Measure A: tell it goodbye?

If Council makes all of the zoning changes proposed by the draft Housing Element presented to the Planning Board last Monday, Alamedans won’t need two hands to be able to count the number of areas in the city that remain subject to the multi-family prohibition and density limitation established by Article XXVI of the City Charter (aka Measure A).

They won’t even need one hand.

In fact, if Council adopts all of the changes, multi‑family housing will be authorized not only in commercial areas where residential use now is restricted but in every residential and mixed-use zoning district in the City.  Moreover, the maximum permitted residential density will rise from the 21 units per acre set by the Charter to as much as 60 units per acre.  And for new construction, the minimum density will be 30 units per acre.

As a result of these changes, Article XXVI, originally put into the Charter in 1973, would become a historical anachronism without any ongoing force or effect.

This is, to put it mildly, an extremely ironic outcome.  After all, it was less than a year ago that Alameda voters overwhelmingly rejected – 60 percent to 40 percent – the ballot measure sponsored by Mayor Marilyn Ezzy Ashcraft and Councilman John Knox White to get rid of Article XXVI.  Now, Council will be able to achieve the same result by a simple majority vote.

How did this happen?

Well, as much as we’d like to give credit (or blame) for the impending demise of Article XXVI to the local “activists” who’ve been fighting against it for years (and who love to vilify its defenders as troglodytes or worse), the true heroes (or villains) are the state and regional housing authorities.  The devil may not be able to make Council do it, but HCD and ABAG can.

These agencies are responsible for determining and distributing what is known as the “Regional Housing Needs Assessment.”  The process begins with the California Department of Housing and Community Development deciding how many new housing units will need to be built in each region in the state in the next eight years.  The Association of Bay Area Governments then allocates the Bay Area’s RHNA share among the 101 cities under its jurisdiction.  And woe to any city that fails to come up with a plan for meeting its RHNA quota.

In each of the last three “planning cycles,” covering 2007‑2014, 2015‑2022 and 2023‑30, ABAG has assigned to the City of Alameda more new housing units than (according to City staff) it was possible to build in compliance with Article XXVI.

In 2012, staff solved the problem by getting Council to accept a clever workaround.  It created a “multi-family overlay” that allowed multi-family housing with a density of 30 units per acre to be built on 11 residential sites, notwithstanding the restrictions imposed by the Charter.  This enabled the City to present HCD with a list of sites zoned to accommodate a total of 2,525 new housing units, just enough to meet its 2,420‑unit RHNA quota (which included a carry-over from the prior period).

Staff pulled off the same trick in 2014.  This time, the inventory included seven sites with the multi-family overlay (all of which originally had been rezoned in 2012), and the total came to 2,245 new housing units, exceeding the 1,723‑unit quota.

The task is much more difficult this time around.  When ABAG first disclosed its proposed RHNA allocation in October 2020, it assigned 4,900 new housing units to the City of Alameda, almost three times the prior quota.  Consternation ensued.  But things only got worse:  the final number announced in December 2020 was 5,353 units.  Alameda joined many other cities in appealing – but all of the appeals were denied.

So it fell to City Planner Andrew Thomas to find sites where, he could assure HCD and ABAG, 5,353 new housing units could be built in Alameda in the next eight years.  Mr. Thomas has been working on that mission since 2020, and the draft Housing Element presented to the Planning Board reflects the latest version of his game plan.

From the beginning, Mr. Thomas has not hidden his intent, as part of the RHNA process, to propose zoning changes inconsistent with Article XXVI.  “Alameda likely cannot accommodate its projected RHNA for 2023‑2031 without amending its General Plan and Zoning Ordinance, notwithstanding Article 26 of the City Charter,” he told the Planning Board in January 2021.

This declaration raised no red flags, since even the staunchest defenders of Measure A conceded that, despite Article XXVI, the City could allow multi-family housing and densities greater than 21 units per acre on specific sites if that was necessary to enable the City to come up with enough new housing units to meet its RHNA quota.  In such a case, the City’s duty to comply with state law would “preempt” any local law, even a Charter provision, that stood in its way.

Indeed, this was the legal argument offered to justify adoption of the multi-family overlay in 2012 and its application in that year and in 2014.  At least at the outset, it appeared that another overlay was what Mr. Thomas had in mind for the current planning cycle.  But it has evolved into something more.

The overlays applied in 2012 and 2014 targeted specific sites with buildings that were either vacant (e.g, North Housing) or being used as warehouses (e.g., Del Monte).  This time around, Mr. Thomas has proposed rezoning entire districts to allow multi-family residential development at densities higher than those permitted by Article XXVI.

Two of those areas currently are being used for retail commerce, and their zoning generally does not allow any residential use except for units built above retail stores.

One area consists of the Park and Webster Street business districts.  Mr. Thomas has had his eye on putting dense multi-family housing in these locations for some time.  In December 2019, he informed Council that “[s]everal mixed-use land developers have inquired about developing a mixed-use project with ground floor retail and residential on the upper floors at the one-acre CVS site at Santa Clara and Oak.”  But all of them backed away because, he said, the 21‑unit‑per‑acre density limitation imposed by Article XXVI rendered development “financially infeasible.”

At the time, Mr. Thomas did not suggest any revision to the zoning ordinances, but his report was part of an “evaluation” in which he roundly condemned Article XXVI, and one didn’t have to be a mind-reader to conclude that he’d prefer to see it removed from the Charter.  But when the voters resoundingly rejected repeal, and ABAG then announced a 5,353‑unit RHNA quota for Alameda, the prospect of putting housing in the Park and Webster Street business districts was back on the table.

As proposed by the draft Housing Element, the zoning designations governing those areas (C‑1 and CC) would be rewritten to (1) remove the multi‑family housing prohibition; (2) permit multi‑family housing by right, provided that ground floor space facing Park Street or Webster Street is reserved for non‑residential and commercial retail uses; (3) remove the prohibition on residential densities above one unit per 2,000 square feet and permit one unit per 750 square feet (i.e., 60 units per acre); and (4) require that all new residential and mixed-use buildings be at least 30 units per acre.

Both in the draft and in his presentation to the Planning Board, Mr. Thomas took pains to point out that the change wasn’t likely to inundate Park Street or Webster Street with new housing units.  “There’s not a lot of land” there, he told the Planning Board, “and what land is potentially available [contains] very small sites.”  As a result, he counted only 200 new housing units from this source against the RHNA quota.

The second commercial area for which the draft Housing Element proposes rezoning consists of the five shopping centers located around town:  Alameda Landing, Bridgeside (aka Blanding), Harbor Bay, South Shore, and Marina Village.

Converting shopping malls into apartment complexes, in whole or in part, isn’t a new idea – but it’s one that has gathered momentum as a result of the shift to online shopping and the effects of the pandemic.  The Terner Center at the University of California recently praised what it called “residential redevelopment” as “present[ing] an opportunity to achieve multiple policy goals.”  Developers don’t necessarily share those goals – but they’re always looking to make a buck, and apartment buildings have become more profitable than retail outlets.  “America’s vast stock of fading shopping infrastructure,” Bloomberg City Lab recently concluded, could “get a second life as places to live.”

The phenomenon has even reached into Alameda.  In July 2019, Jamestown Properties, which had owned the South Shore shopping center since 2011, announced a proposal to build up to 1,215 apartments on the site, with stores and other businesses remaining at the center’s core.  But the proposal died after Jamestown sold the property.

For any significant residential development to occur at South Shore, the City would need to change the zoning from its current C‑2 designation, which allows housing only above retail stores.  But in the draft Housing Element Mr. Thomas has set his sights on a broader goal.  He wants Council to rewrite the zoning ordinance to allow all shopping centers in the city to do what Jamestown proposed to do at South Shore.

Under the draft, the C‑2, MX, and NP‑W zoning designations would be amended to (1) remove the multi-family housing prohibition; (2) permit multi‑family housing by right, provided that at least 75 percent of the ground floor space at the shopping center is reserved for commercial retail and service uses; (3) remove the prohibition on residential densities above one unit per 2,000 square feet and permit at least five units on lots of 5,000 square feet (one unit per 1,000 square feet or 43.5 units per acre), and (4) require that all new residential and mixed-use buildings be at least 30 units per acre.

Taken together, the five shopping centers comprise approximately 100 acres, of which about 50 percent is devoted to surface parking lots.  In the draft, Mr. Thomas estimates that, if the proposed zoning changes are adopted, 1,000 new housing units could be built at the shopping centers over the next eight years.

Whenever he has discussed this issue publicly, however, the Planning Director has made it clear that HCD will insist upon more than a ballpark estimate before it approves a Housing Element with 1,000 units attributed to shopping centers.  As he told the Planning Board, “we’re going to need to back that up with evidence – and the best evidence . . . is going to be the acknowledgment and participation of the actual property owners.”

So far, Mr. Thomas reported, only the new owner of the South Shore shopping center has “expressed interest” in building housing on its site – 800 units over the next eight years.  Staff has “reached out” to the other four owners, and Mr. Thomas is “hoping” that he will be able to find support for the 1,000‑unit number contained in the draft Housing Element.

And now we’ve arrived at what may be the most controversial aspect of the rezoning proposed by the draft:  abolishing, for all property currently zoned for residential use, the multi‑family prohibition and density limitation established by Article XXVI.

There are six residential zoning designations, R‑1 through R‑6, in Alameda.  As the map below shows, the vast majority of residential lots are zoned either R‑1 (9,655 parcels) or R‑2 (1,579 parcels):

As we reported a while ago, SB 9, which was signed by Governor Newsom on September 19, makes it possible for a homeowner or developer in Alameda to put two housing units on any lot zoned R‑1 and, further, to subdivide that lot and put two units on each portion for a total of four units, Article XXVI notwithstanding.

At the Planning Board meeting, however, Mr. Thomas voiced skepticism that SB 9 would lead to construction of very many new housing units in Alameda.  Even without the new law, he pointed out, single-family homeowners already could add a second unit by building an Accessory Dwelling Unit as large as 1,200 square feet in their backyard.  What SB 9 added was the ability to subdivide the lot and sell the second unit.  But how many owners, Mr. Thomas wondered, would avail themselves of that opportunity?  “Maybe we induce some additional units with SB 9,” he concluded. “I don’t know [that] it doubles the number of units being built.”

Whether to go beyond the authority conferred by SB 9 for parcels zoned R‑1 was still being debated, Mr. Thomas told the Planning Board.  In the meantime, however, he proposed comprehensive changes to the residential zoning ordinances that, he said, would result in additional housing units being built in neighborhoods across town.

Under the draft, the multi-family prohibition and the 21‑unit‑per‑acre density limitation would be eliminated in all residential districts.  Multi‑family housing by right and two units per parcel would be permitted on any “existing residentially zoned” lot.  Presumably, SB 9 would govern parcels zoned R‑1.  For parcels zoned R‑2 through R‑6, at least five units would be permitted on lots of 5,000 square feet or more (one unit per 1,000 square feet or 43.5 units per acre).  Finally, all new residential and mixed-use buildings would be required to have at least 30 units per acre.

Mr. Thomas told the Planning Board that these zoning changes could yield 500 new housing units over the next eight years.  He based that estimate, he said, on the City’s experience with ADUs:  after the zoning ordinance was amended in June 2017, the number of new ADUs increased from about one unit every four years to an average of 60 units per year.  Surely, he argued, it was reasonable to expect an equivalent number of new “second units” if the residential zoning ordinances were changed.

We’re sure that Mr. Thomas made his estimate in good faith – but we also know that the number he picked has both practical and legal significance.

As a practical matter, 500 is just about how many new housing units Mr. Thomas calculates the City must get from residential districts in order to meet its RHNA quota.  In addition to the 200 new units on Park and Webster Streets and the 1,000 new units from the shopping centers we’ve already discussed, the Housing Element draft counts against the quota 1,400 units that have been approved but not yet been built in various projects; 1,282 new units at Alameda Point and 589 units at Encinal Terminals (based on the assumption that a super majority of Council will approve revised deals for those sites); and 480 new ADUs.  Add up all of those items and you get 4,971 units.  That’s still short – 382 units short, to be precise – of the 5,353‑unit RHNA quota.

Essentially, Mr. Thomas is relying on the proposed residential zoning changes to fill in the gap.  Indeed, he described the residential districts as a “reservoir” for meeting the RHNA quota.  If any of the other sources identified in the Housing Element draft fails to materialize or hit its target, he said, the City will need to tap that reservoir and put additional new units into the neighborhoods “because there’s no other place to put them.”

The argument Mr. Thomas is making fits neatly with the legal rationale previously offered to justify zoning changes inconsistent with Article XXVI.  If creating a multi‑family overlay in 2012 can be defended as having been necessary to enable the City to meet its RHNA quota for 2007‑13 and 2014‑22, then rewriting the residential zoning ordinances now to eliminate the multi-family prohibition and density limitation is equally defensible on the grounds that it is necessary to enable the City to meet its RHNA quota for 2023‑31.  In either case, under the preemption doctrine, the duty to comply with state law trumps the Charter provision.

But what if the changes proposed by the draft aren’t necessary to make it possible for the City to meet the RHNA quota?  Suppose more than 200 new units could be built in the Park and Webster Street business districts or more than 1,000 new units could be built at the shopping centers such that the total inventory, as augmented, comes to 5,353 units?  (A July “preliminary site inventory” showed 300 new units at the former location and 800‑1,200 new units at the latter.)  In such a case, there would be no need to rezone the residential districts – and, absent such a need, there would be no basis for finding Article XXVI preempted.

Alternatively, suppose Mr. Thomas has underestimated the effect of SB 9, and, in fact, the statute by itself will spur construction of around 400 new units without any other zoning changes.  (The Terner Center projected that an additional 700 units would be built in Alameda as a result of SB 9.)  In such a case, the additional units resulting from the statute would cover the shortfall and there would be no need to rezone every residential district in Alameda in order to meet the RHNA quota – and the preemption argument would collapse accordingly.

We don’t know how a judge would rule on this issue, and, indeed, it probably never will go to court:  Who’s going to pay the litigation costs to challenge whatever decision Council ultimately makes?  But if Council approves the draft Housing Element and the legality of its action went before a judge, there is one other legal argument the City might consider offering in defense.

The City last submitted, and HCD last approved, a Housing Element in 2014.  But since then state law has changed in at least one material respect:  Now, the Housing Element not only must show how the city will meet its RHNA quota but also must demonstrate how it plans to “affirmatively further fair housing.”  The latter duty, HCD has emphasized, affects the identification of residential sites.  Among other things, it requires a city to “[e]nsure that sites zoned to accommodate housing for lower‑income households are not concentrated in lower resource areas and segregated concentrated areas of poverty, but rather dispersed throughout the community, including in areas with access to greater resources, amenities, and opportunity.”

Mr. Thomas is well aware of this obligation.  Indeed, he reminded the Planning Board that, because of it, Alameda cannot plan to put all of the new housing units in “low opportunity” areas like Alameda Point or the West End, but rather must spread them throughout the city, including in “high opportunity” areas like the East End.

We suspect that Mr. Thomas was making this point to rebut suggestions that the City could meet its RHNA quota simply by getting the Navy to remove the cap on residential development at the Point and then sticking all of the new units on the former base.  But his remarks prompted us to wonder whether one could use the “fair housing” law as an alternative justification for the residential zoning changes proposed in the draft Housing Element.

The argument goes like this:

  • State law obligates Alameda to “affirmatively further fair housing”;
  • According to HCD, this duty includes adopting “strategies” and taking “actions” designed to encourage development of new affordable housing in “high-resource areas”;
  • Permitting dense multi-family housing throughout Alameda would promote construction of new affordable units in the city’s wealthier neighborhoods;
  • The proposed residential zoning changes thus ensure compliance with the “fair housing” law, and, as such, they preempt the restrictions imposed by Article XXVI.

A careful reader will have noticed that nowhere in this argument do we use the word “necessary,” nor do we contend that rezoning residential districts is the only, or even the best, way to encourage development of new affordable housing.  This is a distinction that might make a difference to a judge.  But the argument is not implausible on its face.  If the City ever has to use it in a court, just tell us where to send our bill.

Sources:

Draft Housing Element: 2021-10-25 Ex. 1 to staff report to P.B. – October Draft Housing Element; 2021-10-25 staff report to P.B.

Staff reports & presentations: 2020-12-01 staff report re RHNA methodology; 2021-01-25 staff report to P.B.; 2021-01-25 Power Point Presentation to P.B.; 2021-02-02 staff report; 2021-02-02 Ex. 1 to staff report – Information Sheet; 2021-02-02 Presentation; 2021-03-08 staff report to P.B.; 2021-06-14 staff report to PB; 2021-06-14 Ex. 2 to staff report – June 2021 Draft Housing Element Housing Opportunity Sites Table; 2021-07-06 staff report; 2021-07-06 Ex.1 to staff report – Draft Housing Element Housing Opportunity Sites

About Robert Sullwold

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

11 Responses to Measure A: tell it goodbye?

  1. Andy Crockett says:

    The base is the space, to coin a slogan, and resources, amenities, and opportunities can be developed there as opposed to densifying (can’t believe that’s a word) existing multi-use zones and shopping centers, let alone the R-1 and R-2 designations. At some point, if we aren’t already there, the quality of life for everyone suffers as “Alameda” remains familiar by name only. We’ll build monorail people movers and develop the vertical space, but as the city provides pedestrian, bike, and scooter-only thoroughfares, more and more cars will stay in the garage, and that is good. But if they develop the parks, I’m gone.
    I wonder if island cities have any special leverage against state housing requirements. I also wonder what “staff” means in the context of Robert’s very informative, if depressing report.
    On a more positive note, it was so great to see so many kids trick-or-treating amidst the amazing, Disneyland-worthy Halloween decorations in the older, wooded residential neighborhoods tonight.

    • NIMBYs Gonna NIMBY says:

      You’re not the first or last to use the “build everything at the base” mantra. The state requires that we build our new homes equitably, throughout different parts of the city, rather than stacking them to one part of the town. San Diego tried this and got rejected. It’s a bit exhausting to see old arguments from November 2020 being recycled a year later, please keep up if you want to make informed opinions.

  2. Common Sense says:

    I also enjoyed handing out candy and seeing kids enjoying Halloween. We’ve done a terrible thing to kids over the last 18 months and although my kids are grown, I think parents have difficult health decisions coming about vaccine mandates for school kids.

    Sixty units per acre? We are approaching the tipping point. I suppose for the right price the landowners could bulldoze or break up old houses and put up multiple unit dwellings causing much higher density but what if quality of life is more important? We have to live here or move somewhere else. Bottom line-I won’t support any city council member who votes for this.

  3. David says:

    And everyone ignores the double counting in ABAG numbers….

    https://www.planningreport.com/2020/12/21/cant-fix-what-you-cant-measure-correcting-record-double-counting-state-rhna-numbers

    There is a Price to Be Paid: the RHNA Targets Aren’t Just Suggestions

    To an engineer, the words ”the numbers don’t matter” signal cognitive dissonance. Gauging the size of California’s affordability crisis does matter, especially when the problem has been cited as California’s most important. It particularly matters when the current state methodology produces an estimate that is more than twice that produced by previous state methodology (a methodology that was in use for two decades). And it matters because the state can enforce the targets through punitive action. There are two ways in which cities are now held accountable for the housing targets:

    • NIMBYs Gonna NIMBY says:

      The “double counting” myth has been debunked. Your post is from December 2020. Cities made the appeal to ABAG and I believe all (or nearly all?) including Alameda, had their appeals rejected. Alameda proposed a much lower number and that was rejected. My point is, why rethread an old argument? It’s time to move on, be the adults in the room, and build a livable California for our children that we’ve been enjoying – that means having to do our part in building the number of homes needed to meet housing demand by young and growing families.

      • David says:

        The double counting myth has NOT been debunked. Just because ABAG rejected appeals doesn’t mean their numbers are good.

  4. Paul Foreman says:

    Thank you for your very informative and thought provoking article. However there is a strong counter argument to up-zoning R-2 to R-6 zoning districts. Below is a long quotation from ACT’s letter to the Planning Board.

    “Many of these neighborhoods already contain pre-Article 26 multi-family housing, so that in actuality they are already far in excess of the one unit per 2,000 sq. ft. requirement or the multi family dwelling restriction. To make these same neighborhoods available for new development at one unit per 1,000 sq. ft. will create a level of density that is unsustainable regarding parking, water, sewer and other infrastructure needs, and reduction of our urban forest protection against carbon dioxide and heat. We also wonder what consideration has been given to whether the existing antiquated infrastructure providing utility services to these neighborhoods can handle this increased density, and who will pay for upgraded infrastructure if needed.

    It is possible that some of our R-2 thru R-6 zoned neighborhoods may, in fact, be “underutilized”. However, to assert that all R-2 thru R-6 neighborhoods have the capacity for more density defies logic and common sense. The Planning Department needs to define the term “underutilized” and do a block by block capacity study before proposing the up-zoning of any of these neighborhoods.

    We note that allowing five units on 5000 sq. ft. lot will automatically subject the project to our inclusionary ordinance which will require at least one unit to be affordable. That one unit will constitute 20% of the project and qualify the project for a density bonus of one more market rate unit, so that the result will be six units on the lot.”

    With regard to your suggestion that up-zoning these districts will promote the fair housing goals, the draft housing element states that the fair housing goals must be achieved without displacement of current residents. Here is another quote from the ACT letter that addresses this issue.

    “We also assert that up-zoning these neighborhoods will actually conflict with the fair housing goals listed in the housing element draft. These neighborhoods are already the source of some of the lowest rent housing in the city, so that any new development will necessarily result in major displacement of lower income Alamedans. The policy statement on HE-13 at page 18 addresses this issue. (by providing priority to displaced tenants to move into new units at the same rent) However, as a practical matter, it cannot be implemented because increasing the density will significantly increase the land value of development sites. This, along with high construction costs (and loss of Prop 13 real estate tax base) will inevitably result in higher rents that current residents will be unable to pay. Instead of fair housing the result will be gentrification.”

    The above inserted parentheticals are ours.

    If anyone doubts the severity of the displacement issue, just take a walk down any of our R-2 thru R-6 districts and instead of just admiring the lovely homes that give the appearance of single family dwellings, count the number of mail boxes at each address.

  5. richard94501 says:

    Interesting twist. When the city received a planning grant for the Waterfront and Town Center Plan at Alameda Point, it was a Priority Development Area. One day it’s touted as an area with huge potential and now with million dollar condos, the next day the city points to “concentrated areas of poverty” as a reason not to “concentrate” new multifamily housing there.

    • NIMBYs Gonna NIMBY says:

      Is it really a “twist,” though? I do not think these are mutually exclusive statements. Let’s keep making Alameda Point better, but the rest of Alameda isn’t off limits either. Bay Farm, for example, is transit- and job-rich, there’s absolutely no reason not to densify Harbor Bay Landing and the athletic club. South Shore mall is still struggling, they could benefit from having residential units on top of retail stores like they’ve done with Bay Street to boost foot traffic.

  6. Still Yes on Z says:

    I worked on the failed Measure Z campaign, for which I’m proud of, and during the election night concession speech, Mayor Ashcraft told everyone that “the last chapter hasn’t been written on this.” For months, I have warned the Article 26 supporters that they needed to offer real solutions – “No on Z” itself is not a plan, but an absence of one – otherwise the state would erode or even steamroll the city charter on housing. Imagine my lack of surprise when these individuals, Trish Spencer, Sylvia Gibson, Carmen Reid, Karen Lithgow, etc crowed their victory on election night but then went AWOL in the following months without offering any solutions to help preserve Article 26. Paul Foreman, and to a lesser extent, Tony Daysog, were the only ones to try, which I commend.

    My point is, densifying in Alameda is going to happen, whether we want it or not. We can either work together to control what that looks like, or abdicate comtrol to the state and its various mechanisms to do the work for us. There really is no third option here.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s