Alameda Housing Development is Driven by Bad Local Policy Decisions, Not State Mandate

In his June 1, Alameda Journal article, our City Planner, Andrew Thomas states that our housing development is mandated by State law, leaving the City no choice, but to comply. He is correct is saying that State law requires Alameda to provide its fair share of new housing inventory to meet the Bay Area housing crises. However those laws do not mandate our current housing development policy, but are the product of decisions by his Planning Department, the Planning Board and City Council.

The State Housing Element Law sets a regional housing needs allocation (RHNA) for each municipality that requires the City to identify land available to meet affordable and market rate housing needs over an eight-year period.  Alameda’s RHNA for 2015-2023 is set at 975 affordable units and 748 market rate units. The Law also mandates that land must be zoned high density (30 units/acre) in order to make the construction of affordable housing financially feasible. Thus, the City had to increase the allowable density of some vacant land from the Measure A standard of 21 units/acre to 30 units/acre.

The first hole in Mr. Thomas’s assertion that State law mandates our current Housing Element is that the law provides that a municipality may appeal their RHNA and seek a reduction. The last RHNA was appealed by eight municipalities, three of which were successful.

Alameda is an island in a high risk earthquake zone. Many of the island’s improvements are built on fill and thus subject to liquefaction, including a significant portion of the land identified for high density residential development. We are dependent on the mainland for our water supply for all purposes including earthquake caused fires. Almost all of the land identified in our Housing Element for high density residential development is in a short and narrow strip of land on our estuary shore between Sherman and Park Streets. Because of all of this dense housing being in such a small area and in close proximity to the two mainland access points of the Tubes and Park Street Bridge, the normal metering effect that paces traffic to these points is very limited.

With all of the above unique conditions, Alameda has not filed an appeal of its RHNA, while its Planning Director continues to insist that we have “no choice” but to build this housing!

The appeal period has expired. Thus, the next question to ask is whether the City’s implementation of the Housing Element is actually addressing our need for more affordable housing.

There are basically two ways to build affordable housing: 1) directly financing construction by the Alameda Housing Authority and/or various non-profit affordable housing developers; and 2) soliciting market rate housing developers to include a percentage of affordable housing in their development proposals.

Alameda predominately uses the second option through the use of the State Density Bonus Law. This law gives a market rate developer additional market rate units 20 to 35% above 30 units/acre,  If he offers 15% of the initial 30 units per acre as affordable housing (4.5) units, he gets 6 more market rate units on that acre, raising the density to 36 units/acre. As the affordable unit percentage offer increases, the bonus increases to a maximum of 10.5 extra market rate housing units on that acre, raising the density to 40.5 units/acre.  Thus the actual percentage of affordable housing achieved by this method falls in a range of 12.5% (4.5/36) and 25.9% (10.5/40.5).

Alameda has chosen to require developers to provide only the minimum 15% affordable housing level. The City has approved projects entitled to credit against its current RHNA totaling 2336 units with only 426 affordable and 1910 market rate.  However this 18% affordable housing return (426/2336) is misleading with regard to the future because it includes 800 units at Alameda Point Site A, 200 of which will be affordable due to a 2004 settlement of a housing advocacy lawsuit against the City wherein the city agreed to a special 25% inclusionary rate for Alameda Point. Subtract that from the totals above and you get, at best, a projected future affordable housing return of 14.7% (226/1536).

Thus, we are currently 1162 market rate units over our market rate RHNA (1910 –748) and 549 units under our affordable RHNA (975-426). If we keep to our current minimum 15% inclusionary rate, we will have to approve over 3500 additional units to meet our affordable goal by 2023, of which almost 3000 will be market rate. Even Mr. Thomas must admit that our 2023 affordable housing goal is a unachievable.  Thus, we are addressing our critical need for affordable housing with a policy that has almost the opposite effect, creating a surplus of market rate housing that is crowding out affordable housing!

It does not have to be this way. The City could raise the minimum inclusionary rate to 25 or 30%, albeit with the downside of raising the density from 36 to 40.5 units/acre. (Some argue that this would discourage developers, but this is belied by the development at Site A in Alameda Point which is giving us 25% affordable housing, contributing significant funding for infrastructure, and even waiving its rights under the Density Bonus Law which would give it at least an additional 200 market rate units!)

The City could retain its 15% inclusionary rate but also impose an affordable housing impact fee (authorized by State law) of thousands of dollars for each market rate unit, thus creating a trust fund for direct financing of affordable housing.

The point of all of the above is to refute Mr. Thomas’s assertion that State law mandates our current course. On the contrary, the City had many options ranging from appealing its RHNA to restructuring its affordable housing requirements, all of which the City has thus far failed to address.