If you have to ask the price, . . .

Are the residential developments underway at Alameda Landing and Marina Shores (aka Marina Cove II) going to increase the supply of “affordable” housing in Alameda?

What about the Del Monte project just approved by the outgoing Council or the other proposals wending their way through the planning process?

That depends – to paraphrase Bill Clinton – on what your definition of “affordable” is.

If you don’t make much money, or if you have or make a lot of it, the new projects may increase your odds of finding a place to live in Alameda that you can afford.  If not, well, there’s always Modesto.

Here’s how we get to that conclusion:

According to the 2015-23 Housing Element, “In most housing markets, lenders, as well as the federal government, traditionally have considered 30 percent of income spent on housing to be ‘affordable.’”  Applying that definition and using the income limits set by the state Department of Housing and Community Development, the Housing Element includes the following table showing the “maximum affordable price” for owning or renting in four income categories:

Under the Alameda Municipal Code, a new residential development must include units affordable by buyers in these income categories.  Specifically, the “inclusionary housing” ordinance requires that, for residential developments exceeding five units, “at least fifteen percent (15%) of the total units must be Inclusionary Units restricted for occupancy by Very Low-, Low- or Moderate-Income Households.”  (For these purposes, “extremely low” and “very low” are treated as one category).

In addition, if the developer wants to build more “market-rate” units than the zoning ordinance otherwise would allow (and get around Measure A), she can get a “density bonus” by reserving 5% of the total units for “very low”-income households or 10% for “low” or “moderate”-income households.

Thanks to these ordinances, any new residential development necessarily will add some housing units affordable by households in the very low-to-moderate income categories.  And if the developer wants a density bonus, she’ll have to offer even more.

So now let’s look at how the current projects measure up.  We compiled the following data from staff reports:

The first three projects in the table have been approved by the Planning Board, and, where necessary, by Council, and the Planning Board has okayed a tentative subdivision map for Mapes Ranch.  In addition to these projects, a developer called City Ventures has proposed two residential developments, one located at 1835 Oak Street and the other at 2100 Clement Street.  This October, the Planning Board held a public workshop on the former proposal, so, even though it has not been approved (and the site is not yet zoned residential), we’ve included it on the list.

As the table shows, the five projects, taken together, will provide a total of 45 housing units for “very low-income” households; 28 units for “low-income” households; 47 units for “moderate-income” households, and another seven unspecified “inclusionary” housing units.

So if you’re single and earn no more than $78,550 per year, one of the current residential developments may offer a place to live in Alameda that you can afford.  Equally lucky may be four-person households earning no more than $112,200.  But if you qualify, don’t dilly-dally: there’ll be only 127 units available for all of you.

And what if you earn more than the HCD income limits for your household size?

If you’re a renter, don’t get your hopes up.

According to City Planner Andrew Thomas, at Alameda Landing only the very low- and low-income housing will consist of apartments.  The rest of the 284 units – including the 16 moderate-income units – will be for sale.  There will be no rental units available at Marina Shores, Mapes Ranch, or 1835 Oak Street.

The extent to which the Del Monte project will offer anything for renters is uncertain.  According to Mr. Thomas, the Del Monte developer, Tim Lewis Communities, “plans to do a subdivision map to condo the project.  They then plan to sell some units and rent some.” But no hard numbers have been disclosed, and Tim Lewis didn’t respond to our request for additional information.

It is, in other words, a market for buyers (if not a buyer’s market).  And if you have the dough, the current projects will give you plenty of opportunities.  Taken together, those projects will supply a total of 684 units for sale at “market rates”:  237 at Alameda Landing, 73 at Marina Shores, nine (or maybe 11) at Mapes Ranch, 325 at Del Monte, and 40 at 1835 Oak Street.

But it is an open question how affordable these units will be to the average Alameda household.

Of the five projects, Alameda Landing is the farthest along.  The developer, TriPointe Homes, has completed the first round of residential sales and now is seeking buyers for seven condo/flats and four “court-yard style” single-family homes.  The condo/flats are priced to start “in the mid $500,000s” and the single-family homes “in the high $800,000s.”

Lennar Homes, the developer for Marina Shores, also has begun soliciting interest from potential buyers, but the firm’s Website doesn’t list any price range, and Lennar didn’t respond to our request for additional information.  Since the approved plan calls for 10 three-story “waterfront” single-family homes, another 42 two-story detached single-family homes, and 37 three-story “row house” condos, we’d imagine the price range will be similar to the one for Alameda Landing.

Who’s going to be able to pay these kind of prices?

According to the American Community Survey, the mean – i.e., average – household income in Alameda in 2013 was $100,605.  The same survey reported that 16.2% of Alameda households earned between $100,000 and $150,000, 9.6% earned between $150,000 and $200,000, and 10.2% earned more than $200,000.

That’s not Piedmont-style prosperity – there, the average household income is $293,923 – but Alameda beats the county-wide numbers.  Still, unless the prospective buyer can come up with a substantial down payment, even a family with a six-figure income may find it a stretch to buy a home at one of the new developments.

We ran a few hypotheticals through the BankRate calculator.  A household earning $100,000 per year with $100,000 set aside for a down payment might be able to afford – barely – one of those $500,000 “starter” condos at Alameda Landing.  Want one of the “starter” single-family homes in the “high $800,000s” and can come up with $200,000 for the down payment?  It’ll take an annual salary of more than $180,000 to make the deal work.

One thing is clear.  The residences to be offered at the new projects aren’t for the butcher, the baker, or the candlestick maker.  Think instead of the software engineer or big-law- firm associate with a generous parent willing to front the down payment.  (Or maybe an Alameda fire department captain).

What about Alameda Point?  There, the City just entered into an Exclusive Negotiating Agreement for a 68-acre parcel known as “Site A” with a newly formed developer, Alameda Point Partners, LLC.  The developer has proposed to build a total of 800 housing units “comprised of townhomes, condominiums, and apartments.”

At this stage, we know that, pursuant to the settlement agreement between the City and Renewed Hope, 25% (rather than 15%) of these units must be “affordable” (although the agreement defines “affordable” differently than the inclusionary housing and density bonus ordinances do).  But that’s about all we know for sure.

Joe Ernst, the Alameda resident who is a principal in the development partnership, was kind enough to respond to the Merry-Go-Round’s request for information and told us that,

At this point we have looked at a range of product types and for-sale vs. for-rent, but have not yet settled on a definitive mix.  The final mix will depend largely on further assessment of infrastructure costs and market. Will continue to monitor sales activity to get a firm handle on sales prices.

Mr. Ernst added that, “I would hope we have our mix better defined by the end of January 2015.”

Thus far the facts.  Now for a few observations.

Having watched the videos of the December 2 regular and December 16 “special” meetings on the Del Monte project, we heard more than once – from the dais and off it – that the project should be approved because it would create desperately needed “affordable” housing.  And it wasn’t just the usual crew of housing advocates who waved the banner of “affordability.”

One resident urged Council to go forward with the project so that others could avoid the experience of his friends who had been “kicked out of town” because “housing was too expensive” in Alameda even though they were “reasonably well off.”  Another resident endorsed the project because, he said, his sons “would love to stay in Alameda” but couldn’t because rents were too high.

In fact, right now no one knows whether the Del Monte project will provide housing that the one speaker’s friends, or the other speaker’s sons, will be able to afford.  So we’d urge caution when you hear the “affordability” argument being made in support of the next residential development project (and we’re sure it will be).  Don’t dismiss the argument – but don’t swallow it whole.

Instead, we’d suggest that the first question that ought to be asked is:  “Affordable by whom?”

If the answer is, “Affordable by very low-, low- and moderate-income households,” that’s fine.  It surely can be argued that, as a matter of public policy, government should encourage construction of housing for people in these income categories.

But suppose it’s true, as it is for Alameda Landing, that you need to build a 284-unit project in order to get 47 housing units for very low-to-moderate-income households.  A development of that size carries its own baggage, most notably increased traffic.  How much more congestion at the tubes and bridges should Alamedans be willing to accept in exchange for an additional 47 “inclusionary” units?

And then take care to ask the follow-ups about the “market rate” component of the project:  Does it include any rental units?  If the answer is, “No,” you’ll have to acknowledge that it does nothing to solve the perceived rental “crisis” in the City.  Ask also:  Who’s going to be able to pay the kind of prices the developer expects to market the units for?   If the answer is, “Only households making significantly more than $100,000 a year,” you’ve got to think about the impact of the project on the demographic profile of the City.

We confess to a bias in this regard.  As we have argued previously, the idea that Alameda will become an enclave of the affluent – even if it’s just the “mass affluent” – troubles us.  It’s not that we don’t like rich people.  But we do think they are different than the rest of us – and not just because, in F. Scott Fitzgerald’s famous phrase, they have more money.  We tend to sympathize with those who believe there are already enough Brown- and Harvard-educated lawyers tooling around town in their Toyota Highlanders.

Forty years ago, this may have sounded like a pitch in favor of the “silent majority.”  But we know the risks of echoing Richard Nixon.  So treat our concern as a protest against “income inequality.”  Sound better?

Sources:

Alameda Landing: 2012-12-10 staff report to PB re Alameda Landing application; 2013-05-13 staff report to PB re residential design review; 2013-06-18 staff report re tentative maps; 2014-07-28 staff report re affordable housing

Marina Shores (Marina Cove II): 2014-05-27 staff report to PB re Marina Cove II; 2014-07-28 staff report to PB re Marina Cove II design review

Del Monte: 2014-12-02 Ex. 2 to Del Monte staff report – Master Plan

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

1835 Oak Street: 2014-10-13 staff report re 1835 Oak St.

Housing Element: 2014-07-15 Ex. 1 to staff report- 2015-2023 Housing Element

Housing ordinances: 30_16_INCLUSIONARY_HOUSING_REQUIREMENTS_FOR_RESIDENTIAL_PROJECTS; 30_17_DENSITY_BONUS_ORDINANCE

American Community Survey data: ACS Alameda data