Public Comment

Harry Brill once said he wasn’t much interested in local politics, it was just about real estate. He was correct. Much of local politics is about real estate. And real estate is about so much more: where we live, yearn to live, can’t afford to live, racism, classism, profit, greed and poverty.

Developers and the real estate industry are significant contributors to election campaigns, either directly or indirectly through PACs (Political Action Committees) often called dark money. For small direct and PAC investments in local elections, the public can be influenced into electing industry friendly city councils, mayors and other officials and voting for or against ballot measures. Industry friendly mayors and council members can be swayed into industry friendly legislation, discounts and exemptions. And this background makes local, state and national politics so very interesting.

There is a lot to cover and a great number of council actions were not good news, so buckle up. 

The week started with a rather tame Agenda Committee on January 17, 2023. Both Mayor Arreguin and Councilmember Hahn were absent, leaving Councilmember Wengraf and alternate committee member Vice Mayor Bartlett holding down the fort. Little happened with the agenda for the January 31 council meeting. However, the public arrived on ZOOM to comment in opposition to former Councilmember Lori Droste’s proposals to limit public participation at City Council meetings. The Droste proposals, held over after she left the council, were in the “unscheduled list”, not officially up for discussion and action. With Arreguin and Hahn absent, it is unknown when the two items will be discussed: one on limiting public comment and the other on limiting legislation, so concerned citizens are on the hook to keep showing up. Both proposals are explained in the January 8 Activist’s Diary. https://www.berkeleydailyplanet.com/issue/2023-01-08/article/50141?headline=A-BERKELEY-ACTIVIST-S-DIARY-week-ending-January-8--Kelly-Hammargren ) 

The Tuesday evening regular City Council meeting and the Special City Council meeting on Wednesday are connected with big implications. 

This gets complicated fast, so I have broken out the basics for housing concepts, legislation and buzz words: RHNA, in-lieu mitigation fees, Nexus studies, AMI, inclusionary housing, AB 1505 - the Palmer Fix, SB 330, and the 2022 chart on affordable income levels. I will explain each separately in order to keep the account of what happened at City Council on January 17 and January 18 to a readable length, available for readers of this Diary and for anyone who needs it for the future. 

Tuesday evening Item-21 was Affordable Housing Requirements, amending Berkeley Municipal Code Section C 23.328. The purpose of this section of the BMC is described as to “promote Housing Element goals to develop affordable housing for households with incomes below the median…” https://berkeley.municipal.codes/BMC/23.328.010 

Item-21 changes how the in-lieu mitigation fee is calculated. Councilmember Robinson takes credit for suggesting changing the in-lieu mitigation fee from per unit to square footage as one of his first actions after being elected in 2018. It was a welcome suggestion, envisioning ending developers’ gaming the system by designing mixed-use buildings with four, five, even six bedroom units to maximize rent and minimize the in-lieu fee. With an in-lieu fee by square feet, there would be no need to exempt projects with fewer than five units and McMansions could also be charged a fee. 

The process to change the fee was long and protracted as it was handed off to the Street Level Advisors consulting group and wound its way through the City of Berkeley Planning Department, with stops at the Planning Commission on October 21, 2020, and May 5, 2021. Finally, on March 2, 2022, the Planning Commissioners approved the recommended fee schedule and sent it to the Berkeley City Council, where it arrived another 10 ½ months later for a City Council vote on Tuesday, January 17, with several options, including discounting the fee back to the 2020 level instead of 2022. 

So how did the City Council give Mayor Arreguin an eight to one vote, when 43% of the 8934 units assigned to Berkeley to build through the Regional Housing Needs Allocation (RHNA) are for very low income households (2446 units) and low income households (1408 units)? 

After closing the public comment (only six members of the public spoke), Mayor Arreguin called on Councilmember Hahn, even though Councilmember Harrison had her ZOOM hand up first. 

Hahn said that she supported the inclusion of all projects regardless of their size, and that there is no basis for adopting the lower 2020 fee level. The fact that developers frequently choose to pay the fee instead of providing inclusionary units indicates that the in-lieu fee may actually be too low. 

Then Arreguin called on himself, made his motion to accept a supplemental proposal from the Planning Department, choosing the discounted 2020 fee schedule and exempting projects under five units. 

Then Arreguin called on Councilmember Robinson who praised the motion. Councilmember Wengraf followed asking questions, ultimately settling behind Arreguin. Finally, Arreguin called on the patiently waiting Harrison who got into the meat of the proposed ordinance and the mayor’s motion. asking if the ordinance was supposed to change the in-lieu fee to square feet, then why was there an exemption for four unit buildings , instead of setting the exemption by size, square feet, which would reasonably be around 4000 square feet. 

Harrison asked what the reasoning was behind recommending reducing the in-lieu fee with a sliding scale fee starting at 11,999 square feet, and how those reduced fees were created. Was there any study to come up with the adjusted fees? Rick Jacobus, the Principal of Street Level Advisors (the consultant) and Steven Buckley, City of Berkeley Planning Manager, had no explanation, saying that a study had not been done for the sliding scale, but one would be done in the future, implying a new Nexus study. 

An 11,999 square foot project could be anywhere from 13 to over thirty units depending on whether the building is filled with two bedroom units with an average of 700 square feet or small studios at 350 square feet. Or that 11,999 square foot building could be a fourplex, triplex or duplex with luxury size units of over 3000 square feet each, as was suggested and rejected by members of the Planning Commission during a discussion on zoning. 

From all appearances, a deal had been made prior to the meeting. Arreguin bristled at the questioning and time after time Arreguin refused consideration of any changes to his motion. Arreguin even went so far as directing his comment at Harrison and stating, “For open government purposes, I think sticking with the proposal that’s in the packet and that’s public is probably the appropriate thing. If we’re reinventing this on the floor, I don’t know whether, you know, there are Brown Act implications, so I’m not going to accept that.” 

Arreguin’s statement that making modifications “from the floor” during a public city council meeting was a Brown Act violation is pretty shocking coming from someone who is forever making modifications “from the floor” when it suits him or more accurately suits those who have his ear. Modifications “from the floor” are common at City Council meetings as agenda action items are hashed out following public comment and council discussion. 

But maybe the “Brown Act implications” was a slip, hinting that there might have been serial meetings with councilmembers to line up behind an industry friendlier amendment. Serial meetings are a series of smaller private meetings by which a majority of the members of a legislative body like the Berkeley City Council commit to a decision or engage in collective deliberation, violating the Brown Act’s open meeting requirement. 

The mayor and his majority chose the fee based on net floor area with the theory that developers would be more generous with common space like mailrooms, laundry rooms, hallways, maybe even a common room, with a fee calculated only on the actual living/dwelling unit. It looks more like net floor area will bring smaller units which might be a good thing depending on your point of view. 

Mayor Arreguin’s Tuesday evening motion that passed with eight yes votes and one abstention from Councilmember Harrison discounted the in-lieu fee back to the 2020 using the net residential floor area with an in-lieu fee of $56.25 per square foot. The formula in the agenda packet placed the net floor area in-lieu fee of $56.25 per square foot as equivalent to $45 per square foot if gross residential square footage had been used instead. 

When I read through the old 2015 Berkeley Nexus study and calculated the gross square foot fee from the recommended $34,000 per unit fee, a fee that in 2015 gave the developers a 13.9% profit when a 10% to 12% profit was considered reasonable. That fee was $45 per square foot. 

The in-lieu mitigation fee essentially says to the developers, the investors in these multi-unit apartment and condominiums buildings, that you cannot build on Berkeley City land and profiteer without giving back to the community. Your new building carries with it an impact on the community. You can either include in your building 20% affordable housing units with 10% for low income households and 10% for very low income households, or you can pay the in-lieu mitigation fee to avoid having any lower income residents in the building or some combination of the fee and units. 

Berkeley is a microcosm of what is happening around the country and around the world. People who used to define themselves as middle class are priced out of housing, and people who fall into what they and we define as poor are on the street in tents, sleeping in cars, living in RVs, shelters or with nothing. Yes, some are mentally ill, but it is market rate (high-priced) housing and a dearth of affordable housing that keeps a stable place to live out of reach and places low income households in the precarious position where an unplanned financial emergency of even a few hundred dollars can mean the difference between being able to pay rent, buy food, pay for medications, or keep a car that is needed to keep the job to pay the bills running.  

For all the wealth in Berkeley, in the years 2016-2020 (that latest available record) twenty-two percent of children in Berkeley were on SNAP (Supplemental Nutrition Assistance Program) commonly known as food stamps. https://www.healthyalamedacounty.org/indicators/index/view?indicatorId=5749&localeId=132160 

When nearly every multi-unit building under construction or planned is housing for students, what happened Tuesday evening won’t get us housing for moderate income and low income households. To secure the maximum state density bonus with the fewest inclusionary affordable units, 10% very low income units are the ticket. When the eventual day comes that there is enough money in the Housing Trust Fund to build affordable housing, it is dominated by units for very low income households. Watch out for this in the BART station housing projects. 

Councilmember Kesarwani started her comments on Tuesday evening referencing the Laffer Curve. That is the theoretical relationship between the rates of taxes and the resulting levels of revenue. The Laffer Curve has been a GOP favorite, used as the justification that cutting taxes will spur so much economic growth that the new growth will offset the losses created by tax cuts. 

Kesarwani and I obviously went to different graduate programs. The business lectures I listened to for my MBA called the Laffer Curve the Laugher Curve meaning it was questionable nonsense, but obviously there are true believers. 

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That takes care of Tuesday. Wednesday the City Council voted on the Housing Element. 

Kesarwani’s gift to the Housing Element, with co-sponsors Arreguin, Taplin and Humbert, was the supplemental agenda item designed to increase density and development along San Pablo Avenue and providing for “by right” demolition of single family homes if the house the developer wants to demolish has not been occupied by tenants in the last five years and it would be replaced by a middle income housing project that increases density. The middle housing projects are the duplexes, triplexes and fourplexes that the mayor and seven councilmembers (Kesarwani, Taplin, Bartlett, Hahn, Wengraf, Humbert) voted to exempt from any in-lieu fee on Tuesday evening.  

Calling single family home zoning racist and exclusionary is how the real estate industry and true believers in density convince cities to change zoning and open historic minority home neighborhoods to development. Mayor Arreguin and the Berkeley City Council jumped on that bandwagon a year ago. On Wednesday night Arreguin made his nod to the real estate industry and California YIMBY, a developer-funded lobbying organization, parroting a triumphal claim of ending exclusionary zoning 

Never mind that single family zoning (R-1) in the historic Black neighborhood in South Berkeley around San Pablo Park is what protected those homes from demolition up until now. Berkeley eliminated that protection, ignoring that Black families, just like White families, like yards where their children can play and their own space where they can gather with family and friends. Now that will become just getting on the list to be first to reserve a picnic table if there is one at a park. 

Segregation through housing law has been way more complicated than single family zoning. It was covenants in contracts which prohibited the sale of property to any potential home owner who was other than white. It was refusing to rent to non-whites in White neighborhoods. It was redlining to define minority neighborhoods as high risk limiting bank loans, investment, resources, sinking housing values and keeping them low. Richard Rothstein lays it all out in his excellent book The Color of Law: A Forgotten History of How Our Government Segregated America. 

Redlining continues to impact housing and land value in Berkeley. It was because of the former redlining that I was able to afford the house I now live in. There was a lot I didn’t know in 1990, but lots of reading, discussions, listening and the Black Panther exhibit at the Oakland Museum of California brought it all home, with the map of redlining that put my house right in the redlined area on full display. 

Councilmembers Hahn, Harrison and Wengraf voted against by right demolition of single family homes and lost to the majority, so this proposal was folded into the Housing Element and the Final Environmental Impact Report (FEIR), which then passed with a unanimous vote. 

Tucked into that Housing Element and FEIR are plans to add 15,001 new housing units or 5,167 more units than the required 8,934 RHNA which many of us see as ridiculous in this city of 10.5 square miles, bounded on the west by water and the Hayward Fault, landslides and high fire hazard zones in the hills on the east side. Despite this foolishness, the council promised to attack zoning to increase density. And, we can expect where all that new building will land, on the land that costs the least in a tight market. 

Stay tuned.