HOUSING ADVISORY COMMISSION AGENDA

Transcription

1 Housing Advisory Commission HOUSING ADVISORY COMMISSION AGENDA Regular Meeting Thursday, September 6, :00 pm All agenda items are for discussion and possible action. South Berkeley Senior Center 2939 Ellis Street Secretary Amy Davidson Public comment policy: Members of the public may speak on any items on the Agenda and items not on the Agenda during the initial Public Comment period. Members of the public may also comment on any item listed on the agenda as the item is taken up. Members of the public may not speak more than once on any given item. The Chair may limit public comments to 3 minutes or less. 1. Roll Call 2. Agenda Approval 3. Public Comment 4. Approval of the July 11, 2018 Regular Meeting Minutes (Attachment 1) 5. Discussion and Possible Recommendation to Council on Levels of Housing Affordability North Berkeley BART and Possible Dissolution of the North Berkeley BART Subcommittee North Berkeley BART Subcommittee (Attachments 2,3, & 19) 6. Discussion and Possible Action on Draft PY17 Consolidated Annual Performance and Evaluation Report (CAPER) Rhianna Babka, HHCS (Attachment 4) 7. Discussion and Possible Action to Appoint Representatives to Attend the Public Hearing on Community Needs on October 17, 2018 Rhianna Babka, HHCS (Attachment 5) 8. Discussion and Possible Action on the Relocation Ordinance Marian Wolfe (Attachments 6) 9. Discussion and Possible Action on Recommendation Small Sites Program Capacity Building RFP Housing Trust Fund Subcommittee & Jenny Wyant, HHCS (Attachment 7) 10. Presentation on UC Berkeley InCity Small Sites Research Marian Wolfe (Attachment 8) 11. Discussion and Possible Action on a Work Plan Lord/All (Attachment 9) 12. Discussion and Possible Action on a Biannual Housing Policy Advice Report (Measure U1) Thomas Lord & Igor Tregub (Attachments 10 & 11) 2180 Milvia Street 2nd Floor Berkeley CA Tel TDD: Fax: housing@ci.berkeley.ca.us

2 Housing Advisory Commission Regular Meeting September 6, 2018 Page 2 of Discussion and Possible Recommendation to Council to Adopt a Resolution in Support of the Housing, Opportunity, Mobility, and Equity (HOME) Act Amir Wright (Attachment 12) 14. Discussion and Possible Recommendation to Council on a Funding Request for Satellite Affordable Housing Associates Oxford Street Apartments Development Igor Tregub (Attachment 13) 15. Discussion and Possible Action on Housing Code Enforcement Monitoring, Evaluation, and Advice Thomas Lord (Attachment 14) 16. Discussion and Possible Action on a Democratized Housing Innovations Summit Thomas Lord (Attachment 15) 17. Discussion and Possible Action on Reconsideration of the HAC s Recommendation to Sell Fifth Street Properties Thomas Lord 18. Update and Discussion on Smoke-Free Housing Ordinance Thomas Lord 19. Discussion and Possible Action on Joint Subcommittee for Implementation of State Housing Law (JSISHL) Agenda Thomas Lord 20. Discussion on a Lightning Round Information/Response Items Thomas Lord (Attachment 16) 21. Update on Council Items (Future Dates Subject to Change) All/Staff a. Placing a General Obligation Bond Measure for Affordable Housing on the November 6, 2018 Ballot (7/10/18) 10_Item_30_Revised_City_Attorney_(Supp_3)_pdf.aspx b. Housing Trust Fund Request for Proposals for Housing Rehabilitation with the City s 2018 HOME Funds and HOME Program Income (7/24/18) 24_Item_18_Housing_Trust_Fund_Request.aspx c. Referral Response: Second Dwelling Unit/Accessory Dwelling Unit Pilot Program to House the Homeless (7/24/18) 24_Item_49_Referral_Response_Second_Dwelling.aspx d. Direct the City Manager to issue a Request for Qualifications (RFQ) to establish a two-year Home Share Pilot Program that could be expanded into a permanent housing program in the City of Berkeley (9/25/18) e. Including a Public Purchase Option in a Small Sites Housing Program (9/25/18)

3 Housing Advisory Commission Regular Meeting September 6, 2018 Page 3 of Announcements/Information Items a. Commissioner Stipends (Attachment #) b. HUD Displacement of Lower-Income Families in Urban Areas Report (Attachment #) Xavier Johnson c. Joint Subcommittee for Implementation of State Housing Laws (JSISHL) July 19 th Agenda Packet ons/jsishl/ _agenda PACKET.pdf d. California Senate passes huge BART housing bill Future Items 24. Adjourn Attachments 1. Draft July 11, 2018 Regular Meeting Minutes 2. Mayor Arreguín and Councilmember Maio, Suggested Process for North Berkeley BART Parking Lot 3. North Berkeley BART Housing Subcommittee, North Berkeley BART Housing Recommendation 4. Rhianna Babka, City of Berkeley s Draft Consolidated Annual Performance and Evaluation Report for Federal Program Year 2017 (July 2017 through June 2018) 5. Rhianna Babka, Appoint Representatives to Attend the Public Hearing on Community Needs on October 17, Wolfe, Relocation Ordinance 7. Jenny Wyant, Small Sites Program Capacity Building RFP Proposals 8. Wolfe, UC Berkeley InCity Small Sites Program Report 9. Lord, Work Plan Updates and Timeline 10. Lord, Implementing New Duties Under Measure U1 11. Tregub, HAC Item: Record of Recommendations 12. Wright, Housing, Opportunity, Mobility, and Equity (HOME) Act Memo and Resolution 13. Tregub, Funding Request for Satellite Affordable Housing Associates Oxford Street Apartments Development 14. Lord, Housing Code Enforcement: Monitoring, Evaluation and Advice 15. Lord, Democratized Housing Innovations Summit 16. Lord, Call for Lightning Round Information/Response Items 17. Amy Davidson, Commissioner Stipends 18. HUD Displacement of Lower-Income Families in Urban Areas Report 19. North Berkeley BART Housing Development: Public Correspondence Received by the North Berkeley BART Subcommittee & Housing Advisory Commission This meeting is being held in a wheelchair accessible location. To request a disability-related accommodation(s) to participate

4 Housing Advisory Commission Regular Meeting September 6, 2018 Page 4 of 4 in the meeting, including auxiliary aids or services, please contact the Disability Services Specialist at (V) or (TDD) at least three business days before the meeting date. Please refrain from wearing scented products to this meeting. Any writings or documents provided to a majority of the Commission regarding any item on this agenda will be made available for public inspection at the Health, Housing & Community Services Department located at 2180 Milvia Street, 2 nd Floor during regular business hours. Agenda packets and minutes are posted online at: Communications to Berkeley boards, commissions or committees are public record and will become part of the City s electronic records, which are accessible through the City s website. Please note: addresses, names, addresses, and other contact information are not required, but if included in any communication to a City board, commission or committee, will become part of the public record. If you do not want your address or any other contact information to be made public, you may deliver communications via U.S. Postal Service or in person to the Secretary of the commission. If you do not want your contact information included in the public record, please do not include that information in your communication. Please contact the Secretary for further information.

5 HOUSING ADVISORY COMMISSION Regular Meeting Wednesday, July 11, 2018 HAC 09/06/18 Attachment 1 Housing Advisory Commission Time: 7:05 pm South Berkeley Senior Center 2939 Ellis Street Berkeley Secretary Amy Davidson, (510) DRAFT MINUTES 1. Roll Call Present: Luis Amezcua, Joshua Holman (substitute for Amir Wright), Xavier Johnson, Rashi Kesarwani (7:22 pm), Matthew Lewis, Thomas Lord, Darrell Owens, and Ian Winters (substitute for Igor Tregub) Absent: Amir Wright (excused), Igor Tregub (excused), and Marian Wolfe (excused). Commissioners in attendance: 8 of 8 Staff Present: Amy Davidson, Mike Uberti, Jenny Wyant Members of the public in attendance: 6 2. Temporary Chair Appointment Action: M/S/C (Amezcua/Johnson) to appoint Commissioner Johnson as the temporary chair for the meeting in the absence of the chair and vice chair. Vote: Ayes: Amezcua, Holman, Johnson, Lewis, Lord, Owens, and Winters. Noes: None. Abstain: None. Absent: Kesarwani (unexcused), Tregub (excused), Wolfe (excused), and Wright (excused). 3. Agenda Approval Action: M/S/C (Amezcua/Lord) to approve the agenda. Vote: Ayes: Amezcua, Holman, Johnson, Lewis, Lord, Owens, and Winters. Noes: None. Abstain: None. Absent: Kesarwani (unexcused), Tregub (excused), Wolfe (excused), and Wright (excused). 4. Public Comment Public Speakers: 1 5. Approval of the June 7, 2018 Regular Meeting Minutes Action: M/S/C (Lewis/Lord) to approve the minutes. Vote: Ayes: Amezcua, Holman, Johnson, Lewis, Lord, Owens, and Winters. Noes: None. Abstain: None. Absent: Kesarwani (unexcused), Tregub (excused), Wolfe (excused), and Wright (excused). HAC Page 1

6 Housing Advisory Commission Regular Meeting Minutes July 11, 2018 Page 2 of 4 HAC 09/06/18 Attachment 1 6. Discussion and Possible Action on a Small Sites Multi-Family Housing Loan Program Public Speakers: 2 Commissioner Winters recused himself due to his employment at Northern California Land Trust which may apply for a Small Sites loan. Action: M/S/C (Lord/Owens) to adopt recommendations dictated by the Commission for a Small Sites Multi-Family Housing Loan Program. Vote: Ayes: Amezcua, Holman, Johnson, Kesarwani, Lewis, Lord, and Owens. Noes: None. Abstain: None. Absent: Tregub (excused), Winters (recused), Wolfe (excused), and Wright (excused). 7. Presentation on the Tenant Opportunity to Purchase Act (TOPA) 8. Discussion and Possible Action on 1281 University Avenue RFP and Subcommittee Recommendations Action: M/S/C (Owens/Amezcua) to recommend the Resources for Community Development (RCD) proposal with reservations regarding the proposal s financial feasibility (especially in regards to its reliance on project-based Section 8), reliance on tax credits leveraged in combination with other RCD projects, RCD s past performance, the level of homeless provided services on site, detail available about the service plan, and proposed reduction of open-space, and recommend the site provide a temporary use for short term housing while a viable long term project is determined. Vote: Ayes: Amezcua, Holman, Johnson, Kesarwani, Lewis, and Winters. Noes: Lord. Abstain: Owens. Absent: Tregub (excused), Wolfe (excused), and Wright (excused). Action: M/S/C (Johnson/Owens) to extend the meeting to 9:30 pm. Vote: Ayes: Amezcua, Holman, Johnson, Kesarwani, Lord, Owens, and Winters. Noes: None. Abstain: None. Absent: Lewis (unexcused), Tregub (excused), Wolfe (excused), and Wright (excused). 9. Discussion and Possible Action on the Disposition of Former Successor Agency to Redevelopment Properties at 1631 Fifth Street and 1654 Fifth Street Action: M/S/C (Owens/Amezcua) to recommend to Council to approve the sale of two former redevelopment properties at market value and deposit the proceeds in the Housing Trust Fund. Vote: Ayes: Amezcua, Holman, Johnson, Kesarwani, Lewis, Owens, and Winters. Noes: Lord. Abstain: None. Absent: Tregub (excused), Wolfe (excused), and Wright (excused). Action: M/S/C (Johnson/Owens) to extend the meeting to 10:00 pm. Vote: Ayes: Amezcua, Holman, Johnson, Kesarwani, Lewis, Lord, Owens, and Winters. Noes: None. Abstain: None. Absent: Tregub (excused), Wolfe (excused), and Wright (excused). HAC Page 2

7 Housing Advisory Commission Regular Meeting Minutes July 11, 2018 Page 3 of 4 HAC 09/06/18 Attachment Discussion and Possible Action on Community Housing Development Organization (CHDO) Operating Funds for FY 2019 Action: M/S/C (Amezcua/Lewis) to provide federal HOME program CDHO operating funds in the amount of $28,115 to Satellite Affordable Housing Associates (SAHA) and an equivalent amount of General Funds to Resources for Community Development (RCD) again in FY Vote: Ayes: Amezcua, Holman, Johnson, Kesarwani, Lewis, Lord, Owens, and Winters. Noes: None. Abstain: None. Absent: Tregub (excused), Wolfe (excused), and Wright (excused). 11. Discussion and Possible Action on a Work Plan 12. Discussion and Possible Action on Ad-Hoc Subcommittee Appointments and Assignments Action: M/S/C (Lewis/Amezcua) to create a North Berkeley BART subcommittee to make recommendations for potential housing development at the North Berkeley BART site until December 31, 2018 and appoint Commissioners Lewis, Owens, and Tregub. Vote: Ayes: Amezcua, Holman, Johnson, Kesarwani, Lewis, Lord, Owens, and Winters. Noes: None. Abstain: None. Absent: Tregub (excused), Wolfe (excused), and Wright (excused). Action: M/S/C (Johnson/Lewis) to create a Community Development Block Grant (CDBG) subcommittee to review and make recommendations on the CDBG applications until the end of the funding cycle and appoint Commissioners Amezcua, Lewis, and Lord. Vote: Ayes: Amezcua, Holman, Johnson, Kesarwani, Lewis, Lord, Owens, and Winters. Noes: None. Abstain: None. Absent: Tregub (excused), Wolfe (excused), and Wright (excused). 13. Discussion and Possible Action regarding the HAC's Annual Measure U1 Reporting and Work Plan Update Action: M/S/C (Lord/Owens) to establish an April/October publication schedule for the Commission s section (B)(10) recommendations. Vote: Ayes: Amezcua, Holman, Johnson, Lewis, Lord, Owens, and Winters. Noes: None. Abstain: None. Absent: Kesarwani (unexcused), Tregub (excused), Wolfe (excused), and Wright (excused). Action: M/S/C (Lewis/Owens) to extend the meeting to 10:30 pm. Vote: Ayes: Amezcua, Holman, Johnson, Kesarwani, Lewis, Lord, Owens, and Winters. Noes: None. Abstain: None. Absent: Tregub (excused), Wolfe (excused), and Wright (excused). 14. Discussion on Moderate Income Housing Subcommittee Report HAC Page 3

8 Housing Advisory Commission Regular Meeting Minutes July 11, 2018 Page 4 of 4 HAC 09/06/18 Attachment Update on the Joint Subcommittee for the Implementation of State Housing Law (JSISHL) 16. Discussion on Organizing a Democratized Housing Summit 17. Update on Council Items 18. Announcements/Information Items 19. Future Items 20. Adjourn Action: M/S/C (Johnson/Amezcua) to adjourn the meeting at 10:10 pm. Vote: Ayes: Amezcua, Holman, Johnson, Lewis, Lord, Owens, and Winters. Noes: None. Abstain: None. Absent: Kesarwani (unexcused), Tregub (excused), Wolfe (excused), and Wright (excused). Approved on September 6, 2018, Amy Davidson, Secretary HAC Page 4

9 HAC 09/06/18 Attachment 2 From : Commissioner Darrell Owens and the North Berkeley BART Housing subcommittee. To : The Housing Advisory Commission Motion : M/S/C (Lewis/Owens) The HAC will choose between recommending to the Berkeley City Council a mixed-income project and a 100% BMR project, while encouraging the greatest degree (% of units) of inclusionary units and depth of affordability (aka AMI) overall at North Berkeley BART site. Vote: Ayes: Lewis, Owens, and Tregub. Noes: none. Abstain: none. Absent: none. Disclaimer : Land use recommendations as to the zoning of the North Berkeley BART site are outside of the HAC's purview and will be addressed by other public entities and/or commissions." The North Berkeley BART subcommittee has finished its neighborhood outreach and have determined two finalist funding-type recommendations to be brought to the Housing Advisory Commission. This motion is for the HAC to debate two project options to then recommend to the City Council as an affordability guideline when working with the BART district on an ideal Request for Proposal (RFP) candidate. The North Berkeley BART site should see a housing proposal with either of the following affordability structure and financing: Option 1: A nonprofit developer project featuring 100% below market-rate (BMR) units. Option 2: A mixed-income project featuring a nonprofit 100% BMR project as stated above, and a market-rate project with a mandated percentage of affordability. The language of the motion agreed upon with unanimous approval noted that...[the HAC] should encourage the greatest degree (% of units) of inclusionary units and depth of affordability (aka AMI) overall at North Berkeley BART site. The Housing Advisory Commission should also, in addition to recommending a funding-type for the RFP, also recommend an ideal AMI range or depth of affordability for this project. The HAC should recommend an option to be sent to the City Council in a letter. Subcommittee and the Council: Both the mayor and Councilmember Maio were informed of the subcommittee s creation shortly after July 11th. The subcommittee had corresponded with both electeds regarding the scope of the subcommittee to be given prior to the subcommittee s meeting. Their recommendations HAC Page 5

10 HAC 09/06/18 Attachment 2 narrowed down the subcommittee s action to be in-line with the city s vision and neighborhood process for the site. Community Input during the subcommittee: The subcommittee hosted roughly a dozen citizens at the West Berkeley-branch library, and received 23 s. Of the 23 s, 12 recommended a mixed income project (including 1 stating it represented 20 other North Berkeley neighbors), 6 recommended the subcommittee disbanded or believed it to be premature, 3 endorsed the subcommittee without a stated preferences, 1 noted parking concerns, and 1 was a duplicate. In person speakers roughly included 5 speakers in favor of a mixed-income project, 2 speakers opposed to the subcommittee, 1 speaker in favor of an affordable project, 1 speaker in favor of co-op ownership model, and 1 speaker opposed to any high rise. This input was deliberated on by the subcommittee before bringing these recommended options to the full Housing Advisory Commission. HAC Page 6

11 Page 1 of 2 HAC 09/06/18 Attachment 3 INFORMATION CALENDAR July 24, 2018 TO: FROM: SUBJECT: Honorable Mayor and Members of the City Council Council Members Maio and Mayor Arreguin Suggested Process for North Berkeley BART Parking Lot BACKGROUND & RECOMMENDED ACTION Given Assembly Bill 2923, Berkeley must take hold of the reins to determine an appropriate housing scenario for the North Berkeley BART parking lot. Toward that end we need a process that involves the broad community to help inform the Council as it shapes an appropriate vision for the site. We would do this in collaboration with BART. To initiate such a process, we propose a citywide "idea" gathering where a variety of treatments would be showcased by interested community members. This would happen at the North Berkeley Senior Center sometime this fall. We would share BART's guidelines and physical description materials and collaborate with BART on materials, including announcements. This would be an invitation to propose development standards around height, density, affordability, parking, etc. We would link to a map of the site that indicates the buildable area. We could also ask for volunteer professionals to assist laypersons as part of inviting participation. A possible way to proceed is to invite scenarios of no more than three visuals of X size submitted by a specific date to the Mayor's office. These would be made available online. At the event, walls and poster easels will be made available by the Planning Department. The convener will outline the day's process. Attendees will circulate the room to discuss ideas with presenter and offer comments. All presentations and comments will then be distilled and presented, by staff, into several basic proposals for Council consideration at a work session. Council would then determine a preferred scenario and meet with BART to determine next steps as the City proceeds with the zoning. Clearly there has to be a funding plan and a joint working relationship with BART as we move ahead. lmaio@cityofberkeley.info cityofberkeley.info/lindamaio HAC Page 7

12 Page 2 of 2 HAC 09/06/18 Attachment 3 BART Board Member Rebecca Saltzman, who represents North Berkeley BART, is in general agreement with this approach. A more detailed process description with specifics would appear on the Council agenda in the fall. ENVIRONMENTAL SUSTAINABILITY No environmental sustainability impact. FINANCIAL IMPLICATIONS Staff time. CONTACT Office of Councilmember Linda Maio, District lmaio@cityofberkeley.info cityofberkeley.info/lindamaio Office of Mayor Jesse Arreguin mayor@cityofberkeley.info cityofberkeley.info/mayor HAC Page 8

13 HAC 09/06/18 Attachment 4 Health Housing and Community Services Department Housing & Community Services Division MEMORANDUM To: From: Housing Advisory Commission Rhianna Babka, Community Service Specialist III Date: August 28, 2018 Subject: City of Berkeley s Draft Consolidated Annual Performance and Evaluation Report for Federal Program Year 2017 (July 2017 through June 2018) Beginning Friday, August 31, 2018, the public can review and comment on the City s Draft PY17 Consolidated Annual Performance and Evaluation Report (CAPER) for Program Year 2017 (July 1, 2017 to June 30, 2018). The HAC s September 6 th meeting kicks off the public comment period. The draft CAPER will be available for public review on the City s website at As many of you know, the CAPER is a report required by the U.S. Department of Housing and Urban Development (HUD) which tells HUD and the public how the City spent its federal funds in the prior year. The HAC s review of the Draft CAPER is part of the City s Citizen Participation Process. Members or the public and the HAC can provide comment on the draft CAPER at the HAC s September 6 th meeting. Additional public comments on the CAPER need to be submitted to me by Friday, September 21, 2018 at 5:00 p.m. The City must complete and submit the report to HUD, including City responses to all written public comments, by no later than September 30, A Vibrant and Healthy Berkeley for All 2180 Milvia Street, 2 nd Floor, Berkeley, CA Tel: TDD: Fax: HAC Page 9 HHCS@cityofberkeley.info -

14 HAC 09/06/18 Attachment 5 Health Housing and Community Services Department Housing & Community Services Division MEMORANDUM To: From: Housing Advisory Commission Rhianna Babka, Community Service Specialist III Date: August 27, 2018 Subject: Appoint Representatives to Attend the Public Hearing on Community Needs on October 17, 2018 The federal Department of Housing and Urban Development (HUD) funds the City of Berkeley to provide services and housing for low-income residents. The City also receives federal funding through the State of California to provide services to people living at or below the poverty level. The City is required to involve Berkeley residents in the planning for the use of these funds through a Public Hearing. The information from this Public Hearing will be used to help the Housing Advisory, Homeless, Human Welfare and Community Action and the Children, Youth and Recreation Commissions prioritize the types of services and housing needed to meet community needs. The Public Hearing is attended by representatives from the Housing Advisory, Homeless, Human Welfare and Community Action, and Children Youth and Recreation Commissioners. Tonight we are asking that you appoint two to three representatives of the Housing Advisory Commission to attend the Public Hearing regarding community needs. The Public Hearing is scheduled to take place at 6pm, October 17, and at the South Berkeley Senior Center located at 2939 Ellis Street, Berkeley. HAC Page 10

15 HAC 09/06/18 Attachment 6 Date: September 6, 2018 To: Housing Advisory Commission From: Christine Schwartz, Tenant Advocate and Marian Wolfe, HAC Vice-Chair Subject: Relocation Ordinance The Housing Advisory Commission last provided input to the City s Relocation Ordinance in The update to this Ordinance was completed in 2011 and is part of the Municipal Code (Chapter Relocation Services and Payments for Residential Tenant Households). 1 The purpose of this memo is to bring three concerns about this Ordinance to the attention of the HAC and to determine if the HAC shares these same concerns. If so, the HAC could bring these concerns to the attention of the City Council. Background First, there is a problem with Municipal Code B-3 which states the following: 3. If the rental costs incurred by the Tenant Household during the period of Relocation exceed the amount of rent being paid on the Unit or Room to be vacated, the Household shall be eligible for a rent differential payment. The rent differential payment shall be equal to the difference between the rent paid on the Unit or Room to be vacated and the rent paid for a Unit or Room temporarily leased during the period of Relocation, with the following restrictions: a. The rent differential payment shall not exceed a ceiling established annually by the City based on the average market rent statistics gathered and published by the Rent Stabilization Program for the prior calendar year. The problem with this requirement is that in a tight and expensive rental market that exists today in Berkeley, locating a temporary replacement unit that does not exceed the ceiling established annually by the City based on the average market rent statistics gathered and published by the Rent Stabilization Program for the prior calendar year is almost impossible. 1 ( _General/RelocationOrdinance.pdf 1 HAC Page 11

16 HAC 09/06/18 Attachment 6 For , the Maximum Rent Levels for Replacement Units are as follows: Studio: $1,713 1 BR: $2,089 2 BR: $2,883 3 BR: $3,911 Because of these rent ceilings, the tenant, who needs to relocate temporarily and prefers returning to their unit, may not receive sufficient rent differential payment to be able to rent a residential unit on a temporary basis. Consequently, the tenant needs to contest the amount of the rental payment, pay more out of pocket for rent, move in with friends or relatives, or rent a unit outside of Berkeley. None of these are desired options and some may not be possible, particularly if a tenant is lower-income and/or requires a Berkeley location. Secondly, if a tenant wants to contest the rent payment provided, the tenant and landlord have three choices as described in Section Conflict Resolution and Appeal Procedures for Voluntary Code Compliance. A summary of these procedures is as follows: (1) Engage in a conflict resolution or mediation service provided through the Rent Stabilization Board or any other appropriate entity upon request by both parties for such referral in lieu of an appeal to the Building Official. (2) If the Owner disagrees with the Tenant Household s claim for Relocation payments, and such disagreement cannot be resolved through conflict resolution or mediation, then the Owner may file a written request for a hearing by the Housing Advisory Commission. (3) If the Tenant Household disagrees with the Owner as to the necessity to relocate, and such disagreement cannot be resolved through conflict resolution or mediation, the Tenant Household may request in writing that the Building Official make a determination. This Section does not allow an option for the tenant household to disagree with the payment amount directly either to the Building Official or to the HAC, but does allow the owner to disagree with the Tenant Household s claim for payments to the HAC, a public body. This does not appear to be a balanced policy. 2 HAC Page 12

17 HAC 09/06/18 Attachment 6 However, according to Section , the tenant would still have the right to private action, which generally involves engaging an attorney to argue the case. This can prove to be a high hurdle for some Tenant Households. Finally, there is another policy concern that is not addressed in the Ordinance. Specifically, the Ordinance does not address the special circumstances that can occur when a Tenant Household includes a disabled member, who faces more challenges in locating temporary housing that accommodates the disability. A good example is the need for an elevator to access a unit. If a rental unit in a building with an elevator is unavailable, then the Tenant Household may need to move to a hotel with an elevator. Monthly payments for hotels are much higher than for rental units and exceed the maximum payments specified above. Recommendation We encourage the HAC to undertake a review of the entire Relocation Ordinance, given that Berkeley s Ordinance is seven years old. This review can include an assessment of the first two policies presented above (amount of relocation rent ceiling and the conflict resolution/appeal process). In addition, the HAC, in partnership with the Commissions on Disability and Aging, can recommend additional policies to address the situation in which a disabled Tenant Household is required to relocate on a temporary basis. 3 HAC Page 13

18 HAC 09/06/18 Attachment 7 Health Housing and Community Services Department Housing & Community Services Division MEMORANDUM To: From: Housing Advisory Commission Jenny Wyant, Community Development Project Coordinator Date: August 30, 2018 Subject: Small Sites Program Capacity Building RFP Proposals RECOMMENDATION Recommend to the City Council the Housing Trust Fund Subcommittee s August 10, 2018 recommendation to award $50,000 in Small Sites Program Capacity Building funds to Bay Area Community Land Trust (M/S/C (Lewis/Tregub). Vote: Ayes: Amezcua, Johnson, Lewis, and Tregub. Noes: None. Abstain: None. Absent: None.). CURRENT SITUATION AND ITS EFFECTS Council directed staff to develop a Request for Information and Proposals (RFP) to award $50,000 of the $1 million in funds allocated to the Small Sites Program to an organization to work on locating appropriate small properties for conversion from rental to limited-equity cooperatives and assisting the residents in the conversion process. The Small Sites Program will prioritize projects with the potential for cooperative conversion, though it will not be a threshold requirement. The City issued an RFP to support capacity building for nonprofits likely to participate in the City s forthcoming Small Sites Program. The RFP was released on June 11, 2018 and proposals were due on July 10, The City received two proposals for the capacity-building funds: Bay Area Community Land Trust Northern California Land Trust Staff and the HTF Subcommittee analyzed the proposals based on selection criteria identified in the RFP: developer experience, project budget, project scope, and experience with limited equity housing cooperatives. HAC Page 14

19 HAC 09/06/18 Attachment 7 Bay Area Community Land Trust (BACLT) BACLT was founded in 2006, and is staffed by a half-time executive director, Rick Lewis. Mr. Lewis has more than 20 years experience in housing development, focusing on cooperative structures and land trust models. BACLT has provided technical support for cooperative conversions, and project managed the renovation of several properties, including two in Berkeley. The projects BACLT has completed on its own are smaller (in scope and budget) than what is anticipated in the Small Sites Program. However, BACLT worked with San Francisco Community Land Trust on several projects in San Francisco s Small Sites Program, which were larger projects, including one with an $8 million budget. BACLT s annual operating budget in 2016 and 2017 was around $30,000, and both years showed operating deficits. The City currently funds BACLT at $4,991 per year through FY 2019 to provide technical assistance to cooperatives. The proposed budget anticipates that BACLT will secure $145,000 in new grants, loans, and developer fees, which in addition to the $50,000 from the City, would increase the organization s budget eightfold. The RFP funds would support a portion of staff salaries, with $1,000 funding program supplies. The City s RFP funds would allow BACLT to hire a half-time Program Manager to take over the organization s cooperative training program, and allow the executive director to focus on Small Sites Program opportunities. BACLT s goal is to increase the program manager position to full time and the executive director position to ¾ time within 12 months. Staff plan to work with the Rent Board to identify prospective properties for the Small Sites Program, and work with tenants to educate interested tenants on cooperative ownership structures. BACLT and its executive director have converted or helped convert three rental properties to cooperatives. In 2015, BACLT acquired a non-equity cooperative in Berkeley, and worked with residents for a full year to increase resident management of the property. BACLT has developed a manual and a three-part workshop to use in educating tenants and transitioning projects. Northern California Land Trust (NCLT) NCLT is wrapping up its City-funded Scattered Sites Renovation Project a $1.3 million renovation of two Berkeley properties (with a total of 11 units) that is expected to be completed later this summer on budget. With HAC and Council approval, the City loaned $620,000 in City funds for predevelopment and rehabilitation in this project. With the exception of this current Housing Trust Fund project, NCLT s recent renovation HAC Page 15

20 HAC 09/06/18 Attachment 7 experience has been limited to maintenance on its existing properties. NCLT has an inhouse broker, and in the past three years has assisted two other local land trusts in acquiring single-family homes. No recent NCLT-specific acquisitions were listed in the application. Most of the requested capacity building funds - $45,000 would go towards increasing staff hours. The remaining $5,000 would support NCLT s ongoing partnership with the East Bay Community Law Center (EBCLC). NCLT proposes to leverage an additional $100,000, for a total budget of $150,000. NCLT s organizational financials have continued to improve since its 2011 bankruptcy, and its financial indicators (such as current ratio and days cash) are healthy. In 2017, NCLT had a total operating budget of $530,000, and net assets of $1.8 million. RFP funds would support increased hours for three NCLT staff: the Senior Project Manager, the Resident Education and Outreach Coordinator, and the People of Color Sustainable Housing Network Organizer. The funding would increase NCLT s ability to work with existing residents and groups looking to acquire properties for collective ownership and reach out to communities of color at risk of displacement. The funding would also enable NCLT to extend its existing partnerships, including its work with EBCLC. NCLT anticipates that EBCLC will help identify prospective Small Sites Properties in Berkeley where tenants are at risk of displacement. NCLT created two ownership cooperatives, both funded by the City s Housing Trust Fund in NCLT acquired two other Berkeley properties in the mid-1990s, but were unable to convert them to cooperative ownership because not all tenants wanted to convert. Other NCLT properties maintain various levels of resident ownership and management. NCLT is working to educate its current residents and local tenants interested in cooperatives. HAC Page 16

21 HAC Page 17

22 HAC 09/06/18 Attachment 8 A Small Sites Program as a Potential Strategy for the Development of Affordable Housing in Berkeley, California Client: Housing Advisory Commission Talor Wald, Eder Hernandez, Carey Lai, Alejandro Sarabia & Laura Melendez Introduction In response to the rapidly declining availability of affordable housing within the Bay Area, the City of Berkeley is exploring innovative strategies to support the preservation of its existing supply of naturally occurring affordable housing. The term naturally occurring affordable housing describes residential rental properties that maintain lower rents without federal subsidy. A Small Sites Program offers a promising method for preserving naturally occurring affordable housing and easing housing demand without costly new construction. There are two types of Small Sites Program strategies: equity cooperatives where tenants collectively purchase and operate their buildings and the nonprofit developer model. This study will focus on the non-profit model where a non-profit developer acquires and rehabilitates units of naturally occurring affordable housing and preserves these units as permanently affordable. The research agenda is limited to this approach because (1) affordable housing financing is more traditional and easier to obtain within the non-profit model and (2) in Berkeley, there are several non-profits that already have the knowledge and staff to undertake this approach to add to the affordable housing supply. In this study, initiated by the City of Berkeley Housing Advisory Commission, we analyze the feasibility of a nonprofit model, Small Sites Program within the Berkeley context. The purpose of our work is to supply foundational research and to develop possible criteria for a successful Small Sites program. Our results show that a City of Berkley Small Sites Program is feasible and supports the present and future housing needs of Berkeley residents. Methodology We first conducted a literature review to identify the major trends contributing to the housing crisis at the local scale. Following this review, we conducted stakeholder interviews and analyzed two Small Sites Program precedents in San Francisco and Oakland. Using a S.W.O.T analysis, we compared each program, highlighting the strengths, weaknesses, opportunities, and threats of each. Using this analysis, along with what was learned from our literature review and stakeholder interviews, we created a list of criteria to identify eligible properties for a Berkeley Small Sites Program. Based on our criteria, we identified seven properties that are currently on the market and located in Berkeley. Out of the seven potential properties, we chose two sites that met our criteria and represented two extreme types of potential properties: high acquisition cost per unit/ low rehabilitation cost per unit and low acquisition cost per unit/ high rehabilitation cost per unit. We then analyzed the total cost of acquiring, rehabilitating, and operating each site using a pro forma analysis. Based on our analysis, we provided recommendations for the future development of a Berkeley Small Sites Program. 2 HAC Page 18

23 HAC 09/06/18 Attachment 8 The City of Berkeley Context It is widely recognized that the nation as a whole is currently facing a housing crisis. However, this situation is more prevalent in certain states, such as California, and in certain metropolitan areas, such as the San Francisco Bay Area. This complex, multifaceted issue can be better understood by looking at major trends in housing supply and housing demand. These trends can be observed at a variety of scales but this report will focus on the Alameda County and City of Berkeley scales. In both Alameda County and the City of Berkeley there is a housing shortage relative to demand. This section will first consider trends at the level of Alameda County and then zoom into the City of Berkeley itself. According to the Alameda County Housing Need Report, there is a supply shortage of 58,680 homes affordable to the county s very low-income and extremely lowincome households (California Housing Partnership Corporation, 2014). Additionally, while construction costs have increased across the country, they have skyrocketed up to 25% in the Bay Area. Additionally, according to the Terner Center s Research Series: The Cost of Building Housing, between 2000 and 2016, land pricing in the United States increased 76 percent, but price increases were even greater in California metro areas. On the demand side, census data shows that the median income in Alameda County declined nine percent while median rents increased by eleven percent (California Housing Partnership Corporation, 2014). As a result, households today must spend a much larger portion of their income on rent. For example, the National Low Income Housing Coalition found that a renter earning the California and Alameda County minimum wage of $11 per hour would have to work 163 hours per week to afford a two-bedroom rental home at Fair Market Rent (2018). (However, it is important to note that the City of Berkeley s minimum wage is $15 not $11 per hour.) Zooming in on the City of Berkeley, the City s population rose 9% to 112,580 people between 2000 and According to the Association of Bay Area Governments (ABAG), the population is projected to rise 24% to 140,100 by 2040 (2014). The city s population growth has outpaced its supply of housing resulting in higher housing costs. The City of Berkeley s Housing Element reports that city programs address most potential constraints to housing production, governmental and non-governmental (2014). However, the cost of development is still a significant constraint on new housing supply in Berkeley (Housing Element, 2014). Although the city has the capacity to meet the city s fair share of housing needs as determined by ABAG, there is currently a significant lack of supply of affordable housing for low-income households (Housing Element, 2014). According to the City of Berkeley s Housing Element report, housing costs have been increasing since 2011 despite a brief decrease during the recession. Compared to 2010, median rents for studios and one-bedroom units in new developments are 25% higher and for two-bedroom units are 37% higher (2014). Despite these increases, data from 2010 to 2014 indicates that moderate-income households earning % of AMI are able to afford rental units, especially smaller units in the City of Berkeley (2014). However, average market rents were higher than the maximum affordable rent for all lower-income households, 80% of AMI and below, in 2014 (2014). The affordability of for-sale housing shows similar trends. Although the City of Berkeley has prioritized funding affordable housing in the past, the growing need for affordable housing is larger than its available resources. The City of Berkeley s 3 HAC Page 19

24 HAC 09/06/18 Attachment Housing Element includes an Inventory of Restricted Units Potentially at Risk of Conversion to Market Rate between 2014 and The inventory includes affordable housing developments that may be at risk for converting to market rate because they have subsidies or restrictions expiring in the next ten years. Some of the developments included on the list have project-based subsidies from the US Department of Housing and Urban Development that are renewable on an annual basis but do not have other restrictions recorded on the property which would keep them affordable (2014). All 354 of the units included on this list would be at risk if federal policy changes and Section 8 subsidies for these properties are reduced or eliminated (2014). However, the recently elected City Council has indicated that housing is one of its top priorities and put a $135M affordable housing bond on the November 2018 ballot (Raguso, 2018). The bond would fund a variety of projects such as non-profit developers buying land aimed at creating affordable housing for multiple income levels. Case Study Review San Francisco Small Sites Program Rising rents and furious real estate speculation in San Francisco have caused long time tenants to leave their neighborhoods. To counteract displacement and the risk of eviction among vulnerable tenants, in 2014, the Mayor s Office of Housing and Community Development (MOHCD) issued a Notice of Funding Availability (NOFA) for acquiring and rehabilitating financing for Small Sites Program properties. Three million dollars in initial funding have been allocated to support a Small Sites Program. (The Mayor's Office of Housing and Community Development, 2014) The program is funded through Housing Trust Fund revenues and affordable housing fees paid by housing developers in San Francisco (The Mayor's Office, 2014). San Francisco s Small Sites Program is an acquisition and rehabilitation loan program focusing on small, multifamily rental buildings whose existing tenants are low or moderate- income. Buildings are eligible for the Small Sites Program if they fulfill four conditions: 1) a building has 5 to 25 residential units; 2) no major renovation is required for the building; 3) 2/3 of existing tenants have maximum incomes at 80% Area Median Income; and 4) tenants meet per-unit subsidy requirements. (Mayor's Office of Housing and Community Development, 2018) If a building meets all aforementioned conditions, existing tenants can nominate their building for the Small Sites Program. If the building is accepted by the Program, then the Small Sites Program will provide loans to non-profit or for-profit organizations to purchase the building 1. Funding amounts are 350 k for buildings with 3-9 units; $300k for building with units; and $150k for single room occupancy. Also, a small amount of money will be allocated to address safety and health concerns. (Health Housing and Community Services Department, 2018). Once an organization purchases the building, the building will be converted to permanently affordable housing. As of 2018, 25 buildings have been converted to permanently affordable housing. Onehundred sixty units are were acquired serving 264 tenants whose household incomes average 65% of Area Median Income (Mayor's Office of Housing and Community Development of the City and 1 As of 2018, The Mayor's Office of Housing and Community Development of the City and County of San Francisco only received loan applications from non-profit organizations. No application from for-profit organization was received. In addition, working with for-profit organization deivates the model discussed in Berkeley. 4 HAC Page 20

25 HAC 09/06/18 Attachment 8 County of San Francisco, 2018). Neighborhoods served by the Small Sites Program include Mission, Downtown/Civic Center, SoMa, Castro/Upper Market, Haight Ashbury, Bernal Height and Richmond. AN EVALUATION OF THE SAN FRANCISCO SMALL SITES PROGRAM S.W.O.T ANALYSIS Strengths Small Sites Program aims at keeping existing tenants staying in the same place. No tenant will be evicted or displaced. The Mayor's Office of Housing and Community Development of the City and County of San Francisco has developed well-defined guidelines which help nonprofit and for-profit organizations apply for the loans. Small Sites Program heavily relies on support of non-profit organizations. Strong community engagement which definitely helps Small Sites Program get off the ground more easily. The City of San Francisco has cultivated close and positive relationships with stakeholders. Weaknesses In order for a building to qualify as a small site, all existing tenants must provide income verification. In reality, it is very hard to get all tenants on board and follow through protocol. Small Sites Program is very time demanding and staff intensive. In order to complete a timely transaction within 90 days, additional city staff is needed to develop and implement the projects. Small Sites Program only accepts a building that has 5-25 residential units. A 2-4 unit multifamily building is excluded from this program. Small Sites Program is primarily working with special interest nonprofit organizations, such as Chinatown Community Development Center and Mission Economic Development Agency. Therefore, only certain racial groups and communities are covered. Opportunities In order to offset the low rents of existing tenants, San Francisco approves new tenants with incomes up to 120% Area Median Income which helps address housing needs of middle income households. Small Sites Program currently focuses on certain racial groups and communities. Developing a Fair Housing Policy would help address this weakness. Successful non-profit developers have their in-house realtors, housing counselors and project management experts. It would be difficult for small developers to have their own in-house experts due to shortage of resources, therefore, encouraging small developers to partner with large developers would increase their project capacity. Threats 11 buildings and 134 units are in the pipeline (The Mayor's Office of Housing and Community Development of the City and County of San Francisco, 2018). However, slowdown of market rate construction would threaten the source of income to fund the projects. (Figure 2) Since Small Sites Program is not a lucrative program, it is difficult to get developers and lenders on board. Uncertainty of Prop C would threaten the continuation of projects. Small Sites Program involves different stakeholders with various political interest. Political will directly affects the design and implementation of projects. Program is not well publicized would decrease tenant participation. Oakland Naturally Occurring Affordable Housing Program The City of Oakland provides long-term affordable housing to low income residents through the acquisition and rehabilitation model reflected in the Roadmap to Equity policy report of The cornerstone of the project is the Bond Measure KK Site Acquisition Program passed in 5 HAC Page 21

26 HAC 09/06/18 Attachment 8 November 2016, whose purpose is to provide short term loans for acquisition-related costs associated with developing, protecting, and preserving long term affordable housing (p.1, Housing and Community Development Department) 2. According to the Housing and Development Department s debrief, $100 million in Measure KK funds are made available to nonprofit and forprofit affordable housing developers who aim to serve the needs of households or individuals at or below 60 percent of the area median income. Additionally, the framework for the $100 million targets anti-displacement housing strategies monitored by the Affordable Housing & Infrastructure Bond Public Oversight Committee (City of Oakland, 2017). At this time, City staff has committed all of the Measure KK funds currently allocated to the Site Acquisition, Rehabilitation and Preservation Program (approximately $17 million) but only approximately $3 million has been disbursed to the awardees. 3 Furthermore, although Mayor Schaaf s report on the city being on track to build 17,000 new units for affordable housing by 2024 the majority of the construction is for market-rate units. Since the City of Oakland published the Roadmap to Equity in 2015, only 170 homes under construction are affordable housing (Morris). On the flip side, a great success in the City of Oakland model is the growth in financing for long-term affordable housing. City data reports that between 2007 and 2013, Oakland lost sixty-eight percent of its affordable housing funding because of a reduction in financing at the state and federal level. Despite the onus falling at the local level, the losses were recovered in 2016 with two bond measures to fund the preservation and construction of affordable housing At the county level, Measure A1 raised $580 million and at the municipal level, Measure KK funnels $100 towards housing, the bulk of which will be used to rehabilitate affordable housing (Morris, 2017). AN EVALUATION OF THE OAKLAND NOAH PROGRAM S.W.O.T ANALYSIS Strengths Under Measure KK s Site Acquisition Program, vacant land, vacant buildings and existing multi-family rental buildings of 5 units or greater contribute to a comprehensive housing strategy. This program seeks to serve households or individuals at or below at 60% Area Median Income, prior to 2016, no such target profile existed. NOAH targets % Area Median Income. A top priority is to protect Oakland s vulnerable resident s from displacement Weaknesses No community involvement Divides $100M in Measure KK funds between new construction on vacant lands and rehab ($9.5) ($17M). In the upcoming months, the effectiveness of the money towards acquisition and rehabs will be evaluated. Loan money disbursed too quickly. Many applications were received, but no funds were made available leaving hon-profit developers to leverage financing. 2 City of Oakland. Housing and Community Development Department. Bond Measure KK Site Acquisition Program. Applications Accepted Starting June 5, 2017 Funds Anticipated August Michele Byrd. Housing and Community Development. City of Oakland Agenda Report. Bond Measure KK Program Amendment. May 8, HAC Page 22

27 HAC 09/06/18 Attachment 8 Opportunities Focus funds on more acquisitions instead of new construction. Incorporate more community involvement. Much of the structure Threats The cost of properties is rising, and the city can only provide up to $150,000 per unit or a project maximum of 5 million. 4 Funds are depleting, and it remains uncertain if there exist sufficient opportunities to focus remaining funds on the preservation and rehabilitation of sites. Site Criteria Potential Small Sites Within the City of Berkeley The success of a Berkeley Small Sites program rests on selecting sites that are best suited to meet the goals of the program. Broadly stated, the goal of the program is to preserve as many units of naturally occurring affordable housing as possible. As mentioned in the case studies discussions, there are no specified criteria to measure the success of a small sites program. For our site analysis we defined success quite simply as the most bang for the city s buck meaning the most units preserved for the smallest funding gap given the city s current small sites program budget. We selected criteria that would help calculate this rough measure of success based on a staff report to the Housing Advisory Commission Small Sites Program Staff Recommendation as well as the San Francisco and Oakland Small Sites program precedents. 5 Our final eight criteria can be divided into three financial criteria and five physical criteria. First, the financial criteria includes: total acquisition price, acquisition price per unit, and acquisition cost per unit must be less than the cost per unit of new construction estimated at approximately $694,000. Second, the physical criteria includes: total number of units, types of units (ex. 1-bedroom/1-bathroom), total square feet, building condition and Transit Score. Building condition was determined by reading the descriptions and viewing photos of the building included in its online property listing and Google maps. The Transit Score is a patented measure of how well a location is served by public transit on a scale from 0 to 100. Although neither the Housing Advisory Commission Memorandum nor the case studies included the Transit Score, we chose to include this metric because the true affordability of a housing location is determined by an individual s combined housing costs and transportation costs. Site Selection After determining our criteria, we examined seven multi-unit properties that were currently available on the market and then evaluated them using our criteria. We selected sites currently on the market because in the Housing Advisory Commission s Memorandum the staff stated their goal to review project proposals and award funding within a 90-day period to accommodate developers pursuing properties on the market (p. 2). After comparing all of the sites we chose Site One and Site Two. The actual addresses of each site will not be included in order to respect the privacy of the 4 City of Oakland. Housing and Community Development Department. Bond Measure KK Site Acquisition Program. Applications Accepted Starting June 5, 2017 Funds Anticipated August %20HAC%20Agenda%20Packet%20COMPLETE(2).pdf 7 HAC Page 23

28 HAC 09/06/18 Attachment 8 property owner. We chose these properties because they meet all of our criteria and represent an example of one site with low acquisition cost per unit/high rehabilitation cost per-unit and on site with high acquisition cost per unit/low rehabilitation cost per unit. It is important to note that both of these sites include rent control units. However, the Housing Advisory Commission staff report anticipated that potential small sites could include rent-controlled units and recommended that developers must educate tenants on the conversion from rent control to restricted affordability (p. 9). Following the site selection we found the funding gap associated with each property using a Pro Forma Analysis The pro forma work is based on estimated costs in order to provide a perspective on what a possible site in Berkeley could cost to develop. Assumptions Acquisition These costs include the land, improvements, and additional costs associated with the transaction. Transfer Tax The transfer tax, which might be negotiated with or paid by the property owner, was obtained from the County of Alameda and is $15 per $1,000 of the property s sale price. Reserve Replacement According to the proposed City of Berkeley Small Site Program guidelines, a $2,000 per unit or the amount necessary to pay replacement costs for the next 10 years needs to be funded. This has an impact on the operating expenses, which in turn affect the size of the mortgage that can be financed. Hard Costs This amount is an approximation until there is a site assessment, and then the amount could be entered. Besides the "hard" costs of materials and labor include such components as an allowance for the contractor's project-related expenses. Usually completed by a rehabilitation specialist. The construction contingency amount should be considered in the hard costs. Usually it is not part of the construction contract and is not shared with the contractor. The contingency is used to fund change orders. Typical contingency percentage for rental rehab projects is 10% to 15%. The team does not know the real expenses of rehab. Given the lack of information available. However, two approaches can be made using as a quick guide of assessing a rehabilitation. 1. Rule of thumb from a Non-profit developer - RCD Condition Rule of thumb costs ($/unit) Poor $100,000 Good $50, Based on a wider range of projects provided by the Bay Area Community Land Trust 8 HAC Page 24

29 HAC 09/06/18 Attachment 8 Non-Profit Developer Costs ($/SF) Total ($) Per Unit (Dwelling Unit) Condition Sq. Ft. Cost exceeds rule of Poor 5,344 $312 $1,667,328 $166,732 thumb Cost is below rule of Good 5,216 $80 $417,280 $29,806 thumb Both of these costs are approximations, which could be estimated with a greater level of detail, as you can see on the following paragraphs. Hard Costs suggestion- RSMeans A suggestion for future projects is the use of tools as RSMeans for more reliable and updated data. Soft Costs In this case, we used a ratio of 0.3 (or 30% of hard costs) to cover the following costs: 6 Architectural fees: The architect estimates the fee for its work. These fees are usually a percentage of the construction contract amount, a fee per dwelling unit, a flat fee for services, or another basis. The engineering fee: This takes into consideration the different components including mechanical and structural engineering costs, if needed. Environmental review: A third-party contractor completes the review required to determine clearance. Appraisals: This is required for foreclosed properties and eventually for a permanent loan. Property/casualty insurance should be obtained by the developer for the interim period before builder's risk insurance comes into effect. If the developer is also the general contractor, the developer should obtain builder's risk insurance as insurance against casualty and liability risks during construction. Otherwise, builder's risk insurance is typically obtained by the building contractor and will be included in the construction contract amount, above. In addition, grantees typically require developers to obtain commercial general liability insurance, the cost of which is typically covered by the developer fee. Operating reserve: Pre-funding this reserve can cover the cost of operating the property while lease up is occurring, or during periods when the property is not fully leased up. In this example, the operating reserve was calculated as 25% of the first year operating expenses. Tenant relocation-: Units that require relocation of tenants, the developer agreement should consider whether the financial and management responsibilities of tenant relocation lie with the grantee or developer. However, this process is partially or total depending on the project s nature. Soft cost contingency: This is a contingency amount that is for soft costs higher than anticipated. 6 Sample Pro Forma and Guide - Single-Family Rental Development 9 HAC Page 25

30 HAC 09/06/18 Attachment 8 Developer fee: A developer charges this fee to the project for their time and risk. Developer fees as a percent of total development costs generally are between 10% and 15%. Developer fees should be calculated based on the estimated time, effort and risk required of the developer. In general, fees should also be lower for projects with no major rehabilitation. Development Fees These fees were calculated using the Permit Fee Estimator, including: 7 Permit Fee Plan Check Fee California Senate Bill 1473 Fee (State Building Standards) Building Permit Filing Fee California Strong Motion Instrumentation Fee (residential) Zoning Review for Building Project Community Planning Fee California Title 24 Energy Fee California Title 24 Disability Access Fee Fire Life and Safety Plan Check Fee Building Permit Technology Fee Sustainable Development Fee Operating Revenues and Expenses Rent The basic assumption is that the tenant households occupying the units would be at 80% AMI income level. This was calculated using the definitions from the City of Berkeley. Gross rent assumed a 5.0% vacancy level. Expenses These include property taxes and other expenses provided in the table below. Reserves These will be required by the City s program. Debt Services & Supportable Debt "Supportable debt" is then automatically calculated by a formula based on the Net Operating Income (NOI) and the assumptions in the "supportable debt service calculation". The calculation assumes a debt service ratio of 1.2, which means that the NOI must be 1.2 times (or 20% higher) than the amount available for debt service. The debt service amount is also calculated automatically based on the supportable debt amount HAC Page 26

31 HAC 09/06/18 Attachment 8 Site Information and Pro Forma Results The following information was retrieved from the apartment building listings advertised on-line. 8 Site 1 Site 7 Number of Units Types of Units Ten 1 Bedroom/ 1 Bathroom Units in (2) separate 1 bedroom 1 bathroom units buildings situated on a 12,168 square foot lot Total Price $1,549,000 $2,786,000 Price Per Unit $154,900 $199,000 Total Square Feet 5,344 5,216 Cost per unit must be less than the cost yes yes per unit of new construction Building condition Old Good Location Jefferson Ave. Berkeley, CA San Pablo Ave, Berkeley, CA Transit Score 63 (Good Transit) 56 (Good Transit) HAC Page 27

32 HAC 09/06/18 Attachment 8 Revenues, Expenses, and Debt Service Comparison Sites One and Two Site One Site Two No. of Units Acquisition Costs $1,549,000 $2,786,000 Transfer Tax $23,235 $41,790 Total Acquisition Costs $1,572,235 $2,827,790 Reserve Replacement $200,000 $280,000 ($20,000/unit annually) Hard Costs $1,667,328 $417,280 (includes profit, OH, Gen. Conditions) Soft Costs $500,198 $125,184 Total Development Costs $3,939,761 $3,650,254 Total Cost per Unit $393,976 $260,732 Gross Revenues $221,880 $310,632 (based on 80% AMI Rents for a onebedroom unit) Vacancy Loss (5%) $11,094 $15,532 Gross Effective Income $210,786 $295,100 Operating Expenses $52,697 $73,775 (based on 25% of gross effective income) Property 1.8% $28,300 $50,900 Total Annual Operating Expenses $80,997 $124,675 Income before Reserves Subtracted $129,789 $170,425 Maintenance per unit $45,000 $63,000 Operating of income $32,447 $42,606 Annual Cash Flow Before Debt Service $52,342 $64,819 Debt Service Based on 30-year loan, 1.2 coverage ratio, and 5% interest rate) $41,130 $50,454 Cash Flow After Debt Service $11,212 $14,365 Supportable Debt $638,481 $783,218 Supportable Debt Per Unit $63,848 $55,944 Financing Gap $3,301,280 $2,867,036 Financing Gap Per Unit $330,128 $204, HAC Page 28

33 HAC 09/06/18 Attachment 8 Based on assumptions listed in the table above, it is estimated that there would be a financing gap of approximately $330,000 per unit for Site 1 and $205,000 per unit for Site 1. 9 Comparison Many factors outside the scope of this study might influence the pro forma results. Rents that are used to model revenues (and hence cash flow) could be lower than 80% AMI. Reserve fund may be high, but then this provides the "rainy day" fund that may be needed. Actual rehabilitation costs are an unknown, and estimates using a "rule of thumb" vary from those provided by a local nonprofit. Financing Gap According to the proposed program guidelines, the proposed maximum subsidy to be provided by the City of Berkeley is: 1. $300,000 per unit for buildings of units 2. $375,000 per unit for buildings of 3-9 units 3. $175,000 per bedroom for group living accommodations or single room occupancy (SRO) housing For our case study, $300,000 per unit would apply. Thus the Site 1 property would require an additional subsidy of approximately $30,000 per unit, and the Site 2 property would only require 68% of the proposed subsidy per unit Recommendations Following our stakeholder interviews with Rick Lewis, Executive Director of the Bay Area Community Land Trust, Caroline McCormack, Small Sites Project Manager from the San Francisco Mayor s Office of Housing and Community Development and Meghan Horl, City of Oakland s Housing and Community Development Department, our review of the San Francisco and Oakland case studies, and our analysis Sites One and Two we compiled eight recommendations that would help the City of Berkeley establish a Small Sites Program and ensure its success. 1. Encourage the use of the non-profit model in both the development and operation of Small Sites Nonprofit organizations are more centralized, better funded, and have in house resources to support and educate tenants transitioning from rent control to restricted affordability. It is possible that the co-op model does not have the same resources to educate and support tenants. Instead, tenants are solely responsible for the management of their property and allocating resources. The SF Small Sites Program helped fund one co-op model small site project. According to Caroline McCormack, this project is currently struggling because the tenants are finding the property difficult to manage. 9 These numbers still require fine-tuning, but the general comparison is accurate. 13 HAC Page 29

34 HAC 09/06/18 Attachment 8 2. Consider properties that are currently off of the market In their Small Sites Program Staff Recommendation, Berkeley staff emphasizes that the City goal would be to review project proposals and award funding within a 90-day period to accommodate developers pursuing acquisition of properties on the market (p. 2). However, in their interviews with us, both Rick Lewis, Executive Director of the Bay Area Community Land Trust, and Caroline McCormack, Small Sites Project Manager from the San Francisco Mayor s Office of Housing and Community Development, emphasized pursuing off-market properties. According to Mr. Lewis if the City of Berkeley Housing Staff waits for properties on the market, then the staff and nonprofit developer will only have thirty days to complete the many steps between receiving an application and approving it in thirty days is beyond quick for the city. Like Mr. Lewis, Ms. McCormack mentioned that most of the SF Small Sites Program properties were acquired while off the market. In most cases, tenants brought these properties to the attention of local non-profit developers and the City of San Francisco after learning that their landlord was interested in selling the building. Additionally, acquiring properties off- market ensures that the City does not have to engage in an open bidding war on the market. As a result, the City of San Francisco maintains more funds within budget and is able to preserve more units of naturally occurring affordable housing. 3. Budget for a Small Sites Program Staff It requires additional staff to take on projects and develop capital needs assessments. Initially the San Francisco Small Sites Program only had one part time staff working on the project. After four years of program implementation, the City of San Francisco now has two full time and five part time staff dedicated to its Small Sites Program (The Mayor's Office of Housing and Community Development of the City and County of San Francisco, 2018). The City of Berkeley should consider budgeting for at least one additional part time staff working on the project. 4. Seeking other sources of financing In order to fund a Small Sites Program, nonprofit or for-profit developers must get a loan from their city s government. However, if the loan is not able to cover the whole cost of the project, additional funding is needed to execute the project. In order to make the Small Sites Program sustainable and scalable, the City of Berkeley and the development team need to consider additional sources of financing. 5. Streamline the application process In order to review project proposals and award funding as quickly as possible to accommodate developers and acquire properties the Small Sites Project application must be streamlined. All three of our stakeholders emphasized this point during our interviews with them. Namely, the City Council should take steps to expedite loans administered from the Housing Trust Fund as recommended by Berkeley staff in the Small Sites Program Staff Recommendation. 6. Encourage partnerships between nonprofit developers Ms. McCormack noted that a current challenge the SF Small Sites Program faces is geographical concentration of Small Sites Projects and city funds in the Mission and Chinatown 14 HAC Page 30

35 HAC 09/06/18 Attachment 8 neighborhoods. This geographical concentration occurs because the largest, well-funded non-profit developers that work with the SF Small Sites Program are located in, and committed to serving those neighborhoods and their communities. In order to increase the geographical distribution of funds, large non-profit developers must be incentivized to partner with smaller non-profit developers and community organizations from other neighborhoods. The importance of partnerships between nonprofit developers is echoed across the Bay in Oakland. As part of the loan application process under Measure KK, strict guidelines dictate developers applying for funding must have experience successfully completing at least three similar affordable housing projects. A developer entity in question that does not meet the criteria may still apply for funding through a joint-venture with a developer that does meet the criteria. Under these guidelines, developer experience in the city is expanded through a mentorship like process that benefits the community s overall capacity of working with more non-profit developers that understand that process after gaining the experience. Encouraging partnerships between nonprofit developers will most likely require additional funding but these partnerships will build developer capacity and encourage the preservation of naturally occurring affordable units throughout Berkeley. 7. Educate the City of Berkeley public on the Small Site Program The City of San Francisco has done a good job educating and communicating with the public through diverse channels. These channels include close relationships with local nonprofit/for-profit organizations, a SFGovTV Youtube channel, and the Small Sites Program website. Through these various channels, stakeholders-- including the general public, tenants, nonprofit/for-profit organizations and lenders--can easily access information about the Small Sites Program. Public education and communication help the City identify potential small sites and make the program scalable. 8. Identify possible federal, state, and local funding sources to cover financing gap The City of Berkeley Housing Element includes a table that is useful in identifying potential sources of funding that could be used for a Small Sites Program in Berkeley. The most promising sources would be CDBG, HOME, and Project Based Section 8. Conclusion Overall, a Small Sites Program is a promising strategy to increase the supply of affordable housing in the City of Berkeley. The goal of this report was to provide a foundation for the initial considerations needed to advance the program to the next step. We have covered lessons learned from Small Sites Programs currently operating in both San Francisco and Oakland as well as an introduction into the complex criteria- making process for Berkeley s own program. We have also highlighted our recommendations for the future of the program, which we believe are feasible to implement. We believe that our work can be utilized as a tool for the Housing Advisory Commission to advance future decision making. We as an [IN]CITY team were able to broadly analyze the Small Sites Program process, due to our limited scope of the real estate finance and qualifications. This led us to experience certain 15 HAC Page 31

36 HAC 09/06/18 Attachment 8 limitations that limited our ability to perform more in- depth property analyses. First, when choosing our potential properties, taking a tours of each property with a knowledgeable developer could have provided us with a more complete understanding of potential total rehabilitation costs. This would have allowed us to gain a better understanding of the building s conditions and future rehabilitation needs. Without this information, we utilized general cost estimates to supplement unknown costs throughout our proforma which affected the accuracy of our presented costs. Another limitation we came across was not having access to tenant rents that, together would have been calculated as part of our net income value for each acquired property. This is an important value that factors into the total income generated by each property and, consequently, a successful calculation of a properties funding gap. In order to do this, a survey filled out by each tenant would have been necessary. This, however, would be a challenge given possible landlord wariness and privacy concerns. Under the umbrella of future directions and research questions, it is highly encouraged that the City of Berkeley entertain how offsetting carbon emissions through the acquisition and preservation of currently existing structures can be integrated as a facet of the Small Sites Program. A so called Green Profile provides the opportunity for Berkeley s environmental stewardship and values to be translated in tandem with those of providing affordable housing. Additionally, a comparative analysis in carbon emissions between new construction and rehabilitation fosters a nuanced conversation around resource management and resilient environmental planning. If we were to continue with this study, we would further elaborate on how inflation would impact our pro forma analysis. Additionally, we would like to develop a green profile to compare carbon offsets for emissions generated in new construction versus rehabilitation. References The Mayor's Office of Housing and Community Development. (2014) Notice of Funding Availability - Acquisition and Rehabilitation Financing for Small Sites Program Properties. City and County of San Francisco. The Mayor's Office. (2014) Mayor Lee Announces Funding for Small Site Acquisition Program to Protect Longtime San Francisco. City and County of San Francisco. The Mayor's Office of Housing and Community Development. (2018) Small Sites Program. City and County of San Francisco. Health Housing and Community Services Department. (2018) Small Sites Multi-Family Housing Loan Program Informational Report. City of Berkeley. The Mayor's Office of Housing and Community Development. (2018) City and County of San Francisco. 16 HAC Page 32

37 HAC 09/06/18 Attachment 8 City of Oakland. Housing and Community Development Department. Bond Measure KK Site Acquisition Program. Applications Accepted Starting June 5, 2017 Funds Anticipated August Michele Byrd. Housing and Community Development. City of Oakland Agenda Report. Bond Measure KK Program Amendment. May 8, 2018 Morris, Scott. Oakland Housing: Construction on Track, But Behind on Affordable Housing 11 August Schuetz, J., & Murray, C. (2018, April 27). Unpacking the "housing shortage" puzzle: How does housing enter and exit supply? Retrieved July 23, 2018, from (Schuetz & Murray, 2018) Terner Center Research Series: The Cost of Building Housing. (2018, January 17). Retrieved July 23, 2018, from Whyte, S. (2018, June 20). What Archie Bunker Teaches Us About the Housing Crisis. Retrieved June 24, 2018, from (Whyte, 2018) National Low Income Housing Coalition. (2018, June 11). Out of Reach: California. Retrieved June 24, 2018, from (National Low Income Housing Coalition, 2018) Serlin, C. (2018, June 20). Report: Challenges Persist for Lower End of Housing Market. Retrieved July 23, 2018, from (Serlin, 2018) How Alameda County's Housing Market is Failing to Meet the Needs of Low-Income Families (Rep.). (2014, May). Retrieved July 25, 2018, from California Housing Partnership Corporation website: 17 HAC Page 33

38 HAC 09/06/18 Attachment 8 City of Berkeley Departments of Planning and Development and Health, Housing & Community Services. (2014, September 17). Housing Element - City of Berkeley, CA. Retrieved August 2, 2018, from Raguso, E. (2018, July 25). Berkeley to put $135M affordable housing bond on November ballot. Retrieved August 2, 2018, from Terner Center Research Series: The Cost of Building Housing. (n.d.). Retrieved August 2, 2018, from 18 HAC Page 34

39 HAC 09/06/18 Attachment 9 Housing Advisory Commission September 7, 2018 To: From: Subject: Housing Advisory Commission Commissioner Thomas Lord Work plan updates Reminder: Each month, Commission members have the opportunity to update the work plan, such as by adding dates and descriptions to previously submitted work plan items. The current calendar (attached) is incomplete. The full work plan contains many items with no description (see the packet from July). Process: Each commissioner will state any updates they propose. initial motion will be to accept the full list of changes. The This month (September 2018), the initial motion will also authorize the Commission Secretary to publish the work-plan and transmit it to City Council. News: At an upcoming City Council meeting, Council will consider making a referral to the City Manager to consolidate work plans from all commissions in one place, for convenient reference. Let s try to make sure that our Commission s work plan is a good example. HAC Page 35

40 HAC 09/06/18 Attachment 9 A01. Providing digital file storage for the homeless 5 A02. Linking employment growth to housing development 5 A03. Supportive mental health services 5 B01. Expansion of Berkeley Student Coop 9 B02. Group equity and zero equity coops 9 B03. Coordination with UCB for student housing 9 B04. Support more density, less parking in student areas 9 B05. Pressure UCB to engage w/ students 9 C01. Code enforcement review 2 D01. Delayed moderate-income subcommittee report 2 E01. Democratized housing innovations summit 2 F01. JSISHL updates and engagement 2,6,8 G01. Smokefree housing ordinance 2,5,9 H01. U1 reporting 2 I01. Work plan updates 2 J01. Affordable housing continuity following disaster 3 J02. Non-traditional low-/moderate-income strategies 3 J03. Revising the demolition and relocation ordinances 3 J04. Small sites program 3 K01. Continuity of effort (prior work-plan followups) 4,6 L01. Ensure affordable housing growth in all districts 8 M01. Affordable housing at North Berkeley BART 8 N01. Homeshare and ADU pilot program implementation 6 O01. TOPA 3 P01. Housing action plan 3,7 Q01. UC Long range development plan 9 1 Ms. Rashi Kesarwani (D1) 6 Ms. Marian Wolfe (D6) 2 Mr. Thomas Lord (D2) 7 Mr. Amir Wright (D7) 3 Mr. Igor Tregub (D3) 8 Mr. Darrell Ben-Lee Owens (D8) 4 Mr. Luis Amezcua (D4) 9 Mr. Matthew Lewis (M) 5 Mr. Xavier Johnson (D5) Housing Advisory Commission Workplan Timeline 7/18 8/18 9/18 10/18 11/18 12/18 1/19 2/19 3/19 4/19 5/19 6/19 * * * * * * * * * * * * * * * * * * * * * * * indicates a deadline or anticipated HAC agenda item HAC Page 36

41 HAC 09/06/18 Attachment 10 Housing Advisory Commission July 11, 2018 To: From: Subject: Housing Advisory Commission Commissioner Thomas Lord implementing new duties under measure U1 Recommendation Take steps towards implementing Measure U1, particularly: Discuss how the new law changed the role of this commission, compared to prior to the 2016 election. Discuss the substantial practical limits and the potential opportunities of taking a more direct role in helping with policy formation. Establish an April / October publication schedule for the Commission s section (B)(10) recommendations. (requires a vote). Discuss next steps. Background In November of 2016, the duties and powers of this commission grew. That is because voters approved Measure U1, which added this highlighted language below to Berkeley Municipal Code (B)(10): 10. The Housing Advisory Commission shall review and advise the City Council on housing policy, housing programs, and related issues. In particular, the Commission shall make recommendations on how and to what extent the City should establish and fund programs to increase the supply of affordable housing and protect 1 HAC Page 37

42 HAC 09/06/18 Attachment 10 residents of Berkeley from homelessness. These recommendations may be made annually or biannually, as the Commission deems appropriate in light of the City s budget cycle and other relevant funding cycles. The Commission s recommendations shall be promptly published on the City s web site and transmitted to the City Council. The City Council shall consider, but need not follow, the Commission s recommendations, and shall annually inform the Commission as to the extent to which it has implemented the recommendations. The Commission has since voiced its opinions about the allocation of revenues that are generated by Measure U1, but it has not yet implemented section (B)(10) as amended. Rational for April/October schedule Recommendations published in April will arrive at the beginning of key budget cycle discussions. Publication in October establishes a biannual schedule, making it easier to update recommendations as appropriate. HAC Page 38

43 Attachment 11 HAC item: Record of Recommendations Introduction and Recommendation Recommendation: That the Housing Advisory Commission submit the following status report of recommendations to the Berkeley City Council. Background Consistent with BMC (B)(10) (Measure U1 reporting guidelines), we summarize below the work that the Housing Advisory Commission (HAC) has conducted thus far. The relevant section of the municipal code, as amended by measure U1, reads in part (emphasis added): 10. The Housing Advisory Commission shall review and advise the City Council on housing policy, housing programs, and related issues. In particular, the Commission shall make recommendations on how and to what extent the City should establish and fund programs to increase the supply of affordable housing and protect residents of Berkeley from homelessness. These recommendations may be made annually or biannually, as the Commission deems appropriate in light of the City s budget cycle and other relevant funding cycles. The Commission s recommendations shall be promptly published on the City s web site and transmitted to the City Council. The City Council shall consider, but need not follow, the Commission s recommendations, and shall annually inform the Commission as to the extent to which it has implemented the recommendations [BMC (B)(10)]. HAC recommendations from 2017 January 5, 2017 Selecting from a list of options developed by a previous HAC membership, the HAC advised City Council to prioritize these City Council Referrals: Permit Service Center improvements limited use of eminent domain on vacant and blighted properties Create an ordinance to prohibit housing discrimination based on the source of a tenant's income (including Section 8 benefits). workforce housing for BUSD / implement Senate Bill 1413 HAC Page 39

44 Attachment 11 The HAC also recommended that the City Manager be directed to meet with the Rent Stabilization Board to revisit whether the issuance of a new Certificate of Occupancy is required upon conversion of units from unpermitted nonresidential to permitted residential uses. February 2, 2017 The HAC agreed with staff to recommend a $691,394 unplanned but urgent reservation of County Measure A1 funds for the Grayson Street Apartments projects in response to a post-election collapse in the amount of money that could be raised through the sale of Low Income Housing Tax Credits. March 2, 2017 The HAC recommended (additional) reservations of CDBG funding for the Bread Project, Inter-City Services, and Rising Sun Energy Center. The HAC also recommended that registration fees be charged for below-market rate units to pay for the regulation of BMR compliance and gave advice regarding the structure and amount of those fees. May 5, 2017 The HAC recommended against appropriating U1 revenues for the purchase of the properties at 1001, 1007, and 1011 University Avenue and 1925 Ninth St (the "Premier Cru" properties). The HAC also recommended a temporary suspension of efforts to appropriate U1 funds. Finally, the HAC recommended eliminating a discount to the affordable housing mitigation fee when paid at issuance of the building permit, and recommended that the fee be updated every two years based on the Construct Cost Index. June 6, 2017 The HAC recommended a Housing Trust Fund (HTF) reservation of $285,464 for Satellite Affordable Housing Associates' Harper Crossing Project. The HAC recommended an exceptional circumstances reservation of $569,692 from the HTF and a refinancing of outstanding HTF loans and a waver approving the Northern California Land Trust as an eligible receiver of HTF funds for the NCLT scatter sites project. HAC Page 40

45 Attachment 11 The HAC recommended providing HOME CHDO 1 operating funds to Resources for Community Development and Satellite Affordable Housing Associates for Fiscal Year (FY) The HAC recommended changes to the Affordable Housing Mitigation Fee (BMC ) to adopt a fee of $37,000 if paid at certificate of occupancy, or $34,000 if paid at issuance of building permits and to recommend that for developers opting to private units, 20% of the total units be below market rate. The HAC recommended an exemption from the necessity of Council Approval of the use of CDBG funds for construction projects at or below $200,000, and that the HAC CDBG subcommittee be authorized to make recommendations for such projects. Lastly, the HAC expressed "conceptual support" for allocating up to $1.07 million, with no source of funding specified, and no specific funding levels for various anti-displacement programs then under consideration by council. July 6, 2017 The HAC approved an HTF reservation of $50,000 for a pre-development loan for the Bay Area Community Land Trust's 1638 Stuart Street project and approved a waiver of a "recent experience" eligible developer requirement. The HAC recommended that City Council reserve up to $3,131,651 in Housing Trust Funds for pre-development for BRIDGE Housing's Berkeley Way Project and that certain permit fees be deferred. The HAC recommended several specific general allocations for the following anti-displacement programs: the Housing Retention Program, the Flexible Housing Subsidies Pool, the Eviction Defense Center, and the East Bay Community Law Center. September 7, 2017 The HAC recommended that City Council conduct a public hearing for a substantial amendment to the federal Program Year (PY) 2017 Annual Action Plan which included revised allocations of CDBG funding and that, upon conclusion of that hearing, that Council adopt a Resolution approving revised CDBG funding recommendations for City of Berkeley projects; and authorizing the City Manager to submit the Substantial Amendment to the PY 2016 AAP to HUD. The substance of these changes was to shift certain indirect internal 1 "HOME": The U.S. Department of Housing and Urban Development (HUD) Home Investment Partnership Program; "CHDO": Community Housing Development Organization HAC Page 41

46 Attachment 11 costs, associated with administering CDBG projects, to project-specific allocations. December 7, 2017 The HAC agreed to communicate certain recommendations to Council regarding general guidelines for appropriating U1 funds. The HAC also communicated to the Council a statement of principles that places housing as a priority over parking, including support with respect to the Berkeley Way Project. HAC recommendations from 2018 January 18, 2018 The HAC referred certain inquiries into the enforcement practices and history of the Smoke-Free Housing Ordinance and requested that the Berkeley Considers facility be used to solicit public comment regarding that ordinance. This action is a first step towards revising the ordinance in response to citizen reports of its ineffectiveness in some situations. February 1, 2018 The HAC asked the Council to make a number of referrals to commence developing a comprehensive plan for disaster preparedness and post-disaster rebuilding with respect to multi-family housing. March 1, 2018 The HAC recommended a second substantial change to the PY 2017 Annual Action Plan. The proposed change will reserve approximately $1.26 of CDBG community facility improvement funds to the rehabilitation of the City's Mental Health Clinic building at 2640 Martin Luther King Jr. Previously, these funds were planned for small community facility improvement projects to be determined as needs arose. The large, single allocation to the Mental Health Clinic was proposed because initial cost projections for the project were significantly too low. The HAC recommended to the Berkeley City Council consideration of funding a Home Share Pilot Program. The program as envisioned would offer background checks as a City Service provided to qualifying homeowners who wish to offer space in their home to a tenant. Similar programs are operating in some other Bay Area Cities. UC Berkeley has expressed interest in funding such a program in Berkeley. HAC Page 42

47 Attachment 11 The HAC also recommended to City Council that as the Small Sites Program is implemented, it be structured so as to allow (though not require) the City itself to purchase eligible small sites. The program would leave open the possibility of implementing non-traditional ownership models for permanently affordable housing. April 4, 2018 The HAC responded with comments to an earlier referral from City Council regarding an accessory dwelling unit pilot program to house low-income households. A final product is due to be finalized and voted on by the HAC at its June 6, 2018 meeting. May 3, 2018 The HAC voted to draft a letter to the City Council with recommendations dictated by the Commission for the FY Community Agency Request for Proposals. Specifically, the HAC noted support for the following elements of the proposal: publishing agency outcomes, increasing the contract threshold to be considered for Request for Proposals (RFP) bids to $20,000 (while recommending consultation with outside agency partners prior to making this change), enhanced outreach to prospective applicants, and providing a hardship exemption for applicants who miss the deadline to apply. The HAC noted strong opposition to a proposal to extend the current 2-year contract cycle to a 4-year contract cycle and identified a 3-year cycle as a possible alternative. The HAC also adopted Measure U1 funding recommendations for the FY2017/ 2018 and FY2018/2019 cycles. The recommendations for the remaining $3.45 million in revenues (after $550,000 per cycle was already allocated, following the HAC s earlier recommendation, to fund anti-displacement assistance efforts to tenants) were as follows: Anti-Displacement (already reserved) $550,000 Small Sites Program $1,000,000 Housing Trust Fund $2,000,000 Reserve for housing programs in the pipeline (ADU Pilot program, home share, etc.) $400,000 Administrative Costs $50,000 Total $4,000,000 On June 26, 2018, the City Council voted to take these recommendations under consideration. The HAC also voted to direct Commissioners to submit ideas for the annual work plan (FY19) and submit for inclusion in the June 2018 agenda. Finally, HAC Page 43

48 Attachment 11 the HAC discussed, but took no action, on recommendations to revise the Housing Retention Program. June 7, 2018 The HAC discussed and recommended to the City Council uses for the City of Berkeley s 2018 allocation of federal HOME funds and proposed request for proposals process. Specifically, it recommend that the City Council direct staff to create a rehabilitation RFP for CHDOs with the City s 2018 HOME funds and to start looking into a HOME Tenant-Based Rental Assistance program for future consideration. The HAC heard a staff presentation on ongoing efforts to develop a Tenant Opportunity to Purchase Ordinance and provided feedback. It also took action on a recommendation to the City Council in response to a referral to the HAC and city staff regarding an Accessory Dwelling Unit Pilot Program. Finally, the HAC continued its discussion of the FY19 Commission work plan. HAC Page 44

49 To: Housing Advisory Commission From: Commissioner Amir Wright Background: Attachment 12 Housing, Opportunity, Mobility, and Equity (HOME) Act Senator Cory A. Booker (D-NJ) The United States is currently facing an affordable housing crisis. The housing supply has failed to keep up with demand, while the cost of housing keeps rising. Nearly half of all renters in America struggle to pay their rent, devoting more than a third of their income to housing costs, yet only 1 out of 4 eligible families receive housing assistance. Due in part to this limited supply, rents have increased, but the ability of families to pay their rent has not. On average, to rent a two-bedroom apartment, you would need to earn $21.21 per hour fulltime, which is almost three times the minimum wage. Because renters often devote the largest portion of their income to rent, high housing costs make it difficult for families to save and invest in their future. An important driver of low housing supply and high housing cost is restrictive zoning regulations. The limitations on certain types of development such as multifamily housing depress the number of new units available and drive up the cost of existing units. Another contributor to high housing costs is the rents themselves. When there are so few units available and even less of them are designated as affordable the price per unit increases dramatically. Low-income families cannot afford rising prices, and are subsequently driven out of neighborhoods and into areas of limited resources, further away from their jobs. Supporting these families with the means to secure their rent would eliminate undue stress and improve their quality of life. The HOME Act would: Require Inclusive Zoning Strategies Community Development Block Grant (CDBG) recipients must create an inclusive zoning strategy in order to receive funding. o These include, but are not limited to; authorizing high-density and multifamily zoning, eliminating off-street parking requirements, establishing density bonuses, streamlining or shortening permitting processes and timelines, and removing height limitations. The HOME Act would provide the locality with the flexibility to choose the best way to address its affordable housing challenges. Current restrictive zoning such as arbitrary height limits hamper the ability of developers to increase the affordable housing stock. This Act would require localities to take meaningful steps toward inclusive zoning. Help Rent-Burdened Families Through a refundable renters credit (administered through the tax code) to those that spend more than 30% of their income on rent. The credit is a reimbursement made of the difference between the total Small Area Fair Market Rent (SAFMR; 40% of median neighborhood rent), and 30% of the renter s income. Over 13 million families would benefit from such a credit. The HOME Act combats the affordable housing crisis by addressing the lack of units (the supply side) with inclusionary zoning and the fact that incomes have not risen to keep up with housing costs (the demand side) with a renters credit. HAC Page 45

50 Attachment 12 A Resolution reaffirming [city name] s commitment to a fair housing policy, and to promoting the values of equality and integration in housing by affirmatively furthering fair housing. WHEREAS, Rep. Paul Gosar (R-AZ) and Sen. Mike Lee (R-UT) have introduced H.R. 482 and S. 103, proposed legislation intended to weaken the Fair Housing Act and interfere with its implementation and enforcement, WHEREAS, the proposed bills aim to prohibit diligent h0using data collection tools that allow communities to affirmatively further fair housing and establish more equal and inclusive communities; WHEREAS, the Fair Housing Act was passed in 1968 with the goal of ending discrimination based on race, color, religion, sex, disability, familial status, or national origin in any and all housing matters in the United States; WHEREAS, the Fair Housing Act has protected the rights of millions of vulnerable citizens since its enactment and led to landmark court victories for fair housing supporters across the United States; WHEREAS, the Department of Housing and Urban Development and its Office for Fair Housing and Equal Opportunity (FHEO) have a mission to administer the Fair Housing Act and establish national policies that protect American citizens right to housing of their choice, including the rule to affirmatively further fair housing; WHEREAS, affirmatively furthering fair housing means to address significant disparities in housing needs and in access to opportunity, replacing segregated living patterns with truly integrated and balanced living patterns, transforming racially and ethnically concentrated areas of poverty into areas of opportunity, and fostering and maintaining compliance with civil rights and fair housing laws; WHEREAS, the right to live in the area and housing of one s choice is fundamental to the free and equal order of American society and has an impact on the equality in the workplace and education that individuals and families can attain; WHEREAS, such fairness is the foundation of the American system and reflects traditional American values; and WHEREAS, hindering the implementation of fair housing principles undermines the strength and vitality of America and its people; BE IT RESOLVED that on [day month] the City of [city name] reaffirms its commitment to the goals of the Fair Housing Act: the principles of desegregation, access to the housing of one's choice irrespective of race, color, religion, sex, disability, familial status, or national origin and equal protection under the law. FURTHER RESOLVED, the City of [city] opposes H.R. 482 and S. 103, and calls on [name of relevant representatives in the house and senate] to vote against these bills, and to exert influence on other representatives to oppose these bills. HAC Page 46

51 Attachment 12 FURTHER RESOLVED, all persons who feel that they have been discriminated against in any housing or real estate purchase, conveyance or transaction because of race, color, religion, sex, disability, familial status, or national origin, will be assisted to seek equity under federal and state laws by filing a complaint with the [city/region] Office of Regional Fair Housing and Equal Opportunity or the U.S. Department of Housing and Urban Development. FURTHER RESOLVED, the City of [city] will support the U.S. Department of Housing and Urban Development in all efforts to affirmatively further fair housing and collect data to assess the progress of fair housing initiatives and inclusiveness of its communities. HAC Page 47

52 HAC Page 48 Attachment 13

53 HAC Page 49 Attachment 13

54 Attachment 13 Current Owner: All Souls Episcopal Parish (ASEP) 1601 OXFORD STREET Permanent Affordable Senior (age 62+) Housing Cedar and Oxford Streets, Berkeley, California Developer: Satellite Affordable Housing Associates (SAHA) Project Background: 1601 Oxford Street presents an opportunity to build 35 affordable homes by leveraging a valuable land donation by All Souls Episcopal Parish in north Berkeley. In 2015, All Souls Episcopal Parish approached SAHA about a potential partnership to develop affordable housing on surplus land owned by the church. In 2016, SAHA conducted a feasibility analysis for the site and the two parties agreed to move forward with developing the site for affordable senior housing as a joint venture. In 2016 the project was awarded a predevelopment loan from the Housing Trust Fund through a competitive process and is considered a Housing Trust Fund project. After a thorough community process during the summer and fall of 2017, SAHA submitted a Use Permit application early this year and is ready to leverage local funds in advance of a 2019 tax credit award and construction start date. Affordable Housing Unit Mix: Area Median Income Unit Size Number of Units (AMI) Level 20% AMI Studio 7 50% AMI Studio 14 60% AMI Studio 13 Manager s Unit 2 Bedroom 1 35 Units Construction & Building Program: New construction of a stacked apartment building over podium parking garage consisting of 21 spaces (9 residential, 12 for staff and visitors.) The development includes a community room, lobby, bike storage, shared laundry, offices for on-site property management and resident services, upper floor terraces and a landscaped courtyard with community garden space. The building will include 35 affordable units as well as two (2) 3-bedroom units and approximately 1400 square feet of administrative space for staff of All Souls Episcopal Parish. Building & Lot Size: Approximately 35,000 square foot building (gross) on 14,150 square foot lot. Sources and Uses: Uses Sources Land 2,970,000 All Souls Land Donation 2,970,000 Demo and Off Sites 150,244 City of Berkeley 6,000,000 Hard Costs 14,869,615 City of Berkeley HTF Funds (Committed) 25,000 Soft Costs 5,715,354 Tax Credit Equity-9% 12,976,622 Permit & Impact Fees 1,293,705 City Impact Fee Waiver 123,760 Alameda County A1 (Regional Pool) 2,563,536 AHP (Committed) 340,000 Total 24,998,918 Total 24,998,918 Timeline: Use Permit Application submitted to City of Berkeley in February 2018 Approved Use Permit est. early fall 2018 Fully funded est. June 2019 Construction Est. December 2019 est. March 2021 HAC Page 50

55 Attachment OXFORD STREET Permanent Affordable Senior (age 62+) Housing Cedar and Oxford Streets, Berkeley, California View at Corner Oxford and Cedar Street View along Oxford Street View along Cedar Street HAC Page 51

56 Attachment 14 Housing Advisory Commission September 7, 2018 To: Housing Advisory Commission From: Commissioner Thomas Lord Subject: Housing code enforcement: monitoring, evaluation and advice It is the duty of this body to weigh in on code enforcement priorities and to monitor code enforcement procedures in relation to City Council s code enforcement priorities. [BMC (B)(6-7)] In recent years the Commission has made recommendations as to code enforcement priorities but has not, so far as I can tell, made any effort to systematically monitor code enforcement practices and outcomes. In that same time-span, lives, homes, and possessions have been lost in tragedies that, arguably, could have been prevented by better code enforcement. This item will be the Commission s first opportunity to discuss the possibility of systematically monitoring code enforcement in coming years. We will discuss next steps and possibly take action to implement them. HAC Page 52

57 Attachment 15 Housing Advisory Commission September 7, 2018 To: From: Subject: Housing Advisory Commission Commissioner Thomas Lord Democratized Housing Innovations Summit I will lay out a timeline and specific goals for a summit about democratized housing innovations. The Commission will have an opportunity to discuss how to identify who to invite to participate. The Commission will have a chance to discuss a referral to Council requesting authorization. For reference, here is a draft agenda outline for proposed summit, but who knows how this might change. opening presentation: a description of the current situation in Berkeley sample of housing crises manifestations in Berkeley some relevant city law and policy outcome of November housing bond vote challenges with current City programs review of agenda and goals round-table discussions of innovative strategies for leveraging city housing dollars lowering costs and increasing flexibility democratic management of properties aligning housing programs and social need envisioning implementation round-table summations of participants response to the discussion call for a coalition to continue the work call to action HAC Page 53

58 Attachment 16 Housing Advisory Commission September 7, 2018 To: From: Subject: Housing Advisory Commission Commissioner Thomas Lord Call for lightning round information/response items Housing and homelessness are a complex, fast moving, high stakes issues. Consequently, there is a wealth of material out there for study and for keeping up with the latest developments. I have observed that another Commission, the Rent Stabilization Board, seems to make good use of information items as a way to share learning resources and news, and to facilitate useful even if brief discussions about topics of common interest but that are not on the action calendar. Since joining the HAC I ve noticed that this body rarely makes room in the allotted time for even a quick discussion of information items. Such discussion can be very brief. Not everyone needs to speak to every item. Anyone who chooses to introduce an information does not need to give a lecture but should summarize what is of interest in the item and what the introducer hopes others might take from it. Here is an example: SF residential projects languish as rising costs force developers to cash out, J.K. Dineen, SF Chronicle; Aug 27, HAC Page 54

59 Attachment 17 Department of Health, Housing & Community Services Housing & Community Services MEMORANDUM To: From: Housing Advisory Commission Amy Davidson, Senior Community Development Project Coordinator Date: August 30, 2018 Subject: Stipend Information In order to remove economic hardship barriers from public participation, the City Council authorizes payment in lieu of certain expenses to commissioners of all Councilappointed commissions who meet certain household income criteria. Subcommittees of commissions designated by the advisory body and not by Council appointment are not eligible for reimbursement expenses. Eligibility criteria for stipend and reimbursement: Persons eligible to receive reimbursement in lieu of expenses are those commission members whose annual family income reported individually or as filed jointly for federal income tax purposes is below $20,000 per year. To establish eligibility, commissioners must file the Annual Declaration form (in Appendix H of the Commissioner s Manual) with the secretary. Commissioners must file a new declaration form annually prior to May 31 in order to maintain eligibility. An eligible commissioner is authorized to receive: $40 for each official meeting attended, not to exceed four meetings each month. Reimbursement for actual childcare expenses incurred while he or she attends meetings. Reimbursement for actual expenses paid to an attendant to provide care for a dependent elderly person while the commissioner attends meetings. Reimbursement for actual expenses incurred for disabled support services necessary to participate fully in commission meetings. More information on stipends can be found in the Commissioner s Manual. Please contact staff at hac@cityofberkeley.info or (510) if you have questions or would like to apply for a stipend. HAC Page 55

60 Attachment 18 July 18, 2018 Amy Davidson Secretary Berkeley Housing Advisory Commission 2180 Milvia Street, 2nd Floor Berkeley, CA Dear Amy Davidson, In September 2016 our office hosted a roundtable meeting with then-housing and Urban Development (HUD) Secretary Julian Castro. Inspired by our conversations I was proud to successfully request report language in the FY2017 Transportation and Housing Appropriations bill which directed the Department to issue a report on the impacts of displacement in communities around the country and best practices to address it: The Committee recognizes the need for an examination of the effects of rapidly rising rents in urban areas across the nation, and strategies to create and retain affordable housing options, and avoid displacement in these communities. The Committee directs the Secretary to submit a report to the Committee, after 180 days of enactment, detailing best practices and recommendations to address the displacement of lower-income families and long-time residents in urban areas, and loss of affordable housing across the nation. As a result, HUD has for the very first time rolled out its Displacement of Lower-Income Families in Urban Areas Report. The report can be found here. It is my sincere belief that the information in this report can provide guidance and background as you continue your work ensuring everyone has access to affordable and safe housing. To combat the housing crisis, we must get to the root of the issue and this report does just that. Your work in the Bay Area is absolutely appreciated. Please feel free to connect with my Congressional Aide, Xavier Johnson should you have any questions, ideas, or should you need any additional information. Xavier can be reached by phone at (510) or via at Xavier.Johnson@mail.house.gov. Sincerely, Barbara Lee Member of Congress HAC Page 56

61 Attachment 18 Displacement of Lower-Income Families in Urban Areas Report May 2018 U.S. Department of Housing and Urban Development Office of Policy Development and Research HAC Page 57

62 Attachment 18 Displacement of Lower-Income Families in Urban Areas Report Introduction Gentrification is a form of neighborhood change that occurs when higher-income groups move into low-income areas, potentially altering the cultural and financial landscape of the original neighborhood. In the most recent decade, gentrification has been manifested in the return to the cities, with redevelopment and investment in many downtown areas of the nation. Greater demand for centrally located housing, particularly amidst an existing affordability crisis, may be fueling community change in many American metropolitan areas. With increased demand and housing costs comes increased housing-cost burdens, the potential for displacement of long-term low-income residents, long-run resegregation of neighborhoods, and heightened barriers to entry for new low-income residents looking to move to places of opportunity. In the press, news about gentrification in cities such as San Francisco, Chicago, and New York highlight tensions between newcomers and existing residents and raise opposing perspectives about neighborhood change. Alongside the change in culture that is happening in gentrifying neighborhoods, significant increases in rents and evictions have escalated the hostility felt toward newcomers. On the opposite end of the spectrum, other articles claim that gentrification is no longer a dirty word, praising the reductions in crime and greater access to amenities that even long-time residents appreciate (Nevius, 2014). In the middle of the debate, a third set of articles recognize that both of these trends and tensions occur and that, although gentrification brings increased investments and has the potential to decrease crime, higher-income residents benefit disproportionately and displacement is a real concern (PBS, 2003). This report is in response to the House and Senate Committees on Appropriations request for the U.S. Department of Housing and Urban Development (HUD) to examine the effects of rapidly rising rents in urban areas across the nation and avoid displacement. This report reviews the recent research on the causes and consequences of gentrification and identifies key steps policymakers can take to foster neighborhood change that is both inclusive and equitable. Best practices on the ground have varied, but they all include a focus on the preservation and production of affordable housing and are strengthened by collaboration and partnership with other local agencies. This report suggests four key strategies that could address displacement of lower-income families and long-time residents in urban areas and alleviate the pressures on housing affordability and community resistance to change. 1. Preserve existing affordable housing. Normally market forces increase housing supply to meet demand from demographic changes, and rents of older units decrease with time and obsolescence in a process known as filtering down. Since the turn of the century, however, the supply of affordable rental units has shrunk despite rapid growth in the number of very low-income renters. As of 2011, 710,000 units annually were lost to disinvestment and disrepair or owner conversions, even as increased demand was causing 1.5 million affordable units annually to filter up to unaffordable levels (Eggers and Moumen, 2015). Losses of about 10,000 public housing units annually points to the need for programs such as HUD s Rental Assistance Demonstration (RAD) that help the private market invest in decent, safe, and affordable housing. 2. Encourage greater housing development, including but not limited to affordable housing. Housing costs have increased since the 1970s, building to today s affordability crisis, and are particularly pronounced for renters. Issues of affordability are widespread and reach beyond the hottest coastal markets and gentrifying neighborhoods. Federal and local policies that incentivize greater development of housing can ease pressures on overall housing affordability. 3. Engage existing community residents. Renewed investment in urban areas may produce some benefits that long-time residents in gentrifying neighborhoods can harness. However, a common complaint among existing residents is political displacement. The new services and amenities that gentrification brings, such as dog parks and bike lanes, are seen as intended for and attracting new, higher-income residents. Neighborhood change can often take place without regard for the concerns and requests of existing residents. Recognizing that housing affordability and residential displacement are not the only concerns and seeking the active participation of residents could capture the buy-in of residents and ensure that other coping strategies are successful. HAC Page 58 1

63 Displacement of Lower-Income Families in Urban Areas Report Attachment Take a broader look and using regional, rather than localized, strategies. Effective tools will focus on regional coordination, looking above the neighborhood level and beyond housing. The federal government could be particularly helpful in encouraging regional cooperation and coordinating with multiple agencies on issues such as transportation and education. This report is divided into four sections that give context to these solutions. First, the report describes the causes of gentrification and explores the trends of urban revitalization since the 1970s. Second, the report summarizes the recent research on some consequences of gentrification, both positive and negative, including displacement potential, poverty concentration, and neighborhood conditions. Third, the report suggests policy tools in the four categories in the preceding list. Finally, the report highlights new innovations in gentrifying areas. Patterns and Causes of Gentrification and the Broader Urban Revitalization Gentrification Trends Gentrification, particularly of downtown areas, has increased since the 1990s. However, from 2000 to 2014, a greater number of low-income, city census tracts experienced accelerated gains in income and the number of White residents, over and above the increases experienced in the larger metropolitan area, than in previous decades (Ellen and Ding, 2016). Not only is gentrification affecting a broader set of markets than during the 1990s, but it has also resulted in more dramatic economic changes. The biggest difference between the two periods has been the greater prevalence of significant rent increases in the current period. The share of initially low-income city census tracts that saw large gains in rents relative to the metropolitan area more than doubled from 10 percent in the 1990s to 24 percent in the 2000s (Ellen and Ding, 2016). A compositional shift in the urbanizing population, not a surge in population growth in urban neighborhoods, has driven recent neighborhood change. As in previous decades, the nation continues to suburbanize, with population growth in the nation s suburban neighborhoods nearly three times faster than growth in urban cities (Kneebone and Berube, 2013). Beginning in the 2000s, however, the young, college-educated demographic has grown faster in urban rather than in suburban Share of Low-Income City Tracts in U.S. Metropolitan Areas Seeing Large Gains in Rents Relative to Metropolitan Area Source: Ellen and Ding (2016) neighborhoods (Baum-Snow and Hartley, 2016; Couture and Handbury, 2015). Zeroing in on downtown neighborhoods in the largest metropolitan areas of the nation, where much of the urban revival has occurred, the growth in this current set of gentrifiers has been particularly pronounced. Downtown residents represented only 5 percent of the total population during 2010 but, from 2000 to 2010, accounted for 24 percent of the total increase in the college-educated population ages 25 to 34 and nearly 12 percent of the total increase in the collegeeducated population ages 35 to 44 (Couture and Handbury, 2015). Contrary to claims that retiring baby boomers, aged 45 to 65, are increasingly likely to choose to live in urban locations, this demographic continues to suburbanize, along with households 65 and older. The urbanization of the college-educated is a relatively new phenomenon, irrespective of age group. During the 1990s, the college-educated population grew faster in downtowns than in the suburbs in less than one-fourth of the 50 largest metropolitan areas. Between 2000 and 2010, however, the college-educated population urbanized in most of the same 50 metropolitan areas (Couture and Handbury, 2015). The racial compositions of downtown urban neighborhoods have also reversed previous trends of White flight, when the proportion of White residents within close proximity to central business districts declined from 1970 to Baum-Snow and Hartley (2016) attributed this reversal to the probability that White residents with low socioeconomic status (SES) indicators, such as educational attainment status, migrated out of city centers between 1980 and 2000 but were stable in their neighborhood choice after In addition, the probability that high-ses White residents migrated to city centers increased after 2000, prompting growth in the proportion of White residents in downtowns by 2010 (Baum-Snow and Hartley, 2016). This current period of gentrification represents a broader urban revitalization, marking a reversal in the previous trends of significant population losses and the poor performance of downtowns rela tive to the larger metropolitan areas (Baum-Snow and HAC Page 59 2

64 Displacement of Lower-Income Families in Urban Areas Report Attachment 18 Hartley, 2016). During the 1970s and 1980s, two-thirds of all census tracts within a central city experienced a loss in income, relative to the larger metropolitan area. By the 1990s, more than 40 percent of all central-city census tracts experienced a relative gain in income (Ellen and O Regan, 2009a). Similarly, the number of people living in high-poverty neighborhoods declined 24 percent in the 1990s compared with a doubling of the population in high-poverty neighborhoods from 1970 to 1990 (Jargowsky, 2003). 1 Sharp declines in the general population in urban neighborhoods occurred in the 1970s and were reversed in the 1980s and 1990s but only for neighborhoods within a relatively short distance to central business districts (Baum-Snow and Hartley, 2016). Although the benefits of urban revitalization for downtowns have been meaningful, it is critical to consider the full effects of these changes, including whether benefits have been distributed equally to both new and existing residents. Causes of Gentrification Understanding the mobility motivations of the young, collegeeducated gentrifying demographic is important, because their choices are the ones that shape neighborhood change most significantly. The public and private investments during the 1990s that spurred redevelopment of many downtowns, with greater availability of services and amenities that attracted the current set of gentrifiers, may have laid the foundation for the current urban revitalization (Couture and Handbury, 2015). Public Redevelopment Efforts and HOPE VI Federal and local spending on dog parks and bike shares, among other amenities, during the 1990s is likely to have influenced the urbanization of the young, college-educated demographic today. One particular redevelopment initiative, HUD s Housing Opportunities for People Everywhere (HOPE VI), which began in 1992, may have influenced recent trends in changing communities. HOPE VI demolished 96,200 units of severely distressed public housing throughout the nation, with the goal of revitalizing public housing projects and deconcentrating poverty. 2 A study on the impact of HOPE VI found that many severely distressed public housing projects were replaced with high-quality, lower-density, mixed-income housing that contributed to the revitalization of entire inner-city communities, along with improving conditions for surrounding neighborhoods (Popkin et al., 2004). Several HOPE VI developments were successful in attracting a mix of market-rate, affordable, and low-income tenants. In all sites, most residents in new developments reported being satisfied with their units and neighborhoods. Revitalization efforts also led to new community amenities such as police substations, community centers, and job training centers (Popkin et al., 2004). Despite its successes, some researchers argued that the program s aims resulted in gentrification of previously blighted neighborhoods and led to the permanent displacement of many lowincome households (Goetz, 2013; Vale, 2013). The HOPE VI Panel Study, which tracked residents from five sites, asked public housing residents about their replacement housing preferences. Most responded that they would like to return to the site when completed (Popkin et al., 2002). However, in an updated 2016 study of all HOPE IV sites, original tenants occupy only an estimated 21 percent of all units that have been produced (Gress, 2016). Part of the discrepancy suggests that some residents who would have liked to return could not because of a loss in public housing units. As of the third quarter 2014, of those that were receiving services, about one-third of prerevitalization residents remained relocated with a housing choice voucher and about one-fourth relocated to other public housing (Gress, 2016). Evidence has shown that those individuals who utilized vouchers often had improved outcomes in terms of housing and neighborhood quality over those who chose to relocate to another public housing development. Some anecdotal information suggests that some displaced households HOPE VI The Housing Research Foundation s study on eight HOPE VI communities found generally positive neighborhood outcomes, including A 57-percent faster increase in average resident per-capita incomes than in neighborhoods citywide. An average unemployment decline of 10 percentage points compared with no significant net change at city levels. A decline in the poverty concentration of low-income households during the 1990s. An average decline in the violent crime rate that was 30 percent greater than in the overall city. Higher rates of mortgage lending than in the overall county, implying increasing rates of residential development. Source: Zielenbach (2003) 1 Defined as neighborhoods where the poverty rate is 40 percent or higher. 2 The number of units demolished as of fiscal year Congress has not funded HOPE VI since HAC Page 60 3

65 Displacement of Lower-Income Families in Urban Areas Report Attachment 18 opted not to return to the redeveloped HOPE VI sites for a variety of reasons, including improved neighborhood quality and seeking not to disrupt their children s education again. The reductions in density and the mixed-income strategy of HOPE VI resulted in a net loss of about 44 percent of units that would have received the deep, permanent public housing subsidies that would make units affordable for very low-income households. However, with the addition of affordable units financed with the low-income housing tax credit (LIHTC), units intended to be affordable to low- and moderate-income residents replaced roughly 85 percent of the original public housing units (Gress, 2016). Amenity Preferences Public redevelopment can also be an impetus for expanded private investment in a neighborhood, with amenities that may attract a higher-income customer base. In recent research, Couture and Handbury (2015) posited that a greater preference for urban amenities retail, entertainment, and service establishments is the primary motivation for the movement of the young, college-educated demographic into the central core of cities. They concluded that labor market dynamics could not explain the movement into downtowns, because a rise in reverse commutation patterns (from downtown to suburbs) signals the importance of urban amenities. The empirical results on the types of businesses near growing central business districts suggest that the preference of this set of gentrifiers differs from their nongentrifying counterparts. In particular, this demographic is more attracted to proximity to amenities, such as theatres and bars, and less sensitive to changes in house prices (Couture and Handbury, 2015). The recent income growth among the college-educated, as hypothesized by Rappaport (2009) and by Gyourko, Mayer, and Sinai (2013), increased their willingness to pay for locations with a perceived high quality of life. Rental Affordability Crisis At the same time the composition of urban neighborhoods has been changing, average rents across the nation have been rising, with the fastest rent growth in gentrifying neighborhoods (Ellen and O Regan, 2011). Rising housing costs, particularly for renters, may have forced households to consider a broader set of neighborhoods that they may not previously have consi dered. Ellen, Horn, and O Regan (2013) studied the motivations of households that move into relatively low-income neighborhoods and found that households that place less value on services, such as renters and childless households, and those with greater housing choice constraints, such as first-time homebuyers and minority households, are more likely to do so. They found no evidence that the chosen neighborhoods were more accessible to employment but, rather, movers had a lower total cost of housing, because they moved to less-expensive neighborhoods. These findings may suggest that the national affordability crisis may have played a role in the recent change of urban neighborhoods. Racial Composition and Crime It is likely, however, that a combination of several factors, including falling citywide crime rates, has contributed to gentrification of downtown areas. Much like the presence of highly distressed public housing, high violent crime rates may have inhibited investment and in-migration into downtowns during the 1970s and 1980s. Between 1990 and 2012, the crime rate fell 44 percent nationally and even more significantly in central cities (Ellen and O Regan, 2009b). Ellen, Horn, and Reed (2016) found that declines in citywide crimes were associated with increases in the probability that high-income and collegeeducated households chose to move into both high- and low- income central-city neighborhoods, relative to cities where the crime rates did not fall. They posited that high-income households have a greater sensitivity to crime, because they can; that is, because their resources, and therefore residential options, are greater, enabling them to outbid lower-income households in lower-income but accessible neighborhoods (Ellen, Horn, and Reed, 2016; O Sullivan, 2005). Outcomes of Gentrification for New and Existing Residents This section discusses the research on the outcomes of gentrification and the different impact it may have on new versus existing residents. Displacement and Increasing Rent Burdens Research on Displacement The most common critique of gentrification is its potential to displace long-term, low-income residents. Displacement can happen in many ways: direct displacement, in which residents are forced to move out because of rent increases, building rehabilitation, or a combination of both; exclusionary displacement, in which housing choices for low-income residents are HAC Page 61 4

66 Displacement of Lower-Income Families in Urban Areas Report Attachment 18 limited; and finally displacement pressures, when the entire neighborhood changes and the services and support system that low-income families relied on are no longer available to them (Slater, 2009). Although displacement may be the most common concern, most quantitative studies find little evidence of direct displacement occurring. In fact, Ellen and O Regan (2011) found that turnover rates, or the share of households that left their housing units, did not rise among even the most vulnerable populations or in the neighborhoods with the largest gains in relative income. Surprisingly, their research found that exit rates were actually lower in gentrifying neighborhoods than in nongentrifying neighborhoods, even among renters or poor households. Similarly, Freeman and Braconi s (2004) research on displacement in gentrifying neighborhoods of New York found that low-income households were actually less likely to move. Racial and ethnic minorities were significantly less likely to report displacement, after controlling for age and income, in other research (Newman and Wyly, 2006). Even studies that find some evidence that gentrification and displacement are linked, such as Freeman (2005), found only a modest relationship, at best. Moreover, Freeman (2005) did not find evidence that poor renters appeared to be particularly vulnerable to displacement or elevated mobility rates from gentrification. Similar to Ellen and O Regan (2011), he concluded that housing succession through voluntary entries and exits, not displacement, was likely the primary mechanism through which gentrifying neighborhoods undergo socioeconomic change (Freeman, 2005: 480). Measures of Displacement Are Imperfect Measures of displacement generally focus on exit from a unit, rather than exit from a neighborhood, which can tell an incomplete story on the varying pressures of low-income households. Freeman and Braconi s (2004) research found little evidence of displacement, as measured by exit from a specific unit, from the seven gentrifying boroughs in New York City and concluded that the primary potential for harm to low-income families in gentrifying neighborhoods is normal housing succession, in which a vacant rental unit is more likely to be leased by a middle-income household or the gradual shrinking of low-rent housing. Subsequent research inquired whether using turnover rates would fully capture all types of displacement that have occurred. Newman and Wyly (2006) noted that displacement pressures from gentrification should be viewed over the longer run, rather than a snapshot in time. It is likely that few low-income residents continued to stay in the gentrifying areas of New York after 1990, and that those who remained were able to do so through a combination of regulatory protection and individual sacrifice or creativity (Newman and Wyly, 2006: 28). Displacement may be artificially low when measuring exit rates after two decades of intense gentrification, because the most vulnerable residents would have exited earlier. The researchers performed different variations of the previous research and noted the difficulties in fully capturing displacement effects with the New York City Housing and Vacancy Survey data used by Freeman and Braconi, because the survey does not identify persons who were previously displaced and doubling up with a friend or relative nor anyone who leaves the city, rather than leaving to another unit within city boundaries (Newman and Wyly, 2006). Indeed, Freeman and Braconi (2004) acknowledged that using turnover rates may understate displacement by including households that move to cheaper living arrangements within New York City but understate it by failing to incorporate those who leave the city, become homeless, or double up with friends or relatives. Although Newman and Wyly (2006) found similarly small displacement rates using different data techniques, they acknowledge that thousands of displaced persons, even in cities of millions, are not insignificant and should not be dismissed, but also that the task of tracking the outcomes of low-income people is challenging and akin to measuring the invisible. Freeman and Braconi s (2004) work also demonstrated the limited amount of choice for low-income families in gentrifying neighborhoods. Rent increases in gentrifying neighborhoods were associated with a decrease in the probability of poor households moving, and the same result was seen for collegeeducated households. Although the researchers, along with many others, associated this decline in the probability of moving to the desire of low-income households to stay in improving neighborhoods, with the services and amenities to which they are accustomed, others argued that rising rents effectively trapped poor households to stay in place (Freeman and Braconi, 2004). As housing costs rise and the affordable housing stock falls, the options for poor households diminishes, severely limiting their residential mobility (Slater, 2009). Not only do exit rates fail to capture the limited choices of lowincome households to cope with rising housing costs but also the exclusionary effects of gentrification. For families looking to move into areas of opportunity, some neighborhoods are inaccessible because of high rents, forcing low-income households to lower-cost neighborhoods with less investment than gentrified neighborhoods (Newman and Wyly, 2006). HAC Page 62 5

67 Displacement of Lower-Income Families in Urban Areas Report Attachment 18 Differing Outcomes Although exit rates may increase for low-income renters who are unable to cope with higher housing costs, they may decline for those who realize the benefits of neighborhood improvements. On net, then, exit rates may move very little or even decline, even in the presence of some displacement. In addition to the difficulty of measuring displacement, studies on gentrification and displacement were based on changes occurring in the 1990s, when rent increases were not as prevalent as they are today. Despite the difficulty in using turnover in gentrifying neighborhoods as a measure of displacement, evidence suggests that those who move face worse outcomes than those who are able to stay. Recent work from Ding, Hwang, and Divringi (2015), which looked specifically at pathways of moves, found that vulnerable households that do move are generally renters and are at greater risk of moving to neighborhoods that are worse off than the original neighborhood, in terms of home values, unemployment rates, median incomes, and public school per formance. Ding, Hwang, and Divringi (2015) posited that gentrification s pressures on rents and home values are significant drivers in mobility decisions of residents. Indeed, Newman and Wyly s (2006) study found that cost considerations such as unemployment, income, and rising rents were cited among the top reasons for moves. Similar to the results by Ding, Hwang, and Divringi (2015), renters who moved were forced to look for housing in the outer boroughs of New York and into neighbors further into Brooklyn, Queens, and the Bronx, as Manhattan was becoming increasingly gentrified (Newman and Wyly, 2006). Even if exit rates, on net, did not suggest that displacement was occurring, outcomes from these studies suggest that moving from gentrifying neighborhoods has negative impacts on vulnerable renters. These factors may have contributed to the previously muted public policy response when HUD investigated the potential for displacement and found that the scale of displacement was not sufficient to warrant concern during the 1980s. The agency concluded that disinvestment accounted for a greater proportion of displacement than neighborhood revitalization (HUD, 1979). Whereas the earlier focus was on stemming urban decline rather than gentrification, recent trends in the compositional shifts of downtowns and significantly higher rent growth in gentrifying areas put gentrification back on HUD s agenda. HUD s current concerns with neighborhood change have been informed by what the agency has heard from some cities around the nation, particularly regarding tensions around the significant increases rents in high-demand neighborhoods now compared with previous periods. As part of a recent HUD initiative, HUD facilitated discussions in cities and regions around the country on expanding affordable housing opportunity and increasing economic mobility. In areas where neighborhood change is particularly intense or advanced and displacement of minority and low-income households occurs at a rapid pace, local leaders highlighted the need for policies that encourage equitable neighborhood change. Tools that help areas amplify the upside potential of renewed interest and investment in low-income urban areas, while limiting the potential downsides of displacement or long-term segregation, were an important part of the policy discussion between local communities and HUD. Loss of Affordable Housing Units: Exclusionary Displacement As mentioned previously, displacement can also occur when neighborhood choices become limited from the lack of affordable housing units, excluding them from the realm of possibilities for low-income families. Exclusionary displacement from the loss of affordable housing units occurs across the nation, even in nongentrifying neighborhoods, due to the rental affordability crisis. HUD s most recent worst-case housing needs assessment estimated that the number of renter households with worst-case needs defined as renters with incomes less than 50 percent of the Area Median Income who do not receive government housing assistance and who pay more than one-half of their incomes for rent, live in severely inadequate conditions, or both increased to 8.3 million in 2015, up from 7.7 million in 2013 (HUD, 2017). Several demographic changes accounted for an increased demand for rental units, including a pronounced shift from homeownership. Although the supply of rental units also increased, new inventory is generally for more expensive units; HUD reported that, [f]or a growing population of very low-income renters, the expanding supply of rental units in 2015 failed to translate into increased availability of affordable housing. Unlike more expensive units, the stock of rental housing affordable to very low-income renters shrank between 2013 and 2015, the vacancy rates remained highest among the most expensive units. For renters with extremely low incomes, the ratio of affordable and available units decreased to 38 units per 100 renters (HUD, 2017: xi). Higher Rent Burdens for Low-Income Households Unsurprisingly, rents increased significantly faster in gentrifying neighborhoods than in nongentrifying areas during the 1990s, a trend that is happening to a more significant degree since 2000 (Ellen and O Regan, 2011). Freeman and Braconi s HAC Page 63 6

68 Displacement of Lower-Income Families in Urban Areas Report Attachment 18 (2004) study found, for example, that, in New York during the 1990s, three-fourths of low-income renters in gentrifying neighborhoods were paying more than the generally recognized standard of affordability (30 percent of their income) toward rent, and one-half of low-income renters were paying up to 67 percent of their income toward rent. The average rent burden for poor households living in gentrifying neighborhoods, at 61 percent, was also higher than the average rent burden for poor households living outside of gentrifying neighborhoods, at 52 percent (Freeman and Braconi, 2004). These average rent burdens for both gentrifying and nongentrifying neighborhoods are far above the recognized standard of affordability, demonstrating that more affordable housing development is needed across the board. The patterns also show that these pressures can be exacerbated in rapidly changing neighborhoods. Rent burdens have been even more pronounced because of a greater prevalence of rent increases in urban neighborhoods than in the 1990s, a cause for greater concern during the recent period. As of 2016, 72 percent of the lowest-income renters (earning less than $15,000) face severe housing cost burdens, paying more than 50 percent of income toward rent (JCHS, 2016). In Most of the Country, a Large Majority of Lowest- Income Renters Are Severely Cost Burdened transit, economic and workforce development, and other basic services. Urban revitalization often brings new amenities that attract higher-income in-movers but that are not always aligned with the needs of existing residents. Cultural displacement of a neighborhood defined at least partly by the mix of shops and restaurants is another oftencited critique. Recent research by Meltzer (2016) on small business exit rates in changing New York neighborhoods provided only mixed support for this concern. Small businesses do not appear to be at heightened risk of displacement from gentrifying neighborhoods, and retention rates among small businesses are generally higher than exit rates in both gentrifying and nongentrifying neighborhoods. However, gentrifying neighborhoods have a somewhat higher share of businesses that leave without any replacement. When businesses are replaced, they are generally in a different sector than the original, with the highest gains in businesses providing services, such as art and entertainment venues and employee placement services, and losses in goods-producing industries, such as manufacturing. Replacements are also more often chain stores, changing the feel of a neighborhood entirely (Meltzer, 2016). A common view of the new amenities that gentrification brings to a neighborhood is that they are not meant for existing residents (Ellen and Torrats-Espinosa, 2016). Along with the loss of services crucial for low-income families, one of the perceived downfalls is a loss of minority political representation, as new residents successfully advocate for amenities and services they want while the needs of existing residents are pushed aside (Hyra, 2015). Even as existing residents cite neighborhood improvements, such as reductions in violent crime, they recognize that these gains may be only because more affluent residents have a stronger voice to demand greater policing and services (Tach, 2014). Benefits to Residents Who Stay Notes: Severely cost-burdened households pay more than 50 percent of income for housing. Data are for Core Based Statistical Areas. Source: JCHS (2016) Although the existing literature focuses primarily on the potential for housing and neighborhood displacement of lowincome residents, the impact of neighborhood change extends beyond housing alone. A primary motivation for existing residents desire to stay is the services and support systems on which low-income families rely, such as affordable mass Deconcentration of Poverty During the 1990s, gentrifying neighborhoods experienced a decrease in poverty rates of 5 percentage points compared with a 3-percentage-point gain in nongentrifying tracts (Ellen and O Regan, 2011). Similarly, Ellen and Torrats-Espinosa (2016) found that, as rents rise, Housing Choice Voucher (HCV) Program tenants tend to live in lower-poverty neighborhoods. Given the influx of higher-income residents and an increase in investment and likely employment, the reduction in poverty in these tracts is perhaps unsurprising. In fact, the primary goal HAC Page 64 7

69 Displacement of Lower-Income Families in Urban Areas Report Attachment 18 of HOPE VI revitalization efforts was to deconcentrate poverty and encouraged mixed-income development. One of the suc cess ful outcomes of HOPE VI neighborhoods studied was the decline in poverty concentration of low-income households from 81 percent in 1989 to 69 percent in 1999 (Zielenbach, 2002). Neighborhood Improvements In recent research on the outcomes for public housing residents in gentrifying tracts of New York City, Dastrup and Ellen (2016) found improvements in a variety of neighborhood indicators. They found that public housing developments in gentrifying tracts have lower neighborhood violent crime rates and are zoned for public elementary schools with higher standardized test scores than their counterparts in lower-income communities. Residents of these neighborhoods are also more often employed, have slightly higher incomes, and have greater educational attainment levels. Similarly, Ellen and O Regan s (2011) work found increased satisfaction among original renters who stayed in gentrifying neighborhoods, likely due to the improved neighborhood conditions. As communities change, low-income homeowners may face increased property taxes. If not paid, often a lien is placed on the property and can result in foreclosure. One recent policy to address this issue was tested in Washington, D.C., where the government forbade the sale of liens on homes whose owners owe less than $2,500 in taxes and granted a year-long tax deferral to homeowners who owe less than $7,500 in taxes (Cenziper and Sallah, 2014). Greater Access to Services Broader urban revitalization is also likely to bring a greater number of services that were previously absent in the neighborhood. A number of studies have demonstrated that low-income and minority neighborhoods have fewer and smaller retail stores, such as supermarkets, banks, and drug stores, than higher-income neighborhoods (Alwitt and Donley, 1997; Carr and Schuetz, 2001; Helling and Sawicki, 2003; Powell et al., 2007; Zenk et al., 2005). This limited choice and lack of competition may lead families to pay more for basic goods and services ( Caplovitz, 1967; Hayes, 2000; Kaufman et al., 1997). Meltzer and Schuetz s (2012) study on retail establishments in New York City found that lower-income and minority neighborhoods had lower densities of commercial businesses and employment, smaller businesses, and a higher proportion of unhealthy restaurants. Growth of retail establishments increased between 1998 and 2007 and was particularly strong in gentrifying neighborhoods. An increase in the access of a greater number of services can be a potential benefit of neighborhood change, especially if the type of establishment can promote better outcomes for its residents, such as mainstream financial institutions or healthy food establishments (Ding and Hwang, 2016). Meltzer and Schuetz s (2012) research demonstrates that poor neighborhoods and predominantly Black and Hispanic neighborhoods had a greater proportion of unhealthy food chains compared with higherincome areas. Although their research is silent on the effect of a rise in healthy establishments, some anecdotal instances suggest that gentrification has been associated with bringing healthy food options in a previous food desert, such as Harlem. Prior to the early 2000s, Harlem lacked larger grocery stores, leaving little choice for low-income residents except to shop at local bodegas (mini markets) with few healthy options. With urban revitalization from the Upper Manhattan Empowerment Zone spreading into underserved areas such as Harlem, the area has seen an increase in the number of chain grocery stores such as Whole Foods and, at the same time, increasing rents that have forced out older soul food restaurants (Abellard, n.d.). To be sure, the research has demonstrated that potential benefits accrue from gentrification. However, many of those benefits are available only to those who stay in changing neighborhoods. With rising housing costs often associated with neighborhood improvements, it is likely that a smaller proportion of lowerincome residents have the means to stay. Federal housing policies, such as public housing and HCVs, have had a meaningful impact on protecting some renters from displacement but are not the only solution to a multifaceted issue. Policy Responses to Gentrification A common theme echoed throughout conversations between HUD and local policymakers is that a broad-based approach to housing affordability is necessary for its success one that both encourages housing development and affordable housing preservation, as well as community engagement from all residents. This section suggests four key strategies that could alleviate pressures on housing affordability and community resistance to change at all policy levels. Preserve Existing Affordable Housing Between 2001 and 2015, the number of affordable rental units decreased by 2.5 million, while the number of very low-income renters increased by 4.2 million (Watson et al., 2017). Normally HAC Page 65 8

70 Displacement of Lower-Income Families in Urban Areas Report Attachment 18 the rent for a given unit is expected to filter down as the unit ages, but insufficient construction of new affordable units drives up rent. As of 2011, 710,000 units annually were lost to disinvestment and disrepair or owner conversions, even as increased demand was causing 1.5 million affordable units annually to filter up to unaffordable levels (Eggers and Moumen, 2015). These rates are up significantly from 400,000 units lost from stock and 140,000 filtering up in an average year during the 1991-to-2001 period (Schwartz et al., 2016). The units lost from stock include about 10,000 public housing units annually. In this context, programs that preserve existing affordable housing, particularly in gentrifying neighborhoods, are important tools for ensuring that long-term, low-income residents who want to stay have the ability to do so. Rental Assistance Demonstration Public housing developments, in which subsidies are attached to particular units, may be an effective tool for helping lowincome families stay in place. However, the current structure and level of funding, which is through annual appropriations, has been inadequate to address the $26 billion backlog of deferred maintenance that can result in a permanent loss of public housing units (Finkel, 2010). In response, HUD proposed, and Congress authorized, RAD in RAD s main goal is to give public housing agencies (PHAs) a tool to preserve and improve public housing properties by moving units from the public housing program to more stable funding platforms, such as long-term project-based Section 8 contracts like project-based vouchers or project-based rental assistance. Through the movement from a funding platform of annual appropriations to long-term contracts, RAD enables PHAs to leverage external resources in order to invest in the public housing stock. PHAs can obtain mortgages to finance capital improvements and are eligible for LIHTCs. As of October 2015, more than $2.5 billion of external funding was raised for about 19,000 units. To date, 185,000 units have already been awarded RAD status, which is the current cap on RAD set by Congress (Econometrica, Inc., 2016). The funding for units that move to long-term project-based Section 8 con tracts through RAD must be renewed by law, ensuring that these units remain permanently affordable to low-income households. Under RAD, residents continue to pay 30 percent of their income toward rent and maintain the same basic rights, and RAD maintains the public stewardship of the converted property through clear rules on ownership and use. Given the central location of the oldest public housing stock in the country, the existing public housing stock may be an important tool in anchoring long-term affordable housing in and near gentrifying neighborhoods. 3 For example, in New York City, 58 percent of public housing units are in community districts that are classified as gentrifying, and block groups that had average incomes above the city median in 2010 surround nearly two-thirds of public housing block groups (Dastrup and Ellen, 2016). RAD can be a means for ensuring that the existing stock of public housing is maintained and remains permanently affordable for low-income families to stay in place or move to places of opportunity. Housing Choice Vouchers HUD s HCV program is the largest federal rental housing program, providing housing subsidies for more than 2.2 million low-income households (Center on Budget and Policy Priorities, 2015). Voucher holders pay 30 percent of their income toward rent, and the subsidy covers the difference between that and an allowable payment standard, determined largely by the Fair Market Rent (FMR). HCVs and other forms of tenant rental assistance may be useful in broadening neighborhood choice for low-income families and help to alleviate some of the exclusionary displacement that occurs in central neighborhoods. The Urban Institute notes that, without federal rental assistance programs, the affordability crisis would be even worse, and the share of families who could have afforded adequate housing in 2013 would have fallen from 28 to 5 percent (Johnson, 2015). Subsidies can be particularly helpful in keeping low-income families in gentrifying neighborhoods, where some evidence suggests positive outcomes for voucher holders who remain, including living in neighborhoods with lower poverty rates (Johnson, 2015). However, recent research suggests that, even for those with subsidies, this protection is far from complete. Ellen and Torrats-Espinosa (2016) found that, in metropolitan areas where rents are increasing more rapidly, voucher households tend to move more frequently to other neighborhoods, experience higher rent burdens, and become more spatially concentrated. It is particularly likely that a voucher holder will face a higher rent burden in a tight housing market, such as a gentrifying neighborhood, where housing units that meet program requirements become increasingly difficult to find (Finkel and Buron, 2001). Similar results were found for families who relocated after HOPE VI. Evidence from the HOPE VI Resident 3 A caveat to the potential of keeping affordable housing developments in gentrifying neighborhoods is the ability of the PHA to move a RAD project to a different location. HAC Page 66 9

71 Displacement of Lower-Income Families in Urban Areas Report Attachment 18 Tracking Study suggested that former residents ended up in neighborhoods with lower poverty rates, lower crime rates, and better housing conditions than families living in public housing awaiting revitalization, but these benefits were tempered by some residents financial insecurity (Buron et al., 2002). One limit to the ability of rental vouchers to keep residents in place as rents increase may be how the FMR, on which payment standards are largely based, is calculated. Currently, the FMRs provide a single rent standard for an entire metropolitan area, which may understate the rapid rent growth occurring in certain central-city neighborhoods. HUD s final rule on Small Area Fair Market Rents (SAFMRs), published on November 16, 2016, may provide greater flexibility in this instance. 4 Unlike metropolitan-level FMRs, SAFMRs and their associated payment standard amounts are calculated at the ZIP Code level. SAFMRs recognize that neighborhoods within a single metropolitan area can be drastically different in terms of opportunity, services, and, thereby, rents and give greater choice to voucher households in determining their housing locations. For residents of gentrifying neighborhoods, SAFMRs may help to stem displacement by granting higher payment standards than the overall metropolitan area. 5 Preservation-Friendly Incentives On the local level, aligning incentives for existing affordable housing owners with the community s preservation priorities can be effective in maintaining affordable units. Examples of preservation-friendly policies include tax abatements to lower property taxes for owners who agree to preserve units as affordable, such as the Class 9 program in Chicago. The Class 9 program reduces the assessment rate on substantial-rehabilitation or new-construction rental projects to the same lower rate as single-family property assessments when a minimum of 35 percent of units is affordable (CRN, n.d.a.). 6 In addition to Class 9, Chicago s Class S property tax incentive program provides rate cuts to preserve more than 3,000 Section 8 housing units at risk of conversion to market-rate rental or condominium units, which are particularly at risk in gentrifying neighborhoods. Because Housing Assistance Payment contracts began expiring in 1997, owners of more than 1,000 Section 8 units have chosen to opt out in Illinois, reducing the supply of subsidized housing in the state (CRN, n.d.b.). The Chicago Rehab Network estimates that hundreds of rental homes have been preserved as a direct result of the incentive (CRN, n.d.a.). Preservation Catalog Because of uncertain congressional appropriations, localities are asked to do more with less when it comes to affordable housing development and preservation. Using existing resources in the most efficient way can help governments react in an uncertain budgetary environment. Lubell (2016) suggested numerous policy responses that could improve the efficiency of resource utilization, including a preservation catalog that identifies when subsidies or rental assistance will expire. The national online preservationdatabase. org currently identifies when assistance will expire but focuses on federal subsidies and would greatly benefit from information on state and local subsidies (Lubell, 2016). This database can assist communities in prioritizing preservation targets well ahead of subsidy expirations and help them react with the appropriate tools. Currently, the database shows that 2 million federally assisted rental units with affordable use restrictions will expire during the coming decade (JCHS, 2016). Encourage Greater Development In addition to preserving existing affordable units, encouraging greater development of rental units at all levels can lower housing costs and expand housing choice for residents, particularly in areas with significant rent growth. Most of the current affordable housing stock is not subsidized but rather consists of older units that no longer command the highest rents or have filtered downward. Lubell (2016) described such units as market-rate affordable or naturally occurring affordable : units that are affordable for low-income households without direct government subsidies (JCHS, 2016; Lubell, 2016). How ever, older housing stock that could be market-rate affordable is often housing higher-income households due to a shortage in rental housing at all levels (JCHS, 2016). The Joint Center for Housing Studies of Harvard University estimated that downwardfiltered units increased the supply of affordable units 4.6 percent between 2003 through 2013, which was more than offset by the loss of 7.5 percent of similarly priced units due to unit 4 Small Area Fair Market Rents in Housing Choice Voucher Program Values for Selection Criteria and Metropolitan Areas Subject to Small Area Fair Market Rents. Federal Register 81 (221) November 16, Note, however, that SAFMRs are mandated only for 24 metropolitan areas in which voucher households are particularly concentrated in high poverty neighborhoods. PHAs in other metropolitan areas are permitted to voluntarily adopt SAFMRs. 6 The effectiveness of the program has been limited, as the county reduced assessment factors to the same level for all multiunit apartment buildings. HAC Page 67 10

72 Displacement of Lower-Income Families in Urban Areas Report Attachment 18 upgrading that increased rents, or upward filtering (JCHS, 2016). Given the tightening of rental markets nationwide, the number of low-income renters far exceeds the number of available and affordable units, such that both preservation and development of new units are necessary. Indeed, a National Low Income Housing Coalition study found that, in 2014, 31 rental units were affordable and available for every 100 extremely low-income renters (Arnold et al., 2014). Federal Policies To Encourage Supply of Affordable Housing At the federal level, in addition to efforts to preserve the existing stock, HUD has been looking for ways to promote the expansion of the affordable supply, including a review of Federal Housing Administration (FHA) policies such as condominium guidelines and rulemaking related to the production and installation of manufactured housing. Another opportunity lies with condominiums, traditionally a mainstay of affordable housing for both first-time homebuyers and seniors. HUD is in the process of revising condominium project approval requirements in order to provide a Final Rule and updated policies. HUD anticipates that the updated condominium project-approval regulations will be more flexible, less prescriptive, and more reflective of the current market than existing condominium project-approval provisions. HUD also recently announced a top-to-bottom review of its manufactured housing rules to assess their compliance costs and whether those costs are justified against the backdrop of the nation s shortage of affordable housing. Manufactured housing plays a vital role in meeting the nation s affordable housing needs, providing nearly 10 percent of the total single-family housing stock. Estimates suggest that more than 22 million American households reside in manufactured housing. Property Acquisition Beyond federal efforts, local governments have had some suc cesses in developing affordable units in some neighborhoods where such units would be cost prohibitive through the use of property-acquisition funds. For example, the New York City Acquisition Fund grants up to $190 million in loans to affordable housing developers through major financial institutions that are protected by a guarantee (Lubell, 2016). More than 7,650 affordable units have been created or preserved as a result of the fund. 7 A particularly promising approach to applying property acquisition funds in gentrifying neighborhoods is to target existing or upcoming transit development. The Urban Land Conservancy s fund purchases and holds property in key sites in Denver for the construction and preservation of more than 1,000 affordable housing units in current and future transit corridors (Lubell, 2016: 146). Similarly, the Bay Area Transit-Oriented Affordable Housing (TOAH) Fund is a $50 million fund that is focused on the production and preservation of affordable housing in transit-oriented neighborhoods that also sets aside funds for neighborhood amenities such as community facilities, health clinics, and grocery stores (Lubell, 2016). These types of funds can be particularly useful for renters in and around gentrifying neighborhoods. Low-income households are often forced to trade location for affordability to such a degree that they can spend nearly three times more on transportation when living in neighborhoods with lower-cost housing (JCHS, 2016). Creating and preserving affordable housing near transit options can alleviate some of the high cost burdens that low-income renters in these neighborhoods face. Housing Supply and Local Regulations Given rising rents, the question remains why has the supply of housing not caught up to demand? Researchers have increasingly focused on the role of restrictive land zoning regulations, which have risen since the late 1970s, in increasing construction costs. Glaeser, Gyourko, and Saks (2005a) found that, until the 1970s, rising quality of both housing and construction drove housing price increases. The authors concluded, however, that price increases instead reflect the difficulty of obtaining regulatory approval for new home construction. Similarly, Gyourko, Mayer, and Sinai (2013) demonstrated that the widening of real home price distributions is correlated with variation in the adoption of land use restrictions by communities. A collection of work draws direct connections between local zoning restrictions and the cost of housing for specific cities. For example, Glaeser, Schuetz, and Ward (2006) found that a 1-acre increase in a Boston-area town s minimum lot size was associated with about a 40-percent drop in housing permits. In areas with increased demand, such as Manhattan, land use regulations are credited with constraining the supply of housing and leading to increased prices (Glaeser, Gyourko, and Saks, 2005b). These patterns of increased housing costs and restrictions on supply since the 1970s suggest that this problem is not temporary and that we are not waiting for the market to catch up. In fact, 7 HAC Page 68 11

73 Displacement of Lower-Income Families in Urban Areas Report Attachment 18 these regulations can be particularly restrictive for multifamily housing and incentivize expensive housing development more than moderately priced housing (Quigley and Raphael, 2005). Indeed, local governments often discourage or prohibit the type of economical design that could encourage prompt, efficient, and affordable development of housing, such as modular units (White, Wilkins, and Pinto, 2016). At an average asking rent of about $1,381 per month, housing development currently under way is typically more expensive than the average renter can afford (Anderson, n.d.). Whereas a household income of $55,000 would be required to afford that level of rent without incurring a high housing cost burden, the average income for a renter is only $35,000. As housing construction and maintenance costs increase, units rarely filter down to become affordable for low-income people (Anderson, n.d.). The Obama White House s Housing Development Toolkit highlighted the costs of local regulatory barriers to development, including exacerbating the housing affordability crisis, creating a drag on the national economy, and reducing the number of families that HCVs could serve because of higher per-unit costs. The Housing Development Toolkit suggested a variety of strategies that state and local governments could take to promote greater housing development in the face of challenging political barriers to reform and improvement. Specifically, some of the actions emphasized include Establishing by-right development, particularly in conjunction with affordable housing, transit-oriented development (TOD), or energy-efficiency policy goals to shorten the building approval process. Requiring vacant property registration and increasing fees the longer a property remains vacant, encouraging owners to put properties to more productive uses, such as redevelopment or donating land to nonprofit developers. Reducing minimum lot sizes and eliminating off-street parking requirements, which significantly add to housing costs and can impede the affordability of a project. Allowing for accessory dwelling units that can address a greater trend toward intergenerational living. Establishing density bonuses or development taxes that incentivize the addition of affordable housing units. (The White House, 2016) The Toolkit recognized that greater political influence of some neighborhoods provides increased ability to implement strict local barriers. Such barriers often result in pushing any new development to low-income, gentrifying neighborhoods. By actively working to minimize these restrictions on further growth and to encourage greater regionwide development, state and local governments can reduce the displacement potential for neighborhoods with particularly strong rent or housing price increases. Inclusionary Zoning Policies An empirical debate is ongoing about the magnitude of benefits and associated negative effects of inclusionary zoning policies. Some experts have noted that inclusionary zoning policies often fall short of their goals and, in hot housing markets, can raise construction costs significantly (Quigley and Raphael, 2005). They can potentially lead to a decrease in unit production and, ultimately, affordability. Other empirical studies have suggested that the number of affordable housing units produced from inclusionary zoning programs is underestimated and that these policies do not lead to significant declines in overall housing production or to increases in rents and prices (Sturtevant, 2016). A recent report by the Center for Housing Policy notes that the success of inclusionary zoning policies depends on different factors; for example, offering additional incentives that offset the cost to developers, such as fee waivers or expedited permit and approval times (Sturtevant, 2016). Therefore, aligning regulations that attempt to increase the supply of affordable housing with the correct incentives and in the correct markets may be instrumental to their success. The current Administration is interested in reducing regulatory barriers to the production of affordable housing that has constrained supply and left many American families cost burdened. Engage Community Residents Greater development is needed to meet current demand and to compensate for decades of restricted supply. High-density and affordable housing development is often met with community resistance, however. Successful development plans will seek the buy-in of the community in a variety of ways that reach beyond only housing. HAC Page 69 12

74 Displacement of Lower-Income Families in Urban Areas Report Attachment 18 State and Local Measures on Affordable Housing Development Complementing federal incentives for new affordable housing development, local governments have sought new means for affordable housing construction while garnering public support. In San Francisco, Proposition A, a $310 million bond measure for affordable housing, was passed with 74 percent of voters supporting the bond during the November 2015 referendum (Brooks and Pickoff-White, 2015). The measure is expected to finance the construction or rehabilitation of 30,000 affordable units, and a significant portion of the bond will be used to target affordable housing development specifically in the gentrifying Mission District neighborhood. Although the city has been concerned with the displacement of minority and low-income households, on top of affordability pressures from the technology boom, placing the bond for a public vote shifted which actors prioritize housing affordability. By doing so, San Francisco leaders already garnered widespread public support before any affordable units have been constructed. Support for Community-Led Organizations Although residential displacement is a primary concern of many changing neighborhoods, communities should also act to ensure that residents who can remain are not alienated from neighborhood changes. Stemming the social tensions that come with the potential for cultural and political displacement of long-term residents can encourage meaningful social interactions with newcomers and foster greater integration (Hyra, 2017). Researchers, such as Chaskin and Joseph (2015), recognize that meaningful integration will require more than policy responses geared toward housing. If communities are not intentionally activating the mix, as they call it, or working to ensure that increased mixing currently occurring in cities is real, then diversity, if achieved, is much less likely to remain. Indeed, Hyra (2016: 171) argued that, we must look beyond residential and small business displacement impacts to understand how to effectively facilitate community conditions in economically transitioning neighborhoods that better support social cohesion and interaction among traditionally segregated populations. One way for all levels of government to support this kind of meaningful integration is through current funding that can be directed to support community-led organizations that encourage cross-race and cross-class connections (Hyra, 2016). South End Boston provides a good example of the need for these types of policy responses. Despite the area s racial and economic diversity, with high-income and generally White homeowners living in close proximity to minority renters, micro-level segregation continues to occur (Tach, 2014). Higher-income residents often avoid areas immediately surrounding subsidized developments they consider unsafe, and lower-income residents are often priced out of establishments that high-income residents frequent. These patterns show up in neighborhood organizations that are designed to serve the needs of particular interest and social groups, as well. For example, block associations that attract higher-income residents promoted activities such as wine tastings and historic preservation, whereas asso ci ations based in affordable housing complexes focused on social services and ethnic cultural celebrations (Tach, 2014). Clearly, meaningful integration involves more than merely mixed-income neighborhoods. The most successful neighborhood organizations at promoting social cohesion in South End Boston were those that reflected broad-based interests and were not cost prohibitive (Tach, 2014). For low-income residents to garner the benefits of neighborhood change, communities should also pursue policy objectives further than affordable housing by supporting neighborhood organizations that foster greater connections between newcomers and long-time residents and that encourage civic engagement among all groups. Regional Cooperation and Strategies As the number of lower-income and poor households continues to grow faster in the suburbs than in the nation s biggest cities, local suburban agencies struggle to keep up with demand for services, because they lack the fiscal and nonprofit architecture (Kneebone and Berube, 2013). Historically, social service resources were more likely to be supported and funded in urban centers, where large concentrations of poor households resided. However, gentrification, along with the rental affordability crisis and housing bust in the mid-2000s, has resulted in an influx of lower-income and poor households into suburban communities. Murphy and Wallace (2010: 1164) found that, at the start of the 2000s, the suburban poor were more isolated than their city counterparts from organizations that could help them with their daily needs and even more so from those offering opportunities for mobility. This finding illustrates the interconnectedness between neighborhoods and communities. A shortage of housing in one city, and any policies that contribute to it, spill over to surrounding communities. An ecosystem of neighborhoods and communities exists. The impact of gentrification is not isolated to the changing neighborhood, and addressing the forces behind it requires regional strategies. HAC Page 70 13

75 Displacement of Lower-Income Families in Urban Areas Report Attachment 18 Affirmatively Furthering Fair Housing Beyond stemming discrimination, the 1968 Fair Housing Act requires that HUD and other federal agencies affirmatively further fair housing in the administration of housing programs. This obligation applies to jurisdictions and grantees receiving HUD funds. HUD s Affirmatively Furthering Fair Housing (AFFH) final rule sets forth the requirements and process for those program participants. Key parts of the rule relevant to this discussion are Program participants receiving HUD funding are required to complete an Assessment of Fair Housing (AFH), identifying fair housing issues. The AFH is done with a standardized assessment tool and associated data and maps to help in assessing patterns of segregation and what those patterns may mean for access to important neighborhood services, for example. Grantees then set forth their priority goals for addressing those issues and incorporate this analysis into their follow-on planning processes such as the Consolidated Plan for Community Development Block Grant (CDBG) grantees and the PHA plans which include strategies and steps to be taken (O Regan, 2016). Grantees are required to have meaningful community participa tion as part of identifying issues and setting goals. HUD also strongly encourages joint or regional submissions, so that multiple jurisdictions and entities work together on the assessments and goals. The coordination and planning for these assessments may serve as a backdrop for broader conversations on how to support efforts to maximize the upside potential of increased investment into gentrifying neighborhoods while minimizing some of the downsides, including displacement. Neighborhoods that are currently undergoing gentrification, or are likely to in the near future, could pose an opportunity for a particularly impactful strategy within AFFH. These areas frequently already contain minority households and already experience increased investments such that neighborhood services and conditions are improving. Employing strategies here to minimize displacement and secure affordable housing has the potential for securing longer-term diversity. AFFH might provide an opportunity for localities and regions to address the housing affordability and displacement pressures from a more holistic perspective. Convening and Sharing Best Practices HUD recently joined local communities in five regions around the country to talk about the most challenging issues of class, race, and housing s role in accessing opportunity. San Francisco held one of the initial five convenings, in which significant change in the Mission District neighborhood was at the forefront of the conversation. The Mission District historically has been populated by Mexican and Central American immigrants but is currently seeing an influx of younger, White technology professionals. HUDUser.gov also documents and elevates policies, case studies, and best practices that state and local leaders can use in ensuring inclusive community development (HUD, n.d.a.). Online resources are an example of how the federal government can support local efforts to respond to community change and can encourage the coordination and cooperation of multiple localities and agencies. Data Sharing In support of regional coordination, data sharing among agencies and municipalities can help communities respond appropriately to the shifting makeup of their neighborhoods and needs. Utilizing existing networks, such as the National League of Cities and the National Association of Counties, can assist in this effort by providing data and technical assistance to inform local leaders of trends and best practices across cities and counties. Local organizations can take a leadership role in creating and supporting scaled and integrated solutions across jurisdictions and agencies. Within the federal government, interagency efforts to promote region-level planning decisions have also proven successful thanks to cooperation between departments on a similar goal. In the Sustainable Communities Initiative, HUD worked closely with the U.S. Department of Transportation and the U.S. Environmental Protection Agency to provide grants that sought to improve regional and local planning efforts to integrate housing, transportation, economic and workforce development, and infrastructure investments (HUD, n.d.b.). Programs that encourage a broader look at neighborhood change beyond housing and that integrate agency resources and tools can be especially helpful in assisting gentrifying areas. Award Coordinated Efforts AFFH, along with work across jurisdictions and agencies, are good examples of coordinated efforts that can respond more effectively to the pressures of broad community change. HAC Page 71 14

76 Displacement of Lower-Income Families in Urban Areas Report Attachment 18 However, both federal and local governments can go further by acknowledging these interjurisdictional groups as qualified grantees, by explicitly rewarding collaborative and integrative approaches within existing funding streams, such as awarding more points to grant applications, or both (HUD, n.d.b.). For example, HUD s HOME Investment Partnerships Program recognizes the importance of flexibility in empowering communities to create affordable housing and awards grants to collaborative entities that contain both entitlement and nonentitlement communities. However, only entitled cities and counties are eligible for CDBGs for viable urban community development and expanding economic opportunity. In addition to providing direct incentives for coordination, the federal government can also assist in the data-sharing efforts of local collaboratives by aligning data requirements and reporting systems across agencies and programs, when possible (Kneebone and Berube, 2013). Standardizing data systems could help municipalities see an immediate effect on administrative costs but encourage greater cooperation and communication. New Innovations in Responding to Gentrification Local governments and organizations are also looking at innovative and comprehensive ways to ensure equity in neighborhood development and change. This section highlights several communities whose innovative work incorporates elements of the four strategies discussed previously. 1. Preserve existing affordable housing Rental Assistance Demonstration. Housing choice vouchers. Preservation-friendly incentives. Preservation catalog. 2. Encourage greater development Federal Housing Administration insurance rate cuts. Property acquisition. Housing supply and local regulations. Inclusionary zoning policies. 3. Engage community residents State and local measures on affordable housing development. Support for community-led organizations. 4. Regional cooperation and strategies Affirmatively Furthering Fair Housing. Convening and sharing best practices. Data sharing. Award coordinated efforts. Local Policy Platforms That Address Equitable Development Philadelphia, Pennsylvania Strategies employed üüpreserve existing affordable housing through property acquisition and rehabilitation of units in disrepair. üüencourage greater housing development including, but not limited to, affordable housing. üüengage and educate existing community residents on tools needed to participate in planning and zoning decisions and incentivize local and minority hiring. üüimprove data collection to adequately address the degree of displacement and craft effective policy solutions from these findings. In Philadelphia, the development boom in center city has resulted in rapid price appreciation for housing and gentrification of neighborhoods in the downtown core. The Philadelphia Association of Community Development Corporations (PACDC) has attempted to address these issues with its equitable development policy platform, entitled Beyond Gentrification, Toward Equitable Neighborhoods. Among a multitude of policy re commendations, the platform highlights the need to preserve quality affordable housing through the repair of existing mixedincome properties, encourage more market-rate development and increase the dedicated funding for the Philadelphia Housing Trust Fund and attack blight through consolidated public ownership of land and acquiring delinquent properties through the Philadelphia Land Bank, implemented in 2014, and improved code enforcement on vacant properties to hold owners accountable to their neighbors (Hahn and Brey, 2015). PACDC also encourages inclusive communities with resident engagement and education. Through the Philadelphia Planning Commission s Citizens Planning Institute, PACDC encourages that community residents be given the tools and knowledge to participate in the Registered Community Organization process and other planning and zoning decisions. Along these lines, the initiative HAC Page 72 15

77 Displacement of Lower-Income Families in Urban Areas Report Attachment 18 hopes to expand economic opportunities on neighborhood corridors with programs like storefront improvements for small business; increased hiring for minority-, women-, and disadvantaged-owned business enterprises; and incentivizing large employers to hire locally. PACDC has been endorsed by 42 member organizations and calls on the city to develop a coordinated effort with partners, such as housing counselors to track data on displacement and rent increases in order to inform appropriate policy actions. Local policy platforms such as PACDC s may be helpful in garnering support for comprehensive responses that go beyond affordable housing and beyond neighborhoods. Washington, D.C. Strategies employed üüencourage greater affordable housing development through property acquisition in partnership with nonprofits. üüengage existing community residents in the development of a plan, along with policy experts, government officials, and business owners to create the 11th Street Bridge Park Equitable Development Plan (EDP). üüimprove access to quality education through early learning centers, adult education and services for the youth and arts, and stimulating economic development. üüsupporting healthy environments through services by pro viding medical care, food and nutrition, and services for seniors. In Washington, D.C., Local Initiatives Support Corporation (LISC DC) contributed $50 million to the Elevating Equity Initiative to ensure equality in development around the 11th Street Bridge Park (LISC DC, 2016). Recognizing the potential for displacement once the park is complete, LISC DC s initiative aims at early action in five different areas within a 1-mile radius of the future park. Like PACDC s policy platform, the EDP was developed by LISC DC in coordination with government officials, business owners, policy experts, and community members and stakeholders to employ the strategies discussed previously. In addition to the policy plan, LISC DC will provide grants, loans, and technical assistance in achieving these four goals around the 11th Street Bridge area. Chicago, Illinois Strategies employed üüpreserve existing affordable housing by acquiring foreclosed properties and rehabilitating units. üüencourage greater housing development including, but not limited to, affordable housing through creation of a land bank. üütaking a broader look and using regional, rather than localized, strategies by cooperating with multiple agencies and securing funds through a wide range of programs. Some cities, such as Chicago, grappling with changing urban downtowns alongside growing suburban poverty already cooperate on a regional and interagency level. The Chicago Southland Housing and Community Development Cooperative and the West Cook County Housing Collaborative consist of 29 Chicago municipalities that collectively secured $44 million for housing and community development initiatives (Snyderman and Dever, n.d.). With funds from various government grants from programs such as the HUD s Neighborhood Stabilization Program, CDBG Disaster Recovery Program, and the Sustainable Communities Initiative, the two collaboratives began the process of rehabilitating or demolishing foreclosed properties, started a TOD fund and a land bank for the acquisition of foreclosed properties, and created a geographic information system to map demographic and economic trends (Snyderman and Dever, n.d.). San Francisco, California Strategies employed üüencourage greater housing development including, but not limited to, affordable housing along transit lines in the region. üüpartner with private and public organizations and use regional strategies to address high traffic to centralized city locations. The San Francisco Bay Area s TOAH Fund is a $50 million public-private financing resource collaboration of the nonprofit and philanthropic organizations, public agencies, Community Development Financial Institutions, and banks, including the Great Communities Collaborative, the Association of Bay Area Governments, and the Metropolitan Transportation Commission. The fund will provide financing for affordable housing development, retail services, and services like childcare centers and health clinics along transit lines throughout the nine-county HAC Page 73 16

78 Displacement of Lower-Income Families in Urban Areas Report Attachment 18 Bay Area (Kneebone and Berube, 2013). The fund has financed several developments, including the Eddy and Taylor Family Housing, 5th and Howard in San Francisco, Leigh Avenue Senior Apartments in San Jose, and West Grand Development in Oakland (Seifel Consulting Inc., 2013). Minneapolis and St. Paul, Minnesota Strategies employed üücreate and preserve access to affordable housing. üüencourage a strong local economy by connecting people to construction and permanent jobs. üücreate vibrant and transit-oriented places through placemaking and maintaining the character of individual neighborhoods. üüfacilitate effective communication and collaboration among diverse partners. üüengage existing community residents. üütake a broader look and using regional, rather than localized, strategies. A collaborative of public, nonprofit, and philanthropic partners is working together to mitigate displacement along the Metro Green Line, which connects the central business districts of Minneapolis and Saint Paul, as it continues to expand (Sage- Martinson, 2016). This work began with the Central Corridors Funders Collaborative and eventually expanded to other transit corridors in the region thanks to HUD s Sustainable Communities Initiative. The collaborative has succeeded, 5 years in to the initiative, in preserving or building 3,573 affordable units and serving 968 households with resources to help stabilize lower income families in their homes. Beyond the quantitative metrics, a key indicator of success was the degree to which multistakeholder collaboration took place. The collaborative facilitated the coordination of several partners across sectors (HUD, n.d.c.). Other communities can learn from the collaborative s experience. Lessons learned include how to maximize coordinated investments, convene partners, and utilize existing resources and programs to target shared goals. For more information on this work, see Corridors of Opportunity Along the Green Line on HUDUser.gov. Atlanta, Georgia Strategies employed üüencourage multimodal transportation options. üüpreserve existing affordable housing. üüencourage greater housing development including, but not limited to, affordable housing. üüengage existing community residents. üütaking a broader look and using regional, rather than localized, strategies. Atlanta is currently undergoing a transformative infrastructure investment that has the potential to drastically change the way residents move around and interact with their city. The idea for the Atlanta Beltline grew from a 22-mile network of unused railroad corridors. The project will eventually connect 45 neighborhoods via a system of transit, trails, and greenways. The Atlanta Beltline thoughtfully incorporates multimodal transportation options and affordable housing into the plan. The initiative will include 33 miles of biking and walking trails, as well as streetcar service. Getting ahead of the expected increased demand along the corridor, the city of Atlanta and other partners are creating and preserving affordable housing in the neighborhoods connected by the Beltline. Of the 28,000 housing units included in the strategic implementation plan, 20 percent will be affordable (HUD, n.d.d.). The Beltline serves as an example of how to advance equitable development through large infrastructure projects. The project has spurred both public and private investment across the city. By creating new linkages between neighborhoods, the project addresses longstanding patterns of segregation and opportunity. For more information on the project, read the full article, The Atlanta Beltline, on HUDUser.gov. Portland, Oregon Strategies employed üüpreserve housing affordability, by not only acquiring and setting aside land for affordable housing development, but also providing information to residents about tenant rights, foreclosure and home values, and providing direct assistance and information to lower home utility and maintenance costs. üüretain existing neighborhood businesses by providing assistance to small business owners. HAC Page 74 17

79 Displacement of Lower-Income Families in Urban Areas Report Attachment 18 üühelp families achieve economic self-sufficiency by connecting priority populations to targeted employment and preparing them for long-term success and by providing affordable childcare to working parents. üüengage existing community residents and organizations, such as neighborhood associations, churches, and government agencies. Like so many cities across the country, Portland, Oregon has experienced a sharp increase in housing demand in the past 15 years. This demand has driven up housing costs in many neighborhoods, pushing lower-income residents to other parts of the city or further out in the suburbs. In the neighborhood of Cully, an effort to address this displacement sheds light on strategies cities can utilize to ensure that low-income residents can remain in their neighborhoods. The organization, Living Cully, is comprised of community development organizations working together to meet the needs of residents in Cully. Living Cully works closely with the local government to advance their mission. Additionally, they look beyond their own neighborhood to understand how citywide and regional policies and broader market forces affect their residents (HUD, n.d.e.). More details on Living Cully s strategies to mitigate displacement in a rapidly changing neighborhood can be found on HUDUser.gov. Concluding Remarks A recent study by Governing suggests that gentrification is still rare nationwide, with only 8 percent of neighborhoods reviewed experiencing gentrification since 2000 (Maciag, 2015). Many researchers agree that the larger issue is concentrated poverty, with 75 percent of high-poverty neighborhoods staying poor from 1970 to 2010 (Cortright and Mahmoudi, 2014). By introducing high-income households into previously predominately low-income neighborhoods, gentrification may be a part of the solution to concentrated poverty. Indeed, Ellen and Torrats- Espinosa (2016) described the observed decline in poverty levels for voucher neighborhoods as the gentrification effect. Communities undergoing gentrification have a particularly ripe opportunity to harness the upsides of neighborhood change and to address concentrated poverty, which some observers describe as the biggest urban challenge the nation currently faces (Cortright and Mahmoudi, 2014). However, to create stably diverse neighborhoods and communities, policy responses are needed beyond the neighborhood and beyond housing. The policy responses this report suggests attempt to amplify the benefits of gentrification, and the increased investments it brings, while minimizing the costs, such as potential displacement of low-income families and long-term resegregation of cities. Although greater housing production is necessary in communities struggling to keep up with the increased demand for affordable housing, for the outcome of community change to be shared opportunity, efforts at meaningful integration across socioeconomic and racial lines are just as important. References Abellard, Natasha. n.d. Gentrification Brings Health Food to Harlem. gentrification-brings-healthy-food-harlem/. Alwitt, Linda, and Thomas Donley Retail Stores in Poor Urban Neighborhoods, The Journal of Consumer Affairs 31 (1): Anderson, Bendix. n.d. New Construction Is not Enough. SpecialReport_July16-FullArticle-AHF.htmlHF.html. Arnold, Althea, Sheila Crowley, Elina Bravve, Sarah Brundage, and Christine Biddlecombe Out of Reach Washington, DC: National Low Income Housing Coalition. Baum-Snow, Nathaniel, and Daniel Hartley Causes and Consequences of Central Neighborhood Change, Paper presented at the Research Symposium on Gentrification and Neighborhood Change, May 25. Brooks, Jon, and Lisa Pickoff-White S.F. Election: Lee Re-Elected, Peskin Wins, Airbnb Curb Fail. org/news/2015/11/03/san-francisco-2015-election-results/. Buron, Larry, Susan Popkin, Diane Levy, Laura Harris, and Jill Khadduri The Hope VI Resident Tracking Study: A Snapshot of the Current Living Situation of Original Residents from Eight Sights. Bethesda, MD: Abt Associates Inc.; Washington, DC: Urban Institute. Caplovitz, David The Poor Pay More: Consumer Practices of Low-Income Families. New York: Free Press. Carr, James, and Jenny Schuetz Financial Services in Distressed Communities: Framing the Issue, Finding Solutions. Washington, DC: Fannie Mae Foundation. Center on Budget and Policy Priorities Policy Basics: The Housing Choice Voucher Program. housing/policy-basics-the-housing-choice-voucher-program. HAC Page 75 18

80 Displacement of Lower-Income Families in Urban Areas Report Attachment 18 Cenziper, Debbie, and Michael Sallah Groundbreaking Protections Proposed for D.C. Homeowners Behind on Taxes, The Washington Post, March 18. Chaskin, Robert, and Mark Joseph Integrating the Inner City: The Promise and Perils of Mixed-Income Public Housing Transformation. Chicago: University of Chicago Press. Chicago Rehab Network (CRN). n.d.a. Class 9. chicagorehab.org/policy/class9.htm.. n.d.b. Property Tax: New Class S Incentive. Cortright, Joe, and Dillon Mahmoudi Lost in Place: Why the Persistence and Spread of Concentrated Poverty not Gentrification Is Our Biggest Urban Challenge. LostinPlace_12.4.pdf. Couture, Victor, and Jessie Handbury Urban Revival in America, 2000 to faculty.hass.berkeley.edu/courture/ download/couture_handbury_revival.pdf. Dastrup, Samuel, and Ingrid Gould Ellen Linking Residents to Opportunity: Gentrification and Public Housing, Cityscape 18 (3): Ding, Lei, and Jackelyn Hwang The Consequences of Gentrification: A Focus on Residents Financial Health in Philadelphia, Cityscape 18 (3): Ding, Lei, Jackelyn Hwang, and Eileen Divringi Gentrification and Residential Mobility in Philadelphia. Working paper Philadelphia: Federal Reserve Bank of Philadelphia. Econometrica, Inc Evaluation of HUD s Rental Assistance Demonstration (RAD): Interim Report. huduser.gov/portal/publications/rad_evaluation.html. Eggers, Frederick J., and Fouad Moumen Rental Market Dynamics: Washington, DC: U.S. Department of Housing and Urban Development, Office of Policy Development and Research. Ellen, Ingrid Gould, and Lei Ding Advancing Our Understanding of Gentrification. Paper presented at the Research Symposium on Gentrification and Neighborhood Change, May 25. Ellen, Ingrid Gould, Keren Horn, and Katherine O Regan Why Do Higher-Income Households Choose Low- Income Neighborhoods? Pioneering or Thrift? Urban Studies 50 (12): Ellen, Ingrid Gould, Keren Mertens Horn, and David Reed Has Falling Crime Invited Gentrification? Paper presented at the Research Symposium on Gentrification and Neighborhood Change, May 25. Ellen, Ingrid Gould, and Katherine O Regan. 2009a. Reversal of Fortunes? Lower-Income Urban Neighborhoods in the US in the 1990s, Urban Studies 45 (4): b. Crime and U.S. Cities: Recent Patterns and Implications, The Annals of the American Academy of Political and Social Science 626: How Low-Income Neighborhoods Change: Entry, Exit, and Enhancement, Regional Science and Urban Economics 41: Ellen, Ingrid Gould, and Gerard Torrats-Espinosa High-Cost Cities, Gentrification, and Voucher Use. Paper presented at the Research Symposium on Gentrification and Neighborhood Change, May 25. Finkel, Meryl Revitalizing Public Housing: What Will It Take? Revitalizing-Public-Housing--What-Will-It-Take-. aspx?utm_source=sep+enewsletter+working+draft&u tm_campaign=housing+enews-+june&utm_medium= . Finkel, Meryl, and Larry Buron Study on Section 8 Voucher Success Rates. Washington, DC: U.S. Department of Housing and Urban Development. Freeman, Lance Displacement or Succession? Residential Mobility in Gentrifying Neighborhoods, Urban Affairs Review 40 (4): Freeman, Lance, and Frank Braconi Gentrification and Displacement: New York City in the 1990s, Journal of the American Planning Association 70 (1): Glaeser, Edward, Joseph Gyourko, and Raven Saks. 2005a. Why Have Housing Prices Gone Up? NBER Working Paper No Cambridge, MA: National Bureau of Economic Research b. Why Is Manhattan so Expensive? Regulation and the Rise in Housing Prices, The Journal of Law and Economics 48: Glaeser, Edward, Jenny Schuetz, and Bryce Ward Regulation and the Rise of Housing Prices in Greater Boston. Cambridge, MA: Harvard University, Rappaport Institute for Greater Boston. Goetz, Edward New Deal Ruins: Race, Economic Justice, and Public Housing Policy. Ithaca, NY: Cornell University Press. HAC Page 76 19

81 Displacement of Lower-Income Families in Urban Areas Report Attachment 18 Gress, Garyn, Seungjong Cho, and Mark Joseph HOPE VI Data Compilation and Analysis. portal/sites/default/files/pdf/hope-vi-data-compilation-and- Analysis.pdf. Gyourko, Joseph, Christopher Mayer, and Todd Sinai Superstar Cities, American Economic Journal: Economic Policy 5 (4): Hahn, Ashley, and Jared Brey PACDC Hopes Candidates Will Focus on Equitable Neighborhood Development. planphilly.com/articles/2015/02/19/pacdc-hopes-candidateswill-focus-on-equitable-neighborhood-development. Hayes, Lashawn Do the Poor Pay More? An Empirical Investigation of Price Dispersion in Food Retailing. Working paper 446. Princeton, NJ: Princeton University, Department of Economics, Industrial Relations. Helling, Amy, and David Sawicki Race and Residential Accessibility to Shopping and Services, Housing Policy Debate 14 (1 2): Hyra, Derek The Back-to-the-City Movement: Neighborhood Redevelopment and Processes of Political and Cultural Displacement, Urban Studies 52 (10): Commentary: Causes and Consequences of Gentrification and the Future of Equitable Development Policy, Cityscape 18 (3): Race, Class, and Politics in the Cappuccino City. Chicago: The University of Chicago Press. Jacobus, Rick Inclusionary Housing (Policy Focus Report). Cambridge, MA: Lincoln Institute of Land Policy. Jargowsky, Paul Stunning Progress, Hidden Problems: The Dramatic Decline of Concentrated Poverty in the 1990s. Washington, DC: Brookings Institution Press. Johnson, Matthew Stepping Up: How Cities Are Working To Keep America s Poorest Families Housed. Joint Center for Housing Studies of Harvard University (JCHS) The State of the Nation s Housing jchs.harvard.edu/research/state_nations_housing. Kaufman, Philip, James MacDonald, Steve Lutz, and David Smallwood Do the Poor Pay More for Food? Item Selection and Price Differences Affect Low-Income Household Food Costs, Agricultural Economics Report No Washington, DC: U.S. Department of Agriculture. Kneebone, Elizabeth, and Alan Berube Confronting Suburban Poverty in America. Washington, DC: Brookings Institution Press. Local Initiatives Support Coalition Washington DC (LISC DC) LISC DC Launches a $50 Million Elevating Equity Initiative. million-elevating-equity-initiative/. Lubell, Jeffrey Preserving and Expanding Affordability in Neighborhoods Experiencing Rising Rents and Property Values, Cityscape 18 (3): Maciag, Mike Gentrification in America Report. Meltzer, Rachel Gentrification and Small Business: Threat or Opportunity? Cityscape 18 (3): Meltzer, Rachel, and Jenny Schuetz Bodegas or Bagel Shops? Neighborhood Differences in Retail and Household Services, Economic Development Quarterly 26 (1): Murphy, Alexandra, and Danielle Wallace Opportunities for Making Ends Meet and Upward Mobility: Differences in Organizational Deprivation Across Urban and Suburban Poor Neighborhoods, Social Sciences Quarterly 91 (5): Nevius, Charles W Gentrification no Longer a Dirty Word. Gentrification-no-longer-a-dirty-word php. Newman, Kathe, and Elvin Wyly The Right To Stay Put, Revisited: Gentrification and Resistance to Displacement in New York City, Urban Studies 43 (1): O Regan, Katherine Commentary: A Federal Perspective on Gentrification, Cityscape 18 (3): O Sullivan, Arthur Gentrification and Crime, Journal of Urban Economics 57: Popkin, Susan, Bruce Katz, Mary Cunningham, Karen Brown, Jeremy Gustafson, and Margery Turner A Decade of HOPE VI: Research Findings and Policy Challenges. Washington, DC: Urban Institute. Popkin, Susan J., Diane Levy, Laura E. Harris, Jennifer Comey, Mary K. Cunningham, and Larry Buron HOPE VI Panel Study: Baseline Report. Washington, DC: Urban Institute. Powell, Lisa, Sandy Slater, Donka Mirtcheva, Yanjun Bao, and Frank Chaloupka Food Store Availability and Neighborhood Characteristics in the United States, Preventative Medicine 44: HAC Page 77 20

82 Displacement of Lower-Income Families in Urban Areas Report Attachment 18 Public Broadcasting Service (PBS) Flag Wars. Quigley, John M., and Steven Raphael Regulation and the High Cost of Housing in California, American Economic Review 95 (2): Rappaport, Jordan The Increasing Importance of Quality of Life, Journal of Economic Geography 9 (6): Sage-Martinson, Jonathan Remarks at the Research Symposium on Gentrification and Neighborhood Change. Philadelphia: Federal Reserve Bank of Philadelphia. Schwartz, Heather, Raphael Bostic, Richard Green, Vincent Reina, Lois Davis, and Catherine Augustine Preservation of Affordable Rental Housing: Evaluation of the MacArthur Foundation s Window of Opportunity Initiative. Arlington, VA: RAND Corporation. Seifel Consulting Inc., Bay Area Transit-Oriented Affordable Housing Fund: Assessment and Lessons Learned. TOAH_report.pdf. Slater, Tom Missing Marcuse: On Gentrification and Displacement, City 13 (2 3): Snyderman, Robin, and Beth Dever. n.d. Building Capacity Through Collaboration in Chicago s Suburbs. confrontingsuburbanpoverty.org/case-studies/buildingcapacity-through-collaboration-in-chicagos-suburbs/. Sturtevant, Lisa Separating Fact From Fiction To Design Effective Inclusionary Housing Programs. Washington, DC: Center for Housing Policy. Sullivan, Brian FHA To Cut Insurance Rates on Multifamily Mortgages. press/press_releases_media_advisories/2016/hudno_ Tach, Laura Diversity, Inequality, and Microsegregation: Dynamics of Inclusion and Exclusion in a Racially and Economically Diverse Community, Cityscape 16 (3): U.S. Department of Housing and Urban Development (HUD). n.d.a. Prosperity Playbook Toolkit. gov/portal/pp/home.html.. n.d.b. Sustainable Communities Initiative. portal.hud.gov/hudportal/hud?src=/hudprograms/sci.. n.d.c. Corridors of Opportunity Along the Green Line. study html.. n.d.d. The Atlanta Beltline. gov/portal/casestudies/study html.. n.d.e. Mitigating Displacement in a Rapidly Changing Neighborhood. study html Displacement Report. Report on Housing Displacement. Washington, DC: U.S. Department of Housing and Urban Development Worst Case Housing Needs Report to Congress. pdf/worst-case-housing-needs.pdf. Vale, Lawrence Purging the Poorest: Public Housing and the Design Politics of Twice-Cleared Communities. Chicago: University of Chicago Press. Watson, Nicole Elsasser, Barry Steffen, Marge Martin, and David A. Vandenbroucke Worst Case Housing Needs: 2017 Report to Congress. Washington, DC: U.S. Department of Housing and Urban Development, Office of Policy Development and Research. White, Tom, Charlie Wilkins, and Edward J. Pinto Economic Rental Housing by Design for Communities That Work. Washington, DC: American Enterprise Institute. White House, The Housing Development Toolkit. Housing_Development_Toolkit f.2.pdf. Zenk, Shannon, Amy Schulz, Barbara Israel, Sherman James, Shuming Bao, and Mark Wilson Neighborhood Racial Composition, Neighborhood Poverty and the Spatial Accessibility of Supermarkets in Metropolitan Detroit, American Journal of Public Health 95 (4): Zielenbach, Sean The Economic Impacts of HOPE VI on Neighborhoods. Washington, DC: Housing Research Foundation Assessing Economic Change in HOPE VI Neighborhoods, Housing Policy Debate 14 (1): HAC Page 78 21

83 Displacement of Lower-Income Families in Urban Areas Report Attachment 18 Appendix. HUD s Regulatory Barriers Clearinghouse Database Records: Displacement and Gentrification, as of June 9, 2017 Gentrification Response: A Survey of Strategies To Maintain Neighborhood Economic Diversity Publication date: 2016 Location: New York Organization: New York Universtiy, Furman Center Web location: GentrificationResponse_26OCT2016.pdf. This report describes policies that local governments can use to address concerns about displacement in gentrifying neighborhoods. The authors present policies that create or preserve affordable housing in gentrifying neighborhoods and assist displaced tenants or those at risk of displacement. Several measures that reduce regulatory barriers are included to address concerns that such policies inhibit housing development. To preserve affordable housing, property tax relief can be used for apartments occupied by targeted income groups and owneroccupied properties where low-income seniors or long-term residents live. Inclusionary zoning, along with transferable development rights and linkage fees, can be used to produce new affordable housing. To ensure that voluntary inclusionary zoning is attractive to developers and that mandatory inclusion does not inhibit market-rate development, these programs can be supplemented with subsidies, allow for relatively higher maximum rents, and provide waivers for developments with constraining economic conditions. To reduce regulatory barriers for policies that protect tenants from displacement, the report notes that rent stabilization programs can limit the number of protected units, allow for greater rent increases at vacancy, and limit the regulatory period of units, as well as provide tax reductions for stabilized properties. The report also identifies programs requiring permits for substantial construction activities to avoid tenant harassment. Some communities provide fast-track permitting to reduce costs for landlords who have records of respecting tenants rights. For tenants who are displaced, communities can use unified tenant screening reports, which can be efficient for both tenants and landlords. Jurisdictions can provide incentives to landlords who agree to use the unified report. Confronting San Francisco s Housing Crisis in 2015 Publication date: 2015 Location: San Francisco, California Organization: Council of Community Housing Organizations Web location: CCHO-Housing-Agenda-2015-FINAL pdf. This paper presents the Council of Community Housing Organizations strategies to relieve San Francisco s affordable housing crisis. In general, the strategies seek to confront the displacement of low-income residents and add affordable housing units at a rate that is balanced with the growth of market-rate developments. Actions to reduce regulatory barriers include incentivizing private-sector development of low- and moderate-income housing by adjusting the inclusionary zoning fee structure and providing new incentives for offsite affordable buildings constructed to meet the zoning requirement. The paper also proposes the reinstatement of tax increment financing and the dedication of a portion of hotel taxes on short-term rentals to be used for affordable housing. Also, fees are proposed to capture some of the value gained when public land is used for private development and when property is rezoned for more intensive use. Displacement: The Gnawing Injustice at the Heart of Housing Crises Publication date: 2016 Location: Seattle, Washington Organization: Sightline Institute Web location: displacement-the-gnawing-injustice-at-the-heart-of-housingcrises/. In this article about displacement in Seattle, author Dan Bertolet states that the root cause... is a shortage of homes, and the only real solution is to build lots more housing of all types.... Bertolet also notes that this citywide market-rate construction could be supplemented by targeted affordable housing preservation in low-income neighborhoods where large displacement is expected and in high-income neighborhoods where population diversity may be lost. HAC Page 79 22

84 Displacement of Lower-Income Families in Urban Areas Report Attachment 18 Noting that regulatory restrictions prevent new construction that meets the demand for more housing in growing cities like Seattle, the author claims that a development moratorium and rent control would not stop displacement. Further, Bertolet states that zoning regulations that limit the number of houses that can be developed in particular the single-family districts that apply to half of the city are the key roadblock to building more housing. The author acknowledges that public regulations can be crafted to increase the supply of affordable housing, such as tax exemptions for affordable multifamily development and mandatory inclusionary housing that carefully balances density increases with affordability requirements. Transit-Averse Development? The Challenges of Infill Publication date: 2015 Location: Los Angeles, San Francisco Bay Area, California Organization: University of California, Berkeley, Urban Displacement Project Web location: This blog analyzes the effects of transit investment on housing development and displacement near rail stations in the San Francisco Bay Area and Los Angeles. Based on records of development between 2000 and 2014, authors Karen Chapple and Mitchell Crispell find that transit-oriented development occurs in only a few neighborhoods. The authors attribute the lack of development near transit stations to several factors. One is low-density zoning that is still in place, despite the Association of Bay Area Governments having classified station areas as Priority Development Areas. Even where the zoning has changed, according to the authors, development costs land costs and construction costs because of the tight construction market, difficult building sites, and costs associated with buildings more than eight stories are so high that investments may be infeasible. In addition, neighbors anxious about change often threaten legal action under the state s environmental regulations. The authors also note that the exemption from those regulations that SB 375 allows to promote sustainable development is not as useful as it could be, because obtaining an exemption is costly and time consuming. These infill challenges, according to the authors, can make development infeasible. In those cases, affordable housing would require deep subsidies. Market-rate developers might delay their projects until area rents increase, or they might develop sites farther away from the transit station. Urban Displacement Policy Tools Map Publication date: 2016 Location: Bay Area, Los Angeles County, San Francisco Bay Area, California Organization: University of California, Berkeley, Urban Displacement Project Web location: The Urban Displacement Project at the University of California, Berkeley website provides resources for communities in the San Francisco Bay area and Southern California to retain affordable housing in the face of neighborhood change. One of the resources is the Policy Tools Map, an interactive map presenting 14 antidisplacement policies adopted by more than 100 cities in the San Francisco Bay Area. The map displays the cities grouped by the number of adopted policies, as well as the cities that have adopted specific policies. The policies to reduce regulatory barriers include permitting single-room occupancy housing, giving density bonuses for affordable housing, offering incentives for inclusionary housing, and establishing rent control that enables reasonable returns for apartment owners. The website includes white papers on rent control, inclusionary housing, and condominium conversion and case studies of neighborhoods vulnerable to displacement. Gentrification and Neighborhood Change: Helpful Tools for Communities Publication date: 2015 Location: National Organization: Nathalie P. Voorhees Center for Neighborhood and Community Improvement, University of Illinois at Chicago Web location: a4d8fd30039f35a0.pdf. In this report, the Nathalie P. Voorhees Center for Neighborhood and Community Improvement provides a toolkit of strategies to address gentrification, defined as the displacement of low-income households when housing costs rise as higher income households move into a neighborhood. The strategies are categorized for use before gentrification occurs, at its mid-stage, and in the late-stage, and the report defines each strategy, identifies key stakeholders, and lists opportunities and challenges. As an important step for any program dealing with gentrification, the authors urge neighborhood residents, local businesses, nonprofit organizations, officials, and other interested parties to build partnerships. HAC Page 80 23

85 Displacement of Lower-Income Families in Urban Areas Report Attachment 18 The strategies addressing regulatory barriers include tax abatements that keep property taxes at preredevelopment levels for ownership and rental properties occupied by lower income households or long-time residents. Similarly, the report lists tax relief as a tool to encourage employer-assisted housing. Inclusionary zoning is a helpful antigentrification tool although, if not carefully structured, it can lead to concentrated affordable housing in low-income neighborhoods or to housing affordable to moderate- rather than low-income households. Inclusionary housing is most useful when in-lieu fees are not accepted and the affordable units are built in the neighborhood where the market development occurs, according to the authors. The report also includes activities to strengthen protections for tenants, such as rent control, but warns that low- and moderateincome households may not gain benefits from this strategy. Equitable Development Promising Practices To Maximize Affordability and Minimize Displacement in Nashville s Urban Core Publication date: 2014 Location: Nashville and Davidson Counties, Tennessee Organization: Vanderbilt University, Community Research and Action Program Web location: Planning/docs/NashvilleNext/ResourceTeams/Housing_ Gentrification_EquitableDevelopment.pdf. This research report written for NashvilleNext by the Community Research and Action Program at Vanderbilt University, highlights best practices for the creation of affordable housing and prevention of residential displacement. The authors emphasize the need for such strategies by stating that residents of increasingly desirable neighborhoods are at risk of displacement, homeowners and renters alike. The authors propose an equitable development toolkit with 15 tools in four categories: fund it, build it, preserve it, and retain residents. The paper also identifies which tools are appropriate for neighborhoods with weak, improving, and strong housing markets. Several tools reduce regulatory barriers to affordable housing. These tools include affordable infill housing in the Build It category, which is proposed for accessory dwelling units and mixed-use developments, which could assume or explicitly require the housing to be affordable. In the same category is inclusionary housing, which may offer density bonus, height bonus, or other incentive (such as reduced setbacks and parking requirements, expedited permitting, fee reductions or waivers, and tax exemptions). The white paper also proposes several tools related to taxes, including tax exemptions for multifamily developments that include a certain percentage (such as 15 or 20 percent) of affordable units and tax freezes, credits, or deferrals for seniors and those on fixed incomes, which can be especially useful in areas where property taxes rise quickly. In addition, the authors suggest that communities can create tax increment financing districts in which a portion of increased tax revenues is devoted to constructing or preserving affordable housing, especially for households that may be displaced by development pressures. DC s First Right Purchase Program Helps To Preserve Affordable Housing and Is One of DC s Key Anti-Displacement Tools Publication date: 2014 Location: Washington, D.C. Organization: DC Fiscal Policy Institute Web location: 09/ First_Right_Purchase_Paper-Final.pdf. The white paper highlights the District of Columbia s First Right Purchase program, a key tool that has preserved nearly 1,400 affordable housing units since This program provides financial and technical assistance to a tenant group to purchase and, in many cases, rehabilitate their building when the owner decides to sell. However, author Jenny Reed contends that the program s lengthy and complicated process for applying for assistance has limited the effectiveness of the program. The white paper proposes several solutions for shortening the application process. For example, the author recommends starting the review process before the required studies are completed, making revisions to the application form to facilitate underwriting, and waiving requirements that do not apply to tenant purchases of multifamily buildings. Moreover, the white paper suggests having benchmarks during the application process to help tenants meet deadlines for information and decisions. The Growing Transit Communities Strategy Publication date: 2013 Location: Puget Sound region, Washington Organization: Growing Transit Communities Partnership, Puget Sound Regional Council Web location: GTCStrategyReport pdf. HAC Page 81 24

86 Displacement of Lower-Income Families in Urban Areas Report Attachment 18 The Puget Sound Regional Council s Growing Transit Communities Partnership prepared a strategy for directing growth to areas accessible to the region s rapid transit system. To accommodate the 25-percent growth in housing projected in the region s Vision 2040 plan, the Partnership recommends that local governments implement land use reforms, reductions in developmental barriers, and fair housing strategies to provide affordable housing choices near high-capacity transit service. Eight proposed strategies would provide affordable housing choices near transit stations, with actions to be taken by the state, regional council, transit agencies, local governments, and housing providers. In addition to increased funding for affordable rental and ownership housing, the strategies include actions by local governments to reduce barriers to affordable housing. Where affordable housing exists, the Partnership calls for minimal displacement through incentives to preserve or replace the existing housing as new development occurs. The Partnership also calls for new affordable units to be provided either by requiring them in all developments or by encouraging them at the developer s option through more intensive zoning or density bonuses. Suggestions to reduce barriers include market-driven parking requirements, reduced parking for seniors and other special populations, maximum parking limits, shared parking, parking for carsharing, as well as parking costs unbundled from housing costs. Expedited permitting and waivers of impact or permit fees for affordable housing projects are proposed, as well as tax exemptions based on the duration and depth of affordability. The Partnership also recommends that local governments enact standards for universal design and promote fair housing through education, as well as through training for community groups to provide outreach services. Finally, the Partnership calls on the state to adopt legislation prohibiting discrimination against households using rental subsidies. Austin, Texas: The East Austin Neighborhood Publication date: 2008 Location: Austin, Texas Organization: Federal Reserve Bank of Dallas Web location: This report studies the effects of gentrification of low-income neighborhoods on housing affordability in Austin, Texas. According to the report, the increased demand for housing in the area increases housing prices in low-income neighborhoods, creating a housing affordability gap. The report highlights the SMART Housing program that offers fee waivers, expedited reviews, and tax increment financing to increase housing affordability. In addition, the Homestead Preservation District will use land banks and land trusts to enable community orga nizations to purchase and hold land for residential housing to maintain affordability through 99-year leases. Homestead Preservation Districts and Reinvestment Zones Publication date: 2007 Location: Texas Organization: State of Texas Web location: content/htm/lg a.00.htm. This Texas state statute allows for the creation of municipal homestead preservation districts to increase homeownership opportunities, provide low- and moderate-income housing, and prevent loss of affordable housing units. Establishing these new development districts enables cities to utilize a number of tools, including community land trusts, land banks, and reinvestment zones to preserve homeownership in disadvantaged neighborhoods and help ease the effects of gentrification. The statute also authorizes incentives such as density bonuses and tax increment financing to promote housing development. HAC Page 82 25

87 Attachment 19 North Berkeley BART Housing Development: Public Correspondence Received by the North Berkeley BART Subcommittee & Housing Advisory Commission HAC Page 83

88 Attachment 19 Davidson, Amy From: Sent: To: Cc: Subject: Jesse Arreguin Wednesday, August 22, :13 PM Gmail; Igor Tregub Maio, Linda; Droste, Lori; Davidson, Amy HAC Subcommittee on North Berkeley BART Dear members of the HAC Subcommittee on North Berkeley BART: I wanted to update you on efforts to develop a community process regarding potential development on the North Berkeley BART parking lots. As you know, this March we held a well-attended community meeting to present the need for housing, BART's TOD Guidelines and solicit initial input. Following up on May 15, 2018, Councilmember Maio and I introduced an item "Visioning event to present and share ideas on creating housing at the North Berkeley BART Station based solely on BART s guidelines before any participation by the City" which was approved by Council. to_present.aspx The item requests that the City Manager assist in holding an event where ideas for building housing on the North Berkeley BART Station parking lots could be presented by and shared with the public. Following up on this direction, on July 24, 2018, Councilmember Maio submitted an information report "Suggested Process for North Berkeley BART Parking Lot" which stated: To initiate such a process, we propose a citywide "idea" gathering where a variety of treatments would be showcased by interested community members. This would happen at the North Berkeley Senior Center sometime this fall. [...] All presentations and comments will then be distilled and presented, by staff, into several basic proposals for Council consideration at a work session. Council would then determine a preferred scenario and meet with BART to determine next steps as the City proceeds with the zoning. Clearly there has to be a funding plan and a joint working relationship with BART as we move ahead. BART Board Member Rebecca Saltzman, who represents North Berkeley BART, is in general agreement with this approach. A more detailed process description with specifics would appear on the Council agenda in the fall. _for_north.aspx We are working on organizing this idea gathering session for a date this fall. We appreciate your enthusiastic interest in the potential for housing development on the North Berkeley BART parking lots. However I am concerned that this HAC subcommittee is bypassing the community process we are developing with BART. Additionally, upon review of the enabling legislation for the HAC, decisions on zoning and development standards are not within the jurisdiction of the HAC. Those decisions are relegated to the Planning Commission under the Berkeley Municipal Code. 1 HAC Page 84

89 Attachment 19 I have heard interest on the part of Planning Commissioners in forming a subcommittee or task force to guide their work in recommending zoning for the property. As you know currently the site is not zoned. Any development on this site must be done in partnership with BART, as it is their property. We must work with them and consistent with their TOD Guidelines to develop any implementing zoning. We have been working in collaboration with BART officials since Councilmember Maio started this conversation, and we have agreement on a preferred approach. We welcome your participation in the visioning meeting we will be having this fall and in future conversations. My request, given that both Councilmember Maio and I have been leading this process, is that this HAC subcommittee focus its consideration to the issue of what affordable housing requirements (% and level of affordability) should we adopt for development on the North Berkeley BART parking lots. That would be within the jurisdiction of this commission and would be a helpful recommendation to consider. Thank you for your consideration of this request and your interest in development at North Berkeley BART. Mayor Jesse Arreguin -- Jesse Arreguín Mayor, City of Berkeley office 2 HAC Page 85

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93 Page 1 of 2 Attachment 19 INFORMATION CALENDAR July 24, 2018 TO: FROM: SUBJECT: Honorable Mayor and Members of the City Council Council Members Maio and Mayor Arreguin Suggested Process for North Berkeley BART Parking Lot BACKGROUND & RECOMMENDED ACTION Given Assembly Bill 2923, Berkeley must take hold of the reins to determine an appropriate housing scenario for the North Berkeley BART parking lot. Toward that end we need a process that involves the broad community to help inform the Council as it shapes an appropriate vision for the site. We would do this in collaboration with BART. To initiate such a process, we propose a citywide "idea" gathering where a variety of treatments would be showcased by interested community members. This would happen at the North Berkeley Senior Center sometime this fall. We would share BART's guidelines and physical description materials and collaborate with BART on materials, including announcements. This would be an invitation to propose development standards around height, density, affordability, parking, etc. We would link to a map of the site that indicates the buildable area. We could also ask for volunteer professionals to assist laypersons as part of inviting participation. A possible way to proceed is to invite scenarios of no more than three visuals of X size submitted by a specific date to the Mayor's office. These would be made available online. At the event, walls and poster easels will be made available by the Planning Department. The convener will outline the day's process. Attendees will circulate the room to discuss ideas with presenter and offer comments. All presentations and comments will then be distilled and presented, by staff, into several basic proposals for Council consideration at a work session. Council would then determine a preferred scenario and meet with BART to determine next steps as the City proceeds with the zoning. Clearly there has to be a funding plan and a joint working relationship with BART as we move ahead. lmaio@cityofberkeley.info cityofberkeley.info/lindamaio HAC Page 89

94 Page 2 of 2 Attachment 19 BART Board Member Rebecca Saltzman, who represents North Berkeley BART, is in general agreement with this approach. A more detailed process description with specifics would appear on the Council agenda in the fall. ENVIRONMENTAL SUSTAINABILITY No environmental sustainability impact. FINANCIAL IMPLICATIONS Staff time. CONTACT Office of Councilmember Linda Maio, District lmaio@cityofberkeley.info cityofberkeley.info/lindamaio Office of Mayor Jesse Arreguin mayor@cityofberkeley.info cityofberkeley.info/mayor HAC Page 90

95 Attachment 19 Davidson, Amy From: Sent: To: Subject: jane h. yamashiro Thursday, August 02, :17 PM Housing Advisory Commission North Berkeley BART development Hi, I'm writing to express my concern that parking at the North Berkeley BART station might be reduced with development. I can't attend the meeting on August 25th but wanted to let you know that I use that BART station as my main station and regularly park there when I take BART. If there is any development to that area, please make sure to replace the parking spots, or even increase the number. Thank you for considering the needs of the local community. Best, Jane Yamashiro North Berkeley resident 1 HAC Page 91

96 Attachment 19 Davidson, Amy From: Sent: To: Subject: Michael Katz Tuesday, August 21, :25 PM Housing Advisory Commission Please dissolve rogue North Berkeley BART subcommittee Dear Members of the Housing Advisory Commission, As a North Berkeley resident, I am disturbed by reports that a second subcommittee on North Berkeley BART lot development has been formed, without the knowledge of Councilwoman Maio or the community, and apparently without consulting Mayor Arreguin. If these reports are true, I urge you to dissolve this redundant subcommittee, and to ensure that any discussion of this site's future occurs only in a transparent, community-based process that is sponsored by the City's elected leadership. If I am misinformed in any of my assumptions above, I apologize for any errors. Respectfully yours, Michael Katz 2117 Rose Street Berkeley HAC Page 92

97 Attachment 19 Davidson, Amy From: Sent: To: Subject: Ian Wulfson Tuesday, August 21, :11 AM Housing Advisory Commission Please provide more housing near North Berkeley Bart I am a lifelong Berkeley resident. I have seen housing costs skyrocket out of control here. Please allow North Berkeley Bart to develop housing, as much as is possible, to alleviate the housing shortage. Thank you, Ian Wulfson HAC Page 93

98 Attachment 19 Davidson, Amy From: Sent: To: Subject: Vicki Sommer Wednesday, August 01, :07 PM Housing Advisory Commission Secret Sub-committee on north Berkeley Bart Mayor Arreguin and Councilwoman Maio have invested much time creating a community based, open process for determining the future of NBB. As a berkeley resident, taxpayer, and NBB neighbor, I ask you to dissolve your sub committee and allow the Mayor and Councilwoman Mail to continue to work this process. They have made a commitment to transparency which is necessary. The neighborhood (and apparently our council member) was not advised of this sub committee. It therefor lacks transparency and so the credibility or authority to advise on the matter of north Berkeley Bart. Thank you, Vicki Sommer Sent from my iphone 1 HAC Page 94

99 Attachment 19 Davidson, Amy From: Sent: To: Subject: Vicki Sommer Tuesday, August 21, :35 AM Housing Advisory Commission North Berkeley BART Dear Subcommittee, I am writing to request that you disband this committee. Mayor Arreguin and Councilwoman Maio have invested much time creating a community-based, open process for determining the future of North Berkeley BART. So, having two groups meet about the same topic causes confusion for residents and suggests an end run around the current planning process. In the interest of open transparent governance, please disband at once! Thank you Vicki Sommer HAC Page 95

100 Attachment 19 Davidson, Amy From: Sent: To: James Loza Tuesday, August 21, :08 PM Housing Advisory Commission BART and the city of Berkeley want to build housing on the North Berkeley BART parking lot. Recently, a new sub-committee was formed, without the knowledge of either the community or our Councilwoman Maio, by someone who says he wants to build "another 24-story MacArthur Tower" at North Berkeley Bart. I am very against this committee, and against any development on N Berkeley Bart that will add more fleets of Uber and LYFT cars, congestion, and pollution to our neighborhood. Thanks! James Loza 1830 Cedar street 1 HAC Page 96

101 Attachment 19 Davidson, Amy From: Sent: To: Subject: James Loza Wednesday, August 01, :51 AM Housing Advisory Commission No on N Berkeley Bart development I vote NO on development that will ruin our neighborhood and wish this sub-committee be dissolved asap! " BART and the city of Berkeley want to build housing on the North Berkeley BART parking lot. Recently, a new sub-committee was formed." Best wishes, James Loza 1830 Cedar Street Berkeley 1 HAC Page 97

102 Attachment 19 Davidson, Amy From: Sent: To: Cc: Subject: Kate Harper Wednesday, August 22, :39 PM Igor Tregub Housing Advisory Commission Statement for North Berkeley Bart Sub-committee To: North Berkeley Bart Housing Area sub-committee This is a formal statement to recommend this sub-committee be dissolved because the resolution drafted in their 7/11/18 Agenda package of HAC is based on inaccurate information. I will point out just a few: The statement claims the city council has not taken actions on development. This is a incorrect. There is already a community-based process in place explained in the City Council July 24th Calendar. The next step in this process is citywide "idea gathering" to showcase possible housing developments. Recently, Councilwoman Maio visited our community on "National Night Out" and I learned how I can best prepare my development ideas. The extensive detail listed in your agenda about Bart TOC guidelines (legislative bills, etc.) says the city has not acted, then Bart will push through anything, and that is why you need a subcommittee. This again, is inaccurate. I was one of a group of community members who discussed the decision making process at Bart with North Berkeley Bart Board Representative Rebecca Saltzman and she emphasized that the TOC guidelines are not rules, laws, nor must they be followed at any Bart Station. They are guidelines that can be adjusted at any time for any station. She also expressed that she is working with Councilwoman Maio and decisions will be made with the community and city, not made in spite of them. There is nothing that Ms. Saltzman said that led me to believe there is any impending deadline for a decision at North Berkeley. The subcommittee "statement rationale" says that demographics (residential income, property values) should be taken into account for a development at North Berkeley Bart. In my conversation with Rebecca Saltzman, I have come to understand that the property values and household income are not relevant when making development decisions at Bart. For example, if surrounding property values or rents are high or low, it would have no bearing on Bart's decision for a development at that location. And I believe this would also apply to the additional subcommittee statement that North Berkeley has "zero new residential development." Not only is that factually incorrect, but I would conclude this it is irrelevant to Bart since the surrounding property is not theirs. Therefore, it appears this subcommittee thinks these things are relevant, but even according to Bart, this does not seem to be the case. These are only 3 of many statements in the sub-committee draft that are examples of incorrect rationale for the necessity of this subcommittee. This subcommittee appears to be unaware of the many hours invested by multiple people on this project, and this might be partly due to the fact that they did not reach out to the city council representative or community when it was created. If this subcommittee expects the community to attend unrequested meetings, it will only delay the process. This is an example of why having two separate groups working on the same project is not helpful, especially when there is an entire community working on this already, which is way more effective than three subcommittee members. On a personal note, being involved in this project at Bart has been a very rewarding experience for me. Before, I only knew the name of one city council person, now, not only do I know all of them, but I have met with three. I have also met the mayor and three candidates for running for this district. I have attended many neighborhood meetings, listened to speakers talk about Bart projects, and I now realize how many great resources are available to support this neighborhood in order drive a community based process at North Berkeley Bart. Thank you for your attention to this matter, Kate Harper, Neighbor at North Berkeley Bart. 1 HAC Page 98

103 Attachment 19 Davidson, Amy From: Sent: To: Subject: Diego Aguilar-Canabal Friday, August 24, :05 PM Housing Advisory Commission Re: North Berkeley BART subcommittee appended: I live on Francisco Street, 10 minutes from North Berkeley station, in case that is relevant. On Fri, Aug 24, 2018 at 12:58 PM Diego Aguilar-Canabal <d.aguilarcanabal@gmail.com> wrote: Dear Housing Advisory Commission, I am greatly encouraged by the formation of a new subcommittee to study the provision of affordable housing at North Berkeley BART. Having a multi-billion dollar transit investment surrounded by several blocks of surface-level street parking and single-family homes encourages greater reliance on personal automobiles, to the detriment of California's climate goals, and is essentially a suburban theft of valuable urban infrastructure. If North Berkeley homeowners do not want higher-density housing near that station to ease our housing shortage, I would encourage these neighborhood groups to explore the possibility of closing the BART station and removing all nearby AC Transit stops, as well as foregoing the regular paving of roads, so that the aesthetic preference for more rural living can be more accurately reflected in the corresponding provision of public funds. Since that would be a bad idea, I encourage this committee to work with BART to maximize the amount of affordable housing at the station for low-income households. As a reminder, transportation disparities are a leading driver of poverty and inequality. While Berkeley's population has remained roughly the same since 1950, traffic congestion has gotten much worse. This is because students and service workers are driving in from Solano and Contra Costa Counties. Again, if residents do not want more housing near North Berkeley BART, the burden is on these groups to propose a net reduction in jobs and student enrollment. That seems less politically feasible than ensuring a right to shelter for all. Thank you, Diego -- Diego Aguilar-Canabal -- Diego Aguilar-Canabal 1 HAC Page 99

104 Attachment 19 Davidson, Amy From: Sent: To: Subject: Tor Berg Friday, August 24, :18 PM Housing Advisory Commission North Berkeley BART subcommittee Dear Housing Advisory Commissioners: As a Berkeley resident and former Housing Advisory Commissioner, I was encouraged to learn of the formation of the North Berkeley BART subcommittee. As Berkeley begins to consider the future of housing at the North Berkeley BART station, it is critical that the HAC be involved from the outset. Deliberations on the subcommittee and the HAC as a whole should ensure that housing at North Berkeley BART will be accessible to a wide a range of residents as possible. Attempts to limit discussion of housing at North Berkeley BART will result in an exclusionary process that limits opportunities for community involvement. Thank you for your service and dedication to our city. Sincerely, Tor D. Berg 1 HAC Page 100

105 Attachment 19 Davidson, Amy From: Sent: To: Subject: Chris Lee-Egan Friday, August 24, :21 PM Housing Advisory Commission Agenda item 11a: North Berkeley BART Hello, I'm a resident near North Berkeley BART writing on behalf of some 20-odd neighbors, and I would like to express that a subcommittee for finding a good mix of affordability for any TOD on North Berkeley BART is a great idea. At the North Berkeley BART townhall, most speakers expressed a desire to see some affordable housing, but I think it is fair to say that very few people (myself included) have an idea of what would actually be feasible or sustainable, especially in compatibility with BART's TOD guidelines or for attempting to alleviate the current housing affordability crisis. I encourage HAC to move forward with this, and I hope HAC is able to use its time to find a good mix that can maximize the number of new housing units (subsidized or not) that can be built at North Berkeley BART. Thanks! Hopkins St 1 HAC Page 101

106 Attachment 19 Davidson, Amy From: Sent: To: Subject: Tarek Rached Friday, August 24, :34 PM Housing Advisory Commission In support of housing at North Berkeley BART and the NBB subcommittee Dear Housing Advisory Commission, I am writing in support of building housing at the North Berkeley BART station in general, and the NBB subcommittee in particular. The current parking lots are an egregious waste of space, and having a bunch more housing will add to the supply of housing in the city and make for a more lively neighborhood. I live two blocks away from the station, and am looking forward to getting some new neighbors! thank you, and good luck with your work! cheers, Tarek. 1 HAC Page 102

107 Attachment 19 Davidson, Amy From: Sent: To: Subject: Derek Sagehorn Friday, August 24, :27 PM Housing Advisory Commission Housing Advisory Commission subcommittee on developing North Berkeley BART HAC Commissioners, I am writing to register my strong support for the development of mixed-income social housing at North Berkeley BART. Our climate and housing crises demand that we align our shared values of environmental stewardship and support for working families in the practice of land use policy. Planning for the development of North Berkeley BART parking lots into socially-owned mid-rise development embodies those values. I strongly suggest the subcommittee consider the retention of ownership of the land by BART and/or the City of Berkeley. In addition, please consider splitting units equally along the following income bands: 30-60% AMI, 60-80% AMI, % AMI and fair market rents. Such a mix promotes social integration while decreasing the subsidy on a per unit based compared to a 100% BMR project at 60% AMI. This route may require the city use sources other than low income housing tax credits such as the proposed affordable housing bond. But such endeavors are worthwhile if we can maximize this special site for Berkeleyeans of all income levels. Sincerely, -- Derek Sagehorn (925) sagehoe@gmail.com 1 HAC Page 103

108 Attachment 19 Davidson, Amy From: Sent: To: Subject: Julia Schnell Friday, August 24, :42 PM Housing Advisory Commission Supporting Housing at NB BART Hello Housing Advisory Commission Members, I'm writing in support of the design and building of dense housing at North Berkeley BART. I applaud HAC's decision to form this subcommittee, and I hope it will lead the community to provide as many transit accessible units on BART's parking lot as possible. Best, Julia Schnell Berkeley Resident 1 HAC Page 104

109 Attachment 19 Davidson, Amy From: Sent: To: Subject: Tierney, Gerry Friday, August 24, :33 PM Housing Advisory Commission North Berkeley BART Station: Potential Housing To Whom it May Concern, As a resident of North Berkeley and a patron of the North Berkeley BART station I want to support the idea of a mixeduse mixed income development at the North Berkeley BART site. Perkins+Will work on TOD s and Master Plans all over the globe and have witnessed the major benefits that mixed use, mixed income developments bring to transit stations. By mixed use we mean neighborhood serving retail such as dry cleaners or stores where people can pick up groceries on their way to and from the station. By mixed income we mean housing that can accommodate both the traditional lowincome but also the missing middle which in the Bay Area can be those earning between 60% 140% of AMI. Located at a transit station the emphasis should be on a population that either doesn t own or doesn t need to own a car. However facilities should be provide for car sharing [electric?] and bike sharing. In addition, arrangements need to be made for transit, para transit and TNC in any new development. And finally, the HAC shouldn t be afraid of density. If properly designed, for instance mounding the height up towards the center of the site, you will be able to create the critical mass of housing along with a neighborhood sensitive perimeter or edge design. The Bay Area has a critical shortage which our generation created. When none of my grown children, all of whom were born in Alta Bates and went to BUSD schools can afford to live here, we know we have let them down. By developing this site we can, in a very small way, redress this failure. Thanks and good luck at Saturday s meeting. Gerry Gerry Tierney, LEED AP BD+C Co-Director P+W Mobility Lab Senior Project Manager, Associate Principal 2 Bryant Street, Suite 300, San Francisco, CA t Gerry.Tierney@perkinswill.com Perkins+Will Ideas + buildings that honor the broader goals of society perkinswill.com Blog Facebook Twitter Honored to be ranked among Fast Company s Top 10 Most Innovative Companies in Architecture 1 HAC Page 105

110 Attachment 19 Davidson, Amy From: Sent: To: Subject: Attachments: Libby Lee-Egan Friday, August 24, :56 PM Housing Advisory Commission North Berkeley BART subcommittee Screen Shot at PM.png Hi, I wanted to express support for this subcommittee and, while I can't come on Saturday, I wanted to send my thoughts on this. I'm glad to have an outlet on this topic so early in the process, I think that building something is inevitable and I want to make sure no one feels left out. I walk to/from the North Berkeley BART station every day and while I think connecting up the Ohlone Greenway and making the pedestrian experience as safe and easy as possible should be high priority, I do want to see the maximum amount of housing possible at the site and I don't think it should be 100% affordable. Houses bordering the station sell for at least a million dollars (see attached screenshot of the offerings on redfin including houses sold in the last year), that is too high a price for many who want to get around without a car or who want to raise families in Berkeley. I want as many people as possible to have the benefit of taking public transit and to enjoy North Berkeley like I do. Our climate depends on people ditching cars in favor of less polluting ways of getting around. A mix of market rate and affordable will ensure the maximum amount of people who prefer or rely on public transit will get to use it and they won't be segregated by income. I also want to see variety in the forms of housing being offered, ranging from studios to townhomes. I think the sizes of the apartments can also provide a variety in the rents. Thanks for giving me this chance to express my thoughts on this. Libby Lee-Egan North Berkeley 1 HAC Page 106

111 HAC Page 107 Attachment 19