As Oakland Allows Luxury Development, Advocates Question ‘Trickle-Down Housing’

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An ongoing construction project on Union and 5th Streets in Oakland. Housing advocates are concerned that only 7 percent of new Oakland housing construction has been affordable since Mayor Libby Schaaf committed to building 28 percent affordable units about four years ago. Photo by Zack Haber.

In the wake of a Nov. 5 City Council meeting during which the City of Oakland denied the East 12th Street Coalition’s (E12SC) appeal to stop UrbanCore from building a luxury housing tower on public land next to Lake Merritt, housing justice advocates are questioning the city’s ongoing plans to construct far more market-rate units than affordable ones.

“We are advocating for maximizing affordable housing on this precious piece of public land and Mayor Libby Schaaf and half the City Council is ensuring that a luxury tower will be put in our community,” said Dunya Alwan, a member of E12SC and a neighbor to the site. She says the luxury tower would contribute to “trickle-down gentrification” in her neighborhood, which she describes as “the single remaining working-class community by the lake.”

Her statements came after Schaaf gave a final vote to deny E12SC’s appeal, clearing the way for UrbanCore’s luxury housing tower. Schaaf’s vote was necessary as a tie-breaker as Council President Rebecca Kaplan and councilmembers Nikki Fortunato Bas, Noel Gallo and Sheng Thao voted to approve the appeal, while Council Members Larry Reid, Lynette Gibson-McElhaney, Loren Taylor, and Dan Kalb voted to deny the appeal.

UrbanCore’s luxury tower plans to have 253 market-rate housing units and 18 units for those that make 80 to 120 percent of the area median income. On the same public land, the East Bay Asian Local Development Corporation will build a mid-rise building with 90 affordable units. The E12SC had proposed an alternate development that would have 133 homes housing nearly 700 people entirely in affordable housing.

Schaaf’s vote aligns with public statements she has recently made claiming that constructing market-rate housing for those moving into Oakland helps to keep Oakland residents from being displaced and helps the city to construct more affordable units.

“New people are moving to Oakland…and we’re Oakland, we welcome all,” said Schaaf during a Sept. 18 recording of the Podcast “Gimme Shelter: The California Housing Crisis.”

“If I don’t build new housing for the new people, they are going to push you out and price you out of the lovely Lake Merritt apartment you have today. That is a rule of supply and demand.”

Peter Cohen, who for 10 years has co-directed the Council of Community Housing Organizations — a non-profit coalition that promotes developing permanently low-income housing — said Schaaf’s method is called “filtering.”

He said the method could be effective in helping to create affordable housing in some suburbs where land is cheaper and development is slower but it doesn’t work in crowded cities with expensive land. Some advocates have called filtering “trickle down housing.” The Alliance for California Community Empowerment Action (ACCE Action) has planned the March For Housing Now which is calling for East Bay residents to come to Mosswood Park on Nov. 23 to protest against “trickle-down solutions” to housing.

“When people throw filtering out there as a validation for market-rate development policy,” said Cohen, “it’s essentially a fallacy when you’re mostly talking about urban markets.”

Councilmember Bas called filtering into question at the Nov. 5 council meeting.

“Over the last four years we have approved over 9,000 units of luxury housing,” Bas said, “in that same time our homeless population has doubled. Luxury housing is not working in terms of fixing our housing affordability and displacement crisis.”

The Mercury News reported in March that in the last three years only 7 percent of new Oakland housing units were affordable, although Schaaf had originally pledged that 28 percent of new housing construction would be affordable.

Despite the shortfall, Schaaf has stuck to her plan and has begun adopting impact fees for market-rate developers to help create affordable units.

“Market-rate units create a need for protected affordable units,” said Schaaf in the Gimme Shelter Podcast, “so developers have to include protected affordable units in those new buildings or they have to write a nice big check to our affordable housing fund.”

Cohen is weary of relying on market-rate developers to fund affordable housing.

“[Local mayors] have started this narrative that market-rate housing is how you pay for affordable housing,” said Cohen. “I don’t agree with that, but I also think it’s a very risky place to go…because what it means for housing advocates is you’re now putting all your outcomes (dependent on) the private real estate market.”

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