Will Oakland Finally Build Some Affordable Housing in the Hills — or Will Leaders Squander the Opportunity? 

Council to consider fate of five-acres of public land this week, as part of the Oak Knoll project.

click to enlarge A notice of development posted at the entrance to the old Oak Knoll Naval Hospital site.

A notice of development posted at the entrance to the old Oak Knoll Naval Hospital site.

Will the city of Oakland use a slice of public land in the hills to build affordable housing — or will a developer snatch-up the property and put in market-rate single family homes?

That’s at the heart of a proposal in front of the city council this week. Oakland officials want to sell approximately five-and-a-half acres of city-owned land to SunCal. The developer wants to fold the city’s land into its sprawling plans to redevelop the old Oak Knoll Naval Hospital site, which will include 935 new single-family homes and townhouses — all to be sold at market rate.

But critics say the plan contradicts the city’s stated goals of prioritizing public land for affordable-housing projects, and encouraging mixed-income communities — especially in the hills, where inexpensive rental housing is almost nonexistent.

This week, the full city council is scheduled to vote on whether to proceed with exclusive negotiations to sell the land to SunCal.

Elissa Dennis, a housing finance consultant with the nonprofit Community Economics, called the plan frustrating. “Many of the councilmembers over the years have complained that low-income housing is concentrated in certain neighborhoods, and that it’s difficult to obtain sites in the hills above 580,” she told the Express. “But here we are, it’s a big site, and they’re balking at including low-income housing.”

Dennis and other affordable-housing experts say the city should instead keep the property and solicit developer proposals that involve affordable rental housing.

City council members who have already weighed in on the plan say it doesn’t preclude affordable housing, and that Oakland is just negotiating at this point.

At a committee meeting two weeks ago, Councilmember Lynette Gibson McElhaney said the city should look at requiring SunCal to build below-market-rate ownership housing so that middle-class buyers can move to the hills.

“Saying mixed-income does not always mean looking for the extremely poor,” McElhaney said. “We need to also make space for our professional families, that group of lower-middle class people … that includes a lot of our city employees, OUSD employees.”

Councilmember Rebecca Kaplan said that if the proposal to sell the land to SunCal doesn’t involve some type of affordable-housing requirement, “we should vote it down.”

But Jeffrey Levin, of the nonprofit East Bay Housing Organizations, said that, by entering into exclusive negotiations with SunCal to sell the land, the city is potentially foreclosing on multiple superior alternatives that could result in much more affordable housing at Oak Knoll.

“This is a big missed opportunity to do something more creative,” he argued.
Levin added that the council’s insistence to deal solely with SunCal, rather than solicit bids from multiple developers, exposes the city’s continuing lack of transparency when it comes to how public lands are used.

After the controversial attempted sale of surplus city property near Lake Merritt two years ago to a developer for the construction of a luxury apartment building — a deal Oakland City Attorney Barbara Parker said violated state law — the city pledged a new approach.

“There’s been no public discussion about this, and we haven’t had any kind of competition so developers can come through with different visions of how to approach it,” Levin said.

Robert Stahl of the Urban Strategies Council agreed. “The process by which they arrived at these decisions isn’t clear. It’s opaque,” he said.

According to records, SunCal sent the city a letter last June asking to buy the five acres. The council discussed selling the land in several closed-session meetings, and the proposal was then made public for the first time two weeks ago at a council committee meeting.

Stahl also noted that the city has been drafting a comprehensive public-lands policy for well over a year, but nothing has been brought to the council for review and approval. He said it’s a big mistake for Oakland to dispose of any more of its real estate without a solid policy framework in place.

The City Administrator’s office didn’t respond to a request from the Express for information about whether a draft public-lands policy exists, or when it might be brought to the council for public hearings and a vote.

But Joe Aguirre, a spokesman for SunCal, said the city’s parcel isn’t a necessary part of the company’s larger master-planned community. But if his company ends up buying the land, they would build 15 single family homes.

“If we had to extract this parcel from the project, we could do that,” he wrote in an email. “However, we have been working very closely with the neighboring residents to reach agreement about the uses on these lots, as well as the rest of the Oak Knoll community.”

For more than a decade, the rest of the Oak Knoll community, which includes five neighborhood associations that surround the site, have adamantly opposed affordable housing as part of the new neighborhood that will rise where the hospital once was.

In a March 2015 letter to the city council and mayor, the Oak Knoll coalition wrote that “all housing at the site should be market rate,” and that a ban on affordable housing should be contractually required in whatever development agreements and other deals the city strikes with SunCal.

Other neighbors, however, say their hillside enclave should do its part to contribute affordable housing. Beverly Tucker has lived on Sequoyah Road for 29 years and thinks the hillside community needs to open itself up to more diversity. “We should have affordable housing in every neighborhood, not just the flats but also in the hills,” Tucker told members of the city council’s community and economic development committee two weeks ago.

But the city has repeatedly taken actions to reduce the likelihood that affordable homes will be built at Oak Knoll. In 2006, the council removed a requirement that 15 percent of all housing built at Oak Knoll be affordable. Because the land was originally part of a redevelopment area, state law required this. The council, however, merged the Oak Knoll Redevelopment Area with another of the city’s redevelopment areas, located entirely below the 580 Freeway in East Oakland. City officials then allowed affordable housing that had already been refurbished in the other redevelopment area to count toward fulfilling Oak Knoll’s affordable-housing numbers.

Whether or not SunCal acquires the city’s land, the company will make a major contribution to affordable housing through the city’s impact fees, with an estimated $20 million payment, Aguirre said.

But affordable-housing advocates say the impact fee is all the more reason for the city to hold on to the land. With $20 million, Oakland could subsidize an affordable project on the five acres. But without the land, Oakland only has cash and nowhere to build.

“If they do just dump it,” said Stahl, “there’s no timeframe for when the affordable units will actually be built.”

Steve Spiker, a colleague of Stahl’s at the Urban Strategies Council, said the proposed land sale shows that Oakland needs to finalize its public-land policy and get all of its various departments on the same page to address the city’s housing crisis.

“There’s a disconnection internally,” said Spiker. “No cohesive vision.”


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