Unbridled profiteering, future political careers, and environmental loopholes foster public policy in Oakland. While headlines decry budgetary woes, and residents reel under deficit spending, the truth lurks beneath, unreported and festering. Oakland’s budget for smart growth and affordable housing development was generously augmented in FY2003. Mayor Brown and the Oakland Redevelopment Agency – doubling as the City Council – set aside millions to entice investment bankers, real estate moguls, and large-scale national development conglomerates to capitalize on an open invitation to exploit this unprecedented opportunity to build with public funding, without environmental constraints, without permitting restrictions, and without limitations on the amount of new construction approval.

Held hostage by a self-serving governing body with conflicting public and private interests, Oakland’s residents will live with Jerry Brown’s despotically imposed legacy long after the politicians, developers and investment bankers are finished speculating, making their fortunes, buying their own homes in the hills or pristine countryside, warehousing the poor within the densely crowded and polluted urban core, and moving on from Oakland to their next capital ventures.

Oakland’s high rate of poverty, accumulation of industrial waste, and proximity to San Francisco prompted Jerry Brown to turn the city into California’s smart growth pilot. To expedite his 10K plan, Brown collaborated with his California legislative allies – dating from his time as governor – to amend the California Environmental Quality Act (CEQA). Bills AB 436 and SB 1925 were authored and lobbied for by the Mayor himself. State legislation specifically names Oakland neighborhoods by street boundaries, and was enacted in "urgency" to "help Oakland". The impact is greatest on affordable or inclusionary housing with at least 10% of the units set aside as affordable.

Targeted neighborhoods are legally silenced from raising CEQA’s cumulative impacts defense to fight development that will result in excessive crowding, traffic congestion, noise pollution and other similar quality of life degradation. Infill sites are "categorically exempt" from environmental assessment. This relieves developers of the expense, and their public obligation to clean hazardous wastes before construction. Plastic liners and concrete caps hide contaminants from above while below they continue leaching into the groundwater that eventually makes it way into California’s drinking water.

Stripped environmental protections for urban dwellers negate assertions that smart growth will make Oakland livable and sustainable into the future. City spending decisions belie arguments of compassionate concern affordable housing developers and politicians use to get multibillion dollar bond measures passed, to divert public transit funds from the provision of adequate and affordable public transportation into transit village construction, to reward developers for building excessively dense residential projects, and to sequester for private developers, U.S. Housing and Urban Development grant monies to finance neighborhood demolitions, low-income landowner dispossession, urban redevelopment and the intentional gentrification of selected low-income city neighborhoods.

The single general funds department not cut in FY 2003 was the Cultural Arts and Marketing (CAM) department. It pays for Jerry’s public image enhancement and damage control, the media veil hiding redevelopment’s seedy underbelly and marketing to promote unlimited development in the name of "smart growth" and "affordable housing". CAM funds the campaign to give outsiders a perception of safety, so they will not be afraid to move to Oakland, do business, and walk the streets of a city that laid-off police officers, closed a fire station, and had a record number of murders last year. So far in 2004, there has been a murder nearly every other day. At this pace, Mayor Brown’s final year in office will culminate in another record murder rate; the third year in a row Oakland will claim this dubious distinction.

In FY 2003, Jerry Brown and the ORA dedicated $86.7 million in taxpayers’ money to transform the Central Business Redevelopment District. This is one of nine districts slated for massive development giveaways; money that has not been, is not now, and will not be available for resident necessities or the infrastructural needs of the city. In 2003 and continuing through subsequent rounds of cuts, Oakland slashed funds for indigent health care services, eliminated most mental health care for the poor, reduced public transportation routes and schedule frequency, hiked transit fares, closed thirteen public schools, reduced teachers’ salaries, laid-off police officers, cut fire services, curtailed library hours, enforced a one-day-a-month municipal employee unpaid furlough, and increased fines and fees for residents.

No money was allocated to upgrade Oakland’s seventy-year-old sewer system. Officials give no thought to the impact additional human waste loads will have on a dilapidating sewage system designed to serve a population a fraction of that currently residing in Oakland, much less the number of people 10K hopes to attract. If all of the 20,000+ approved units to date are constructed and filled, the population in the Oakland flatlands could increase by between 35,000 and 80,000 new residents.

One stated smart growth objective is to encourage greater use of public transportation and to decrease dependency on private automobiles. Variances on the number of required parking spaces new affordable housing projects provide, extreme residential project densities, and geographically confined clusters of high density, multifamily or multiuse projects located within a half mile of transit hubs, are means the Planning Department uses to decrease available urban parking. Constructing these projects over central city parking lots to eliminate them makes parking even scarcer.

Ironically, The Mayor is spending copious amounts of money, compliments of the fully funded Cultural Arts and Marketing Department, to air commercials during prime time on cable TV. The Mayor begs the audience to buy their cars in Oakland in order to replenish its depleted coffers. Parking tickets are $5 more than they were in 2002, and towing bailouts are $250, up from $65. The City instituted a new expired meter policy in 2003. When a driver approaches his or her vehicle as the ticket is being written, issuance is now mandatory rather than at the discretion of the ticketing officer. Indeed, buying a car in Oakland will increase revenue, particularly if the new car owner happens to be an Oakland resident.

Five years into Jerry Brown’s 10K agenda, and after adding 8,000 more units – including a surplus of over 1,000 affordable units – in excess of Oakland’s recommended Association of Bay Area Governments (ABAG) housing element share, the city faces a housing glut that may prove to be the worst in its history. Rents plummeted an average of 25% after the height of California’s latest silicon gold rush. Nearly every multifamily residential building in Oakland has "For Rent", "For Lease", "Vacancy" "Condos for Sale", and "Space Available" signs conspicuously posted. Oblivious to reality, 10K rushes forward. Developers continue to receive expedited permitting, density bonuses, low interest loans, tax credits, "categorical exemptions", and grants for building still more housing.

An important smart growth component is the "smart city", packaged and marketed as a unique "brand identity". CAM provides funding for the Oakland brand – "There", that Jerry Brown is promoting. Nationwide, cities are competing to attract as residents the top 20% of the technical professional class with the highest education levels, and the most lucrative salaries: According to the "smart city" theory, this is the way cities must prepare for the future since the availability of inexpensive labor and raw materials is no longer beneficial to the urban economy. In other words, a "smart city" is a gentrified city.

The flip side of this coveted class is the emerging underclass – the growing segment of the population that is chronically unemployed, underemployed, or relegated to work that constricts income levels to bare survival. Too poor to be consumers, or to contribute to the city’s tax base, their presence is ignored. The exception is when their burgeoning ranks can be used as a marketing tool to portray a housing crisis, and public sympathy can be exploited to generate an outpouring of dedicated money for the enrichment of public officials and their developer friends. Warehousing Oakland’s low-income residents in small, densely clustered units, perched over hazardous waste sites, and with scarce open space, is the method city planners, politicians, developers, and real estate investment bankers are using to keep the poor housed in a city that is intentionally gentrifying at record pace. The hidden face of smart growth and affordable housing development is double-sided. The aforementioned is one.

The other is the volume of corporate welfare being handed out to affordable housing developers from the U.S. Department of Housing and Urban Development (HUD), State bond monies, such as Proposition 46, the Metropolitan Transit Commission, Association of Bay Area Governments (ABAG), Oakland’s Community and Economic Development Agency (CEDA), private foundation grants, and financing from Fannie Mae, Wells Fargo, Washington Mutual and other investment banking sources.

Publicly funded affordable housing development is considerably more lucrative to build and poses fewer financial risks than market rate development, thanks to HUD’s encouragement of public/private partnerships between for profit and nonprofit developers. Armed with the "affordable housing" and "nonprofit" labels, it is easy to take advantage of taxpayer-funded programs and private foundation grants. A public/private partnership gives the for profit developer nonprofit benefits through the business association.

Developers receive billions of dollars in grants and low interest loans from HUD to go into "blighted" or "underutilized" neighborhoods, secure large tracts, and level the homes in preparation for redevelopment. Oakland facilitates land banking of acreage targeted for redevelopment by its questionable and liberal use of eminent domain.

Gentrification encourages the land banking and speculation that drives the cost of inner city land and urban housing up. Publicly financed housing that is more costly to build than privately funded market rate housing is not truly affordable. Taxpayers pick up the extra expense pay by paying additional subsidies, and doing without essential services to fund these projects. Developers save money and maximize profitability on affordable housing by cutting corners, becoming property managers after the structures are built, decreasing unit size, maximizing bulk and density, and eliminating open space so the poor receive little in shelter value. Because of HUD’s reformulated voucher structure, these "affordable" units are more costly per month than comparable housing in the neighborhood. This remains hidden since affordable housing landlords advertise only the portion of the rent that is unsubsidized by public money – normally one-third of the unit’s actual rent.

Nonprofit, affordable housing developers who own large real estate portfolios, regularly partner with national for profit real estate development and property management conglomerates, speculatively land bank, pad expenses to maximize public financing, and balk at the cost of environmental assessment and remediation, do not have the interests of the low income communities they purport to serve at heart. Exposing these developers as the charlatans they are is critical to the financial, cultural, physical and social health of the collective American public. They use smoke and mirrors in their manipulation of public sympathies, they pay off their politician friends for favors, cry poverty to maximize their publicly funded bankrolls, jeopardize funding for programs that actually do improve the lives of the poor, and tarnish the reputations of nonprofits with integrity by inappropriately using nonprofit status to get rich.

This is an abstract for a much longer article with extensive references and footnoting. For those interested in reading the details, and viewing the documentation, please email me.

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