About that $200,000 …
In my recent article, “Ideology vs. Housing” (available at http://tinyurl.com/yaygrgru), I recommended setting the “in-lieu” mitigation fee on new housing developments at the monstrous sum of $200,000. This suggestion has been received, I might say, with a bit of skepticism.
This mitigation fee, I remind, is a fee a developer would have to pay (per unit) should it decide not to fulfill its agreement to make an agreed-upon unit affordable. “Affordable,” in HUD’s technical use of that term, means that the unit rents for no more than 30% of the tenant’s income. That is what “affordability” means.
The city is attempting to fool people about this by substituting the term “Below Market Rate” (BMR) for housing, which sets rent at a percentage (defined by means of complex tables) below “market rate,” but considerably higher than 30% of income. Thus, the city toadies to developers’ priority relation to a market rather than to its own residents’ needs. Accept no substitutes!
Right now, the mitigation fee is set at $34,000. Resistance to setting a humongous mitigation fee comes in three modes. One holds that the fee should be higher (maybe $45,000) because Berkeley is a prime place to build. A second holds that “we need more housing,” so we should not chase developers away (the position I critique in “Ideology vs. Housing”). A third says that we need new developments to pay into the Housing Trust Fund so the city can build affordable housing. Of course, there’s a fourth skepticism that simply says the super-high fee is “unrealistic.”
The three serious objections are all (ho-hum) tied to developer interests. The fourth forgets that, though there may be only one reality, there are many realisms, especially in a class and racially hierarchized society.
The real issue
All these skepticisms about the $200,000 mitigation fee leave out the central political issue: responsibility. The city has a responsibility to protect its residents and constituents from being forced out of their homes and out of town. The reason there is a crisis is that thousands of people are being forced out of their homes by rent increases, and can’t find housing they can afford any more. That is the problem, and building more housing they can’t afford will not help them. We have a responsibility to protect people who belong to our city, and we have government founded on the premise that that is the way to do it (as opposed to vigilanteism or dictatorship). How to get housing that is affordable to those being displaced is the substance of that responsibility. All perspectives that begin with how the city should deal with developers (tacking a few affordable units onto their buildings) is ancillary to its fulfillment of that responsibility.
Here’s the kicker. The city has already fulfilled its market rate housing requirement under Plan Bay Area. It now has no excuse for not prioritizing its responsibility to its own residents and constituents. If it has fulfilled its responsibility to the high income people coming in from the suburbs and pushing up rent levels beyond resident affordability, it can now demand development that is 100% affordable. That would be a serious focus on its responsibility for its own residents.
That means finding developers who agree to build 100% affordable, and insist on conditions that will hold them to that, and make it hard for them to then buy their way out of their agreement. That is the meaning of the $200,000 mitigation fee.
It is a way of holding developers to their promise to build affordable units. In that respect, it is not an added expense because they do not have to pay the fee if they actually build affordable units.
If the large mitigation fee chases for-profit developers away, then the land can be used for non-profit development of housing that can be rented for 30% of a tenant’s income.
The urgency to provide for present city residents who are being expelled economically from the city is such that a moratorium on market rate “unaffordable” housing is necessary. This large mitigation fee would in effect be such a moratorium.
To reject the $200,000 mitigation fee because it would chase away developers is to fall prey to the idea that only for-profit developers can build the housing we need. Not only does that abandon the people being displaced, and abandon this city’s responsibility to them, it betrays the city’s responsibility to its own people by proclaiming that is has a responsibility to fulfill the profit desires of developers. Wrong responsibility.
The city’s responsibility is our responsibility. If the city represents us by acting to fulfill the profit desires of development corporations, that means we are the one’s supporting the private profitability of those corporations. We are being led down a proverbial “garden path.”
There are some serious issues we need to organize around and against in all this.
–Steve Martinot
