Opinion: New affordable housing fees are just rearranging the deck chairs

Increasing fees on market-rate housing makes won’t produce more affordable housing; it will only make housing more expensive for everyone.

Tuesday evening, the Berkeley City Council is poised to consider some super-wonky and super-flawed proposals regarding modifications to the affordable housing mitigation impact fee. This impact fee policy is one of three tools the city of Berkeley can use to produce affordable housing; the other two are the state density bonus and public housing, which I will not discuss here.

The proposals for Tuesday night are flawed in two important ways. First, they rest on the bizarre idea that new housing creates poor people which leaves us with a permanent underclass of low-income families. In City Councilwoman Harrison’s op-ed, she says, “New market-rate housing creates additional demand for services provided by teachers, police officers, and, yes, the construction workers who help build housing.” This statement tells me Harrison believes low-income Berkeleyans will never escape poverty as long as there are higher income people nearby in demand of their services; that there is no way to help those left behind by shifts in our economy, that teachers, police officers, and construction workers are forever barred from receiving an adequate income.

Hogwash. Harrison is an elected official charged with the power to make laws including ones that can increase minimum wages for teachers, police officers, and construction workers.

The second flaw in Tuesday’s proposals is that increasing fees on market-rate housing makes that housing more expensive for everyone. Whether or not this is a tax is up for debate, albeit an uninteresting one. The result of increasing fees on market-rate housing is manifested in two parts. First, homebuilders and new residents are burdened with picking up the City’s slack in not building sufficient affordable housing. Berkeley city government has failed in its capacity to secure the human right to shelter for decades, but these proposals levy ever higher fees on the people who actually are building the housing we need. It’s the chorus line of that great Bay Area Progressive hymn: “We could not have possibly brought this on ourselves; it is clearly the fault of hippies/yuppies/techies/the all-powerful, uncontrollable, unregulated Free Market.”

A higher market rate rent increases the opportunity cost of below market rate (BMR) housing. Imagine that market rate rent was only 20% higher than the target BMR rate. It is a lot more palatable to ask a developer to take a 20% hit on 20% of their units than it is to ask them to swallow a 50% or higher reduction in revenue on the same number of units. Such a drastic difference in rent also sets a lower bound on the required income from the market-rate homes to make the project viable, which is why so many new buildings target the higher end of the market.

Second — and most importantly — these changes do nothing to increase the rate at which we produce affordable housing. The project at 2902 Adeline took nearly 1½ years to get approved. ZAB meetings are a circus. Berkeley got sued twice for illegally denying housing. Many parts of the city seem locked in amber, remaining just as they were in the 1950s. The racist, classist and segregationist policy of making single-family homes sacrosanct pushes development into communities of color instead of pushing affordable housing into wealthy neighborhoods.

Councilwoman Harrison’s op-ed points to the fact that, in 2015 and 2016, 11 and 17 projects got approved, respectively. This misses the forest for the trees: we should be building hundreds upon thousands of homes if we ever wish to solve our housing shortage. Seventeen projects is a pittance when we need to be building at least 100,000 homes every year in California to accommodate population growth; Berkeley is no special sunflower exempt from this.

If Berkeleyans want to be serious about making housing affordable to people from all walks of life, we need to focus on the root of the problem: We are not building enough housing. I’m an outspoken socialist who longs for the day we’ll see an end to private development of land and the abolition of landlords. Even so, it’s important to recognize that socialism won’t help you if there isn’t enough housing to go around in the first place. I challenge Harrison to disprove her record: even if we could get a 100% affordable mid-rise project in District 4, she wouldn’t support it–unless of course it could be reduced in size, required generous setbacks, included parking, included a beautiful “eat the rich” public art mosaic at the front door, or other concessions that trade affordable housing for aesthetic preferences.

Rents continue to increase in Berkeley, even in the absence of development. North Berkeley, virtually untouched by new dense housing development, grows unaffordable to more people every day; blaming too low a fee here is a stretch of the imagination. It is a wild fever dream that lets left-leaning elected officials pander to aging leftists who would rather re-litigate Redevelopment of years past than find a way to move forward. Berkeley has an opportunity to lead that must not be wasted on token gestures like this.

Tuesday’s policy proposals will do nothing for housing affordability and the City Council should be ashamed to think otherwise.

Victoria Fierce is the organizer and co-executive of East Bay Forward, a grassroots housing abundancy advocacy organization, a socialist, and a YIMBY.