Berkeleyside, "Dispute over details puts ‘innovative’ deal for new Berkeley housing on hold" - March 9, 2017

“No matter what happens with the vote, Ben Bartlett is a hero for coming up with that idea and getting the people on all sides to think that that’s a great step forward,” said Worthington, after the confusion arose but before it was clear how the night would end. He called the compromise “an incredible, innovative policy initiative.”


In a bizarre twist both sides said was unforeseen, a deal more than a year in the making stalled out Tuesday night prior to a City Council vote that had been expected to bring 50 new housing units to South Berkeley.

It was a night of multiple revelations. First, neighbors who had appealed a zoning board permit for a new building at 2902 Adeline St. announced they had reached an agreement with developer Realtex just an hour before the meeting. But by the time the night was done, the strength of that compromise seemed shaky at best, as council put off its vote until April 4 at the developer’s request. And no one seems to know what will happen next.

Throughout the night, the meeting room was crowded with neighbors who reluctantly had come around after opposing the project in earlier iterations, as well as advocates — including some neighborhood residents — for increasing Berkeley’s housing stock as quickly as possible.

For nearly two hours, it seemed most everyone was in agreement in asking council to approve the project, though the reasons varied. Appellants and their supporters said they wanted the compromise to move ahead, and wanted more housing in the neighborhood. The “yes-in-my-back-yard,” or YIMBY, crowd, said projects on transit lines in urban areas — such as 2902 Adeline — must be built now to ease the housing crunch for everyone. But then, as Councilman Ben Bartlett read out the terms of the deal, which he was key in brokering, there came a sticking point about exactly how many units of below-market-rate housing would be built on site.

Both sides said the developer agreed to include 20% affordable housing. But the appellants said that meant 10 units, while Realtex said the city code requires just eight, because the 20% calculation is based on the project’s 42 market-rate units rather than the overall 50. (Berkeleyside has requested clarification from the city about how to understand the code, but had not heard back before publication time.)

Neighborhood residents who had appealed the project, as well as the East Bay Community Law Center, which has represented that group in negotiations, said they believed there would be five units for people making 50% of the area median income, and five more for people making 80% of it. In fact, noted Councilman Kriss Worthington, 80% of all those units would go to people with Section 8 vouchers, who make much less than either percentage, as per city policy.

Not under dispute: Both sides said Realtex agreed to a payment of $100,000 to help create a position at the Law Center to help fight displacement, which is another Bartlett initiative (along with Mayor Jesse Arreguín and Councilwoman Cheryl Davila) set to come before council later this month. Realtex also said it would meet monthly with neighbors during construction to make sure it’s going well.

“No matter what happens with the vote, Ben Bartlett is a hero for coming up with that idea and getting the people on all sides to think that that’s a great step forward,” said Worthington, after the confusion arose but before it was clear how the night would end. He called the compromise “an incredible, innovative policy initiative.”

Realtex had previously planned to build just four below-market-rate units, and then pay an $884,000 fee to the city that would be used to build additional units elsewhere in the future. The neighbors have been pushing for 30% affordable units on site, as well as community benefits.

Realtex rep Cody Fornari told council Tuesday that Realtex is willing to build four units at 50% and four at 80% of the area median income (AMI), and to pay $68,000 into the city’s Housing Trust Fund to comply with the code. Alternatively, he said, Realtex could include a ninth unit in the project — and pay no fee — but he said it would have to be available at 80% rather than 50% AMI. But council wasn’t having it.

“I’d like to just hold my ground and say 10 units on site,” said Bartlett, who attended the meeting by phone. “I’m kind of surprised … that we’re even discussing this right now.”

Fornari told council he was surprised, too. And, when it became clear neither side would budge, Fornari asked officials to postpone the rest of the meeting to a later date. His request was met with hissing and booing from many in the crowd.

Councilwoman Lori Droste said, in her remarks, she would have liked to have approved the project Tuesday night had there been “true compromise.” She said she was “incredibly frustrated” with how the meeting had turned out, and that the city needs to find a way to maximize affordability while retaining economic feasibility, and help projects get through the pipeline faster.

“We’re all affected by the housing crisis,” Droste said. “We all agree it’s a huge problem, and we need to do something.”

In her motion to push the meeting to April, Councilwoman Linda Maio said there are technical issues that need a deeper look, and that the delay could give Bartlett and potentially Mayor Arreguín a chance to meet with Realtex to continue the negotiation. She said it would also give the city time to “explore our various options legally.”

One legal issue of concern relates to a zoning modification called a concession, which is tied to the use permit that allowed 2902 Adeline to add its fifth and sixth stories, even though that meant the project would exceed the district’s allowable “floor area ratio,” or how its total floor area compares to the overall lot size. A city planner told council it would be within its rights to deny that concession, due to a new state law, which would result in a 4-story building.

But City Attorney Zach Cowan told council the issue is “a little more complicated” because the burden is on the city to justify the denial, and because the legal basis for the denial was left intentionally vague in the state code. As of January, state law says concessions can be denied if they do not result in cost reductions to provide for affordable housing costs. But Cowan said there is no guidance about what that actually means.

Project architect David Trachtenberg told council he thought the city could also be more flexible in its thinking about the floor area ratio, noting that, over the whole project site, which includes a residential lot bought by developers for $1 million to help create a buffer between nearby single-family homes and the proposed 6-story building, the floor area ratio actually comes in below the commercial district limit. He said he had kept the denser massing on Adeline, away from those neighbors, and thought council could “be reasonable” and take that into consideration.

According to the staff report for Tuesday’s meeting, the proposed building would reach 6 stories, or about 65 feet, in the commercial zone on Adeline, then “step down” to 5 stories (about 55 feet) closer to the residential zone, and drop to 1 story, or 18 feet, on the west side of the building.

Planning staff said after the meeting that the floor area ratio only applies to the commercial district and cannot technically, under the zoning code, be calculated as per Trachtenberg’s suggestion.

Shock, confusion after meeting

Wednesday, Berkeleyside tried to zero in on exactly what led to the breakdown Tuesday night. But no coherent narrative emerged.

Fornari said he was perplexed by the turn of events before council because the draft version of the deal the Law Center sent him shortly before the meeting says 20% of the project’s market-rate units would be for below-market-rate households, as per his understanding of city code. By his calculation, that means 42 market-rate units and eight units below market rate, to get to the 50 total units.

Fornari said he and Bartlett “specifically talked numbers,” noting: “It was eight units.”

“That’s exactly what we agreed to. That’s exactly what I am still willing to do. When 10 units was put forward that was a very big surprise to me,” he said. “It’s very unfortunate. And I’m deeply saddened that … it obviously looks like I went back on a deal that was made. I really don’t feel that’s what happened.”

Including too many units below market rate, Fornari said, makes a project economically infeasible, which means no bank will finance it. He said he now plans to continue talks, but said the delays may impact project plans and drive up costs.

“It only pushes both sides further apart,” Fornari said. “I was very excited to come in with what I thought was the understanding of all parties, and very disappointed to walk out with a lot of trust of the community lost.”

Bartlett said Wednesday he hopes Realtex will take some time to reevaluate its position. He said he wasn’t sure if there had been a miscommunication, a misunderstanding, or something else, and described the issue as one of “murky numbers.”

“I never heard any qualifications of 20%,” he said.

“This has been the result of 13 months of negotiations and … multiple channels of dialogue,” Bartlett said. “The concessions which were presented by the applicant were the ones I read to the dais. So we were a bit taken aback by the reversal by the applicant. Needless to say: We were displeased.”

Bartlett said he has been working to create a three-pronged model to fight displacement through “equitable development” in South Berkeley that would create diverse populations within any given building; help fight displacement through the advocacy position at the Law Center; and build “pipelines for employment” by making sure construction jobs stay local. A “community benefits overlay” is also in the works that would help streamline project approvals for developers who give back.

“Those developers that can align themselves with our efforts will prosper,” he said. “This is about achieving a true and just end for the people.”

Janis Ching, who addressed council Tuesday night on behalf of the 30 or so signatories of the appeal, said the main feeling as the meeting wore on was shock.

“When the whole thing started to unravel, it was like: What just happened? You offered us this, we went through all of this work to get people to do this, and then you say, ‘Oh no, it’s eight units,'” said the 15-year South Berkeley resident. “And that’s still where we are.”

She said neighbors — who are working under the umbrella of Friends of Adeline, though not all of them are members of that group — had tried since last summer to get Realtex to the negotiating table. But the company never agreed to sit down until Monday, following a community meeting last week where neighbors had continued to fight for 30% affordable housing on site.

Monday, Ching said, Realtex suddenly offered the group 20% affordable housing if it would drop its appeal and agree not to fight the project in court.

Intensive phone-banking then happened, she said, to get all 30 appellants to agree. And it wasn’t easy. Many had balked at the deal, but ultimately decided it was the best one they would get, particularly because Realtex had said it needed to move fast.

Ching said she always understood the 20% number to be based on the 50 units of the project overall: “What alternative math universe are they living in that 20% of 50 is eight?”

She said she didn’t know whether Realtex had negotiated in bad faith or not, but said it definitely felt like the company had “pulled the rug out” during the meeting, which led to a lot of anger and ill will. She said the neighborhood wants to see the project built, and wants the additional housing for South Berkeley. But she doesn’t know where to go from here.

“I’m not even sure anyone’s going to agree to the 20% anymore,” Ching said. “Everybody’s asking when we’re going to meet again. And everybody else is like, ‘Oh, I’m so tired.'”

Attorney for appellants: “It’s certainly not just a misunderstanding”

Over at the East Bay Community Law Center, attorney Jassmin Poyaoan agreed: “I feel that people just feel deceived, and rightfully so. It’s a very hard pill for a lot of people to swallow to come back to the table after what happened last night.”

She said Wednesday she believes the 20% calculation should be done on all 50 units — her understanding of city code — and said, in a letter to the city, Law Center attorneys “reiterated … many times that building 20% on­site meant building 20% of the 50 units.”

She said shifting figures had come up in negotiation talks with Realtex before.

“They have switched up numbers on us throughout this whole time we have been dealing with them, almost over a year,” Poyaoan said, adding that Realtex had talked previously about building four or six affordable units on site. She said, also, Realtex had talked in negotiations about paying no fee to the city’s Housing Trust Fund — which would have required at least nine units, as per Tuesday night’s discussion. Eight units were simply never on the table, she said.

But she also said the number of units was “always discussed in terms of percentages.” She wrote, in her letter, neighbors are “shocked and appalled” by the process over the past 20 months, “and especially in the last two days.” She said the community negotiated in good faith after finally getting a seat at the table, and was concerned Realtex may not have done the same.

“I don’t know what’s going on,” Poyaoan said, “but I know it’s certainly not just a misunderstanding.”