The real housing shortage

In our last column, we discussed how more new housing units are expected to be built in Alameda during the next seven years than the regional planners have determined the City needs.

Today, we’ll look at what – for us – is a more important question:  Will the number of “affordable” housing units expected to be built during that period satisfy Alameda’s needs?

To put it another way:  We take it as a given that a shortage of “affordable” housing – i.e., homes or apartments within the means of lower-income households – now exists in the City.  Will the situation get better or worse in the foreseeable future?

The answer is likely to depend on what happens at two specific parcels on the northern waterfront:  the 36.36-acre North Housing site located north of the existing Coast Guard housing, and the 8.1-acre Shipways site located off Marina Village Parkway.

All of the residential development projects now in the pipeline, taken together, won’t supply enough “affordable” housing between 2015 and 2023 to meet the increased need for it.  Instead, nearly 300 additional “very low” and “low” income housing units will have to be built, and North Housing and Shipways are the only two remaining sites designated by City planners for lower-income housing.

Unfortunately, the only existing commitment to put “affordable” housing on these sites encompasses just 120 units at North Housing.  There are no plans on file, and none in the works, to build any more “very low” or “low” income housing on either site.

Unless another project providing “affordable” housing materializes, those more concerned about “affordable” housing than about high-end residential development will just have to keep their fingers crossed.

And they’d be well-advised to keep their eyes on City Hall.  If Council and the Planning Board view the “affordable” housing issue only through the lens of the City’s Housing Element, they’ll conclude that Alameda will meet its legal obligations for “very low” and low” income housing with room to spare.  That conclusion is true as a matter of state housing element law.  But it delivers scant solace as a matter of public policy.

We’ll get to this anomaly in a minute.  But first let us lay out the facts about the projected shortfall in housing for lower-income households.

The starting place is the City’s RHNA numbers.  The Association of Bay Area Governments assigns to each city within its jurisdiction a share of the state-determined regional housing need in each of four income categories over an eight-year “planning cycle.”  For the period between 2015 and 2023, ABAG concluded that Alameda needs the new housing units shown below:

Very Low Low Moderate Above-Moderate Total
444 248 283 748 1,723

As we reported in our last column, Assistant Community Development Director Andrew Thomas presented a “housing construction forecast” last September showing the number of new housing units that already-approved residential development projects were expected to provide between 2015 and 2023.  Previously, we’ve broken down the forecast into “affordable” and “market-rate” components, and the table below summarizes the former:

 Project Total units       “Affordable”
              units            
  VL L
Oakmont Seniors
(Cardinal Point)
                       25 0 0
Alameda Landing
(Stargell Commons)
285 25 6
Marina Shores 89 3 7
Del Monte 380 17 14
2437 Eagle 22 10 12
Site A 800 48 80
Boatworks 182 13 8
2100 Clement 52 2 2
1835 118 129

Comparing the RHNA targets to the forecast, the prospects for “affordable” housing over the next seven years appear pretty bleak:  Of the 622 new “very low” and “low” income units ABAG determined the City needs by 2023, only 247 are expected to be built.

Since the forecast was prepared, two new residential projects have been announced, one for Encinal Terminals, the other for Alameda Landing.  (A third subsequently announced project, on Webster Street, contains no “very low” or “low” income housing).

The draft master plan for the Encinal Terminals project submitted to the Planning Board last Monday included 25 “very low” income and 20 “low” income units.  No similar plan was presented for Alameda Landing, but Mr. Thomas relayed the developer’s representation that the project would contain 53 “affordable” units, half in the “very low” and “low” income categories.

Updating the table to reflect this data, the “affordable” housing picture gets better, but it is still grim:  Even if the two new residential projects are approved and developed, there still will be a 303-unit shortfall between the number of new “very low” and “low” income units ABAG concluded the City needs and the number of units that are expected to be built.

Is there any chance of making up this gap?  That’s where North Housing and Shipways come in.

When the City’s planning staff prepared the 2015-23 Housing Element, it identified three sites as being available to supply housing for lower-income households.  One was Encinal Terminals; the other two were North Housing and Shipways.  We’ve already included Encinal Terminals in the updated projection.  As a result, the burden of making up the deficit will fall on the other two sites.

The North Housing parcel will do part of the job:  90 units of housing for the homeless and 30 units of “self-help” housing already are committed to go on the property.  But that still leaves around 200 “very low” and “low” units to be built – somewhere – if the supply is to meet the anticipated need.

When we asked Mr. Thomas about current plans for the North Housing site, he responded, “The Navy is actively working on their plans to convey the North Housing site out of federal ownership to the [Alameda] Housing Authority and a portion would be auctioned. The Navy process is always slow, but I would assume some development will occur on that site before 2023.”

For the Shipways site, Mr. Thomas told us, “I have no idea about the status. . . .   Nobody has contacted me or the city about it in the last year or so, that I am aware of.”

So there’s the challenge to our City planners and public officials:  Find someone willing and able to build around 200 “very low” and “low” income units on the North Housing and Shipways sites.  Or find another place those units can be built.  Otherwise, despite all of the pricey housing provided by the residential development projects approved to date, the shortage of “affordable” housing will persist well into the future.

But that isn’t the conclusion one would reach by looking solely at the Housing Element.

State housing element law requires the City to prepare a list of sites zoned for residential development, then determine the number of housing units each site can accommodate based on its “realistic capacity” and assign it to one of the four RHNA income categories. As long as the total “realistic capacity” of the sites in each category meets the RHNA target for that category, the City has complied with its legal obligations.

For the 2015-23 Housing Element adopted in 2014, the site inventory showed a total of 1,186 housing units in the “very low” and “low” income categories, far more than the 692-unit RHNA requirement.  Since then, the numbers have been adjusted to reflect changes in the inventory.  Mr. Thomas recently provided us with an updated table showing a “surplus” of 721 units in the lower-income categories as of April 2016.  (By our calculation, the net effect of the two new residential developments announced Monday will be to reduce the surplus slightly, but only to 558 units).

So how can there be a shortage and a surplus at the same time?

The reason is that the numbers and categorizations in the site inventory are based on formulas and presumptions, not on expectations about how many units, in total and by income category, actually will be built on a particular site.  For example, any site zoned to permit 30 units per acre “shall be deemed appropriate to accommodate housing for lower income households” and thus may be counted in the “very low” and “low” income categories, regardless of the likelihood that a developer actually would devote the entire site to lower-income housing.  (As Mr. Thomas puts it, “Under state housing law, density equals affordability.”)

Thanks to this presumption, when the planners prepared the 2015-23 Housing Element, they were able to treat Encinal Terminals, North Housing, and Shipways as sites available for  “very low” and “low” housing, since all are zoned for 30 units per acre, and to count their entire “realistic capacity” toward the RHNA numbers.  This created the “surplus,” which has grown as lower-income housing provided by projects not included in the original site inventory – like Alameda Point and Island High – are added to the list. Nevertheless, the Housing Element “surplus” remains an artificial construct.

We’re not accusing Mr. Thomas of trickery; he’s just worked the system. (“Why did you take $250,000 to give a speech at Goldman Sachs, Mrs. Clinton?” “Because that’s what they offered”).  And he deserves credit for ensuring that the City is now, and will continue to be, in compliance with the state housing element law.

But let’s not jump to the conclusion that, therefore, all is well.  The fact remains:  unless the policy makers take action, the residential projects so beloved by the pro-development crowd aren’t going to provide the “affordable” housing the City needs, now or in the future.

Sources:

RHNA: Final RHNA (2014-2022)

2015-23 Housing Element: 2015-2023 Final Housing Element Background Report

September 2015 forecast: 2015-09-14 staff report to PB re annual H.E. report

Housing Element update: RHNA STATUS – april 16

 

 

About Robert Sullwold

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

11 Responses to The real housing shortage

  1. Steve Gerstle says:

    There is de facto approval of a lot of low income housing in Alameda. Garages, attics and out buildings are being converted into living space. More people are living in existing spaces and the police have granted tacit approval to two encampments. There aren’t any plans or documents or council votes for it, but it is happening nonetheless.

  2. One problem is our agreement with the policy of giving developers 6 market rate units for every below market rate unit we “get”. This means 7 families, with their needs for schools, transit, roads, parking, firefighters, and police, for every barely affordable unit of housing. It’s a bad deal. We need to get more out of the developers who are panting at our doors, or else get some of the federal and state housing money and build our own housing.

    Another issue I see cropping up is the herding of low income families into certain areas. Rather than mixing the low income units into the neighborhoods, we are segregating them off into the corners of each development. In my 1920’s neighborhood we have large houses and tiny bungalows next to each other going down the block, why are the new developments all the same size houses except in the “poor zone”? Why not just have every 7th house be affordable? Or, let it be the same size but be broken into two apartments?

  3. Audrey Lord-Hausman says:

    And how many of these homes will include Universal Design Elements for accessibility for persons with disabilities, mobility challenges, and aging.

  4. Paul S Foreman says:

    Thank you Mr. Sullwold for another very informative and well-reasoned article. However I do have a few issues with it.

    First, your comment on the two pending projects at Encinal Terminals and Alameda Landing would lead one who has not be a regular reader of your blog to think that these are desirable projects. Based on your past postings I doubt if you believe that adding almost a 1000 more units to the northern waterfront, 85% of which will be market rate is a good planning decision. I would have expected you to say that getting 150 more affordable units while adding another 850 market rate units is too steep a price to pay.

    Secondly, I am concerned that your article completely ignores the moderate income housing shortfall. Your March 15, 2015 Article showed 48 moderate units committed at Del Monte, Boatworks, and Alameda Landing. Site A will provide72 more, for a total of 120, leaving us 163 short. Clement, Marina Shores and Eagle do not appear in your March 15, 2015 article, so they may be contributing a few more, but we are still way short of our 283 unit RHNA allocation. Everybody ignores this group that represents household income of 80% to 120% of the median. In Alameda County the median is 93000+, yielding a moderate income of 75000+ to 112000+. However, I have seen figures that place the City of Alameda median at about $75000. Thus, it is safe to say that a large block of folks in our City qualifies for moderate housing. It may well be the most populated income group in the City. Shouldn’t we be paying more attention to them?

    • Mr. Foreman,

      As to your first point, you are right that the idea of building an additional 850 market-rate units — which we don’t need to satisfy our RHNA goal — in order to get an additional 150 affordable units — which we do need — doesn’t make a lot of sense to me.

      As to your second point, your conclusion about the shortfall in moderate-income housing is correct. Here’s the “forecast” for the “moderate” income housing units provided by projects now “in the pipeline”:

      Total “Moderate”-income
      units units

      Oakmont Seniors (Cardinal Point) 25 0
      Alameda Landing 285 16
      Marina Shores 89 6
      Del Monte 380 24
      2437 Eagle 22 0
      Site A 800 72
      Boatworks 182 0
      2100 Clement 52 3

      Totals 1835 121

      (N.B. I lack the skills to format the chart correctly. The first number is total units, the second is “moderate”-income units).

      Add the 34 “moderate” units in the Encinal Terminals master plan and the 26 “moderate” units the developer represented would be built at Alameda Landing and you get a total of 181 units, well short of the 283-unit RHNA target.

      I didn’t discuss the shortfall in “moderate” income housing because the focus of the column was on “affordable” housing and I didn’t want to get into a debate over whether housing for those earning 80-to-120% of median income is properly classified as “affordable.” But your point is well-taken: the demonstrable shortage of housing for households in this income group is something we should pay attention to.

  5. Laura Thomas says:

    If you don’t want developers building housing, then it’s time to get behind the proposed $500 million housing bond for Alameda County on the November ballot. It’s going to require a 2/3 vote and a parcel tax but it is all for affordable projects. It needs everybody’s support

  6. Laura Thomas says:

    I am wondering if Alamedans would be willing to support a parcel tax to get the needed money to build affordable housing. That would get rid of the developers

    • Steve Gerstle says:

      Does the November bond include the City of Alameda or only unincorporated area? If Alameda, what share would come to us? What is the possibility of non-profits developing housing? What are the barriers to additional housing authority housing? People need to live somewhere and the current system of illegal units and living space as well as encampments basically criminalizes a necessity and has all sorts of social costs.

  7. carol says:

    Isn’t that tonight, WED, 6/1/2016— San Leandro Library’s Karp Room- 300 Estudillo Avenue, San Leandro, CA at 6:00 pm?
    I keep getting emails from Wilma Chan about it.

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