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Saturday, September 26, 2015

Emeryville Can Demand More From Developers Than Neighbors Cities Can

Position of Power:
Emeryville Can Say 'NO' to Developers and the Developers Know It

After a generation of taking anything and everything from every developer who wished to make a buck off our town, Emeryville is finally in an inarguable position now to demand better development.  And we can easily get it.

Opinion / News Analysis
  • Emeryville doesn't need any more market rate housing.
  • Emeryville doesn't get any positive revenue from housing.

Got that?  These two points aren't a matter of someone's opinion even though that word precedes them in this story.  These two points are factual and they assertively inform us through hyperbolic debate frames rising up from interested parties of the ideological sort as well as those who would materially benefit.  Once people realize the prophetic exigency of these two points, how we finish the job of developing our town becomes a lot clearer.

Emeryville is in an enviable position with regards to development. Due to forces in our control and those out of our control, we're at a powerful place where we can call the shots; we can rationally say NO to flawed development, starting now.  The last City Council election with its progressive sweep and the rise of a newly enlightened electorate has something to do with this fortunate position we find ourselves in, of course, but in addition it has to do with the extremely limited supply of large scale development properties left in our town and the incredibly valuable geographic location of Emeryville that only gets more valuable over time.   But more pressing than those extant and compelling realities, our new power position has to do with our over the top, nay epic RHNA numbers.

Emeryville's RHNA Numbers
Twice as big as we need.
RHNA or Regional Housing Needs Assessment (pronounced reena) is a housing data compilation of the whole Bay Area produced by a consortium of local governments meant to mete out each municipality's work load share of the goal of providing a jobs/housing parity.  The state mandated idea is each city should carry its weight as far as providing enough housing for the entire region.  Emeryville was given a specific housing goal by this consortium (known as Association of Bay Area Governments ABAG).  Due to Emeryville's huge housing boom over the last 20 years, we not only met our ABAG goal, we smashed the goal.  We actually doubled the market rate housing goal, Emeryville's built market rate housing right now is more than 200% of what RHNA suggests.  At this point, nobody can claim with a straight face Emeryville needs to build more market rate housing, that we're somehow derelict in our duty.
If we do approve more housing projects moving forward, it can and should be only those that improve the livability of our town.  We've already more than done our regional market rate housing duty.

Emeryville's 'double RHNA' numbers have the effect of punching a huge hole in the 'supply and demand' argument that's always proffered by developers.  They use that argument to shame municipalities into approving housing projects they want to build.  Some places, they would have a point.  Not here.
Everybody knows the argument; if we increase the housing supply, the housing demand goes down and so do the prices.  Except here in Emeryville we've doubled RHNA and the housing prices still keep going up, especially rentals.  That's because all the developers are really interested in is maximizing their profits and thus, all they're interested in building (and all we've been getting) are $2500 per month one bedroom luxury apartments. As shocking as it is, this shouldn't come as a shock.  The idea that a developer (or indeed any business owner) might lie to protect his profits should be seen as a given...especially since there's no down side to lying, no penalty.  And so that's what we get from them generally.

With the supply and demand canard off the table, there's really no cogent reason developers can offer as to why we should accept a flawed housing project.  Some apologists will fatuously claim housing development adds to the City's tax base, but that's a lie too; Emeryville actually loses money (a little) off residential projects.  Residents use more in services than they pay in.  City Hall gets its revenue from businesses, not residents.

With nothing to gain and much to lose, at this point with these RHNA numbers, developers better offer something overwhelmingly good in trade for approving a project that will increase traffic, noise, pollution and crowding.  That's the point of the Tattler story of July 23rd.  We posit there are four chief areas where Emeryville needs improvement:

  1. Affordable Housing
  2. Family Friendly Housing
  3. Parks / Open Space
  4. Locally Serving 'Non-Formula' Retail
These points are measurable.  We say every developer's project proposal must demonstrably improve (or least not make worse), the existing ratios we have in these four categories.  These should be the starting point for any residential project.  Otherwise, the default position should be no development at all.  Right now, we have an intensively developed town with a lot of density and a lot of commercial revenue shared by our existing population.  If we stay as we are, we're fine.  Unlike our neighbors who haven't met their RHNA goals, we don't need to take on more market rate residential development.
The residential developers may be salivating at our remaining three or four fallow patches of land with their boatloads of potential profit but we could retain the status quo; keep a couple of patches of our town fallow for future consideration (a future park perhaps?), and we'll be OK.
Or we could allow more development...a new kind of development we haven't demanded or gotten up until now; development that demonstrably improves our town.

Emeryville has always had naysayers in our midsts.  There's always been those who loudly claim we're no good, terrible really and we must let the developers have what they want because we don't rate anything better.  Indeed, before last November, the City Council majority itself said as much ad infinitum over the years.  There are plenty of regular residents still saying it now.  Somehow, these Chicken Littles see these last pieces of fallow land left as an emergency; a gap that must be filled with whatever the developers want.   No time to waste they're saying, we must defer to the developers now.
Or maybe they'll bide their time: we expect the naysayers to try to retake the City Council majority next year with lots of hidden campaign donations from developers.
But in the meanwhile, next time you hear the old 'supply and demand' con, remember our epic RHNA numbers.  Next time you hear them try to frame the debate in terms of development being a given, remember we don't increase our revenue from residential projects.

To reiterate:
  • Emeryville doesn't need any more market rate housing.
  • Emeryville doesn't get any positive revenue from housing.


  1. The RHNA data are a revelation, and Emeryville would be a better place if we added affordable housing, family-friendly housing, parks and open space, and more retail like Arizmendi to the present mix.

    The first three, at least, would come at a cost--right?

    These additions may well be worth the price, but, somewhere in the various studies that our city has paid for over the years, is there a credible estimate of what that price would be?

    1. All four of these things should be provided by developers with specific projects they're proposing. The idea is that there are no more freebies. If a developer wants to build a residential project, he has to keep the existing ratios of these four areas the same as they currently are or improve on the existing ratios. So for instance the ratio of park acreage per resident in Emeryville is currently X, the developer has to provide either money for the city to buy land and build a park or he could provide the land directly. After he brings in Y number of residents (his project), he needs to make the City whole: we need at least X residents per acre of park space after the project gets built. The same or better. No more making the town get worse because of these residential projects.

  2. "If we increase the housing supply, the housing demand goes down..."

    Uh, no, not at all. That's not how supply and demand work. Supply and demand are independent variables. The housing supply can go up and the demand can go down, up, or stay the same. Price depends on both variables not just one, so yes, it's completely possible and common for supply to go up and prices to increase.

    The way to fix your statement above would be something like this: "If we increase the housing supply and the demand remains constant, costs go down." In the Bay Area, demand actually has increased significantly faster than supply in recent years, so prices go up.

    Your article actually gives one of the reasons prices continue to go up: surrounding cities have failed to build to meet increasing demand. If everyone had met the RHNA numbers (assuming they accurately predicted job growth), we wouldn't be in the middle of a housing shortage.

    Supply and demand really is not a canard. In all seriousness, I'd encourage you to consider taking an intro college economics course. You seem very interested in economic policy, and it would give you a lot of insight.

    1. You (eloquently) went into the weeds a little further than I wanted to for purposes of the story but your point is well taken. I do agree with you and the story shows that but from a different angle than you took. Emeryville keeps increasing housing supply and the price keeps going up. The reason is because other cities aren't increasing their supply of housing like Emeryville has done (and because of regional growth as you say). But this is all just academic really. Because the differing cities have different governments run by different people, there will never be 100% compliance for a regional vision, much to ABAG's chagrin. There's no way to control this so as far as Emeryville is concerned, the supply and demand meme is not applicable, hence descriptors like "canard". Every time a developer or an apologist uses 'supply and demand' as an immutable law in Emeryville, they're being disingenuous for purposes of increasing their profits in the case of the developers and for unknown purposes for their apologists.
      Those furthering this bogus meme always fail to note the negative effects on the quality of life increasing density brings. We've done more than our share of building (market rate) housing in Emeryville and to build more at this point without a major regulatory increase as I've called for, will simply lower the livability of our town. There is no rational reason why we should do this, regardless all the screams of "supply and demand" from these interested parties and their hangers on.