Oakland’s affordability crisis deepens every month. In August, the city was named the “nation’s hottest rental market,” because apartment prices had increased at a faster rate over the past year than in any other major American city. The median price for a one bedroom in Oakland soared to $1,980. And in September, the real estate firm Trulia reported that the median single-family home price in Oakland had reached $562,000 — an amount far higher than most city residents can afford.
In fact, according to a recent city report, “A Roadmap Toward Equity,” the average renter household in Oakland would need to spend a whopping 73 percent of its monthly income just to afford the city’s median monthly housing payment of $2,076. In addition, stories of direct displacement — especially in West Oakland and other parts of the city where longtime residents are being squeezed out by San Francisco tech workers — are rampant.
Oakland Mayor Libby Schaff speaks at a press conference when Uber announced it was moving into the Sears Building in Downtown Oakland, Wednesday, Sept. 23, 2015. Credits: Darwin BondGraham
You would think that in light of this crisis, Oakland’s top officials would be working overtime to address it. You would be wrong.
Sure, thanks to Vice Mayor Rebecca Kaplan, the city council is planning to hold a special “study session” on Wednesday night. But the meeting includes no serious proposals to address Oakland’s affordable housing woes. For example, unlike Berkeley and Emeryville, Oakland city officials have yet to propose, let alone adopt, a housing impact fee on apartment developers in order to help pay for more affordable housing. Likewise, Oakland, unlike many other California cities, has yet to seriously consider a so-called inclusionary zoning law that would require condo developers to include affordable housing in their projects or pay a fee to build them elsewhere.
But that’s not all. As Express staff writer Darwin BondGraham noted in our September 16 cover story, “Turning Housing into Hotels,” Oakland is also way behind the curve in dealing with the growing problem of landlords taking homes off the rental market and turning them into Airbnb vacation rentals full-time. At a time when housing has become increasingly scarce, Oakland simply can’t afford to allow any portion of its rental stock to be turned into hotels for tourists visiting San Francisco. And yet Oakland city officials are doing nothing about it — other than requiring Airbnb to pay hotel taxes for the first time this summer (again, thanks to Kaplan).
Berkeley, by contrast, is planning to consider sweeping legislation this fall that would establish an outright ban on turning housing into full-time hotels, would cap short-term rentals at ninety days, would bar the conversion of secondary units (mostly backyard cottages) into hotels, and would require landlords who rent out their property on Airbnb to obtain a business license and pay taxes.
So what is Oakland doing other than “studying” stuff? Well, last week, city officials rolled out the red carpet for Uber — another giant of the misleadingly named “sharing economy” — to celebrate the company’s purchase of the old Sears building in Uptown. Mayor Libby Schaaf and council President Lynette Gibson McElhaney were practically giddy over Uber’s announcement.
Now, don’t get me wrong, it’s good news that the empty Sears building is going to have a new tenant that will supply local jobs. But a dog and pony show for Uber, a company whose long-term business model is anything but certain?
Despite the fact that Uber has attracted obscene amounts of investment capital, the company is facing some serious legal problems that threaten its viability in the years to come. On September 1, a federal judge ruled that Uber drivers in California can go forward with their class-action suit to force the company to treat them like employees rather than contractors. And late last week, the taxicab app company, Flywheel, sued in federal court, arguing that Uber, Lyft, and Sidecar receive unfair advantages in California and should be regulated just like any other taxi company. Flywheel is right: Uber and its ilk do receive unfair advantages. For example, their drivers don’t have to buy expensive city-issued medallions and undergo strict background checks, nor do the companies have to comply with local rules that mandate workers’ comp coverage for drivers, fuel-efficient cars, and access for disabled people.
Uber’s argument seems to be that it deserves special treatment, because it’s supposedly different from a taxi company. But that seems pretty weak. In fact, a federal judge in Chicago last week summarily dismissed it. US District Judge Sharon Johnson Coleman called the claim that Uber and other “for hire” ride companies should be regulated less than taxis “utterly arbitrary.”
So why does this matter? If Uber loses on these issues — if it’s forced to treat its drivers like employees and provide them with benefits, and if it’s regulated like any other taxi company — then it suddenly will no longer be some type of “disruptive” business; rather, it will be just another taxi company. And as such, it probably won’t have a need for the 300,000-plus- square-foot Sears building.
If that were to happen, then Oakland’s leaders, who should be devising solutions right now to the city’s affordability crisis, will have instead wasted time celebrating the arrival of a company that, at least in the short-term, might actually help worsen the housing crisis, while in the long-term, will likely leave the city with yet another abandoned building downtown.
