Report: City lacks money, staff to handle proposed affordable housing

With too many referrals to handle, Berkeley Way, a supportive housing complex, is considered the one to prioritize. Image: Google Maps

There is nowhere near enough money or staff to handle the plethora of projects proposed to ease Berkeley’s housing affordability crisis, and Berkeley officials must set priorities, according to a May report prepared by city staff.

There are nine proposed construction and acquisition projects totaling between $39.5 and $45 million, but the city has only around $3.6 million in its Housing Trust Fund, the report said. Annual income is hard to estimate but falls at least $10 million below what’s needed.

Also, there are an additional 40 or so outstanding housing-related projects that were referred to staff by the City Council for study, but not even one full-time city staffer to handle them, said Paul Buddenhagen, the city’s director of health, housing and community services.

“The list of possible interventions greatly exceeds existing housing funding and the capacity of staff. The Council’s priorities are needed to determine the use of limited resources,” Buddenhagen wrote in the report, which was presented to the City Council at a special meeting on affordable housing May 30.


The report touched on nine proposed construction and acquisition projects that could be paid for with city funds. It highlighted an approximately $90 million project — requiring an estimated $13-14 million from the city — with Bridge Housing on a city-owned parking lot on Berkeley Way downtown.

Other building projects include the city’s planned $6.65 million acquisition of the old Premier Cru building complex on University Avenue. The council hopes to use the site for future City Council chambers and, ultimately, affordable housing. Another potential project: a small sites project pegged in the report at about $2 million.

If Berkeley acquires the old Premier Cru complex on University Avenue for $6.65M, as is planned, it will have almost an acre of land onto which it can place affordable housing. Layout of the property: Gordon Commercial

Additional projects referred to the staff by the City Council for study include creating an informational website for renters on below-market-rate units; writing new policies encouraging non-traditional rental practices such as land trusts; lobbying for changes to the Ellis Act; and creating an eviction defense fund.

The amount of funding available for these proposed projects is hard to estimate.

The city can expect to get about $2.98 million to $3.45 million annually from the city’s business license tax, but other revenues are uncertain, Amy Davidson, a senior project coordinator, said in a presentation at the May 30 meeting.

“The U1 tax will bring in about $3.5 million a year starting in 2018,” Davidson said. “This is a possible source of funding for affordable housing.” By “the U1 tax,” Davidson was referring to the business license tax for owners of certain rental units.

The federal HOME program, which funds affordable housing development, supplies about $500,000 annually, but may be eliminated, Davidson said.

The city’s affordable housing mitigation fee compels developers to either pay a fee to the city or build affordable housing in their projects, so the income varies. Davidson said an estimated $760,000 in fees could be paid into the city’s Housing Trust Fund for projects currently under construction.

The city can also tap monies from Alameda County bond measure A1, which allows the county to issue bonds to acquire or improve real property. Of this money, $15.8 million has been set aside for Berkeley programs. The city can also compete for a portion of the $89 million designated to northern Alameda County cities under A1.

Staff resources also limited

Not only financial resources, but staff resources, are limited. At present, there are only three full-time staffers working on housing, with one more expected to come on board in August. However, much of the present staffers’ time is committed to federal and other projects.

At present, the department has less than the equivalent of one full-time staffer to work on affordable housing referrals, Buddenhagen said.

Councilwoman Lori Droste noted in an interview, “Staffers have to work on federal initiatives,” as well as council referrals.

“There might be a sense from council that housing staff just gets to work on our items, that’s all they should work on — but in fact, it’s a very small part of what they do,” Droste said.

Buddenhagen said the August hire will be focused on the affordable housing referrals. This will help, he said, but it’s not enough.

“One more staffer is not going to be able to do 40 referrals,” the director said. He said an additional staffer is needed.

As far as priorities, “Berkeley Way would be the best project to tackle right away,” Buddenhagen said.

Berkeley Way is a partnership between the city, Bridge Housing Corp. and the Berkeley Food and Housing Project. The plan is to replace a 112-spot parking lot at Berkeley Way and Henry Street with 89 affordable apartments in one building and, in another, 53 studios of permanent supportive housing, 32 shelter beds, 12 transitional units for veterans, and a first-floor services center with community kitchen.

The project has drawn kudos from the council and housing advocates.

“I think it’s a good project. It would be good to see it go forward,” said Diego Aguilar-Canabal, who served on the Housing Advisory Committee in 2016.

“Let’s focus on the (project) that seems closest to completion,” Droste said. “It’s the one that will provide affordable housing in the downtown and it’s desperately needed.”

“This is the biggest project, so it will have the most impact on providing housing to low-income and homeless people,” Buddenhagen said. “It will offer the most housing to the most low-income people, with services at the site.”

Berkeley Way is on the agenda for the June 13 council meeting with a request to make the project the first priority for A1 funds and make it the first priority for Housing Trust money once funding for three other current proposals is considered in July.

Not everyone is on board with the project. Merchants have expressed concerns about losing parking downtown. As early as 2013, Craig Larsen, who developed 2054 University Ave., wrote a letter to the city about the project that said the loss of parking, even temporarily, would be “catastrophic” to businesses in the area.

Strawberry Creek Lodge: a completed 150-unit affordable senior housing project at 1320 Addison St. (at Acton). Photo: Nicholas Bruno

Council members will also grapple at the June 13 meeting with how much developers of new market-rate projects should underwrite affordable housing.

During the May 30 presentation, Davidson described some of the affordable housing projects that have been completed.

“The city contributed $859,000 to Strawberry Creek Lodge,” Davidson said, referring to a 150-unit affordable senior housing complex on Addison Street in West Berkeley. Funding for the city’s contribution to the acquisition and rehabilitation of the housing complex came from the Housing Trust Fund.

The city also contributed Housing Trust Fund money to University Avenue Cooperative Homes, Davidson said. The city contributed $1.2 million toward the rehabilitation of the property about three years ago.

The council did not make any decisions as to priorities at the meeting, asking staff to come back with recommendations as to which projects should be tackled first.

[Note: Berkeley Way project information was updated June 15 following a council vote to make the project a priority. A new project description and updated financial information also became available.]