August 7th, 2024
Oakland City Council
1 Frank H Ogawa Plaza, Oakland, California 94612
Dear Councilmembers,
We are writing to provide input to the City of Oakland as it explores inclusionary zoning (IZ) policies to meet the required number of new affordable homes of the Regional Housing Needs Allocation (RHNA). We are excited that the City is taking a fresh look at different policies to address the housing crisis. Building new housing within transit-rich cities instead of more rural and suburban locations is part of the Sierra Club’s national housing policy, and we are happy to see the City evaluate different ways to achieve that.
The Sierra Club’s Urban Infill Policy Report encourages the use of IZ insofar as it makes new below market-rate (BMR) housing feasible. The report also sees IZ as a tool to end exclusionary zoning and make high-resourced neighborhoods more accessible to lower-income people. While we support IZ, particularly as a tool for fighting segregation, we consider it preferable when it is subsidized in housing projects. Taken to extremes, it can result in less housing, including less BMR housing, getting built.
The Northern Alameda County Group would like to add insight to the Sierra Club’s official support for IZ based on what has been learned from these programs in recent years. Our wish is to highlight opportunities to make it more effective at producing new homes for the City of Oakland. We would like to draw attention to a recent Terner Center for Housing Innovation report that evaluates the effect of IZ on housing production. In this report, the author models how the highest unfunded IZ requirements result in “diminishing returns to BMR production and accelerating losses to overall housing production.” Instituting a requirement for IZ that results in fewer new homes would be counterproductive, as it could slow market rate and BMR housing development. It is for this reason that we request that to the greatest extent possible, mandates for IZ be publicly financed or have costs offset by incentives.
We recommend providing incentives for new projects with inclusionary zoning that would help offset the cost of providing those units. There is precedent for this kind of policy already in Oakland’s Affordable Housing Overlay, which relaxes zoning standards for projects meeting certain affordability criteria. Zoning standards that could be relaxed by this new policy could be parking minimums, setback lengths, building heights, building densities, and others. Such a policy could be complementary and additive to the State density bonus laws. The City could also streamline these developments during the permitting process, which would greatly reduce the cost, making new affordable housing more feasible to developers. For example, in Los Angeles, Executive Directive 1 has resulted in an influx of BMR proposals from market rate developers by streamlining those projects. Such a policy could work for the City of Oakland.
Though there is a clear tradeoff between Inclusionary Zoning requirements and overall housing production, the Sierra Club remains committed to solving the affordable housing crisis and prioritizing the whole community, advocating for both below-market-rate affordable housing units and market rate housing. To that end, it is important for the City to create policies that work for current and future market conditions. We encourage the City to do a thoughtful analysis of more incentive-based Inclusionary Zoning systems that will result in more BMR and naturally-affordable homes getting built.
Sincerely,
Maxwell Davis, Chair
Sierra Club Northern Alameda County Group