Grim Future Predicted for Bay Area Housing
By Patrick Hoge
June 11, 2018
Photo courtesy Karen Chapple
As a Professor of City & Regional Planning at the College of Environmental Design, Karen Chapple spends her days thinking about what cities will look like in 30 years. And even though Chapple has been remarkably influential on local development policies in the Bay Area, what she sees in the region’s future is unsettling to her: a whole lot less economic, ethnic, and racial diversity than she would like.
“I’m not terribly hopeful about the Bay Area,” said Chapple grimly. “It’s too late for a lot of the Bay Area.”
The rising cost of housing is the No. 1 factor undercutting efforts to build equitable communities in the region, Chapple said. That will only get worse if 2 million more residents arrive as expected by 2040, and 80 percent of new development packs into just 5 percent of the region’s land as suggested by Plan Bay Area, a regional planning document, she said. Regional planning efforts, meanwhile, have also focused on creating dense villages around transit stops, an approach Chapple supports but which she believes has not adequately taken into account the rippling gentrification effects such policies produce.
Chapple, who is writing a book on the subject, supervises about 30 researchers at UC Berkeley. She has become known nationally and internationally partly for leading the Urban Displacement Project, which has collaborated with UCLA and Portland State University. This year, she has been traveling to New York City, Europe, and Latin America on a Fulbright Global Scholar Award aimed at expanding the displacement project to cities that include London, Madrid, Buenos Aires, Bogotá, and Sydney.
While many of the world’s urban regions face similar trajectories in terms of growth and rising inequality, the Bay Area is a special case because it has so many high-paying jobs and attracts so many skilled workers from other places, Chapple said. “The Bay Area is cursed in a way. Everybody wants to live here. It doesn’t fit the conventional rules of demand and supply,” said Chapple in an interview from Bogotá. Chapple said too much attention gets focused on gentrification and not enough on the plight of lower-income neighborhoods, which have been getting poorer with increased housing costs.
In the Bay Area, Chapple said San Francisco has set the standard for trying to protect lower-income people from displacement and also preserve industrial uses. Half of the city’s housing is rent-protected in some fashion, she said. By contrast, Oakland has been “a failure,” although in recent years, it has begun to make progress, notably through the adoption of an impact fee on new development to pay for affordable housing and the passage of a preservation bond, she said.
“So how do we plan for the people who are here already? How do we protect the kids and grandchildren? Where are they going to live given this continual influx of highly skilled immigrants?” Chapple asked. Regional planning efforts have not taken those people into account, she said. “It’s unconscionable,” Chapple said. “We plan mostly for the people coming rather than the people who are here.” Chapple is hopeful that initiatives at the state level will produce effective tools for encouraging diversity in neighborhoods, particularly by overcoming local opposition to development. “It’s for their own good. It’s for their grandchildren,” she said.
One example of such an effort was SB 827, a controversial bill by state Sen. Scott Wiener, D-San Francisco, that would have allowed the construction of apartment buildings up to five stories tall near high-frequency mass transit stops. Chapple said the proposal was on the right track, but was “a one size fits all blunt instrument” that lacked enough affordable housing requirements and protections for renters in nearby neighborhoods.
“We have constructed housing policy and planning mechanisms around production, and around a certain kind of infill development, without thinking through the wider implications,” she said.
Because land around transit is so costly to assemble, entitle, and build upon, private developers inevitably aim to build luxury apartments there, Chapple said. Local governments have been requiring developers to build some units for low- and medium-income people, but that does not protect residents in surrounding neighborhoods, she said. Chapple did not take a position on SB 827, which died in its first committee in April. She has also not taken a position on efforts to qualify a November ballot initiative to repeal California’s Costa-Hawkins Rental Housing Act, which restricts rent control on certain buildings. Chapple has advocated on other measures, however, and she believes her research has been influential partly because she has been “aggressive” about disseminating it, especially over the internet, where she maintains four websites for various work-related projects and a website of her own.
In the Bay Area, Chapple said too much attention has gone to developing new affordable housing at the expense of more cost-effective approaches, notably that of protecting existing affordable housing. Chapple’s work on that subject helped to inspire the housing portion of Measure KK in November 2016, a city infrastructure bond that set aside $100 million for the preservation of existing affordable housing, said Joshua Simon, executive director of the East Bay Asian Local Development Corp.“Karen’s overwhelming data showed that we are living in a time that is unlike anything we’ve seen in the past,” Simon said.
“We saw that building affordable housing is important, but we can’t build it fast enough for the changes coming to the Bay Area,” Simon said. “Based on her work, it occurred to us that it was faster to lock in the affordability of existing apartments so people do not get priced out.”
As a result, EBALDC bought five apartment buildings in the last two years, a pace the agency is hoping to double, he said.
Another creative method of easing the housing crunch that Chapple has championed to great effect is getting governments to relax permitting requirements on accessory dwelling units, or “granny units” as they are often called. In 2011, Chapple released a study called “Yes in My Backyard” in which she demonstrated the potential for backyards to yield significant numbers of housing units. That was about the time that Chapple built a 400-square-foot cottage behind her own West Berkeley home in order to get rental income. (The university had cut salaries and she could no longer afford to pay for child care as a single mother.) The Bay Area Council, a business group that among other things advocates on housing policies, subsequently took Chapple’s research around the state pushing “granny units.” “Karen’s research and her data have made it much easier at the policy level to make change,” said Matt Regan, the senior vice president of public policy.
State Sen. Bob Wieckowski, D-Fremont, said Chapple’s research and testimony in the Legislature was “pivotal” in getting a law passed in 2016 streamlining the approval process and reducing fees for accessory dwelling units. The law, which eliminated off-street parking requirements within a half-mile of transit, along with two related bills by other authors, went into effect January 2017. Since then, accessory dwelling units have mushroomed statewide, although the overall number remains small. Banks have also begun showing more interest in lending for such projects.
California saw a 63 percent increase in permitting accessory dwelling units from 2016 to 2017, the most of any state, according to ATTOM Data Solutions, which tracks real estate indicators. The state’s total number rose from 2,664 to 4,352. In Oakland, the number of permits rose 63 percent, from 63 to 103. In Berkeley, the increase was 88 percent, from 48 to 90. Chapple admits that she did not anticipate such a sharp spike. As to the larger building boom in Oakland, Chapple expects it will relieve some pressure on the housing market, though not enough over the long-term. Her research has challenged the notion that building market rate housing is the only way to increase housing affordability.
In general, Chapple thinks governments ought to extract more money from developers when changing zoning to allow for greater density, which she said provides landowners “a windfall.” Oakland did not take adequate advantage of that opportunity when it up-zoned large parts of downtown, she said.
“From my point of view, private property rights have been winning out more than the public good, and it’s time to switch that dynamic,” Chapple said. “Not that I’m a communist.”