November 30, 2017 – Real Estate Market Numbers
By Glen Bell (510) 333-4460
Here are some highlights for the 38 East Bay Cities that I track:
- Following a dramatic 60% drop at the end of last year, inventory began its usual seasonal trend upward. Typically, we see a steady increase on a month by month basis to occur before finally peaking in September. This year has taken a slightly different course. Inventory has been fairly flat over the summer and fall months fluctuating slightly up and down. We did see a decrease in the available housing inventory since last month. However, we are 24% below where we were last year at this time. That’s concerning considering last year was a very “tight” market. There was an 11.5% decrease in pendings compared to the previous month, (October). Our monthly supply is now 21 days. Last year, our months’ supply at this time was 30 days. As a reminder of what we mean by “months’ supply;” If no more homes come onto the market, and homes continue to sell at the same pace as they have been over the last 12 months, then the “months supply,” (in this case 21 days), tells us that’s how many days it would take to sell the remaining number of homes we currently have available for sale in any given market.
- The number of pendings, (homes that are in contract), decreased in comparison to last month, but is still below where we were last year by 16.5%. The pending active ratio increased to 1.57. This compares to last year at the same time of 1.44. This supply and demand ratio signals whether we’re in a sellers’ or buyers’ market. Typically, a number well above 1, (more inventory with less pending) favors sellers. A number below 1 favors buyers.
- The percentage of homes “sitting” has increased slightly with 48% of the homes listed now remaining active for 30 days or longer, while 26% stayed on the market for 60 days or longer. This is lower than what we saw last year at this time.
- The “distressed” market, (foreclosures and short sales) are no longer a factor representing less than .05% of the market with only .02% of the active listings and .02% of sales over the past 4 months.
- The month’s supply for the combined 38 city area is 21 days. Historically, a 2 to 3 months supply is considered normal in the San Francisco East Bay Area. As you can see from the graph above, this is normally a repetitive pattern that we’ve seen over the past four years. However, we are well below supplies levels compared to last year at this time, of 30 days. However, this year the inventory level on the graph is shallower.
- Our inventory for the East Bay (the 38 cities tracked) is now at 1,547 homes actively for sale. This is still above the December 2012 low of 1,086 and well less than last year at this time of 2,028 or (22% lower). We’re used to seeing between 3,000 and 6,000 homes in a “normal” market in the San Francisco East Bay Area. Pending sales decreased slightly to 2,433, but lower than where we were last year at this time of 2,911 or (16.5% lower).
- Our Pending/Active Ratio is 1.57. Last year at this time it was 1.44.
- Sales have decreased slightly from the last (4 month period) now at 8,981 for the 38 cities tracked. This is slightly higher than what we saw last year at this time (8,836).
- The one factor that has changed this year is that we had a very late start to the spring season due to the heavy amount of rain received compared to very little in the preceding 3 years. The rains more than likely delayed many sellers from putting their homes up for sale early. They simply got a late start because they couldn’t work on the exterior of their homes during this time. Also, on average, homes are closing in fewer days than before. It seems that inventory is still being gobbled up but at a slightly faster pace than is being replenished. Inventory seemed to flatten out over the summer and fall months and remains at a lower level when compared to last years numbers.
- Sales over the last 4 months, on average, are 4% over the asking price for this area, greater than what we saw last year’s at this time, 2.8%.
By Kathleen Pender, SF Chronicle, December 6, 2017
The median Bay Area home price rose 10.9 percent to $765,000 in October from the previous October, the third consecutive month it posted a double-digit year-over-year gain.
The October median price was up 2.6 percent from September but 1.3 percent below the region’s all-time high of $775,000 set in June 2017.
Those sales closed before the House introduced a bill on Nov. 2 that would strip away some tax benefits of homeownership. Many in the real estate and housing industry say that bill, which passed the House Nov. 16, and a somewhat different one that passed the Senate on Friday would bring down California home prices.
In a press release, California Association of Realtors President Steve White called the House bill “a direct attack on California housing and homeownership. Eliminating the incentive for people to buy homes and raising taxes on hundreds of thousands of California homeowners only puts the American dream further out of reach.”
The big jump in Bay Area home prices last month was mainly a result of “low inventory, affordability constraints and market disruptions caused by the destructive and deadly North Bay wildfires that began in early October,” CoreLogic spokesman Andrew LePage said in a press release.
The impact of the fires and tax bills will be more strongly felt in coming months.
Both tax bills would eliminate the federal itemized deduction for state and local income or sales tax and limit the property tax deduction to $10,000 per year.
Under the House bill, homeowners could deduct interest on up to $500,000 in debt used to buy or improve a primary residence. Today they can deduct interest on up to $1 million in mortgage debt used to buy or improve a first and second home. That would not change under the Senate bill, but both bills would eliminate the deduction for up to $100,000 in home-equity debt not used to buy or improve a house.
Both would also extend the holding period needed to qualify for the capital gains tax exclusion — up to $500,000 for married couples and $250,000 for singles — break on a primary residence. House and Senate leaders are trying to reconcile those bills and hope to pass a final one by Christmas.
By MARISA KENDALL, Bay Area News Group, December 4, 2017
As Republicans worked Monday to reconcile conflicting versions of their tax plans, a prominent group of realtors is warning that both the Senate and House proposals will slash home prices and values in California and beyond.
The proposed cuts to real estate-focused tax deductions could cause prices in the Golden State to drop between 8 and 12 percent, leading to a loss in home value of between $37,710 and $56,550 for the typical home owner, according to the National Association of Realtors, which continued to oppose the bills as Republicans moved closer to a final plan over the weekend.
While a price drop may sound like good news to Bay Area residents bemoaning the region’s soaring housing prices, the trade group says plummeting prices could bring new troubles — including a reluctance to sell that could further squeeze an already tight supply of homes. The strain is expected to be greatest in regions like the Bay Area, where home prices are already high.
“The tax incentives to own a home are baked into the overall value of homes in every state and territory across the country,” association president Elizabeth Mendenhall wrote in a news release over the weekend condeming the proposed tax overhaul. “When those incentives are nullified in the way this bill provides, our estimates show that home values stand to fall by an average of more than 10 percent, and even greater in high-cost areas.”
Affordable housing advocates also worry the tax overhaul will gut California’s efforts to house its low-income residents.
It’s not yet clear what the final tax plan will look like. Republicans still have plenty of work to do to iron out the differences between the House and Senate proposals. They reportedly expect to pass a final version before Christmas.
So how would the tax proposals affect our housing market?
One of the key provisions is the mortgage interest deduction — the tax break homeowners get for the interest paid on a mortgage. Under current law, homeowners can deduct interest on purchases of up to $1 million for a primary residence and one other home, plus an extra $100,000 for equity debt. The Senate bill would keep the former cap in place, but eliminate the equity debt deduction, Forbes reports. The House plan would grandfather in existing mortgages, but would cap new mortgages at $500,000. In addition, homeowners would get no deductions for a secondary residence.
Halving that deduction cap could impact as many as half of Californians who have a mortgage, according to the National Association of Realtors. Last year 49 percent of housing units with a mortgage were worth more than $500,000. Homeowners who claimed the mortgage interest deduction saved an average of $3,070, the association said.
Another controversial housing-related item in the tax proposals is the capital gains provision. Under current law, homeowners can exclude up to $250,000 (or $500,000 for married couples) in capital gains on the profit from the sale of a home — if they have lived in the house for two of the last five years. Both the House and Senate proposals would change that — homeowners must have lived in the house for five of the past eight years to qualify for the savings.
Last year, 13 percent of homeowners in California had lived in their home for between two and four years, meaning they won’t be eligible for that tax exclusion, according to the National Association of Realtors. Some housing experts worry the GOP tax plans will encourage Bay Area homeowners to stay put instead of selling, exacerbating the region’s housing shortage.
Both the House and Senate tax plans would also cap the property tax deduction at $10,000.
A recent White House analysis of the tax proposals attempted to put homeowners’ fears at ease. Last month, researchers with the Council of Economic Advisers estimated a “muted” drop of less than 4 percent in housing prices as a result of proposed changes to the mortgage interest deduction. Meanwhile, the researchers wrote, the rate of home ownership may rise “modestly.” The researchers noted that while itemized tax deductions would be reduced under the proposals, the standard tax deduction would be increased. The current standard deduction of $6,350 for single tax payers would jump to $12,000, and the deduction of $12,700 for married tax payers would jump to $24,000.
Bay Area accountant on tax reform: ‘It’s almost malpractice not to talk to clients about leaving California’
By Mark Calvey – San Francisco Business Times, Dec 7, 2017
Tax reform under consideration in Washington that would eliminate the deduction for state income taxes could spur more wealthy Californians to move to low-tax states.
California’s status as having one of the highest levies on income already makes a move out of state a frequent point of discussion between the wealthy and their financial advisers. But the loss of a federal deduction for state income taxes paid will only provide more evidence that high-income taxpayers could be better off moving to Texas or another state with less burdensome taxes, Edward Hanley, a principal at San Francisco accounting firm Shea Labagh Dobberstein, told the San Francisco Business Times.
Asked whether he’s had conversations with any of his clients about leaving the Golden State, Hanley responded, “Yes. All of them. It’s almost malpractice not to talk to clients about leaving California.”
Several of Hanley’s clients are looking at possible moves out of California when they retire in five to 10 years, with Washington state and Wyoming among the destinations often under consideration since the two states are among the seven with no income tax. (The other states with no income tax are Alaska, Florida, Nevada, South Dakota and Texas.)
Many of California’s wealthy own businesses or real estate, so they can save millions in taxes by moving to Texas or Florida before selling those assets.
Wealthy individuals, as with companies, are often more mobile than lawmakers realize.
Some California tax preparers say they’re having painful conversations with clients about how much more tax they’ll pay under tax law changes now under consideration.
Hanley said he’s advised many of his clients, who aren’t subject to the Alternative Minimum Tax, to be prepared to pay their California income and property taxes this month, rather than waiting till they are due next year, to avoid the risk that payments made next year for 2017 taxes owed become a non-deductible expense in 2018.
On Thursday, San Francisco-based Paragon Real Estate Group took a closer look at Census data tracking migration to and from California in 2016. The report highlighted that more California residents are moving to other states than other states’ residents are moving into California, although that can be hard to believe for Bay Area residents finding their favorite restaurants and roadways increasingly crowded.
Paragon noted that foreign immigration into California has more than offset state residents leaving for other states, so the Golden State’s population has been rising.
But President Trump’s efforts to stem immigration may “dramatically curtail foreign influx numbers into California and the Bay Area in 2017 and subsequent years,” Patrick Carlisle, chief market analyst at Paragon, said in his report on Bay Area demographics.
“Secondly, changes to the tax code currently contemplated by the Republican-dominated Congress — the deductibility of mortgage interest costs and local and state taxes in particular — would almost certainly make living in the Bay Area, which already has either the highest or close to highest cost of living in the country, more expensive for many residents, but also increase the cost difference in cost of living between it and other parts of the country,” Carlisle said. “This could exacerbate the outflow of companies and residents to lower-cost states.”
Carlisle says the outflow of residents breaks into two groups: Those relocating for jobs in lower-cost states and those moving after retiring, often cashing out of California’s pricey housing market to help make their golden years shine.
Fewer immigrants coming to California from other countries coupled with more people leaving the state “might have substantial ramifications for state and local economies and housing markets,” Carlisle warned.
By MARISA KENDALL, Bay Area News Group, December 3, 2017
As home prices skyrocket across the state, there’s one California city where they’ve shot up more than anywhere else in the U.S. — nearly doubling in the past five years.
No, it’s not San Francisco, San Jose or Oakland. It’s not even in the Bay Area.
It’s Stockton, the Central Valley community twice dubbed America’s “most miserable” city by Forbes Magazine because of its high rates of housing foreclosures, unemployment and violent crime.
The jump in home prices in Stockton and neighboring Lodi — up about 92 percent over the past five years — is dramatic evidence of the ripple effects of the Bay Area’s tight housing market and the increasingly out-of-reach cost of living here. As people flee San Francisco and Silicon Valley in search of cheaper housing — heading to places like Stockton, Oakland and Sacramento — prices in those second-tier markets are rising.
“There’s flight away from areas where it’s expensive, to areas where it’s relatively cheap,” said Andrew Leventis, deputy chief economist at the Federal Housing Finance Agency, which first noted Stockton’s dramatic rise. “It would be just incredibly improbable if that wasn’t driving up prices in the west by some magnitude.”
The federal agency analyzed housing markets in the country’s 100 largest metropolitan areas. Oakland came in second, boasting an 86 percent jump in prices, according to the report released this week. Sacramento, also a major destination for Bay Area expatriates, is number six, seeing its home prices climb 74 percent.
The San Francisco/South Bay area is high on the list too, coming in at number four with a 77 percent increase — far above the national average of 35 percent.
Cities where home prices are soaring
Of the country’s 100 largest metropolitan areas, these saw the biggest increases in home prices over the past five years:
- Stockton/Lodi — 91.94 percent
- Oakland/Hayward/Berkeley — 85.71 percent
- Las Vegas/Henderson/Paradise — 85.21 percent
- San Francisco/Redwood City/South San Francisco — 77.07 percent
- Seattle/Bellevue/Everett — 74.66 percent
- Sacramento/Roseville/Arden/Arcade — 74.03 percent
- North Port/Sarasota/Bradenton, Florida — 72.5 percent
- Riverside/San Bernardino/Ontario — 70.82 percent
- Cape Coral/Fort Myers, Florida — 70.1 percent
- West Palm Beach/Boca Raton/Delray Beach, Florida — 69.19 percent
Source: The Federal Housing Finance Agency
By LOUIS HANSEN, Bay Area News Group, December 1, 2017
Apartment prices in the Bay Area dipped last month, but renters, don’t breathe a sigh of relief — analysts expect prices to continue to climb in 2018.
Rental market watchers noted slight declines in apartment prices in November, attributing it to routine seasonal swings in a month where fewer people are searching for housing.
The Bay Area remains home to the highest rental prices in the country, with San Francisco topping the charts with a median price of $3,050 per month for a two bedroom, according to rental website Apartment List. A typical two bedroom in San Jose listed for $2,550 in November, while a similar Oakland pad went for $2,170.
“Even when rents dip a little bit, they’re still more than twice the national average,” said Sydney Bennet, a researcher for Apartment List. Nationwide, apartment prices fell in two-thirds of the major cities last month, she said.
Prices fell month-to-month in San Jose, San Francisco and Oakland, but still have shown a net rise over the last year. Prices in the East Bay dropped 1.4 percent, while San Jose rents fell about 1 percent, according to Apartment List.
The hottest market this year has been Sacramento, as Bay Area residents flee high prices for more affordable housing. Rent prices have increased almost 10 percent in the last year. But Bay Area escapees can still find better deals in Sacramento, where the median price for a two bedroom was $1,190 a month.
“Jobs are a big factor for rent growth in the whole area,” Bennet said. Apartment List researchers expect prices to climb in 2018, she said.
Nationally, rents have risen about 2.7 percent in the last 12 months. California has led the way, averaging a 4.3 percent increase.
A report by real estate website Zumper also found dips in San Francisco, but monthly increases in San Jose and Oakland. The website tracks apartments in the U.S. and Canada.
Zumper analysts also are bullish on demand for Bay Area apartments, as new apartments are being built across the region. “I don’t think the tech market is going to slow down any time soon,” said spokeswoman Crystal Chen.
Looking for relief from Bay Area prices? Zumper found rents sliding in Pittsburgh, Pennsylvania, Durham, North Carolina, Buffalo, New York, and Milwaukee, Wisconsin, although a check of the weather forecast might be in order before moving.
By Cicely Wedgeworth | Realtor.com, Nov 29, 2017
We’re almost there: the long-awaited home stretch of 2017. And quite a year it’s been! Already, we can’t help imagining what developments next year might bring to the wild world of U.S. real estate. So we asked our realtor.com® data team to give us the inside scoop. The team sifted through historical real-estate data and other major economic indicators to come up with a realistic forecast of just what might be in store next year.
And it looks like a sea change is brewing.
From housing inventory to price appreciation to generational and regional shifts, these are the top trends that will shape, and reshape, real estate markets in 2018. Buckle up! It’s going to be quite a ride.
Game-changer no. 1: Supply finally catching up with demand
After three years of a crushing shortage of homes for sale, the realtor.com economics team is predicting that the shortfall will finally ease up in the second half of 2018.
“The majority of the year should be challenging for most buyers, but we do expect growth in inventory starting in the fall,” says Danielle Hale, chief economist for realtor.com.
That’s a potentially transformative development for many would-be buyers who’ve been frustrated in their search for a home that meets their needs—and their budget.
“Once we start to see inventory turn around, there is plenty of demand in the market,” Hale says.
Although for-sale housing inventory is expected to stay tight in the first quarter of the year, reaching a 4% year-over-year decline in March, if it increases as predicted by fall, that will be the first net inventory gain since 2015. Markets such as Boston, Detroit, and Nashville—all of which recently made it onto our monthly list of the nation’s hottest real estate markets—may see inventory recover first.
Bullish construction is the engine that’s turning this ship around, bringing new homes to the market and creating opportunity for people to trade up into new homes.
“It’s adding inventory instead of just shuffling people around in existing homes,” Hale says.
But those itching to buy a starter home may have to be patient for a while longer.
“We expect the relief to start in the upper tiers, and it will make its way down to the lower tiers,” Hale says. Specifically, most of the initial inventory growth will be in the mid- and upper-tier price ranges, $350,000 and up.
As the market eases, home prices are expected to slow to 3.2% growth year over year nationally. But again, it’s the higher-priced homes that will be appreciating less. And even slower appreciation still means that prices will continue to rise.
“Overall, prices are expected to increase, and we’re expecting to see more of that in lower-priced homes,” Hale says. “It will get a bit worse before it gets better for buyers of starter and midprice homes.”
Game-changer no. 2: Millennials starting to come into their own
The housing market in 2018 will continue to present challenges for millennials—sorry, all of that student loan debt isn’t just going to disappear—but there are some bright spots on the horizon for these millions of Americans.
Millennials seem to be having more success at taking out mortgages on homes at varying prices, and not just starter homes, Hale says.
“They’re at that point where they’re seeing their incomes grow, and that will help them take on bigger mortgages,” she says. That’s because of both the overall strong economy and their own career development.
And as the largest generation in U.S. history reaches that sweet spot in their 20s to 30s when they’re settling down and starting families, they’re particularly motivated to buy. Millennials could make up 43% of home buyers taking out a mortgage by the end of 2018, up from an estimated 40% in 2017, based on mortgage originations. That 3% uptick could translate into hundreds of thousands of additional new homes. As inventory starts to rebound in late 2018 and in years to come, first-time home buyers will likely make up an even larger share of the market.
They probably shouldn’t wait too long to buy, either—mortgage rates are expected to reach 5% by the end of 2018 due to stronger economic growth, inflationary pressure, and monetary policy normalization.
Game-changer no. 3: Southern homes selling like crazy
When it comes to home sales growth, bet on Southern cities to beat the national average in 2018. We’re especially looking at you, Tulsa, OK; Little Rock, AR; Dallas; and Charlotte, NC. Those markets are expected to see 6% growth or more, compared with 2.5% nationally.
The South has been luring corporations and individuals to its balmy cities with its low costs of real estate, and living in general. The resulting strong economic growth and strong household growth, combined with an accommodating attitude toward builders, is setting the stage for an accelerating boom in homeownership, Hale says.
As soon as there are more homes to sell, these places will be selling strong.
Game-changer no. 4: Tax reform (maybe)
The Republican Party’s proposed changes to the tax system could change everything—but with both the House and Senate versions in limbo, the jury is still out on this one.
If a version of tax reform does pass with the current provisions affecting real estate, Hale says she would expect to see fewer home sales and declining home prices. However, it would be the upper price tiers that would likely be affected the most, in areas with expensive homes and high taxes, such as coastal cities, especially in California.
By Roland Li – San Francisco Business Times, Nov 30, 2017
For the first time in eight years, cranes have arrived in downtown Oakland.
Three residential highrises are under construction. Collectively, they will add over 1,000 new housing units to the city’s core, replacing an empty lot, a parking garage and small office building. Three more residential towers are approved and could break ground by next year. Another dozen are in the pipeline.
It’s the city’s biggest building boom in decades with over 3,600 units under construction. Although activity is primarily concentrated downtown, there are also projects moving forward in Temescal, West Oakland and East Oakland.
It’s a boom that took years of economic shifts to materialize after Oakland’s home prices and rents shot up. Those soaring prices made both wood-frame and concrete highrise construction profitable enough to attract new developers.
Carmel Partners is among those newcomers. Last month, Carmel started construction on a 634-unit tower that will be the city’s second-tallest building. It’s San Francisco-based Carmel’s first Oakland project and replaces a garage a block from the 12th Street BART station.
Dozens of other investors have come to Oakland for the first time: The Blackstone Group is funding over 400 new apartments developed by partner CityView that are under construction in the Broadway-Valdez district. Vancouver, Washington-based Holland Partner Group has two approved highrises in downtown Oakland.
Longtime builders are also still active in Oakland: Signature Development Group has started construction on the first market-rate building at Brooklyn Basin, the city’s largest master development with 3,100 waterfront units. SunCal also has approvals for 918 for-sale townhomes at the former Oak Knoll hospital site.
Madison Park Financial has a new plan for nearly 400 units in East Oakland, but the veteran Oakland developer has been pickier about additional deals.
Rising construction costs have been a barrier, as well as new impact fees and the cost of connection to water from East Bay Municipal Utility District, which can hit tens of thousands of dollars per new unit.
espite rising costs, bigger developers are able to get large projects underway. A block from the 19th Street BART station, Lennar Multifamily Communities and its contractor Build Group Inc. are laying the foundation of 1640 Broadway. The tower will have 254 apartments.
Previous owner Joe Hernon proposed the project in 2000, but never got it off the ground. In 2015, Lennar pursued the project.Being one of the first new towers was a challenge.
“A lot of investors want to see the proof of concept,” said Tyler Wood, Lennar Multifamily development director.
But there hadn’t been a new residential highrise built in Oakland since 100 Grand St. in 2009. Lennar looked at rents downtown and concluded it was viable to build tall.
“You kind of extrapolate — this is what’s happening in the city. It’s performing quite well. There should be an appetite,” said Wood.
Lennar is targeting rents in the low $4s per square foot, or over $3,000 per month for a 750-square foot unit. Pricing is higher than Oakland’s older highrises and less than rents in new San Francisco towers. Wood declined to disclose the project’s budget. Bay Area highrise projects typically cost over $500,000 per unit to build and design.
By Roland Li – San Francisco Business Times, Nov 30, 2017
Every weekday, hundreds of thousands of riders pass through West Oakland’s BART station on their way to San Francisco. Only a handful get off.
Despite the station’s central location, the neighborhood doesn’t have many jobs outside of the hulking U.S. post office and the adjacent Port of Oakland. It’s primarily a residential area, with single-family Victorians now selling for over $1 million.
That may change. Two massive development plans could replace parking lots next to the BART station with housing and office towers, along with new shops and plazas. Another half-dozen midrise housing projects are under construction or approved in West Oakland. It’s the boldest vision to transform the area since the 1950s and 1960s, when government-sponsored “urban renewal” devastated what was once a vibrant retail strip on the very same blocks. Homes, jazz clubs and restaurants were demolished to make way for BART, the post office and a new highway that bisected an established community.
The projects are still years away from becoming reality, but they’re evidence that developers are focusing on West Oakland as a place for high-density housing and office space, and that the city supports this push. Developers say the neighborhood’s central location in the BART system and abundance of empty lots make it a strong candidate for dense growth. The proposals are moving forward as Oakland’s rents have hit record highs of $1,930 per month for a one-bedroom and over $50 per square foot for Class A office space, according to brokerage data. That makes new highrise construction more financially viable, developers say.
By Antoinette Siu – San Francisco Business Times, Nov 29, 2017
Developer The Pacific Cos. is proposing 200 affordable housing units and a charter school in the Oakland hills.
A shuttered Ace Hardware store currently sits on the site at Foothill Boulevard and 68th Avenue where Pacific Cos. wants to build the housing and a K-8 charter school for 550 students. Eagle, Idaho-based TPC has developed seven other charter schools throughout Arizona, California, Minnesota and Texas. TPC subsidiary Strategic Growth Partners is led by former Aspire Public SchoolsCEO James Wilcox.
TPC has completed more than 150 multifamily and charter school projects in the West, many of them in California. Mike Kelley, business developer at TPC, said the company is still identifying the tenant for the charter school. It’s possible two of Aspire’s current schools in the area will consolidate and move to the new space, he added.
The company just proposed a similar project with housing and a charter school in San Jose. It also sold an apartment community at 955 South First St. in San Jose earlier this year and built workforce housing at the Mayfair Court Apartments at 65 McCreery Ave. in San Jose.
The Oakland development would be 100 percent affordable: All units will have a rent cap at 60 percent of the area median income. Rents would be limited to $1,174 for a one-bedroom, $1,408 for a two-bedroom and $1,627 for a three-bedroom.
While still in the early stages, Oakland City Council member Desley Brookswelcomes the additional housing.
“There are no elevations, engineering or construction drawings; and there are approvals that still need to be obtained. That said, as with many jurisdictions, Oakland needs more housing,” Brooks said.
Construction would take about 16 months, said Kelley. Developing a school alongside housing has its advantages, he said. “By doing this co-location model, we get affordable housing. It’s very difficult to find housing for families and for teachers to live where they work,” Kelley said.
It’s also easier to finance building both at the same time, he said, without having to ask for a lot of subsidies from the city of Oakland. “By bringing them together, leveraging the different sources individually, it allows for something like this to happen,” Kelley said.