Over a hundred community members crowded the city council’s Community and Economic Development (CED) committee meeting Tuesday to react a staff report on the feasibility and implementation strategy of a citywide impact fee proposal.
Impact fees are one-time fees imposed on private developers that can add up to millions of dollars used by cities to fund affordable housing projects and improve public services.
Oakland currently has an impact fee in place on commercial developments but is deciding how it should implement a housing impact fee on new market-rate units, given the city’s ballooning housing market.
The nexus study report detailed what city staff is recommending as the most appropriate method of implementing these fees on private housing developers who are not contributing any affordable housing to the city amid Oakland’s widely-acknowledged housing crisis.
The staff proposal recommends waiting until Dec. 1 to begin collecting the fees, gradually phasing them in over a three-year period and having varying fees in different parts of Oakland, determined by each area’s housing market costs.
But nearly all of the 112 public speakers who spoke at the meeting disagreed with the staff recommendation, saying they would not do enough to take advantage of the current housing boom, which could easily be short-lived and currently is pushing out about 1,000 residents per month.
According to the staff report, Oakland would be divided into three zones, with Zone 1 for downtown Oakland and the hills, Zone 2 for parts of West Oakland and Zone 3 for East Oakland.
During the three-year phasing process that begins on Dec. 1, Zone 1 fees would gradually increase from $5,000 per unit to $20,000 by 2018. Zone 2 would increase from $4,000 to $16,000 per union, and Zone 3 would increase from $3,000 to $12,000 per unit.
By comparison, Emeryville and Berkeley already have housing impact fees in place, which are set at $28,000 per new market-rate unit, considerably more than what Oakland’s fees would look like in 2018 if the council goes ahead with the staff proposal.
Nearly all the community members at the hearing demanded more from the city’s impact fee proposal, saying the fees should be implemented in June of this year and should start at $20,000 per unit.
“It would be a huge mistake to phase in these impact fees slowly or to limit the highest fees to the hottest neighborhoods,” said one speaker, a member of East Bay Housing Organization (EBHO).
Another speaker said the staff proposal erroneously sets lower impact fees for West Oakland and the flatlands, neighborhoods that have the highest Black and Latino populations in Oakland, are the most vulnerable for being displaced and are therefore the most impacted areas.
“How can this be equitable?” Asked the speaker. “The majority of displacement is not happening in the majority-white zone one but in the majority-Black zones two and three.”
Council President Lynette McElhaney and Councilmember Anne Campbell-Washington defended the gradual phase-in process, however, arguing that high impact fees could deter future developments from coming to Oakland.
Community members opposed the council members’ position, reminding the committee that Oakland “already has about 42,000 development units already in the pipe that are not going to be subject to fees during the next five years,” which is higher than the city’s pre-recession boom.
“Development is not going to stop because of these fees,” said another public speaker. “Projects have already had two years notice that this was going to be implemented, and they have gone ahead with seeking building permits anyway.”
“This is no time for cooling off or for taking the tranquilizing drug of gradualism,” said another member of EBHO. “There may not be a housing boom in 2018 and then it’ll be too late to fund affordable housing in Oakland.”
CED committee members asked the staff to come back at a later date after taking into account the public’s recommendations and committee members’ questions and concerns.