Most New Housing is Not Affordable Housing

Most New Housing is Not Affordable Housing

Some people believe that Measure A is discriminatory. The claimed discrimination (against poorer people, or people of color) is due to an assumption: that apartments are affordable. The assumption that apartments are affordable may have been true at one time. It is not true any longer.

The push to repeal Measure A is justified by the claim, “Alameda will be more inclusive.” This is, largely, a false statement. As in Berkeley and Oakland, lower income people will not be able to afford those newly constructed units.

Private investors are only interested in building luxury apartments. “Due to high land costs and using union labor, it is not feasible to build working class “C” apartments...” Joseph W. DeCarlo, Apartment Owners Association News, July 2020. In Alameda, a developer has to designate 15 of every 100 units as “affordable” (less if qualified for density bonus).

Affordable, in this context, is defined by the U.S. Department of Housing and Urban Development (HUD) and the California Department of Housing and Community Development (Cal DHCD). HUD has defined affordable housing as costing no more than 30 percent of a household’s gross income. Per Cal DHCD, “lower income” means 50 percent to 80 percent of local area median income. Median is defined as the center figure in a list of numbers.

According to the Census, the median income of the City of Alameda is $98,150. Getting out the calculator, that means a “lower income” person, per the Cal DHCD definition, in Alameda makes between $49,075 and $78,520 per year. To put this in perspective, a person making $15 per hour and working a 40-hour week makes $31,200 a year and the average salary for an Alameda high school teacher is $55,076 per year.

Therefore, a developer could set the rent for his apartment units at $1,963 per month (30% of 80 percent of median income, on a monthly basis) and claim they are “affordable units.” Also note that the developer only has to designate 15 out of every 100 apartments built as “affordable.” Will the small number of apartments with rents at this level aid diversity? I don’t think so.
Therefore, there is no reason to permit private developers to build apartment houses, because the lower income people we want to benefit won’t be able to afford them.

What about nonprofit developers? Nonprofits depend on grants, mostly from different branches of the government. The same pressures of high land cost, materials costs and labor costs also affect nonprofits. “Affordable” apartment houses can cost a lot of money to build. The Los Angeles Times found six affordable housing developments in California — all in the Bay Area — that have eclipsed $900,000 per apartment to build as well. Half opened in the last year and the rest are under construction, according to Liam Dillon, Ben Poston and Julia Barajas of the Los Angeles Times. One of these projects is in Alameda. Everett Commons, first announced as containing 36 apartments, is opening with 20, due to skyrocketing construction and labor costs (Los Angeles Times, April 24, 2020).

The bottom line is that new construction — the only solution proposed by groups seeking to repeal Measure A — is not going to solve the affordable housing crisis. The affordable housing crisis occurred when the once affordable housing of the East Bay was turned, over the last ten years, into unaffordable housing. A new study claims San Francisco and Oakland are the most “intensely gentrified” cities in the United States (Jul 6, 2020 Building more housing for the gentry will not solve the sad fact that many people cannot afford rent in this area.

Some possible solutions:

Lobby the state to expand the Section 8 program. Turn all the empty store fronts and stores — on Webster and Park streets, the building that was once Pagano’s and the empty complex at High Street and Fernside Boulevard — into housing. Retail is not coming back.

If the trend to have people work from home continues after the pandemic subsides, there will be a lot of empty office buildings that can be rehabbed into nice apartments.

Lastly, I support the move to rename Jackson Park. Andrew Jackson was a miserable excuse for a human being. I propose naming the park after John Lewis, a lifelong fighter for civil rights and an inspiration to many, who recently passed.