The rest of the housing report

Assistant Community Development Director Andrew Thomas didn’t get a chance to present his annual Housing Element report orally to Council last Tuesday – the item was placed on the consent calendar.

And that’s a shame, because there was a lot Mr. Thomas could have said.  So the Merry-Go-Round will take the opportunity to say it for him.

As Mr. Thomas probably would, we’ll begin with the bottom line:  counting just the projects that already have been approved, more new housing units are expected to be built in Alameda by 2023 than the regional planners have established as the City’s share of Bay Area housing needs from 2015 through 2023.  So, to quote from the staff report, “the City is producing new housing consistent with its State of California RHNA obligations.”

This statement may be correct – but it’s not the whole story.

In fact, it’s also accurate to say that far less housing for very-low-, low-, and moderate-income households – and far more housing for above-moderate income households – is expected to be built in Alameda than the planners say the City needs.  And this is true even if the proposed projects that have not yet received final approval are added to the totals.  Indeed, those projects will make the imbalance between “affordable” and pricier housing even worse.

This doesn’t create a legal problem.  (More on that later.)  But it does raise a policy issue that, thus far, only Mayor Trish Spencer and Councilman Frank Matarrese seem willing to confront:  Putting to one side the undisputed detrimental impact on traffic flow and the potential negative impact on municipal resources caused by new residential development projects, how substantial are the benefits those projects provide to local residents affected by the “housing crisis”?  And it also lays down a challenge:  If the proposed projects are allowed to proceed – and it’s hard to revoke an approval – what can the City do to make sure that they increase the supply of housing that Alamedans actually need?

In recent years, the staff report accompanying the annual report on the Housing Element has included a chart of proposed and approved projects.  This year, it contains only a series of bullet points.  So we’ll build the chart ourselves.

The starting place is the RHNA – the “Regional Housing Needs Assessment.”  For each municipality in the Bay Area, the Association of Bay Area Governments assigns a share of the region’s housing needs over the next eight years in each of four income categories:  Very-Low (up to 50% of area median income); Low (51-to-80%); Moderate (81-to-120%) and Above-Moderate (more than 120%).  (For reference, the area median income in Alameda County for a four-person household in 2016 was $93,600, according to the state department of Housing and Community Development.  It thus takes a household income of $112,320 or greater to afford an “above-moderate” unit).

For the City of Alameda, these are the housing units required by the RHNA in each income category for the period from 2015 to 2023:

Very- Low Low Moderate Above-Moderate Total
444 248 283 748 1723

Now let’s look at the already-approved projects identified in the staff report, excluding the high-end Oakmont senior living facility.   We got the number of units in the VL, L, and M income categories – aka the “affordable” housing – from the staff reports and other documentation submitted when the projects were approved, and then subtracted the sum of those three categories from the total units to compute the number of AM units.  (We should note that this last category does not differentiate between “market-rate” and “below-market-rate” housing – i.e., units whose price exceeds the maximum considered “affordable” but is still less than the prevailing market rate.)

Here’s the data:

Project Very-Low Low Moderate Above-
Moderate
Total
Units
Alameda Landing    25      6    16    237  284
Marina Shores      3      7      6      73    89
Del Monte    17    14    24    325  380
Eagle Avenue   20*         0     20
Ala. Pt. – Site A   48   80    72    600  800
Boatworks    13      8     161   182
2100 Clement      2      2      3      45     52
1435 Webster      2        7       9
Totals 108 129 131 1448 1816

* The staff report does not differentiate between VL and L.

Now put the two together and you’ll see the problem:

  Very- Low Low Moderate Above-
Moderate
Total
Units
RHNA  444  248  283     748 1723
All approved projects  108  129  131   1448 1816
Surplus/(deficit) (336) (119) (152)     700    93

But hang on a minute.  As the staff report notes, there also are five other sites on which housing is likely to be built by 2023 – Encinal Terminals, Alameda Marina, Shipways, the Alameda Point “Main Street Neighborhood,” and North Housing – and developers have submitted development plans for the first three.  In addition, Catellus has prepared a draft development plan for the last phase of the Alameda Landing project on the northern waterfront.

The developer for Alameda Marina has stated that 160 of the 670 housing units planned for the site will consist of “senior housing,” but it has not submitted any breakdown by income category, so we can’t include the project in the analysis.  Here’s the data on the other three proposed projects:

Project Very- Low Low Moderate Above-
Moderate
Total
Units
Encinal Terminals   25   20      34     510   589
Shipways   13   10      17     252   292
Ala.  Lndg. waterfront   26*     27     392   445
Totals   38   56     78    1154 1326

* The staff report does not differentiate between VL and L.

Now let’s update the summary to include these projects:

  Very- Low Low Moderate Above-
Moderate
Total
Units
RHNA  444  248     283     748 1723
All approved projects  108  129     131   1448 1816
Additional planned
projects
   38   56      78   1154 1326
Surplus/(deficit) (298) (63)    (74)   1854 1419

So, yes, the staff report is accurate in stating that the City will meet its aggregate RHNA quota, even if only the already-approved projects are counted.  But Council, and the public, ought to recognize that new housing in each of the “affordable” categories will fall short of the mark – even if three of the projects still in the planning stage are added to those already approved.  (And it’s unlikely that, when the breakdown for the fourth proposed project, Alameda Marina, is finally announced, a deficit will become a surplus.)  At the same time, two-to-three times as much “above-moderate” housing will be built as the regional planners say the City needs.  (Moreover, based on the prices being asked at Alameda Landing and Marina Shores, it’s likely that these units will consist primarily of “market-rate” housing.)

Put another way, households earning more than $112,320 per year will see plenty of new housing in Alameda in the next few years, but households in the lower- and middle-income groups will get the short end of the stick.  (Sort of like Donald Trump’s tax plan, eh?)

Alas, this result doesn’t violate any state law.  As Mr. Thomas frequently notes, the state Housing Element law doesn’t require a city to ensure that the required number of units in each income category is actually built during the planning period.  It just has to “make available” – i.e., zone – sites where enough units can be built.  Moreover, as Mr. Thomas always points out when we raise this topic with him, the Housing Element law provides that any site zoned for a density of 30 units per acre “may be deemed appropriate to accommodate housing for lower income households.”   Since the City rezoned the Marina Shores, Del Monte, Encinal Terminals, Alameda Marina, and Shipways sites for precisely that density in 2012, Mr. Thomas argues that all of the units planned for those sites can be counted as “low” income housing for purposes of meeting the RHNA quotas – regardless of the type of housing the developer actually proposes, or the Planning Board or Council actually approves.  So voila!  Any legal problem disappears.

But the discrepancy should concern our elected officials.  We suspect that those Council members who typically read staff reports line-by-line are aware of the still-unmet need for very-low-, low- and moderate-income housing (as well as the unnecessary surplus of above-moderate-income housing).  If the outspoken “progressives” on the dais can be persuaded to spare a few minutes to focus on improving their constituents’ lives rather burnishing their own leftist credentials, Council will have plenty to discuss.

The staff report itself suggests one line of inquiry:  whether to revise the inclusionary housing ordinance to bump up the number of “affordable” units required for every residential development.  (Currently, the requirements are four percent apiece for very-low- and low-income households and seven percent for moderate-income households.)  The state density-bonus law complicates the issue, since it dictates that a city must give a density bonus to any developer proposing a project that meets the criteria specified in the statute.  But we’re confident City Attorney Janet Kern or one of her staff attorneys could write an ordinance that mandates more “affordable” housing yet complies with state law.  (One suggestion mentioned in the staff report:  add a new requirement that every project include a stated percentage of “middle-income” housing.)

In addition, relying on for-profit developers isn’t the only way to increase the supply of “affordable” housing.  Last November, Alameda County voters passed Measure A1, which authorized issuing $580 million in bonds to fund, among other things, rental housing development programs.  The City of Alameda will get a $10.4 million “base allocation” of Measure A1 money from the County, with the right to apply for more from a $50 million “mid-County pool.”  Already, Council has committed $5 million of the City’s base allocation to the two buildings devoted to affordable housing at Site A at Alameda Point and $1 million to the all-affordable-housing project owned by the Alameda Housing Authority on Eagle Avenue.  But that still leaves $4.4 million – with the right to apply for more – to leverage for future City/AHA-owned affordable-housing projects.

Councilman Jim Oddie is fond of larding his speeches with quotes from political figures, so we’ll take a cue from Mr. Oddie and end with one from John F. Kennedy:  “The Chinese use two brush strokes to write the word ‘crisis.’  One brush stroke stands for danger; the other for opportunity.  In a crisis, be aware of the danger –but recognize the opportunity.”  Mr. Oddie, and his colleagues, would do well to make those words their guide to solving the City’s “housing crisis.”

Sources:

Staff report re H.E.: 2017-05-02 staff report re Housing Element

FY 2015-16 H.E. annual report: 2017-05-02 Ex. 1 to staff report – Annual Report

RHNA: Final_Bay_Area_2014-2022_RHNA_Plan

Area median income: 2016 HCD income limits

Alameda Landing: 2012-12-10 staff report to PB re development plan & density bonus2014-07-28 staff report re affordable housing

Marina Shores: 2014-05-27 staff report to PB re Marina Cove II

Del Monte: 2014-12-16 Ordinance – Del Monte Master Plan-redline

Alameda Point – Site A: 2015-06-16 staff report re Site A

Boatworks: 2011-07-11 staff report to PB re Boatworks

2100 Clement:2015-06-22 staff report to PB re 2100 Clement

1435 Webster: 2016-03-28 staff report to P.B. re density bonus application

Encinal Terminals:Final master plan (Part II)

Shipways: 2017-04-24 Ex. 3 to staff report to PB -Notice of Preparation

Alameda Landing waterfront: 2017-02-27 staff report to PB

Alameda Marina: 2016-11-14 Ex. 3 to staff report to PB – Notice of Preparation (NOP)

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.

8 Responses to The rest of the housing report

  1. RJS says:

    Define housing crisis. Are you saying that we don’t have enough housing in Alameda for those who want to live here? It seems to me that housing costs have historically been high here – due to demand, not due to supply. I submit that the concept that this ‘crisis’ can be resolved through government action is both naive and dangerous.

    There are economic forces here much larger than the Alameda City Council can resolve – and actions that are taken in an attempt to mediate them are not only questionable with respect to the underlying cause of the problem of affordability, ans well as subject to negative consequences. Both the City Council (and the State of California RHNA) are wise to tread carefully here.

    It is wise not to forget that Alameda is an island, and has limited access to the shore. It is not San Leandro.

    • David says:

      Some people insist on viewing the issue as a supply problem (i.e. too little supply.) However, one may also view it as a (too much) demand problem.
      It can be useful and instructive to view it as a demand problem. One may approach the issue differently.
      Of course, if one builds houses for a living, it’s always a supply problem.

  2. Mark Greenside says:

    Quite a while ago, Frank Matarrese submitted a referral to raise the minimum amount of affordable housing in every new residential development above the current 15%. The City Manager and Council have failed to move that referral forward. It languishes somewhere on someone’s desk. Somehow, there’s plenty of time for Council to discuss and vote on Trump’s presidency, but not enough time to discuss the most critical issues in Alameda: unbridled market-priced residential development, gridlocked traffic, and too few well-paying jobs. By any definition, Alameda’s government does not work, at least not for the people who live here.

  3. wordist45 says:

    Well done, Robert, as usual.

  4. carol says:

    Is this a sign that they’ve all just given up on traffic? Transportation Authorities are now known as Congestion Management Agencies:
    http://www.planbayarea.org/contact-us/congestion-management-agencies

  5. anonymous says:

    Very nice analysis. Very helpful.

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