delling on density eploring affordable ......uc berele icit 2015 m arian wolfe, phd, scott chilberg,...

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 / EXPLORING AFFORDABLE HOUSING DEVELOPMENT IN THE CITY OF BERKELEY

THE PROBLEM

Housing Trust Fund

$$

$

Development fees

Other sources

CountyState

Federal

Affordable housing in Berkeley is produced in two ways:

by private developers mixed into market-rate projects, and

through government-funded nonprofit development projects.

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.

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.

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.

How should Berkeley expand the supply of affordable housing using the density bonus plan?

Downtown Berkeley/ Downtown Area Plan

San Pablo Avenue/ West Berkeley Project

South Shattuck/ South Shattuck Strategic

Telegraph Avenue/ Southside Plan

Adeline Street/ South Shattuck Strategic Plan

University Avenue/ University Avenue Strategic Plan

BAY AREA

Priority Development AreasBay Area Plan

0 1.20.3Miles

PRIORITY DEVELOPMENT AREAS


DWELLING ON DENSITY /

$ $

INCOME BRACKETS Income brackets are defined in relation to Area Median Income (AMI)

Extremely Low Income Very Low IncomeLow Income

<30 % AMI 31 - 50 % AMI 51 - 80 % AMI

Residential density is defined as the number of dwelling units per acre (du/ac)

FLOOR AREA RATIO [FAR]Ratio of total floor area of a structure to the total square footage of its parcel

LOT USE

AFFORDABILITYDENSITY

DENSITY BONUSAn increase in the number of residential units on a parcel beyond what the zoning ordinance allows

ZONING CONCESSIONSReductions in certain zoning regulations, such as:

100% Affordable Housing

Inclusionary Housing

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).

100% AFFORDABLE HOUSING

ASSOCIATED PROBLEMSINCLUSIONARY HOUSING

Housing Trust Fund

Parking spaces

Parking spaces

Parking level entrance

4 - 10 du/ac

20 - 40 du/ac

50 - 100 du/ac

Single Family Dwelling

Townhouses

Apartments

Below market rate (BMR) units

Residential affordability is defined as 30% or less of household income spent on rent

BELOW MARKET RATE (BMR) UNITS

DEFINITION OF KEY CONCEPTS

open space parking setbacks height limits

Services

Lack of community Peripheral location

“Ghettoizing” the poor

Lengthy build process

No in-building services

Less affordable

Building


DWELLING ON DENSITY / BERKELEY DEMOGRAPHIC OVERVIEW

20101995

2014

2000

SNAPSHOT OF BERKELEY DEMOGRAPHICS

BERKELEY OVER TIME

ToTal PoPulaTion Median age 27% of Berkeley’s Population is 18-24 yrs old

Workforce eMPloyed by uc berkeley Median houshold incoMe average household size renTer / hoMeoWner households

POPULATION GROWTH NUMBER OF UNITS BUILT(In Buildings with 5+ Units)

% OF INCOME SPENT ON HOUSING

COMMUTER POPULATION

11, 197

52,330

27,176

AT A GLANCE

1970 1980 1990 2000 2010 2013

116,716

103,328 103,137 103,027

112,914

116,768

WhiteAfrican American

Asian, Native Hawaiian/ Pacific Islander

Two or More Races

Hispanic Latino

55%

10%

19%

5%11%

BREAKDOWN BY RACE

1960s 1970s 1980s 1990s 2008

4027

2125

578 573

1150

2010 Census Data, Berkeley Daily Planet

2010 Census Data

Workers commuting into Berkeley daily

Work & live in Berkeley

Berkeley residents working elsewhere

Data from LEHD

City of Berkeley - Consolidated Plan for Housing & Community Development (2010)Berkeley Housing Element (2009)

2010 Census Data, 2015-2023 Berkeley Housing Element

Housing in Berkeley has become more expensive over time; construction has declined while demand, especially from students, has increased.

48% of commuters to Berkeley make <50% of AMI

36% of Berkeley residents make <50% of AMI

UC BERKELEY STUDENT POPULATION GROWTH

37,581

Census Data, American Community Surveys

Census Data

UC Berkeley

10 15 20 23 27 30 33 37 40 45 50

¯

70,000-140,000

30,000-70,0000

0-5000

5000-10,000

10,000-15,000

15,000-30,000

DENSITY

29,662

116,76831 yrs

23%$61,960

2.1759% / 41%



1979

2008

2009

2011

2013

2015

1990

California passes Senate Bill 375

California Superior Court effectively bans Inclusionary Zoning for rental residences

Berkeley creates Housing Mitigation Fee

Association of Bay Area Governments passes Sustainable Communities Strategy

Changes proposed to Berkeley density policy

Berkeley creates Housing Trust Fund

California passes Density Bonus Law

STATE DENSITY BONUS LAW

BERKELEY’S CURRENT PATHS TO AFFORDABLE HOUSING

PROPOSED CHANGES

DISINCENTIVESReduced rent from BMR units

Density bonus granted

% of total units in project that are reserved for:

DISINCENTIVESPer-unit mitigation fee

INCENTIVESDensity bonus

Mitigation fee exemption

INCENTIVES100% market- rate rents

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.

moderate income

low income

very low income

10%

5%10%

11%20%

5%

10%

15%

20%

25%

30%

35%40%

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.

POLICY BACKGROUND

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.

10% very low income

50% accessible for seniors

20% low income

Housing Trust Fund

Housing Trust Fund

$28,000

$28,000 $10,000

35%density bonus

mitigation fee per unit

per unit fee per base unit fee for the developer for affordable housing

INCLUSIONARY

100% AFFORDABLE

+ &$


DWELLING ON DENSITY / COMPARISONS: SAN FRANCISCO & SANTA MONICA

SAN FRANCISCO

SANTA MONICA

SquARE MIlES POPulATION MEdIAN INCOME RENTERS/ OwNERS % Of RENTERS SPENdINg >30% Of HOuSEHOld INCOME ON RENT

47837,442$75,604

65% / 35%38%

884,084

$71,40072% / 28%

41%

AFFORDABLE HOUSING POLICY Residential developers building 10 + multifamily units must choose from the following options:

Mayor’s Office of Housing and CommunityDevelopment

Build affordable housing off-site, within 1 mile radius of market rate projectInclude 12% BMR

DEMOGRAPHICS

AFFORDABLE HOUSING POLICY Residential developers building multifamily housing must choose from the following 4 options:

Housing Trust Fund

Build affordable housing off-site, within .25-mile radius of market rate project

Donate, sell, or option land to city or non-profit hous-

SquARE MIlES POPulATION MEdIAN INCOME RENTERS/ OwNERS % Of RENTERS SPENdINg >30% Of HOuSEHOld INCOME ON RENT

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.

DEMOGRAPHICS DENSITY STANDARDThe San Francisco planning code standards outline maximum dwelling unit density based on zoning district and building use.

DENSITY STANDARDThe Santa Monica municipal code outlines maximum dwelling unit density based on zoning district and building use.

Inclusionary units



GEOGRAPHIC DISTRIBUTION ECONOMIC DISTRIBUTION

5 - 1,407 1,407 - 5,616 5,617- 12,00012,001 - 22,45022,450 - 35,076

BERKELEY POPULATION BY INCOME BRACKET

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

# LOW-INCOME UNITS

# EXTREMELY-LOW- INCOME UNITS

# VERY-LOW-INCOME UNITS

JOB DISTRIBUTION (jobs per sq mi)INCLUSIONARY

HOUSING UNITS MAPPED

100% AFFORDABLE HOUSING UNITS MAPPED

AVG. MARKET RENT*

HOUSEHOLD INCOME NECESSARY TO AFFORD AVG. MARKET RENT

2010 2014

INCOME DISTRIBUTION

54% of Berkeley renters are overpaying for rent. While sheer 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. Below- market-rate units should be available within Berkeley’s economic centers, and should meet the needs of the lowest income groups.

15,00020,00025,00030,000

40,000

50,00075,000100,000

35,000

45,000

DISTRIBUTION OF AFFORDABLE HOUSING

33 units

168 units

3,650

7,865

# of households

4,305

126 units

255 units 248 units

0 units

9,565Extremely Low Income

Very Low Income

Low Income

Moderate & Upper Income

0 to 19 units

20 to 39 units

0 to 19 units

20 to 39 units

40 to 59 units

60+ units

100% affordable housing, in contrast to inclusionary units, is distributed outside job centers and provides more deeply affordable units.

$1,765

$70,600

$2,171

$86,840*3-person, 2-bedroom

MODERATE & UPPER INCOME

LOW INCOME

VERY LOW INCOME

EXTREMELY LOW INCOME

Berkeley 2010 & 2015 affordable housing nexus studies

Job distribution data from LEHD, income distribution data from 2013 ACS

2007-2011 American Community Survey data



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.

NEIGHBORHOOD AMENITIES

INCLUSIONARY UNITS

TRANSIT

WALK, BUS, BIKE SCORES

WALK, BUS, BIKE SCORES

LAND USE

Shat

tuck

Ave

MLK

Jr

Way

Virginia St

Blake St

University Ave

Hearst Ave

Bancroft WayEducation

Bus RoutesBart

Community Center

Park

Grocery

Hospital

Cultural Institution

Cultural Institution

InstitutionResidential UnitsCommercialMixed Use ResidentialRecreational

959869

AMENITIES AREA

Shat

tuck

Ave

MLK

Jr

Way

Virginia St

Blake St

University Ave

Hearst Ave

Bancroft Way

AFFORDABLE UNITS

TRANSIT

LAND USE

M.L

.K Jr

Way

Sacr

amen

to S

t

San

Pabl

o A

ve

Alcatraz

Russel St

Ashby St

Dwight Way

Education

Bus Routes

Institutional Residential UnitsCommercialMixed Use ResidentialRecreationalMixed Use Light Industrial

Bart

Community Center

Park

Grocery

Hospital

8859 99

AMENITIES AREA

M.L

.K Jr

Way

Sacr

amen

to S

t

San

Pabl

o A

ve

Alcatraz

Russel St

Ashby St

Dwight Way



INCLUSIONARY HOUSING


Ashby Lofts (54 Units)

Communal Outdoor Courtyard/ Terrace

Computer Work Space

On-Site WorkshopsHelios Corner (80 Units)

“ARTISTS THRIvE IN lIvE/wORK lOTS AT 800 HEINz AvE.” - The Berkeley Daily Plant, August, 2005Margaret Breland

Homes (28 Units)

Wheel-Chair Accessible

“IT OffERS MORE THAN juST AN APARTMENT HOME, IT OffERS A wORRy-fREE lIfESTylE.” - HARRIET TuBMAN TERRACE wEBSITE

Workout FacilitiesActon Courtyard (70 Total Units, 20 BMR)

Washer-Dryer In-Unit

Berkeley Central(118 Total Units, 23 BMR) Pet friendly

Allston Place(60 Total Units, 12 BMR)

Communal Outdoor Courtyard/ Terrace

In-building Access to car-share services

“SET yOuR HOME APART fROM THE REST”- HIllSIdE vIllAgE APARTMENTS

[wE PuT AN] EMPHASIS ON HIgH-quAlITy dESIgN THAT lOOKS lIKE A MARKET-RATE BuIldINg- SAHA HOMES

“OuR MISSION IS TO CREATE ANd PRESERvE AffORdABlE HOuSINg...TO BuIld COMMuNITy ANd ENRICH lIvES” - RCd HOuSINg

“wE gO TO gREAT lENgTHS dESIgNINg AMMENITIES ANd CHOOSINg lOCATIONS THAT PuT EvERyTHINg wITHIN REACH.” - AvAlON BERKElEy

“A HOME THAT SuITS yOuR PERSONAl NEEdS” - EquITy RESIdENTIAl (gAIA BuIldINg)

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.

IN-BUILDING AMENITIES

BUILDING TYPOLOGIES

BUILDING TYPOLOGIES

AMENITIES & SERVICES

AMENITIES & SERVICES

QUOTES

QUOTES



SCENARIO EVALUATION

CONCEPT-TO-OPERATION TIMELINE

50-unit building

SCENARIO A:

SCENARIO B:

PRODUCTION OF AFFORDABLE HOUSING

INCLUSIONARY HOUSING


Meets 10% BMR unit req.

Pays $1.4 million ($28,000/unit) to city

5 BMR units

14 BMR units

A typical affordable housing project costs $350,000-$400,000 per unit to build

Funding sources:

20-25% 75-80%etc.

$100,000 of city funding produces 1 unit of affordable housing

It takes more time to build 100% affordable housing projects; however, you get more affordable units per development with that approach.

I. ConCept II. pre-Development III. Development Iv. ConstruCtIon v. operatIon

I. ConCept & seCurIng FInanCIng II. pre-Development III. FInal DesIgn Iv. ConstruCtIon v. operatIon

3.5 - 8 years

3 - 6 years


DWELLING ON DENSITY / HYPOTHETICAL COST & REVENUE ANALYSIS

PROPOSED DEVELOPMENT:

IMPLICATIONS FOR AFFORDABLE HOUSING

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.

Pay mitigation fee?

Seek 35% density bonus?

Include BMR units?

FEESANNUAL NET REVENUES

CAPITALIZED VALUE NET FEES*

$1.4 million one-time mitigation

fee

$0

$1.9 millionone-time mitigation

& density bonus fees

* At a capitalization rate of 6% (equal to that used in the 2015 Nexus Study)

scenario aCurrent policy: Pays mitigation fee

scenario bCurrent policy: Builds on-site BMR housing

scenario cProposed policy: Pays mitigation+ density bonus fees

Housing Trust Fund

$1.4 million

$1.9 million

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.

2124 Bancroft WayBANCROFT APARTMENTS

$1,563,000on 50 market-

rate units

$1,945,776on 62 market- rate & 6 BMR

units

$2,110,050on 68 market-

rate units

$24,650,000

$33,267,500

$32,429,600

Housing Trust Fund


DWELLING ON DENSITY / LOOKING AHEAD

Services

Proposed market-rate development

Proposed 100% affordable housing project

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.

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.

SUMMARY OF ANALYSIS

RECOMMENDATIONS

Priority Development Areas

PROPOSED DEVELOPMENTS

delling on density eploring affordable ......uc berele icit 2015 m arian wolfe, phd, scott chilberg,...

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