I’m not sure where Carroll Fife thinks she’s going to find the money to build her “social housing,” but I have a sneaky feeling it’s going to come from you and me.
In case you’re not familiar with this neologism, social housing is government-built housing, or what we used to call “projects.” It’s when the government builds housing for poor people, at the very lowest cost it can, in order to keep rents as low as possible. That’s the project that Fife just jammed onto the November 8 ballot: building 13,000 low-rent housing units in Oakland. There’s no doubt that voters will approve it. The City Council passed her resolution unanimously; Rebecca Kaplan wasted no time at all in tweeting “thank you” to her friend Fife.
The twittersphere didn’t take kindly to Kaplan’s tweet. Within minutes someone tweeted, “13,000 low rent social housing units is A LOT of units! Who pays for that? Not just the cost to acquire or build each unit, but who then subsidizes the rent to be low.” Someone else then noted, “I don't understand…As drafted seems too vague to survive scrutiny - the measure should have clarity that it does not provide any funding.” And then someone else: “I believe it is intentionally vague, so more people might vote ‘yes’ than would otherwise. They need to clarify where any and all *future* funding will be coming from. This is done on purpose.”
Great points. We have such smart people in Oakland, we really do. They see through Fife & Kaplan’s scam. The proposal, as the San Francisco Chronicle noted, “does not include a funding pathway.” That bad news was not included in the publicity that Fife’s machine ground out. But voters intuitively understand that 13,000 units of housing don’t automatically pop into existence because Carroll Fife wants them to. Nor will they pop up when the measure is passed in November.
Kaplan, running interference for her partner in crime, read this string of tweets and realized someone had to protect the flank. She tweeted, “This measure isn’t to fund the affordable housing - it will allow the affordable housing. The question of how many units, and funding sources, is a separate question from simply making it allowable.” Well, that is at least honest. The City Council is sponsoring an ambitious cloud cuckoo-land construction project for which there is zero funding.
Nobody has the faintest idea how much building 13,000 units of low-rent housing will cost. The Bay Area Council reported that “In 2019, the average construction cost of new below market rate housing in the Bay Area was $664,455 per unit.” (And, of course, that average cost, three years later, is obviously higher today.) At that rate, building 13,000 units of below market rate housing in Oakland will cost more than eight billion dollars which is, like, 20 years of Oakland’s entire budget! Clearly, that’s not going to happen. But let’s suppose that Fife’s project won’t be built at average Bay Area construction costs: the developer (i.e., the city) will save money on cheap materials. But the building and construction trades unions will demand standard wages and full benefits for the workers, and the City Council, being beholden to the unions, will guarantee that, so the city won’t be able to save any money there. But the ultimate cost for building what undoubtedly will be shabby projects is still going to be in the billions of dollars.
Maybe what Fife & Kaplan envision is 13,000 Tiny Homes. The average cost for a Tiny Home is only $7,500. That still amounts to $97.5 million, money Oakland doesn’t have. But I don’t think Fife & Kaplan are thinking about Tiny Homes. They want buildings, with lobbies and elevators and balconies. And you just know that the homeless people are going to demand their own apartments. No congregate shelter for them!
So when people on Twitter wonder “who pays for that?” there’s no answer. Of course, there’s talk that “grants” will be available, but the COVID spigot is rapidly turning off; whatever free money Oakland has been able to suck out of Washington and Sacramento is rapidly coming to a halt. See why I think that Fife & Kaplan’s ultimate ATM machine is going to be you and me? They’re coming after us, friends.
Look: This project is going nowhere. It’s dead on arrival. But the voters are going to pass it anyway, which will lead to an impasse similar to what happened with the Encampment Management Policy, which also passed the City Council unanimously. When the city proved unable to implement the EMP, they got sued. They’re also going to be unable to build 13,000 units of housing. Another empty promise. Another lawsuit.
Steve Heimoff