October 31, 2014

Will Berkeley’s Demolition Ordinance preserve affordable housing?

A projected sketch of the Acheson Commons project at University Avenue and Shattuck Avenue in Berkeley. Courtesy of Equity Residential.

A projected sketch of the Acheson Commons project at University Avenue and Shattuck Avenue in Berkeley. Courtesy of Equity Residential.

Corrections made July 16 to the description of the second set of amendments.

Affordable housing is critical to the state’s Sustainable Communities Strategy. Affordable housing along transit corridors and in walkable areas gives a chance for people with lower earnings to live close to where they work, rather than commuting into town, as many do now, in Berkeley in particular.

But what happens to affordability when an owner wants to demolish a building containing rental units subject to rent control? Because of long-standing disagreements over interpretation of the Berkeley Demolition Ordinance in such situations, the City Council is considering amendments.

On June 4 the Council was set to vote on new language. This language, from the Sierra Club’s perspective, would have been a “good” compromise. It would make demolitions of certain types of buildings easier, but would provide that if any rent-controlled units are demolished to clear the way for new development, the developer must create an equal number of new units perpetually priced at low-income levels. This would be whether these rent-controlled units were rented or vacant at the time of the application for the demolition, and the requirement would be in addition to any other affordable-housing requirements. The compromise language appeared to resolve most of the previous disagreement. A majority of the Council (Mayor Bates and Councilmembers Anderson, Arreguin, Maio, and Worthing­ton) supported this draft, but the meeting ran out of time.

At the following meeting, a different Council majority (Mayor Bates and Council­mem­bers Anderson, Capitelli, Maio, Moore, and Wengraf) voted to refer a much-changed set of amendments to staff. These amendments would have a weaker set of rent restrictions.

  • A sitting tenant would (as in the previous ordinance) have the first right of refusal to move into the new development, at their last rent ceiling prior to the demolition. If they decline to move in, the first tenant would get the replacement unit at the same rent ceiling.
  • If a unit to be demolished has been vacant for more than five years, or the last rent is not known, the replacement unit would initially be set at a low-income rent level.
  • If a unit to be demolished has been vacant for less than five years and the last rent is known, the replacement unit would initially have the same rent ceiling as under the last-known previous rent ceiling.

In any of these cases, however, once the first tenant would vacate the replacement unit, the owner could rent it at market rate (subject to rent-control-“like” restrictions). The developer could also opt to not replace the old units and pay $20,000 per demolished unit into the City’s Housing Trust Fund. In short, rent control (but with unlimited rent increases allowed every time a new tenant moves in) would replace permanent afford­ability—or developers could simply pay it off.

Why did three councilmembers switch in one week to supporting these much weaker affordability protections? One reason may be that numerous developers contacted the Coun­cil opposing the earlier draft. One of the most fervent was Equity Residential, the nation’s largest developer of residential housing and the property-owner behind the 205-unit Ache­son Commons proposal in Downtown Berkeley.

(The Sierra Club supported the appeal of the Alameda County Building Trades against construc­tion of this project, due to inadequate community benefits around housing and labor; see April-May Yodeler, page 4. The City Council remanded the appeal to the Berkeley Zoning Adjustments Board (ZAB), which in June approved the project with added conditions.)

Equity argued that providing affordable housing would be an onerous requirement, and that rent-control equivalency would be more appropriate. Affordable-housing advocates and the Sierra Club pointed out in reply that market rents, applied to new tenancies regardless of rent control, would likely be between $2,000 and $3,000 per unit (or even more!) in the replacement housing. Further, it is not clear that restrictions on new construction that resemble rent control are legally enforceable under the 1995 state Costa-Hawkins Act, which prohibits rent control in new construction. (Ironically, as a condition for ZAB’s approval of Acheson in June, Equity agreed to either move or replace on-site the eight rent-controlled units that stood in the way of the project, in either case creating eight perpetually affordable units at low-income levels—the very policy that Equity is so vociferously fighting.)

On July 2 the City Council discussed the changes that staff had made based on the June 11 referral. By then, in a show of agreement rare for Berkeley, a number of disparate organizations—including the Sierra Club, the Berkeley Architectural Heritage Association, the East Bay Community Law Center, the Berkeley Neighborhoods Council, and the Berkeley Tenants Union—all opposed this new draft. Recognizing the solid public opposition to this draft, the Council unanimously referred both the “good” June 4 and the “poor” July 2 draft to the Berkeley Planning and Housing Advisory Commissions for further review. Both are slated to take up this item at their September meetings. This will provide an opportunity for the Sierra Club and other stakeholders to work with the city to devise language that will truly reduce greenhouse gases and provide affordable housing.

To get involved and to learn about further developments, contact Sierra Club Northern Alameda County Group chair Olga Bolotina at Olga.Bolotina.ab@gmail.com.

You can read the “good” June 4 Demolition Ordinance draft at www.ci.berkeley.ca.us/Clerk/City_Council/2013/06Jun/Documents/2013-06-04_Item_24_Zoning_Amendments_to_BMC.aspx, and the “poor” July 2 draft at www.ci.berkeley.ca.us/Clerk/City_Council/2013/07Jul/Documents/2013-07-02_Item_17_Zoning_Amendments.aspx.

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