Oakland finally gets affordable housing
A consortium of elected officials, financiers and real estate developers broke ground Tuesday in Oakland on a long-awaited affordable housing development near Lake Merritt — celebrating the project as one of the first to take advantage of a local bond measure meant to help the city meet its housing needs.
The six-story, 91-unit development, which will be 100% below market rate, is set to be built on a city-owned lot at East 12th Street and First Avenue on the southeast side of the lake. The official launch of the project comes after a decade of protests, political tussles and even the exit of an original developer.
“Today’s groundbreaking marks an investment in Oakland’s future,” Oakland City Council President Nikki Fortunato Bas said at the event. “It represents the culmination of a decade of fierce and determined advocacy for public land for public good.”
The efforts to develop the site began in 2015, when the City Council agreed to sell it to Oakland developer UrbanCore, which planned a 300-unit, market-rate apartment tower. But the city attorney sided with critics who contended that the city had an obligation to try to find a partner to build affordable housing before soliciting market-rate construction on the site.
Another plan emerged to have UrbanCore partner with a nonprofit housing developer, East Bay Asian Local Development Corp., to build two buildings, a project that was to include a mix of market-rate and below-market-rate housing. But after years of delays, the council pulled the plug on the project, voting against giving the developer another extension in the wake of the pandemic.
Now East Bay Asian Local Development Corp. is the lead developer, along with the Unity Council, a nonprofit developer based in Oakland’s Fruitvale neighborhood, and the private equity firm Jordan Real Estate Investments.
“We believe that everyone has a right to housing,” Wayne Jordan, president and CEO of Jordan Real Estate Investments, said in a statement. “The project at East 12th Street will provide stability for hundreds of Oakland residents.”
The project will cost $102 million for the construction of the building — about $1.1 million per unit.
The funding package includes about $23 million from the California Department of Housing and Community Development, $19.5 million in loans from the city of Oakland, $13.3 million from the Oakland Housing Authority, $41.2 million in equity supported by the federal Low-Income Housing Tax Credit, and $11.4 million in other private investment — a total that includes money for additional operating costs.
About 23 units will be set aside as permanent supportive housing for formerly homeless people and families, and the rest will be tiered for people making between 20% and 60% of the area median income, now between $20,700 and $59,000 for a one-person household and $29,500 and $84,000 for a four-person household. Rents will be calculated at 30% of income.
Because the construction money will not be recouped from rent or sales, the project is being financed through a combination of state and local incentives and awards for housing development. All told, 16 funding and transit groups collaborated to get the project off the ground, including Citi Community Capital, the Oakland Housing Authority, and the California Municipal Finance Authority.
One mechanism developers will utilize is Measure U, a 2022 ballot measure passed by Oakland voters that authorized $850 million in bonds for affordable housing projects to help the city reach state-mandated goals.
The city of Oakland is required to create more than 10,000 units of affordable housing by 2030 but has been falling well short of that goal.
The project will also include investments in street, sidewalk and pedestrian improvements along the 10th Street Corridor, a new AC Transit bus in the area, and a bikeshare area at the Lake Merritt BART Station.