DWELLING ON DENSITY / EXPLORING AFFORDABLE HOUSING DEVELOPMENT IN THE CITY OF BERKELEY THE PROBLEM Affordable housing in Berkeley is produced in two ways:
BAY AREA
by private developers mixed into market-rate projects, and through government-funded nonprofit development projects. Priority Development Areas Bay Area Plan
Funding for the latter comes from fees on private development leveraged with county, state, and federal sources. All of these funding sources have declined in recent years.
PRIORITY DEVELOPMENT AREAS Adeline Street/ South Shattuck Strategic Plan Downtown Berkeley/ Downtown Area Plan San Pablo Avenue/ West Berkeley Project South Shattuck/ South Shattuck Strategic Telegraph Avenue/ Southside Plan University Avenue/ University Avenue Strategic Plan
0
0.3
1.2 Miles
The Bay Area’s population is exploding. With an expected population growth of 24% by 2040, and pursuant to California Senate Bill 375, Berkeley has adopted a high-density, transit-oriented growth-management strategy around identified Priority Development Areas (see map above). With most of its land already developed, Berkeley is now facing the complicated task of accomodating “its share” of regional population growth while expanding availability of affordable housing.
Development fees
Other sources
$
$
Housing Trust Fund
County State Federal
$
Berkeley is considering a local policy change that would grant a “density bonus” to developers in exchange for paying fees that would be used to fund affordable projects.
How should Berkeley expand the supply of affordable housing using the density bonus plan? UC BERKELEY [IN]CITY 2015 Marian Wolfe, PhD, Scott Chilberg, Holly Clarke, Soham Dhesi, Eleanor Fisher, Rebecca Pynoos
Nicola Szibbo, PhD, Sonia-Lynn Abenojar, Eric Anderson, Justin Kearnan
DWELLING ON DENSITY /
DEFINITION OF KEY CONCEPTS
DENSITY
AFFORDABILITY
Residential density is defined as the number of dwelling units per acre (du/ac)
Residential affordability is defined as 30% or less of household income spent on rent
FLOOR AREA RATIO [FAR] Ratio of total floor area of a structure to the total square footage of its parcel
INCLUSIONARY HOUSING
100% AFFORDABLE HOUSING
ASSOCIATED PROBLEMS Inclusionary Housing
100% Affordable Housing
LOT USE
Parking spaces
4 - 10 du/ac
$ $
Single Family Dwelling
Housing Trust Fund
Parking spaces
Parking level entrance
20 - 40 du/ac
Townhouses
50 - 100 du/ac
Apartments
Lack of community Building Services
No in-building services
Below market rate (BMR) units
Peripheral location
Less affordable
“Ghettoizing” the poor
Lengthy build process
ZONING CONCESSIONS Reductions in certain zoning regulations, such as: open space
parking
setbacks
height limits
DENSITY BONUS An increase in the number of residential units on a parcel beyond what the zoning ordinance allows
BELOW MARKET RATE (BMR) UNITS Units that are reserved as affordable housing. Rents for below-market-rate units are set as 30% of the income of target tenant group (see “Income Brackets” table to the right).
UC BERKELEY [IN]CITY 2015 Marian Wolfe, PhD, Scott Chilberg, Holly Clarke, Soham Dhesi, Eleanor Fisher, Rebecca Pynoos
INCOME BRACKETS Income brackets are defined in relation to Area Median Income (AMI)
Extremely Low Income Very Low Income Low Income
<30 % AMI 31 - 50 % AMI 51 - 80 % AMI
Nicola Szibbo, PhD, Sonia-Lynn Abenojar, Eric Anderson, Justin Kearnan
DWELLING ON DENSITY /
BERKELEY DEMOGRAPHIC OVERVIEW
SNAPSHOT OF BERKELEY DEMOGRAPHICS AT A GLANCE Total Population Median Age
DENSITY
¯
116,768 31 yrs
27% of Berkeley’s Population is 18-24 yrs old
COMMUTER POPULATION
0-5000
Workforce employed by UC Berkeley 23% Median houshold Income $61,960 Average Household Size 2.17 Renter / Homeowner Households 59% / 41%
5000-10,000 10,000-15,000 15,000-30,000 30,000-70,0000
52,330 Workers commuting into Berkeley daily
70,000-140,000
2010 Census Data, 2015-2023 Berkeley Housing Element
11, 197
BREAKDOWN BY RACE White African American
11%
5%
19%
Work & live in Berkeley
27,176 Berkeley residents working elsewhere
Asian, Native Hawaiian/ Pacific Islander
55%
Two or More Races Hispanic Latino
10%
48% of commuters to Berkeley make <50% of AMI 36% of Berkeley residents make <50% of AMI
2010 Census Data
2010 Census Data, Berkeley Daily Planet
Data from LEHD
BERKELEY OVER TIME POPULATION GROWTH
NUMBER OF UNITS BUILT (In Buildings with 5+ Units)
UC BERKELEY STUDENT POPULATION GROWTH
% OF INCOME SPENT ON HOUSING 2000
4027
116,716
116,768
112,914
103,328
103,137
1980
1990
37,581
2014
1150
103,027
2000
1995
2125
578
1970
29,662
2010
2010
2013
Census Data, American Community Surveys
1960s
1970s
1980s
573
1990s
2008
City of Berkeley - Consolidated Plan for Housing & Community Development (2010) Berkeley Housing Element (2009) UC Berkeley 10
15
20
23
27
30
33
37
40
45
50
Census Data
Housing in Berkeley has become more expensive over time; construction has declined while demand, especially from students, has increased. UC BERKELEY [IN]CITY 2015 Marian Wolfe, PhD, Scott Chilberg, Holly Clarke, Soham Dhesi, Eleanor Fisher, Rebecca Pynoos
Nicola Szibbo, PhD, Sonia-Lynn Abenojar, Eric Anderson, Justin Kearnan
DWELLING ON DENSITY /
POLICY BACKGROUND STATE DENSITY BONUS LAW
1979 1990 2008
California passes Density Bonus Law
Berkeley creates Housing Trust Fund
% of total units in project that are reserved for:
Grants a % increase above local limits on the allowed number of residential units for a project along with two zoning concessions in exchange for inclusion of below market rate (BMR) units. Local governments cannot deny a density bonus to proposed projects that meet the state’s criteria.
moderate income
low income
very low income
10%
Density bonus granted 5% 10% 15%
10%
5%
20% 25% 30%
California passes Senate Bill 375
40%
20%
11%
35%
BERKELEY’S CURRENT PATHS TO AFFORDABLE HOUSING
2009
2011
10% very low income
California Superior Court effectively bans Inclusionary Zoning for rental residences
20% low income
INCLUSIONARY
Berkeley creates Housing Mitigation Fee
$28,000 mitigation fee per unit
2013 2015
Association of Bay Area Governments passes Sustainable Communities Strategy
Changes proposed to Berkeley density policy
50% accessible for seniors
Housing Trust Fund
100% AFFORDABLE
DISINCENTIVES Reduced rent from BMR units
INCENTIVES Density bonus
DISINCENTIVES Per-unit mitigation fee
INCENTIVES 100% marketrate rents
Mitigation fee exemption
PROPOSED CHANGES Berkeley City Council is reviewing a proposal that, if passed, would grant a 35% density bonus to developers who pay the housing mitigation fee as well as a density bonus fee.
35% & density
+
$28,000 per unit fee
bonus
$10,000 per base unit fee
for the developer
$ Housing Trust Fund
for affordable housing
California’s density bonus policy reduces Berkeley’s discretionary control over zoning and density, and gives developers incentives to include affordable housing on-site. The proposed changes could create an enticing local alternative. UC BERKELEY [IN]CITY 2015 Marian Wolfe, PhD, Scott Chilberg, Holly Clarke, Soham Dhesi, Eleanor Fisher, Rebecca Pynoos
Nicola Szibbo, PhD, Sonia-Lynn Abenojar, Eric Anderson, Justin Kearnan
DWELLING ON DENSITY /
COMPARISONS: SAN FRANCISCO & SANTA MONICA
SAN FRANCISCO DENSITY STANDARD The San Francisco planning code standards outline maximum dwelling unit density based on zoning district and building use. AFFORDABLE HOUSING POLICY Residential developers building 10 + multifamily units must choose from the following options:
DEMOGRAPHICS
Include 12% BMR
Square Miles Population Median Income Renters/ Owners % of Renters spending >30% of Household Income on Rent
47 837,442 $75,604 65% / 35% 38%
Build affordable housing offsite, within 1 mile radius of market rate project
Mayorâ&#x20AC;&#x2122;s Office of Housing and Community Development
SANTA MONICA DEMOGRAPHICS
DENSITY STANDARD The Santa Monica municipal code outlines maximum dwelling unit density based on zoning district and building use. AFFORDABLE HOUSING POLICY Residential developers building multifamily housing must choose from the following 4 options: Inclusionary units Build affordable housing off-site, within .25-mile radius of market rate project
Square Miles Population Median Income Renters/ Owners % of Renters spending >30% of Household Income on Rent
8 84,084 $71,400 72% / 28% 41%
Donate, sell, or option land to city or non-profit hous-
Housing Trust Fund
San Francisco and Santa Monica both have instituted housing policies not present in Berkeley, namely setting density standards and a radius requirement for off-site affordable housing. UC BERKELEY [IN]CITY 2015 Marian Wolfe, PhD, Scott Chilberg, Holly Clarke, Soham Dhesi, Eleanor Fisher, Rebecca Pynoos
Nicola Szibbo, PhD, Sonia-Lynn Abenojar, Eric Anderson, Justin Kearnan
DWELLING ON DENSITY /
DISTRIBUTION OF AFFORDABLE HOUSING 2010
54% of Berkeley renters are overpaying for rent. While sheer
AVG. MARKET RENT*
production of housing is necessary, it’s important to look at the distribution of affordable housing, both geographically and economically, to ensure that that production is equitable. Belowmarket-rate units should be available within Berkeley’s economic centers, and should meet the needs of the lowest income groups.
HOUSEHOLD INCOME NECESSARY TO AFFORD AVG. MARKET RENT
2014
$1,765
$2,171
$70,600
$86,840 *3-person, 2-bedroom Berkeley 2010 & 2015 affordable housing nexus studies
GEOGRAPHIC DISTRIBUTION INCLUSIONARY HOUSING UNITS MAPPED
ECONOMIC DISTRIBUTION JOB DISTRIBUTION (jobs per sq mi)
22,450 - 35,076 12,001 - 22,450 5,617- 12,000 1,407 - 5,616 5 - 1,407
INCOME DISTRIBUTION
15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 75,000 100,000
BERKELEY POPULATION BY INCOME BRACKET
# of households
MODERATE & UPPER INCOME
9,565
LOW INCOME
4,305
VERY LOW INCOME
3,650
EXTREMELY LOW INCOME
7,865 2007-2011 American Community Survey data
# LOW-INCOME UNITS
0 to 19 units
AFFORDABILITY LEVELS These bar graphs show the number of BMR rental units in Berkeley affordable to low, very low, and extremely low income households, broken out by method of production
20 to 39 units
100% AFFORDABLE HOUSING UNITS MAPPED
# VERY-LOW-INCOME UNITS
126 units
168 units 33 units # EXTREMELY-LOWINCOME UNITS
0 units
0 to 19 units 20 to 39 units
255 units
40 to 59 units 60+ units
248 units
Job distribution data from LEHD, income distribution data from 2013 ACS
100% affordable housing, in contrast to inclusionary units, is distributed outside job centers and provides more deeply affordable units. UC BERKELEY [IN]CITY 2015 Marian Wolfe, PhD, Scott Chilberg, Holly Clarke, Soham Dhesi, Eleanor Fisher, Rebecca Pynoos
Nicola Szibbo, PhD, Sonia-Lynn Abenojar, Eric Anderson, Justin Kearnan
DWELLING ON DENSITY /
NEIGHBORHOOD AMENITIES
AMENITIES y MLK Jr Wa
AREA
e Shattuck Av
INCLUSIONARY UNITS TRANSIT
Bus Routes Bart
WALK, BUS, BIKE SCORES
Virginia St
Hearst Ave
69
98
95
Ave University
Institution Residential Units Commercial Mixed Use Residential Recreational
y MLK Jr Wa
e Shattuck Av
LAND USE ay Bancroft W
Education Community Center Park Grocery
Virginia St
Hospital
AMENITIES
TRANSIT
y M.L.K Jr Wa
AREA
Ave y t i s r e v i n U
St
AFFORDABLE UNITS
Sacramento
Hearst Ave
Cultural Institution
Blake St
y Dwight Wa
Bus Routes Bart
WALK, BUS, BIKE SCORES
Ave o l b a San P
ay W t f o r c n a B
59 Blake St
Russel St
Education
y M.L.K Jr Wa
S Sacramento
t
Ashby St
Community Center
88
Institutional Residential Units Commercial Mixed Use Residential Recreational Mixed Use Light Industrial
Park
y Dwight Wa
Ave o l b a San P
LAND USE
99
Grocery Hospital Cultural Institution
Alcatraz
There is significantly better access to neighborhood amenities, public transit, and retail in the areas with a high concentration of inclusionary housing than in the areas with a high concentration of 100% affordable projects. Russel St
UC BERKELEY [IN]CITY 2015 Marian Wolfe, PhD, Scott Chilberg, Holly Clarke, Soham Dhesi, Eleanor Fisher, Rebecca Pynoos
Ashby St
Nicola Szibbo, PhD, Sonia-Lynn Abenojar, Eric Anderson, Justin Kearnan
DWELLING ON DENSITY /
IN-BUILDING AMENITIES
INCLUSIONARY HOUSING BUILDING TYPOLOGIES
AMENITIES & SERVICES
QUOTES “Set your home apart from the rest” - Hillside Village Apartments
Allston Place (60 Total Units, 12 BMR) Communal Outdoor Courtyard/ Terrace Workout Facilities
Acton Courtyard (70 Total Units, 20 BMR)
“We go to great lengths designing ammenities and choosing locations that put everything within reach.” - Avalon Berkeley
Washer-Dryer In-Unit
“A home that suits your personal needs” - Equity Residential (Gaia Building) Berkeley Central (118 Total Units, 23 BMR)
Pet friendly
In-building Access to car-share services
100% AFFORDABLE HOUSING BUILDING TYPOLOGIES
AMENITIES & SERVICES
QUOTES “Our mission is to create and preserve affordable housing...to build community and enrich lives” - RCD Housing
Margaret Breland Homes (28 Units)
Computer Work Space Communal Outdoor Courtyard/ Terrace
“Artists Thrive in Live/Work Lots at 800 Heinz Ave.” - The Berkeley Daily Plant, August, 2005
“It offers more than just an apartment home, it offers a worry-free lifestyle.”
Ashby Lofts (54 Units)
- Harriet Tubman Terrace Website
Wheel-Chair Accessible Helios Corner (80 Units)
On-Site Workshops
[We put an] emphasis on high-quality design that looks like a market-rate building - SAHA Homes
Both emphasize clean, modern designs.100% affordable projects put a strong emphasis on empowering residents through community activities, while inclusionary buildings focus on giving residents access to services on a more individual level. UC BERKELEY [IN]CITY 2015 Marian Wolfe, PhD, Scott Chilberg, Holly Clarke, Soham Dhesi, Eleanor Fisher, Rebecca Pynoos
Nicola Szibbo, PhD, Sonia-Lynn Abenojar, Eric Anderson, Justin Kearnan
DWELLING ON DENSITY /
PRODUCTION OF AFFORDABLE HOUSING SCENARIO EVALUATION
A typical affordable housing project costs $350,000-$400,000 per unit to build Funding sources:
20-25%
SCENARIO A: Meets 10% BMR unit req.
75-80%
5 BMR units
SCENARIO B:
etc.
$100,000 of city funding produces 1 unit of affordable housing
50-unit building
Pays $1.4 million ($28,000/unit) to city 14 BMR units
CONCEPT-TO-OPERATION TIMELINE INCLUSIONARY HOUSING
I. Concept II. Pre-Development I.
Concept & Securing Financing
3 - 6 years
III. Development
IV. Construction
II. Pre-Development
100% AFFORDABLE HOUSING
V. Operation
III. Final Design
IV. Construction
V. Operation
3.5 - 8 years
It takes more time to build 100% affordable housing projects; however, you get more affordable units per development with that approach. UC BERKELEY [IN]CITY 2015 Marian Wolfe, PhD, Scott Chilberg, Holly Clarke, Soham Dhesi, Eleanor Fisher, Rebecca Pynoos
Nicola Szibbo, PhD, Sonia-Lynn Abenojar, Eric Anderson, Justin Kearnan
DWELLING ON DENSITY / This is a hypothetical analysis of the costs a 50-unit proposed development might incur related to affordable housing requirements under 3 scenarios. Scenarios A and B look at the current density bonus policy, and Scenario C looks at the proposed changes.
HYPOTHETICAL COST & REVENUE ANALYSIS PROPOSED DEVELOPMENT: BANCROFT APARTMENTS 2124 Bancroft Way
ANNUAL NET REVENUES
Include Seek 35% Pay FEES mitigation BMR density units? bonus? fee? SCENARIO A Current policy: Pays mitigation fee
SCENARIO B Current policy: Builds on-site BMR housing
SCENARIO C Proposed policy: Pays mitigation + density bonus fees
$1.4 million
one-time mitigation fee
$1,563,000 on 50 marketrate units
$0
$1,945,776
$1.9 million
$2,110,050
one-time mitigation & density bonus fees
on 62 marketrate & 6 BMR units
on 68 marketrate units
IMPLICATIONS FOR AFFORDABLE HOUSING CAPITALIZED VALUE NET FEES*
$24,650,000
$1.4 million
Housing Trust Fund
$32,429,600
$33,267,500
$1.9 million
Housing Trust Fund
* At a capitalization rate of 6% (equal to that used in the 2015 Nexus Study)
Scenario C, reflecting the proposed policy change, produces more units in aggregate while charging higher fee costs to developers. However, the resulting development has the greatest capitalized value after fees are considered of the three scenarios. UC BERKELEY [IN]CITY 2015 Marian Wolfe, PhD, Scott Chilberg, Holly Clarke, Soham Dhesi, Eleanor Fisher, Rebecca Pynoos
Nicola Szibbo, PhD, Sonia-Lynn Abenojar, Eric Anderson, Justin Kearnan
DWELLING ON DENSITY /
LOOKING AHEAD SUMMARY OF ANALYSIS
PROPOSED DEVELOPMENTS Priority Development Areas Proposed market-rate development Proposed 100% affordable housing project
Services
The lack of community issue was qualitatively supported, but needs further research.
Spatial analysis shows 100% affordable projects are primarily in peripheral locations outside job centers. However, the small city size mitigates this issue.
In-building services exist in both cases, but address different needs.
No noticeable income difference between market-rate and 100% affordable development neighborhoods.
Extremely low income housholds are underserved by inclusionary housing. Moderate income households are underserved by both due to structure of policies.
100% affordable housing projects have a slightly lengthier build process, but result in more affordable units per development.
RECOMMENDATIONS RECOMMENDATION #1: Conduct a feasibility study of the proposed fee structure and levels, looking especially at the potential to administer the fees on all, instead of just base, units. Also look at possible ways to promote unit production for moderate-income households.
RECOMMENDATION #2: Develop systems for gathering and analyzing data on below-market-rate unit production, location, and affordability to allow for a holistic and adaptive affordable housing strategy.
RECOMMENDATION #3: Create mechanisms for early community engagement between developers and community members around new proposals.
RECOMMENDATION #4: Conduct a study on the effects of high-density developments on neighborhoods and incorporate community education.
UC BERKELEY [IN]CITY 2015 Marian Wolfe, PhD, Scott Chilberg, Holly Clarke, Soham Dhesi, Eleanor Fisher, Rebecca Pynoos
Nicola Szibbo, PhD, Sonia-Lynn Abenojar, Eric Anderson, Justin Kearnan