We need affordable and market-rate housing

Housing complexes with line of people and cars
Chi Park/Staff

The housing crisis in Berkeley and the greater Bay Area is not an unfamiliar narrative to most. Many residents agree that there is a problem, but they disagree on how to solve it.

Last month, Berkeley City Council approved Shattuck Green Terrace Apartments, an 18-story, 274-unit apartment building in Downtown Berkeley. This decision was controversial — some residents wanted to protect the views and others pushed for the inclusion of affordable units. But to effectively combat the housing crisis, the city must build both market-rate and affordable housing. Since 2012, Alameda County has experienced an influx of 125,000 jobs but only 27,505 homes, according to a report from the Bay Area Council Economic Institute. The insufficient supply of both types of housing is what exacerbates the crisis and drives up rents.

Supporting this project was not a disregard of the “importance of affordability,” as suggested by the Daily Californian Editorial Board. Rather, it was an acknowledgement that the housing crisis needs urgent and informed action, not further delays.

When discussing policy solutions, it is important to make the distinction between affordable housing and the broader concept of housing affordability. The former refers specifically to low-income, government-subsidized housing. Increasing the supply of affordable housing is critical, but it alone will not fix the housing crisis. On the other hand, housing affordability means building up a community that is affordable, livable and inclusive for residents at all income levels.

Existing affordable housing programs only help a small portion of low-income Californians: according to a report from the California Legislative Analyst’s Office, or LAO, most “receive little or no assistance.” Yet, expanding access to low-income housing to everyone who needs it would cost the state tens of billions of dollars annually, which is roughly as expensive as the entirety of Medi-Cal.

Instead, the LAO recommends focusing on increasing overall housing supply — and yes, that includes market-rate, “luxury” housing. The construction of market-rate housing increases housing affordability for residents of all economic backgrounds. By meeting the demand for housing, it adds to the community’s stock of future low-income housing, reduces competition between middle- and low-income families, and slows the growth in prices and rents. In turn, this cuts down on housing costs for low-income households and lessens the displacement of Berkeley’s most vulnerable residents.

It is true that the Bay Area housing crisis is not just a crisis of supply and demand, but affordability as well. Our elected officials must also act with the utmost urgency to build more affordable housing — and in Berkeley, they are.

In the city of Berkeley, developers must either build a set percentage of affordable units or pay an affordable housing mitigation fee, which is added to the Housing Trust Fund and used to fund future affordable housing projects. In April 2016, Berkeley City Council voted to increase both the percentage of required affordable units, from 10 percent to 20 percent, and the mitigation fee, from $28,000 to $34,000 per unit. A year later, City Council voted to further raise the fee to $37,000. These policies address the immediate need for affordable housing by incentivizing developers to include affordable units in their current projects, rather than contributing to the trust fund.

But that does not mean that developers who still elect to pay the mitigation fee are enemies of affordable housing. Instead of building affordable units, the 2190 Shattuck developer opted to pay $10.1 million into the Housing Trust Fund, which is one of the largest contributions to date.

The importance of this funding must not be downplayed. In March 2018, Berkeley City Council voted to grant additional funding for the Berkeley Way project — the city’s largest-ever affordable housing undertaking, which will supply 186 permanent affordable housing units for Berkeley’s homeless, veteran and low-income residents.

Such a large-scale, comprehensive response to the city’s housing crisis was only achievable because of the $2.2 million in funding provided by the Housing Trust Fund. The Berkeley Way project completely depleted the fund, making it harder for the city to move forward with any new affordable housing plans.

This is precisely why the Shattuck Green Terrace Apartments’ contribution to the trust fund is so crucial. The $10.1 million will not only replenish the fund, but also allow the city to leverage it for additional outside funding at a four-to-one ratio. In addition, $2 million of it will be paid within 18 months, which, according to Mayor Jesse Arreguín, will help the city build affordable housing more quickly. Dismissing the Housing Trust Fund as a way to “postpone these crucial solutions to a date far in the future” is short-sighted and reductionist. In fact, this fund is the very mechanism by which groundbreaking affordable housing projects such as Berkeley Way are made possible.

While we agree that Berkeley needs more affordable housing, delaying good market-rate housing projects in pursuit of perfection is not productive in the midst of our housing crisis. The City Council, Zoning Adjustments Board, Design Review Committee, community members and other stakeholders have been working on the creation of the Shattuck Green Terrace Apartments since 2016. This project is the result of almost three years of deliberation and community input. Ultimately, it will encourage transit-oriented living, provide much-needed funding for affordable housing and help alleviate the housing crisis.

Angie Chen is a junior at UC Berkeley and is the local affairs director in the ASUC Office of the External Affairs Vice President. Ella Smith is a sophomore at UC Berkeley and is the director of housing and local affairs in the ASUC Office of the President and a former news reporter for the Daily Californian.