Oakland falling behind in push to add housing

The Lampwork Lofts is a newly opened development offering 92 apartments in a former General Electric lightbulb factory building in West Oakland, CA, on Wednesday, November 26, 2014. The Lampwork Lofts is a newly opened development offering 92 apartments in a former General Electric lightbulb factory building in West Oakland, CA, on Wednesday, November 26, 2014. Photo: Michael Short / Special To The Chronicle Photo: Michael Short / Special To The Chronicle Image 1 of / 10 Caption Close Oakland falling behind in push to add housing 1 / 10 Back to Gallery

Oakland’s housing boom is bringing more than 11,000 new apartments, condominiums and lofts to the city, but it’s not nearly enough to satiate the Bay Area’s seemingly endless need for new housing, regional planners say.

Despite the onslaught of development in Oakland and San Francisco, the Bay Area is far short in reaching its goal of 188,000 new units by 2040 to accommodate the projected growth in jobs and population, according to planners at the Association of Bay Area Governments.

The shortfall is in all categories, from low-income housing to family-size units to luxury condos for single people, they said.

“To the extent that Oakland and other cities are adding housing, that’s great, but this is really a regional problem,” said Johnny Jaramillo, a senior regional planner for the agency. “Across the Bay Area, we’re still behind in all categories.”

Still, Oakland’s push for housing is an important step, planners said. At the geographic center of the Bay Area, with its plethora of public transit and relative affordability, Oakland’s growth will be critical to the Bay Area’s long-term economic health, they said.

Oakland leaders and developers are doing what they can to provide homes for Bay Area workers. The city has more than 1,000 units under construction and more than 11,000 in the planning phase, mostly around downtown, Uptown, West Oakland and the waterfront. The City Council recently changed zoning near the Lake Merritt BART Station to bring in an additional 3,500 units.

Still, the city is not on pace to meet its goal of 51,000 new units by 2040, ABAG planners said.

The problem, in Oakland, San Francisco and elsewhere, is lack of space, long waits for permits and tough environmental regulations that tend to delay big projects and add to the costs, Jaramillo said. In addition, he said, residential developers must compete with commercial projects, which tend to bring in more tax revenue for cities and often get faster approval.

Steep price increases

In Oakland, several large commercial projects are under way, including the Port of Oakland expansion at the former Oakland Army Base and a half dozen large new office buildings downtown and at Jack London Square. In all, more than $2.5 billion in commercial projects are in the works, which are expected to add thousands of jobs and millions of dollars in tax revenue.

All the economic growth, coupled with San Francisco’s tech explosion, have given Oakland some of the Bay Area’s steepest housing price increases. Since 2010, rents have risen 45 percent and home prices have soared 76 percent, according to ABAG.

Some Oakland leaders said the city should tread carefully while planning for its continued expansion. Maintaining the economic and ethnic diversity of the city should be a priority because ultimately, it’s Oakland’s greatest strength, they said.

“People are discovering Oakland, and it’s great. The alternative would be a dying city,” said Councilwoman Lynette Gibson McElhaney, whose district includes West Oakland and Uptown, two of the city’s hottest real estate markets. “But how do we get our arms around this beast? How do we make room for all these new residents while not forcing people to the exurbs? We don’t want to lose the integrated diversity that’s drawn so many people here in the first place.”

Push for affordable housing

City officials and housing advocates are hammering out developer fees that would address some of those concerns by increasing the affordable housing requirements as well as adding money for parks, schools, transit, roads and other projects.

At the 3,100-unit Brooklyn Basin development under way along the waterfront, advocates for the poor succeeded in requiring the developer to include 465 units of affordable housing, some of it three- and four-bedroom units for families. In addition, the developer will have to hire Oakland residents for some of the construction jobs.

While requirements like that help, they won’t solve the long-term problem of displacement, said Steve King, senior associate at the Urban Strategies Council, which worked on the Brooklyn Basin agreements. Tougher rent control, stricter affordable housing quotas and economic policies that benefit low earners also need to be in place, he said.

“We can’t build our way out of the affordability problem,” he said. “People say the value of Oakland is its economic and ethnic diversity. If folks really believe that, they need to start making some difficult choices.”

'It’s been a nightmare’

The housing boom is good news to people like Rachel Kesel, 33, of San Francisco. She and her roommate have been searching for a two-bedroom place in Oakland for months, to no avail. Their landlord in Bernal Heights plans to sell their current home in early 2015, and Kesel fears she and her friend may not be able to find anything in time.

“It’s been a nightmare. We never thought it would be this difficult,” she said, noting that she and her roommate have steady, well-paying jobs and are willing to pay between $2,000 and $3,000 in rent. “Landlords are asking $2,500 for a shabby place with no laundry, and there’s dozens of people there aggressively trying to give deposits, and there’s no way you can push back because everything is so competitive. It’s just really scary.”

The news of 11,000 new units coming to Oakland is great, she said, but the demand remains so high that apartment hunters probably won’t notice any difference.

“The current housing market scares the crap out of pretty much everyone I know,” she said. “So 11,000 new units? Well, it certainly couldn’t hurt.”

Carolyn Jones is a San Francisco Chronicle staff writer. E-mail: carolynjones@sfchronicle.com Twitter: @carolynajones