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Oakland’s housing woes: a classic bind

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Monday’s report, in the San Francisco Chronicle, that the city of Oakland has surpassed San Francisco in new apartment construction came as no surprise to those of us who, like me, live at the epicenter of the new development, in the so-called “Broadway-Valdez Corridor.”

In the last two years or so, Oakland, with less than half the population of San Francisco, has built, or is building, more than twice as many apartments (both rental and condos). That’s never happened before; the Chronicle’s reporters attribute it to Oakland’s laxer development costs (including the price of land) and lower taxes, contrasted with San Francisco’s very high taxes and fees on construction and a super-cumbersome approval process that can stall projects for years.

But there’s more to it than that. Geographically, Oakland sits at the bullseye center of the Bay Area. Surrounded by major freeways, with BART running right through the heart of the city, Oakland is a perfect place for young Millennials who work here, or in San Francisco, or in Silicon Valley, or out in the Tri-Valley area: together, those regions account for close to 100% of all the new tech and tech-related jobs. While it’s true that new office construction in Oakland is just a tiny fraction of what it is in San Francisco, it almost doesn’t matter; with the buses, subway, car pools and driving amenities like Uber and Lyft, younger workers don’t have to live close to their jobs.

As a result of the new influx, Oakland’s profile is changing, fast. When I moved here, in 1987, Oakland was a rather sleepy city. It always played second fiddle to San Francisco. There wasn’t a lot going on. My neighborhood—the Broadway-Valdez Corridor—was considered part of downtown Oakland. It consisted of older apartment housing stock (most of it dating back to the 1960s and 1970s), with a few fine, old single-family houses, many of them by such renowned designers as Bernard Maybeck and Julia Morgan, in various states of disrepair. Broadway itself, which from the 1920s through the 1960s was a lively stretch of department stores and office buildings, had begun slowing down. The 1989 Loma Prieta Earthquake finalized that process: downtown Oakland was heavily hit, and building after building shut down. The department stores closed; the retail shops became nail parlors, second-hand clothing stores, dive bars.

All that began to change when Jerry Brown became Mayor. His two terms (1999-2007) saw a concerted outreach to developers. Up sprouted Oakand’s first condo and rental developments in decades. By the early 2000s, real estate interests redubbed my neighborhood “Uptown,” to distinguish it from “Downtown” and to make it sound hipper. The process continued under all subsequent Mayors, up to and including our present one, Libby Schaaf.

With the new housing came increasingly fierce criticism from affordable housing advocates, who pointed out, correctly, that the new apartments and condos were too expensive for lower-paid workers to afford. This criticism was entirely true. The newest apartments, some of which haven’t yet come online, average more than $3,000 a month for a small one-bedroom unit, while condos can cost upwards of $750,000. This is part of Oakland’s changing demographic. The city benefited from San Francisco’s own housing crisis in the 1990s, which forced out thousands of artists, musicians, dancers, writers and entrepreneurs; many of them found their way across the Bay Bridge to Oakland. Now, those artists and musicians are being forced out yet again.

Where do they go? North, South or East, inland, to places like Redding, or Tracy, or Sacramento—or they leave the Bay Area altogether. This is probably the toughest challenge Oakland faces: the displacement of all those people. African-Americans, too, are caught up in this vicious cycle of upward-spiraling apartment prices.

It’s very easy for affordable housing advocates to demand that the city build more units. They argue that Oakland owns lots of buildings, or acreage where existing buildings can be torn down and replaced with inexpensive apartment complexes. What they consistently fail to realize is that cities aren’t in the business of being real estate developers. They don’t have the money or expertise to do so. What cities can do is encourage private developers to come in and build; and this is what Oakland has been doing. Unfortunately, for those on limited incomes, the process isn’t happening fast enough, and the new apartments and condos, as I said, are far from affordable.

But you can’t force a developer to build something if he can’t make a profit on it, and let’s face it, affordable housing, while desirable, doesn’t turn a profit for the people who build it. This is precisely where Oakland, and so many other cities, finds itself: caught between the devil and the deep blue sea. When and how the process resolves itself, if it ever does, can’t be foreseen.

  1. J.K. Dineen says:

    Hi Steve — This is JK Dineen from the Chronicle. I’m interested in doing a deep dive into the Broadway Valdez neighborhood — how the housing projects are doing, what it’s like to live there, how the retail is shaping up etc. I’m wondering if you would be able to meet for coffee or a drink and maybe show me around a bit? I’m hoping to do the story this week, probably for the weekend. My cell is 415-828-5788. Desk is 415-777-7366.

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