and his planners sounded like a football coach whose well-crafted game plan hasn’t succeeded by halftime:  They’ll make adjustments.  (The one favored by Mr. Thomas is to make parking even more expensive).  Sometimes, changes made at halftime do turn the game around – but sometimes they fall flat.  And to those Alamedans who might suffer the consequences of a failed TDM plan, gridlock is no game.

According to Mr. Russo, in a worst case scenario, Council could suspend further residential development until “technology catches up,” “behaviors catch up,” or “differently moded opportunities present themselves.”  By then, of course, the damage will have been done.  We’d have hoped to hear a better exit strategy than this.  Candidates, any ideas for Plan B?

Thus far our three questions about development.  We don’t expect any of the candidates to have all of the answers.  But we do think that voters are entitled to insist that those running for office at least will have thought about these issues and will have something to say about them.  If not, we’ll end up with a Mayor and Council content to continue to allow staff and the Planning Board to run the development process for the City.  Maybe that’s not such a bad thing – but it isn’t why we have elections, is it?

Sources:

Alameda Landing: 2012-12-10 staff report to PB re Alameda Landing application; 2013-05-13 staff report to PB re residential design review2013-06-18 staff report re tentative mapsTri Pointe press release; 2014-07-28 staff report re affordable housing2011-10-24 Fehr & Peers transportation report2014-01-06 staff report re CFD 13-12014-01-06 CFD Report for CFD 13-2TDM-Ala Landing 5-2007

Alameda Point: 2014-09-02 staff report re Site A developers2014-07-15 staff report re AUC (taxiways)4c_traffic (final)2014-05-20 staff presentation re TDM plan

Boatworks: 2011-07-11 staff report to PB re BoatworksBoatworks Residential Project DEIR (transportation)

Del Monte warehouse & Encinal terminal: 2014-03-24 consultant memo re Del Monte & Encinal traffic2014-04-28 staff report re DelMonte master planDel Monte Warehouse – initial study

Marina Cove II: 2014-05-27 staff report to PB re Marina Cove II2014-07-15 staff report re Marina Cove II CFD

Mapes Ranch: 2012-10-02 staff report re Mapes Ranch

Development Impact Fees: 2014-07-01 staff report re DIF

Alameda income by household: Alameda 2012 income

About Robert Sullwold

Partner, Sullwold & Hughes Specializes in investment litigation
This entry was posted in Alameda Point, City Council, Development, Housing and tagged , , , , , , , , , , , , , . Bookmark the permalink.

4 Responses to Questions the candidates won’t want to answer (Part II)

  1. notmayberry says:

    OMG..starting @$900K! But mere Cost does not a Blackhawk make. As I recall, the Homes at Blackhawk are actually surrounded by Land. What many [old, like me] Alamedans find offensive about Bayport, et al new developments, is that they consist of huge houses on tiny lots/no yard, with streets so narrow that 2 SUVs can barely pass each other.
    I am not willing to be so hard on Andrew Thomas. [doesn’t he live in a nice old house in Berkeley?] He has a job to keep, and has to perform an “appeasement” of the Plan Bay Area forces driving city management. Who knows what he really thinks-he doesn’t get paid to have an opinion! I am more worried about TransForm employees like JKW who have weaseled their way into city government, and clearly have a financial stake in TDM. To keep such special interests from dominating city government without the citizens’ awareness, the city should really post capsule biographies of each board/commission member on the city website. When you click on a name, a box should open which tells about their occupation, how long they have been in town, what they bring to the board, etc.

  2. dave says:

    One wonders how Russo & Thomas get to & from work. Have their behaviors “caught up?”

  3. Tom says:

    Just check the traffic at Buena Vista and Atlantic at 5:00pm on week nights!
    The deluge is existent, with Del Monte, Marina Cove II, Encinal terminals and Boatworks on line one can be sure of an extremely protracted commute travel time when on the island.

    There will be much weeping and gnashing of teeth to no avail after these island overpriced additions line developers pockets with cash.

  4. dlm says:

    I’m guessing that Measure BB, the new 1/2 cent sales tax that the county Transportation Commission has placed on the ballot will figure prominently in the proposed TDM planning promised here. The thing is, Measure BB has yet to pass, and the last iteration of this tax, on the ballot in 2012, failed to pass (by a very small margin). The funding for the much touted Broadway Jackson bypass, and for a rapid bus to Fruitvale are covered by Measure BB, among other things. So promises are being made on the basis of funding that doesn’t exist right now, and that might never exist. Meanwhile, we’re stuck with the consequences.
    And the reference to “Blackhawk by the Bay” — that’s very saddening, to me anyway. I like Alameda as it is, a place where all sorts of people can afford to live, with its mansions on one end and stucco block apt. buildings on the other. All of this brought about by people who are evidently blind to what the city is, and some of whom don’t even live here.
    here’s a link to a summary on Measure BB:
    http://ballotpedia.org/Alameda_County_Transportation_Commission_Sales_Tax,_Measure_BB_(November_2014)
    And here’s a link to the Measure itself — the list of projects begins on pdf pg. 16:
    http://www.votenoonbb.com/MeasureBB.pdf

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