Opinion: Will Berkeley kill new housing? Berkeley residents should stand up for responsible policy making

By relying on outdated information, the City Council is putting hundreds of affordable housing units and millions of dollars in funding at risk.

By Eric Panzer

Eric Panzer is a UC Berkeley graduate with a background in environmental science and city planning. He serves as Board Chair for Livable Berkeley and has also been involved in numerous local political campaigns. 

When the U.S. House of Representatives voted to repeal Obamacare before they even knew the consequences, experts across the country called it irresponsible. How in good conscience could the House take such an important action before the Congressional Budget Office had fully assessed impacts to the budget and healthcare access?

Here in Berkeley, we believe in careful policy-making that uses up-to-date information and rigorous analysis. But this coming Tuesday, the Berkeley City Council intends to make enormous changes to the city’s housing policies, with scarcely any analysis at all. The June 13 council agenda features no less than eight housing-related items. The two most impactful items alone propose over 10 different housing policy changes.

Taken together, these proposals could result in Berkeley losing out on hundreds of affordable housing units and millions of dollars in funding to support affordable housing. Even with sky-high rents, there is a limit to what new housing projects can bear in terms of fees and requirements. A recent analysis conducted by the San Francisco City Controller’s office showed that if San Francisco went too far with the demands it places upon new projects, the housing affordability crisis would get even worse. Yet Berkeley is poised to adopt requirements that are even more stringent than San Francisco’s.

Berkeley’s housing policies have been working, and we should consider the consequences before we radically alter them. For example, the Downtown Plan has resulted in hundreds of new housing units, millions of dollars in funding for affordable housing, and multiple mixed-income projects. The city should be exploring ways to replicate the success of the Downtown Plan, instead of rushing into policies that could undermine it. Changing the rules in the middle of the game is risky; doing so without even studying the consequences would be irresponsible.

It’s indisputable that rents and home prices in Berkeley have skyrocketed over the past five years; but so too have the costs of land, construction, and city fees. Berkeley homeowners know they can get a lot of money if they sell their house; but they also know that windfall doesn’t matter much if the house they want to buy instead has also become expensive. Homebuilders face very similar considerations: The housing they build may be extremely valuable (perhaps even exorbitantly so), but the things necessary to build that housing (land, labor, and materials) have also become vastly more expensive.

An updated analysis would ensure the city knows whether new housing will remain economically feasible in Berkeley—or, for that matter, whether developers are making out like bandits after all. Addressing this question requires updated data. To give a sense of just how outdated the city’s current Economic Feasibility Study is: The study used an estimated land cost of $110 per square foot; but the city of Berkeley itself just paid over $176 per square foot for a piece of land. How can the City in good conscience rely on a study whose inputs are now off by over 60%?

The most recent Economic Feasibility Study also does not account for numerous changes in city fees that have already taken place. Berkeley Unified School District will soon begin adding several thousand dollars in new fees to any housing units built in Berkeley. The City Council is also set to double the amount of money that new housing must spend on providing public art. At this rate, new housing may die a death by a thousand cuts—or maybe it will be just fine. We don’t know, because the City Council has so far declined to update the critical economic studies.

No one can live in housing that doesn’t get built and even 100% of zero is still zero. If the Berkeley City Council enacts policies that overestimate the burden that new housing can shoulder, we may end with much less housing, fewer units of affordable housing, and drastically decreased revenue for the city. It’s understandable that the City Council doesn’t want to leave money on the table, but these new policies could very well overturn the entire table. Unless the council does its due diligence, we simply won’t know until it’s too late.

Every Berkeleyan who supports more housing and affordable housing should contact their City Council member this week. Call or email the City Council and ask them to delay action on new housing policies until they can be comprehensively evaluated by city staff and peer-reviewed by a third party. And, if you can, attend the City Council meeting Tuesday, June 13, to make it clear how much you care about these issues.

As my grandfather liked to say, “If you don’t have time to do something right the first time, how do you expect to have time to do it right the second time?” The City Council needs to hear that alleviating the housing crisis and creating more affordable housing are important to you, and that you expect them to take the time to get our housing policies right.