(Bloomberg) — The housing shortage in California is at the root of the state’s biggest problems, said Oakland Mayor Libby Schaaf, who wants to expand the use of local bonds to promote more building in one of the country’s priciest areas for real estate.
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“I believe that the housing crisis in California actually is the biggest threat to our golden-ness as a state,” Schaaf said in an interview with Bloomberg News at Oakland City Hall, referring to the state’s nickname as the “Golden State.”
“The cost of housing drives financial insecurity,” she said. “How it impacts our ability to have clean, safe, healthy cities is threatening people’s belief in being in cities or coming back to cities.”
The mayor, set to leave office next year after two terms, said she is “very involved” in efforts to accelerate the use of general obligation bonds for affordable housing. Oakland has a bond measure on the ballot in November that would include about $350 million toward affordable housing projects. Schaaf also is involved with a regional agency called Bay Area Housing Finance Authority, which is seeking to put a $10 billion housing bond measure on the 2024 ballot for participating municipalities, she said.
Oakland, home to about 450,000 residents, has seen home prices soar over the past decade as part of the San Francisco Bay area’s tech-fueled boom, with many people choosing the city as a less-expensive alternative to nearby San Francisco. But the influx of jobs hasn’t been met with an adequate building of new homes. A report last year by the Manhattan Institute think tank found that there were nearly 3.5 jobs created for every new home permit in the San Francisco and Oakland metropolitan area from 2009 to 2019.
“Every year we fall more and more behind just at a pure supply level, let alone an affordability level,” Schaaf said, noting that the crisis is also driving homelessness and affecting business leaders concerned about recruiting talent.
Only 15% of households in Oakland’s home of Alameda County could afford the median-priced house in the second quarter, which stood at $1.5 million, according to the California Association of Realtors.
Oakland voters approved a $600 million bond in 2016 under Measure KK, aimed at putting money toward infrastructure and affordable housing. After selling $212 million of bonds earlier this year, the city has about $85 million more to sell under the measure, according to bond documents from February. Schaaf said Oakland will produce more than 660 units of affordable housing this year because of the bond.Efforts to use bonds for housing needs have been less successful in other areas, with some localities being slow to use borrowing and rack up interest costs because projects can get bogged down in obstacles such as zoning approvals and construction delays.
Schaaf, 56, also addressed safety concerns, noting that Oakland, like many American cities, experienced a surge in violent crime during the pandemic. She said the increase was “heartbreaking,” especially in light of the decrease in gun violence during the city’s “Ceasefire” campaign her administration promoted, emphasizing violence prevention, intervention and gang-focused enforcement.
While crime statistics show some reduction from pandemic-era highs, Schaaf acknowledged that many of the city’s residents are still left “feeling unsafe and unmoored” and that they want greater police protection. The Oakland Police Department currently is understaffed, in part because of the cost of living.
Democratic party leaders who embraced calls to “defund the police” in the wake of protests over the 2020 murder of George Floyd have gotten “a lot” wrong in how to reform police departments nationwide, Schaaf said. While she supports efforts to improve training and root out racial bias, “people need someone to call when they are in a crisis,” she said. “You sometimes still need to send someone with a badge and a gun.”
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