Berkeley, a city known for its molasses-like approval of multi-unit developments, signed off on two affordable housing projects in December, including one that will be its largest-ever permanent housing project for homeless and low-income residents.

The city notified Bridge Housing and its partner, Berkeley Food & Housing Project (BFHP), that their application for the $110 million Berkeley Way project was approved under state law SB 35, which streamlines the development process and requires no additional hearings be held.

The controversial law, which many city officials, including Mayor Jesse Arreguín, thought usurped local control, went into effect in 2018. The law allows projects providing 50% of residential units at affordable rents (80% of area median income) to bypass much of the usual red tape before breaking ground. It requires cities to approve compliant projects over the counter within 90 days of submittal. The application was submitted in late October and the city approved the project in less than 60 days.

“This is something I’ve been working on for more than 10 years now,” said Mayor Jesse Arreguín. “We have a growing crisis of homelessness, especially in the downtown area. It’s really an exciting project.”

Located at 2012 Berkeley Way, the six-story complex is actually composed of two separate buildings: One will feature 89 rental units affordable at 50%-60% of the area median income. The other will offer 53 permanent supportive housing units for people who were previously homeless and 44 short-term shelter beds, 12 of which will be for veterans. The project team aims to break ground by the end of the year or the beginning of 2020 and expects construction to take two years.A city-owned parking lot with 112 stalls currently operates at the site. There will be no parking after the rebuild.

Ninety-nine percent of the units will be affordable to households earning 60% of the region’s AMI, according to the SB 35 application.

Funding, for what will be the city’s largest permanent affordable housing project ever, will come from various local, state and federal sources.

Arreguín said the city’s investment could decrease, but the council has set aside about $23.5 million, which constitutes its entire affordable housing fund. “It really depends on the ability to find other funding sources,” he said.

The project, which has been in the works for years, became more feasible after voters signed off on raising more money for affordable housing through local Measure O, which passed with more than 77% of the vote in November. The measure authorized Berkeley to sell $135 million in bonds for affordable housing. Voters also passed a companion measure, P, which will use funds generated from increasing the property transfer tax from 1.5% to 2.5% on the top third of properties sold to pay for homeless services.

Bridge Housing donated $35,000 to the campaign to fund the passage of measures O and P, according to city campaign election filings. Many other nonprofit and for-profit developers also contributed to the measures. Berkeley election law limits the amount individuals can donate to candidate campaigns to $250 but there is no limit on donations to measures. Real estate interests donated heavily to the campaign fighting  P.

Bridge will operate the affordable housing component, while BFHP will manage the homeless and veteran’s component. BFHP Executive Director Terrie Light said the building will accomplish a decades-old goal in consolidating services and housing for those in need in one spot. BFHP’s existing 32-bed men’s shelter, 12-bed veterans transitional housing program, agency cooking operations and community meal service will move into the new space.

“It’s a huge deal for the city of Berkeley,” she said. “Which is why they’re willing to fund it. It’s a huge piece of solving the problem (of creating housing for chronically homeless people with disabilities and providing them with wrap-around services to keep them housed). So they won’t have to go find them. We can go right to them in the building.”

The project will include a kitchen and dining area for residents and the BFHP daily community meal, which is open to the public. Light said she expects BFHP to have 15 to 20 staff members on site working on the first two floors.

The building will also house office space for Berkeley Mental Health and a small medical suite for Berkeley non-profit LifeLong Medical Care, as well as several conference-style rooms meant for residents to meet with social workers and case managers.

“We’ve been serving people out in the streets for decades, and we’ve always known we’ve needed something like this,” said Light, who has worked at BFHP since 1998. “It’s very exciting for all of us. It’s just too bad we have to wait two more years (until the project’s completion).”

Light’s organization had to move its men’s shelter out of the city-owned Veterans Memorial Building last year due to weather-related problems. The city deemed the building seismically unsafe as far back as 2005. The men’s shelter is now operating in conjunction with the women’s shelter on Dwight Way. BFHP has run into similar difficulties in its 48 years of operation, prompting Light to  comment that it has at times been “close to being homeless ourselves as an organization.”

BFHP is looking forward to having a permanent home for many of its operations, Light said.

Complications due to parking

Until last year, the Berkeley Way project included an underground parking garage that was scrapped after city staff considered more than a dozen ideas. Staff said, during a City Council meeting in September, that including any parking at all would make the project financially infeasible.

According to a city analysis from the fall, the cheapest parking option would have increased the budget by about $40 million and taken up to 25 housing units from the project: “The loss of the parking lot will result in a loss of approximately $665,000 per year for the City of Berkeley, but is preferable to all considered alternatives, which result in even greater revenue losses.” The city noted that it would have cost between $12 million and $21 million to build the garage, which would also have increased project liability. Staff said in September that trying to figure out a parking solution had held up the project by at least a year.

Neighbors and local businesses both expressed significant concern about the loss of parking. The city said it would pursue several ideas to redesign parking in the neighborhood to increase the capacity.

“We spent a lot of time trying to replace the parking at the site,” said Arreguin. “At the end of the day, given the site’s constraints and our desire not to add additional costs, we decided not to (build the garage).”

The city opened the nearby $40 million, 720-car Center Street garage in November, which Arreguin said allowed the city to forego more parking capacity at the Berkeley Way site, which is only a couple blocks from BART.

“Building housing close to public transit is the environmentally responsible thing to do,” Arreguin said by phone, while riding BART.

The next step is for BFHP and Bridge to apply for three grants in January and February, said city spokesman Matthai Chakko.

1601 Oxford St. slated for a streamlined process, too

The city also approved the SB 35 application for 1601 Oxford St. at the corner of Cedar Street on property owned by All Souls Episcopal Parish. though an appeal by neighbors is pending.

Satellite Affordable Housing Associates, which donated $5,000 to the campaign to support measures O and P, will provide 37 residential units, including 34 affordable units for seniors. The City Council set aside $6 million for the development in October. Like Berkeley Way, the approval process for the Oxford Street project would be streamlined via SB 35.

The approval of the Berkeley Way project using authorization from SB 35 is a first for Berkeley, a city notorious for its slow approvals of multi-family dwellings. In September, Berkeley rejected a developer’s SB 35 application to build a 260-unit housing complex at 1900 Fourth St. even though 50% of those units would have been designated as affordable. The project on the old Spenger’s parking lot would have been built on property the city has landmarked as an ancient Ohlone shellmound.

City staff argued that invoking SB 35 for 1900 Fourth St. would have violated the state constitution, which allows cities to protect landmarked areas. Even without the constitutional issue, the project would not comply with local rules around affordability and traffic, and could demolish a historic structure, making it ineligible for the state law, the city alleged.

The owners of the 2.2-acre parcel, Ruegg & Ellsworth and the Frank Spenger Company, have sued Berkeley over the decision.

Berkeleyside reporters Emilie Raguso and Frances Dinkelspiel contributed to this story.

Update 1/18: This article has been updated to clarify the appeal filed by neighbors on the Oxford Street project. Technically, there was an appeal, according to a city spokesman. However, SB35’s “ministerial approval” means that there’s no use permit for the project. So the appeal is no longer viable and the city will not take any further action on the appeal.

Update 5:00 p.m.: This article has been corrected to say that BFHP’s men shelter, but not its headquarters, moved from the Veterans Memorial Building to the Dwight Way building. Also, real estate interests donated to defeat Measure P, not Measure O.