In late June, several Richmond City Council members advocated downsizing the Richmond Police Department and using the savings to hire more city staff in the Planning and other departments to “bring more affordable housing to Richmond,” citing a successful program in Oakland where as many as 20 city staff members are dedicated to creating affordable housing.
I am always skeptical about emulating Oakland, and I said so regarding this idea. Now I know why. An East Bay Express article yesterday revealed that Oakland is not exactly leading the affordable housing challenge, with “Only Six Percent of Housing Under Construction in Oakland Is Affordable.” Like all cities, including Richmond, Oakland has a robust affordable housing strategy, but it doesn’t seem to be working all that well.
The Median rent in Richmond is $2,500, and flat (down significantly from a year ago), while the median rent in Oakland is $3,435 and rising.
Even without special programs, Richmond remains the most affordable community in the inner Bay Area.
Richmond needs more housing at all income levels, and all market rate for-sale housing constructed in Richmond results in millions of dollars being added to our affordable housing fund because of our inclusionary zoning requirements. In fact, with redevelopment and other traditional sources of affordable housing subsidies no longer available, the revenue generated through inclusionary zoning is the largest source of subsidies for affordable housing left.
Another very effective program is the use of Social Impact Bonds to rehabilitate vacant and foreclosed properties for new low income homeowners. Richmond is unique in the U.S. for implementing this program, and it is being accomplished by largely Richmond Community Foundation and Mechanics Bank.
We don’t really need Oakland to show us the way. Maybe we have this figured out on our own.
Only Six Percent of Housing Under Construction in Oakland Is Affordable
by Darwin BondGraham
August 11, 2017
- 11th and Jackson, one of the few affordable housing developments built recently in Oakland.
According to a new City of Oakland report, there are 18,793 housing units in the city's development pipeline, and 2,781 of these homes are already under construction.
But only 170 of the under-construction homes — 6 percent of the total — are being developed using tax credits or other financial tools to keep rents at affordable levels.
Meanwhile, the average market-rate rent for a one bedroom apartment in Oakland has risen to $2,400 per month, a level that's only considered affordable for people who earn upwards of $86,000 per year.
Half of Oakland's households earn just $54,618 per year, according to the U.S. Census.
While Oakland's thousands of soon-to-be-built market-rate homes should help address the region's supply-demand imbalance, it won't do much to help low-income renters who rely on subsidized housing for shelter.
The report notes that things could get worse due to uncertainty about the federal tax credits used by developers to finance affordable housing. According to the report, "the tax credit market has been volatile due to pending tax reform efforts since the change in national leadership. The value of credits is decreasing, thereby creating a financing gap."
The city report, which is an update to Mayor Libby Schaaf's 2016 Oakland at Home report, does list a number of accomplishments, however, that have helped preserve affordable housing, protect tenants against displacement, and create new funds for development.
For example, the city's Rent Adjustment Program office has a new, more user-friendly website. According to the report, materials on the old RAP website were written only so that someone with a post-graduate education could understand them. Now they're written so that people with an 8th grade reading level can understand the rules and what resources are available.
The city's recently approved infrastructure bond also will create millions in funding for affordable housing. The report states that the first bonds will be issued later this summer and will be used to help nonprofits acquire and rehabilitate hundreds of housing units.
The full report can be downloaded here: https://beta.oaklandca.gov/documents/oakland-at-home-update-2017