On June 28, Berkeley’s Zoning Adjustments Board voted seven to two to deny an application by Xin Jin and Nathan George to build a five-story mixed-use building at 3000 Shattuck Ave. The stated grounds in the ZAB’s notice of decision were that the proposed project was too big, tall, and dense for the site; lacked safe loading zones for deliveries, ride-sharing pickups and drop-offs, and garbage collection; and would make the intersection of Ashby and Shattuck even more dangerous than it already is.
The City Council will hear the applicant’s appeal of that decision on Tuesday, Nov. 13. They should reject it. The ZAB had sound reasons for denying the application, some of which were discussed in detail at the hearing but not included in the notice of decision or the staff report to the Council for the appeal.
The ZAB’s first hearing on this project was in July 2017. At that time, the plan was for 44 studio, one-bedroom, and two-bedroom units, which would have required a payment to the Berkeley Housing Trust Fund of $37,500 per unit for a total of $1,650,000. The applicants requested a “hardship waiver” reducing the fee to $880,000, arguing that in the two years they had been working on the project construction costs had gone up. (That same month, they paid $6.7 million for the lot down the street that currently houses the Model Garage and Eastern Supplies hardware store.) The ZAB gave them some feedback and continued the hearing.
At the next hearing, this past May 10, the applicants submitted a revised floor plan converting the project to a dormitory-style “co-living” project of 23 units of mostly four and six bedrooms. Per their calculation, this lowered the required trust fund contribution to $37,500 per unit for a total of $862,500. The ZAB asked the applicants to come back with a revised, more dormitory-like floor plan and more detailed information on the co-living aspect.
At that point, neither planning staff nor the ZAB had realized that converting the residential portion of the project from apartments to co-living meant that it was now what the Zoning Code calls a Group Living Accommodation (GLA), for which the trust fund contribution is $18,500 per bedroom. The new plan has a total of 69 bedrooms, so the trust fund contribution should have been $1,276,500.
At the next hearing, on June 28, the applicants failed to provide the co-living details the ZAB had asked for. After a long discussion of that and other issues, the ZAB invited them to resubmit the project as a GLA, but they declined. Presumably this was not just because they didn’t want to make the higher trust fund contribution but also (as made clear by the remarks of their consultant, Mark Rhoades) because they knew the Zoning Code limits the number of residents in a GLA to one for each 350 square feet of lot area (which in this case would mean 39) and requires 90 square feet of usable open space per resident (which for 39 residents would be 3,510 square feet, 70% more than proposed).
Rhoades insisted the project was not a GLA, but was unable to provide a logical explanation for that assertion. Given that the application called for bringing in the co-living company Common Living to run the project, and for it have on-site residential management, his argument that it was a conventional apartment building was not plausible. Given this impasse, the ZAB denied the application.
Nothing has changed in the meantime to justify the City Council overturning that decision.
The Council should also consider the pernicious effect of land values being radically increased by this sort of speculation. Jin and George are in the business of buying property, developing plans to redevelop it, getting the necessary permits, and flipping the package of property and paperwork for a fat profit (see their website, nx-ventures.com, for details). In early 2015, they paid around $150 per square foot for 3000 Shattuck. Given the current property market in Berkeley, there’s no way they can make a profit on the deal except by getting permits to build extremely dense market-rate housing for techie commuters. The options for the Model Garage/Eastern Supplies lot are even narrower: they paid around $235 a square foot for that. This extreme increase in land costs threatens to displace every neighborhood-serving business in the area along with their lower-income customers.
At least in South Berkeley, the ZAB and City Council have a tool they can use to keep land costs in check. In the Commercial-South Area zoning district (Adeline and Shattuck from Dwight south), big, tall, dense mixed-use projects require use permits under Zoning Code section 23E.52.070.D. These are issued at the ZAB’s discretion, and could be reserved exclusively for nonprofit affordable housing developers, or partnerships between such groups and for-profit developers to build projects with, say, at least 40% affordable units on site. The project the City Council approved for 2902 Adeline was a flawed, small first step in that direction, but we can do much better. Certainly we shouldn’t just give away the bonuses available under 23E.52.070.D to for-profit developers working overtime trying to increase their profits by shortchanging the Housing Trust Fund.