Playing With Politics

A Blog on Law, Politics, Planning, Development, and Other Vices

Understanding Berkeley’s Measure R

Posted by Roobs on October 27, 2010

Measure R is about environmentalism but it is also about understanding how planning and development work to improve communities

Residents in the City of Berkeley will be asked this November to vote on the direction of their Downtown… again.  Like most issues in Berkeley, this measure is the subject of some controversy.

The fight between environmentalists and their opponents over how to plan the development of Downtown Berkeley has gone on for years, with affordable housing and the height of future buildings being two subjects of contention.

On one side, supporters of Measure R include environmental groups like the Sierra Club and The League of Conservation Voters, 7 of the 9 City Council members, as well as organized labor and a range of planners and economists, including former Labor Secretary to the Clinton Administration, Robert Reich. Supporters argue that Measure R is the greenest direction for Downtown Berkeley and that by increasing Downtown’s density, it will help achieve Berkeley’s Climate Action plan passed last year.

On the other side you have the opposition–which includes two council members, The Berkeley Daily Planet—a local news website, and the Berkeley Architectural Heritage Association, argue that Measure R is too vague and doesn’t go far enough to ensure affordable housing.  They also protest the increased height limits.

To understand why Measure R is on the ballot, you need only know that this measure repeats a part of the Downtown Plan the Berkeley City Council had approved last year. This plan was later rescinded after Councilmen Jesse Arreguin and Kriss Worthington–the only council members who voted no on the original plan–led a controversial, though successful, signature gathering campaign to place the council’s decision on the ballot.  As a result, the City Council scrapped the original plan and are  now tasked to create a new one.   It comes as no surprise that both Arreguin and Worthington are the only two council members opposing Measure R and actively seeking its defeat this November.

In the end, whether Measure R is good or bad comes down to density, environmentalism and an understanding of how planning and development works.

Advice vs. Action

Let’s set one thing straight first off.  Measure R is an advisory measure. Measure R is meant to give the City Council direction as they move forward as they come up with a new Downtown Berkeley plan.  And there really isn’t much in the measure that is intrinsically bad.  The plan states:

  • Make Berkeley one of the “greenest” cities in America
  • Downtown should be a destination neighborhood (Meaning, Downtown should be awesome!)
  • Downtown should build on its successful Arts District (theatres, galleries, etc.)
  • Downtown should have cool restaurants, shops, parks, plazas and, yes… be generally awesome!
  • Downtown should work to preserve its cultural assets
  • Downtown should be the first choice for new transit oriented development
  • New buildings in Downtown should be built to the highest green standards and look good.
  • Provide a “green pathway” to streamline bureaucratic red tape and provide affordable housing
  • Read the full text of Measure R

What’s not to like about this?  Green, affordable housing, destination neighborhood, arts, restaurants, TOD, it all looks good to me.  Measure R is trying to push the City Council in a direction that meets these goals. But the devil is in the details and that’s what the critics exploit.

The Critics

As mentioned above, critics of Measure R include Councilmen Jesse Arreguin and Kriss Worthington, both running for re-election this year.  One of the most active critics of Measure R is Councilman Arreguin.  Both say, among other things, that the measure is too vague.

If you take a quick read of Measure R, you can see why the first argument opponents make against the measure is that it is vague.  But again, it’s supposed to be vague because it’s an advisory measure.  Critics cry foul because they claim measure does not tell us anything about affordable housing requirements or landmark preservation outside of what I summed up above.  It doesn’t talk about enforcement mechanisms.  But this is false.

First, Measure R actually does provide for affordable housing in the Green Pathway.  Developers who take this financially beneficial route will provide 20% affordable housing as well as other community benefits.

Second, the argument that Measure R provides no enforcement mechanism is entirely misleading.  A recent California Supreme Court case, Palmer v. City of Los Angeles, made it illegal for a city to require inclusionary housing in new development projects.  Meaning: the City of Berkeley cannot require inclusionary housing in Measure R or any future Downtown Plan.  But Measure R actually helps get past the Palmer decision and encourages affordable housing with the Green Pathway, which reduces the cost of development for both developers and the city in exchange for developers including affordable housing in their proposed projects (more on this towards the end).

Measure R is simply to give the city council direction as they move forward with determining a new Downtown Plan.  It is up to the Council to include specific aspects in the draft and finalized Downtown Plan.  It is not up to Measure R to do that for them.  To suggest otherwise is to falsely distort the entire process.

But how do we achieve our goals?  Is there one particular group that will benefit more than another with Measure R?  What do this mean to me?  It is with these questions that Measure R opponents laser guided themselves to this particular passage in Measure R:

Section 4. Guidance for Council Decision-Making

A. In order to advance Berkeley’s green future, and foster needed economic development and revitalization, the People of the City of Berkeley hereby advise the City Council that planning efforts for the Downtown should include consideration of a limited number of new buildings, as follows:

1. A maximum height in the Downtown Area of 5 stories (60 feet).

2. Exceptions to maximum height of 60’ include:

a) A total of 5 new buildings in the Downtown Area as follows:

1) 2 -residential buildings in the Core, with commercial on the ground floor, no taller than existing 180 foot buildings;

2) 1 hotel with conference facilities in the Core not to exceed 180 feet; and

3) 2 buildings not to exceed 120 feet, which may be mixed-use (residential/commercial ground floor) or office buildings.

b) Buildings up to 75 feet with a use permit on Shattuck Avenue from Hearst Avenue to Haste Street and along University Avenue from Oxford to Milvia Streets.

3. On Martin Luther King Jr. Way, limit height of new buildings adjacent to or confronting existing residential buildings

At this point, I have to go after Stewart Jones, a candidate for Berkeley City Council in District 8 and recent author of an op-ed in the Daily Cal (UC Berkeley Newspaper).  Jones bases his attack largely on this particular passage and my biggest critique of this op-ed is the distorted and utterly false statement he makes regarding building height.

In his op-ed, Mr. Jones declares that Measure R “raises height limits to 180 feet and even potentially taller with a density bonus”.  This is patently false.  Measure R does not raise downtown height limits to 180 feet.  Measure R allows for the construction of only 5 (count ‘em) towers, 3 with an allowable height limit of 180 feet, and 2 at 120 feet.  At present, the City of Berkeley has limited the height of buildings in Downtown to 65 feet tall.  Measure R would actually decrease this to 60 feet tall.  Developers could apply for a permit to build up to 75 feet on specific sections of University Ave.  It is true that a developer can apply for a state density bonus, which would supersede any Berkeley ordinance.  But in doing so, the developer waives his right to use the “green pathway” option described below.  However, nothing in Measure R would remotely allow a 180 foot construction free-for-all and such suggestions by Stewart Jones are flat-on-its-face false and unproductive for rational and respectful discourse.

The question remains:  Why would Measure R be a bad thing?  Let’s address some other concerns that have come up in the discourse around Measure R.

“Too Much Density?”

One of the basic tenants of “green” or “sustainable” development is density.  That is to say, to create a green and sustainable neighborhood, a city should encourage a dense mix of units for multiple purposes within walking or short transit distance of residents’ daily needs.  You want people to be able to live and work within a relatively close proximity to each other, but also to be able to do things like, walk to the grocery store or local restaurants. To make neighborhoods greener and more livable, you want people to be less reliant on their cars.  Such districts usually prove to be successful and charming.

Last year, Berkeley passed its Climate Action Plan which calls for a dramatic decrease in greenhouse gas emissions.  This goal NEEDS density.  It needs density and it needs mass transit to reach fruition. Without density or transit, Berkeley will almost certainly fail in its climate goals.

Berkeley has had some recent shortfalls when it comes to going green.  Earlier in the year, Berkeley failed to participate in AC Transit’s study of the Berkeley portion of the East Bay Bus Rapid Transit project because they were afraid it would get rid of too many parking spots and kill businesses.  Read my previous post for more details.

To be a green advocate or environmentalist in Berkeley requires, as a simple matter of fact, support for increased density in places like Downtown Berkeley.  And that’s what Measure R does.  It calls for the development of high density, mixed use developments around Downtown Berkeley BART station, which is also a hub for many of AC Transit’s major bus routes.  This alone makes Downtown Berkeley ideal for increased density and upzoning in order to take FULL advantage of the available transportation options.  It brings new residents to live and work in downtown and reduces their need to drive.  It revitalizes these areas because the new residents will not only visit local restaurants and shops, but will bring in new ones as well.

“Height limits allow buildings to be unnecessarily tall”

Measure R sets general height limits of buildings in Downtown Berkeley to 60 feet tall (5 stories).  If a developer wants, he can apply for a permit to build up to 75 feet tall on certain section of University Ave.  Measure R also allows for 5 taller towers, 3 at 180 feet and 2 at 120 feet.  Keep in mind that these are “allowable” heights;  these are not necessarily the exact heights of the towers, should they be built.  A developer will make the final decision on whether to reach 180 ft based on his or her bottom line.

Another critique from Measure R opponents is the issue of tall buildings.  They don’t want them.  But they do want more housing, especially affordable housing.  Here in lies the perpetual conflict.  Councilman Jesse Arreguin, who is running for re-election, told the Bay Citizen:

“I do not believe that we need to build buildings at 17 stories downtown to build the units we need.”

I respectfully ask the following questions of Councilman Arreguin.  1) How many units are currently available in Berkeley? 2) How many units do you think is adequate to satisfy Berkeley’s Regional Housing Needs Assessment?  3) How would you go about creating those extra units?  4) Where would you build those units?

There are basically two ways of constructing a building: either using a wood frame or a steel frame.  Wood framing is much cheaper than steel.  Some developers like wood frame projects because it reduces construction costs of the project.  However, wood frame is not as strong as steel and there are serious questions about whether or not wood frames can be used to construct tall towers.  The California Building Code (CBC) says that a wood-frame building, usually on a garage or concrete slab, cannot exceed 5-stories (including below grade) or up to 70 feet tall. After that, you need to use steel.  This is an important number to keep in mind when thinking about Measure R.

Downtown Berkeley is not littered with large developable parcels that are owned by a single individual or group.  Downtown Berkeley, like many downtowns across America, is made up of small land parcels owned by different individuals or groups.  Only a few large parcels exist, such as the one with the Bank of America at the corner of Shattuck and Center–which, for this reason, is the location for the proposed 180 foot hotel.  Why does this matter?  To put very simply, when you look at the cost of construction of a 5-story building in Berkeley on a small parcel–which can only go 60 feet before it needs an expensive permit, the cost-benefit analysis is usually not in favor of developing.

Because of the height limits, California law requires any building in Downtown Berkeley that is constructed above 5 stories to be built using steel.  Berkeley would also require an expensive permit to go up as well.  This means that a building of 60 feet is much cheaper to build than a building of 70 feet because the marginal cost of building that one extra floor is significant.  And because they can’t go any further up, it is likely the developer will stop at the 5th floor because on small parcels, a developer cannot build enough more units on the extra floor that can be sold to compensate for the increased price.

How do we deal with this?  You build taller.  Developers want to build taller because they need to hit a point where it is profitable.  Remember, tall buildings (including those smaller 2-5 story ones) are not just rooms.  They are elevators, stairwells, sprinkler systems, HVACs, plumbing, wiring, and a range of other things that take away leasable or sellable space.  Due to the very expensive nature of building in Berkeley (see below for more info) and the cost of steel construction, developers have stated they need to build higher so they can build more units to sell and this is usually around 180 feet tall (17 floors) in order to reach a point when the total cost of construction is less than anticipated revenue.  And it is for this reason that the tallest buildings described in Measure R are at an allowable 180 feet.

So no.  Measure R is not trying to Manhattanize Berkeley.  Measure R is recognizing the demand for housing within the Downtown Core as well as giving incentives to developers to come and develop the very units demanded. But wait, you ask.  If it’s cheaper to just stop at 5 stories, then why do we need the increased heights at all?  Why aren’t developers lining up to build a bunch of cheap 5-story buildings in Downtown Berkeley?  The answer to that is what opponents like Councilman Arreguin usually go out of their way to call for: regulatory fees and permits that make it really expensive to build.

“The ‘Green Pathway’ hurts more than helps”

Development is an expensive and risky business.  But it is even more expensive in places like Berkeley. Developers are not just paying for the cost of the land plus the cost of construction, they are also paying the cost of compliance: permits, EIRs, affordable housing, getting past the zoning and historic preservation boards, convincing neighborhood associations that they aren’t going destroy civilization.  All of this costs a great deal of money.  So when developers do manage to come in to Berkeley and build, their units are often expensive because the cost of compliance is tacked on to the cost of the unit.

In the end, the costs of construction plus compliance, compounded with the limitations of small parcels mean that the developer is not likely to make a profit.  This is coupled with the fact that Berkeley requires a great deal of affordable housing in its new buildings, which again burdens the developer to make up the money lost with such a small building.  A developer is not going to develop a project that is guaranteed to lose money.

How do you deal with this?  The answer is in Measure R.  The “Green Pathway” is a streamlined permitting process that helps get past a lot of the bureaucratic red tape in exchange for 20% affordable housing and other community benefits in the proposed development.  This is actually a brilliant idea because it lowers the cost of permitting new construction for both the city and the developers while accomplishing Berkeley’s affordability goals.  By allowing this process to become cheaper, Measure R helps create an economic incentive for developers to build more units, including affordable housing.  And by allowing more development to bring more units into Downtown Berkeley, you can actually begin to produce enough units to bring down the cost of housing.

Now, this isn’t to say that there aren’t uses for buildings of 60 feet or lower in Berkeley.  But let’s keep in mind what opponents of Measure R want: More units and more affordable housing.  This goal and a lower height limit are at odds with one another; if you want more units, you need to make it profitable for a developer to build them.  Measure R brings Berkeley closer to that goal.

“Developers benefit the most”

Despite what some people think, developers are not out trying to destroy everything that the community holds dear.  Developers can’t even really rig the price and gouge a potential buyer for all their worth.  The reason is because a developer is limited in how much he can ask for his units.  Just like when you are trying to sell your house, a developer can’t charge an exorbitant amount of money beyond what the local market will allow.  If he did, he would never sell the units.  Conversely, if the market for new homes is so strong that developers are making ridiculous sums of money, they would flood the market with more units and drive down prices.  But developers aren’t doing that because they can’t.

If the going rate for a condo in Berkeley is $800,000 a developer is going to charge around that price for a comparable unit.  Also, a single developer building a residential tower in Downtown Berkeley isn’t going to significantly affect the housing stock as to manipulate the cost of a unit (in this case, supply and demand indicates it would, if anything, lower housing prices). A developer can only charge what the market will allow—subtracting the sum of his construction and miscellaneous costs (i.e., compliance) plus whatever else the market will allow to yield profit.

Also, development is a very risky business.  When we think of developers, we think of these wealthy individuals just treating the world as one giant Monopoly board.  And that makes sense because we are thinking of the successful ones.  This ignores the fact that there are a lot of developers that go in and come out with Chapter 11 under their belt.  Again, development’s profitability is largely affected by the local housing market, land value, construction and compliance costs and less by the individual greed of the developer and his investors.

“Developers back Measure R financially”

I purposely leave this point to last because I believe it deserves the least amount of attention.  Opponents are using this completely non-planning or development related issue to try and derail Measure R:  That some of the major backers of Measure R are developers.  My response:  “Of course they are!”

Of course developers are backing Measure R.  Yes, it does benefit them.  Why does it benefit them? As I mentioned above, it is because they are the one’s building.  But it also benefits residents and new residents because they get new housing, including some new affordable housing.  Developers recognize that Berkeley is a desirable city to build in because people do want to live there.  The problem isn’t a lack of desire to build, the problem is a lack of cooperation.  If it costs too much to build in Berkeley; more than they could get back from selling units, then they have no reason to build regardless of desirability.

In Closing…

In closing, Measure R is about good planning and good strategy to improve the quality of life in Downtown Berkeley.  It encourages the right kind of density and growth around transit hubs.  That is why it is backed by environmentalists, planners, and the majority of the city council.  It is unfortunate that opponents of Measure R use distorted information to lean on voters to choose a path that may actually handicap their climate change efforts.  Measure R takes us off of the NIMBY sidelines and puts Berkeley back in the game of being an environmental policy leader.

I urge all Berkeley voters to vote YES on Measure R

Roobs is a graduate student at the University of California, Los Angeles pursuing a Masters in Urban & Regional Planning with concentrations in Transportation Planning & Policy and Urban Design & Development.  Roobs lived in Berkeley for 6 years.  He is a former Waterfront Commissioner and graduated from UC Berkeley with a BA in Legal Studies and Sociology.  Roobs worked as a clerk and paralegal for 5 years for the firm, Katzoff & Riggs in Emeryville, CA that specialized in real estate development law.

2 Responses to “Understanding Berkeley’s Measure R”

  1. […] 3 Posts Hey Arnold! Animating the Benefits of Urban DesignUnderstanding Berkeley's Measure RMelanie Shelby Wont Play With […]

  2. There is obviously a lot to know about this. I think you made some good points in Features also.
    Keep working ,great job!

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