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Inclusionary Zoning is Horribly Unfair

Since Jerry Brown’s 10K plan has begun to transform Oakland’s budget, reputation, and economic base, all of the candidates for Mayor are allegedly pro-development. However, Nancy Nadel and Ron Dellums (and Ron Oz as well) advocate government-directed, socialist economic policies that are doomed to failure, chiefly among them so-called “inclusionary” zoning. These wrong-headed initiatives threaten to choke off all downtown and neighborhood development, or transform Oakland from a mecca for first-time homebuyers to a San Francisco-style playground for the extremely wealthy.

Basically, this housing regulation requires that an arbitrary percentage of units in new developments be reserved for people making moderate-to-low incomes. The purchase of those usually 20% of homes is determined by lottery. The regulation usually allows for in-leiu fees to be assessed per unit to compensate the city if the developer is unwilling or unable to build the “affordable” units. This money is earmarked for low-cost housing. According to the San Francisco Chronicle, those fees amount to $115,000 to $300,000 per unit.

It is important to note that developers already pay fees linked to affordable housing, and that the State of California requires mixed-income developments in poor areas. Low-income housing advocates note that there are 80,000 impoverished people in Oakland, and are asking Oakland’s newest residents to aid their housing. This is the problem with what sounds like a nice, pro-housing program. In fact, this is a massively inefficient, terribly regressive, and horribly unfair system that targets the politically inactive and makes wrong-headed assumptions about social responsibility.

A $100,000+ tax on every new condo in Oakland would clearly put homeownership out of the reach of most people. For example, that’s the difference between what my friends can afford and what they cannot. A typical one-bedroom condo in downtown Oakland costs about $325,000. That’s a 30% tax that falls on young, first-time homebuyers. Meanwhile, Hills residents in their million-dollar mansions pay a 5% transfer tax that’s not even clearly earmarked for affordable housing. New downtown residents are assessed ridiculous fees while condo residents in the Piedmont area are not. This will discourage new construction, and discourage middle-class people from living downtown.

This tax is horribly regressive and stems from a fundamental misunderstanding of social welfare. Just because there is new construction, that does not mean that new residents should shoulder the entire cost of providing the city with adequate housing. 70% of downtown Oakland condo owners are first-time homebuyers. Why should they pay $100,000+ while nobody else in the city has to do that? Housing is a social problem, and deserves a social solution. It’s easy to demonize developers and new condo owners, but I’d love to see Nancy Nadel tell a 28-year-old to his face that she wants to take away his chance to own a home. New residents are targeted precisely because they’re new, and so aren’t voting on this gigantic tax.

Berkeley and San Francisco have passed similar measure, mostly during the dot-com bust. What happened? Well, Berkeley has seen no new housing construction in years. Gigantic fees discourage construction and the consumers that would occupy the new units (that’s pretty clear). In San Francisco, in order to pay these humungous fees or for the subsidized units, everything there has become incredibly expensive, with one-bedroom condos averaging more than $200,000 more than units in Oakland, even as their population and job base has shrunk.

In order to make a dent in our housing shortage, Nancy Nadel and Ron Dellums want to punish downtown residents, assess massive fees on first-time homeowners, and change downtown Oakland from a vibrant, mixed-use community into a soulless neighborhood of the extremely wealthy and those lucky enough to win the lottery.

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Posted in california, citycouncil, housing, iz, jerrybrown, oakland, planningcommission.

9 Responses

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  1. deckin says

    Oakland Native:

    Nicely put; it’s either mind boggling shortsightedness on the part of the ‘progressive’ community, or it’s a willfull ‘f— you’ to people who, like me, were lucky enough to buy small condos (in my case a 400 sq. foot studio downtown) and bring money and life downtown.

    Although it’s not Oakland, I know personally of a Berkeley hills resident who authors (in her fair city) many of these types of ‘funding drives’ for programs that would never affect her and for which the cost is a pittence of her ample net worth. I imagine Montclair has more than a few like her.

  2. Oakland Native says

    The champagne socialists in the hills and their shill Nancy Nadel has it out for us downtown residents. They really want to fuck us over to soothe their consciences. Did you know Nancy Nadel is hosting a “forum” tonight called Housing Verus Jobs? My friend sent her an email about it and got yelled down. She’s using city money to advocate her radical mayoral platform, and that’s wrong.

  3. Anonymous says

    I’m curious what you mean by “got yelled down.” I’d like to hear more.

  4. deckin says

    Oakland Native:

    I hope you’re still checking this stream. Did you see the editorial in the Tribune today (5/4)? About Brenda Payton’s latest piece of offal? Was that you? If not, then that means they got a lot of responses our direction. Papers use the letters section to represent the responses they get. That is, every letter published usually stands for many.

  5. V Smoothe says

    deckin –

    Yes, the letter was excellent. And no, oakland native didn’t write it. Today’s letters section includes a good anti-Dellums letter as well as another response to Brenda Payton’s column. Have there been any positive responses?

    anonymous -

    I hope you read this again. Sorry we haven’t responded to you. We weren’t ignoring you on purpose, just been really busy. I’m hoping to post a blog about the whole exchange this weekend. Please check back!

Continuing the Discussion

  1. Great Expectations » Who pays for inclusionary zoning? linked to this post on August 6, 2007

    [...] of the many objections to inclusionary zoning is that it unfairly places the burden of providing affordable housing for the entire city on the handful of hom…. In response, inclusionary zoning advocates repeat ad nauseum they are simply asking developers to [...]

  2. Commission Impossible: Exclusively Inclusionary « Oakland’s Future linked to this post on September 10, 2007

    [...] I have expounded repeatedly about the dangers of a policy that amounts to a huge, regressive tax on condos (but not [...]

  3. A Better Oakland » Real problems deserve real policy solutions linked to this post on September 18, 2007

    [...] bags from grocery stores is not going to help the environment. Inclusionary zoning is not going to provide housing to poor people. Banning smoking near bus stops is not going to reduce asthma and lung [...]