West Oakland: the Intervention of Hope

Lochlan Sinclair reviews efforts to revitalise social housing in West Oakland, California.

October 1, 2007

West Oakland was once recognised as a vibrant and culturally rich suburb of California’s Bay Area. Defined by its clusters of jazz venues, a local community employed by local business, an African-American political stronghold and endless streets of majestic Bay Area style houses; West Oakland had characteristics that were, once upon a time, distinct and proud. Today, however, this character is all but lost. It has become one of the poorest suburbs in the area and is recognised by its high crime rates and unemployment levels. Failed public housing projects, a loss of industry, bad planning, and multiple earthquakes have been significantly damaging to the area. West Oakland has now become dilapidated and physically disconnected from the greater urban fabric of Oakland City and the not-so-far-away San Francisco. Many attempts have been made to address the necessity for new public housing provision, but as history has revealed, these schemes have failed to achieve their initial aspirations, and have done little to repair the growing social problems of the suburb. New methods and techniques are still being trialled to improve West Oakland and revitalise the area.

One of the latest strategies in alleviating the housing crisis is a new contemporary version of ‘social housing’ aimed at integrating and rejuvenating West Oakland. Contemporary ‘Social Housing’ is now labelled as ‘Affordable Housing’ and the American government has undertaken major policy reforms to try to advance from the previously disastrous large scale housing estates. Since 1996, the control of American Public Housing has been decentralised from an overseeing federal body to smaller local housing associations. These associations are responsible for engaging with their own community and instigating affordable housing schemes in their area. Called HOPE VI, this new housing policy supports the demolition of existing dilapidated housing schemes, replacing these models with mixed-use, integrated schemes with provision for residents of varying income levels in an effort to encourage eventual home ownership. Funds are distributed to the associations who spend money on the construction or management of affordable housing. In West Oakland, the Bridge Housing Association used HOPE VI funds to build the ‘Mandela Gateway Transit Village.’ The Mandela Gateway project in West Oakland was hoped to be a key catalyst in the new re-development plan for West Oakland. It sits on a five-acre site consisting of 168 both rental and occupant-owned dwelling units and incorporates a ground floor of commercial retail space. The demolition of an existing public housing project and the purchase of the neighbouring car park – which came about as a result of a $1 million negotiation with the Californian Transport Authority – were the preliminary steps taken by the council to get the project underway. Bridge Housing Association raised the additional funds and managed the construction of the project. As part of this strategy, tenants now pay rent to Bridge. Both the residents’ rental fees and the sale of the partially subsidized apartments contribute to covering the cost of the Mandela Gateway project, and the funding of future Bridge developments. Within the current context of West Oakland, the Mandela Gateway Housing project is hoped to be a great opportunity in introducing a cohesive and safe community.

Like all the previous West Oakland social housing schemes, Mandela Gateway was initially seen as a great success and was showered with praise. However, two years on and multiple awards later, doubts about Mandela Gateway’s contribution to social unity are beginning to emerge. West Oakland remains a fractured community, and the immediate area around the development has not altered in any shape or form. The living units in the development are full, however, in the broader context, West Oakland as a suburb is yet to reap the rewards. Why is it then that such a supposedly diverse and considered addition, such as Mandela Gateway, fails to connect with the surrounding community? The first criticism of the project lies in the policy restructuring of the new HOPE VI housing funds. In the case of Mandela Gateway, Bridge Housing Association obtained US$10.5 million in 1999 to construct a suitable housing project in West Oakland. This money was allocated with a five-year expiry date and if not spent, would be withdrawn. Bridge then became entirely responsible for the project’s construction and the gathering of extra funds from other private sources. The subsequent pressure on Bridge to deliver a scheme that would be economically efficient, and could be completed in a short time frame became vital in determining the project’s success. Essentially, the now decentralized control of HOPE VI funds has allowed the government to distance itself from these financial pressures and is no longer responsible for the provision and management of public housing. Albeit an effective means in achieving swiftly built projects, it places too much of a strain onto local housing associations, such as Bridge. As in the case of Mandela Gateway, the success of this project is now directly tied to the success of Bridge as an organisation. This accountability has meant that Bridge has become more than cautious about their residents’ capacity to deliver on rental payments – the result being that a considered criterion of resident selection has jeopardized the ability of public housing to reach the neediest people. According to Jesse Wu, project director of Bridge, all tenants are working and undergo thorough background checks into their financial history in order to ensure they are able to pay the monthly rent. Potential renters may also have to consent to periodic income, credit, and background checks. If the selection criterion is not met, tenancy is denied.

Restrictions which include income caps, credit checks, criminal record checks and previous housing references have become necessary and perhaps too extensive to include those most needy of housing. If deemed unsuccessful, the Mandela Gateway project would make any future funding both from the government and other private contributors very difficult to obtain. This raises questions about Mandela Gateway’s accomplishments as a social housing project; Is it in fact improving the standard of living for the existing West Oakland residents, or rather, is it just housing people from outside the community with the means and resources to comply?

In addition to the rental units, Mandela Gateway also provides a small number of units that can be purchased from Bridge at a subsidised rate. In order to purchase an ‘owneroccupied’ unit, the buyer must fall within the minimum and maximum wage bracket of $40,000 – $80,000 Area Median Income (AMI). To deter potential market rate investors, units in Mandela Gateway must comply with government controls that restrict their resale at full market rate; the intention being that these homeowner units grant low-income earners the equity required to enter the private market, which in turn lessens the stress on the affordable housing system. Besides the initial criticism of the realistic affordability of these units, these imposed restrictions do not aid lower income families. Value increases in ‘affordable housing’ property is judged relative to the area’s average wage. Recent rises in Bay Area property values, however, show that this comparison in inequitable. Of course, restrictions are necessary to avert private investors, but they are now looked upon as a double-edged sword. Owners of these affordable units do not gain ownership of a property with sufficient value to compete with or enter the private market. So again, does Mandela Gateway really offer any potential outlet of property equity to the community of West Oakland? Or rather, does establishing a market for ‘affordable housing’ only perpetuate the class distinction that currently exists. The system in place does have its merits, yet in the context of revitalising the adjacent private community, it appears to have failed in its initial goal.

While Mandela Gateway is largely seen as a success in terms of housing a specific group of people, the retail areas tell a different story; the 20,000 square feet of commercial retail space still remains empty. Bridge wants to give priority to local businesses, but they have failed to develop a business plan with proper financial incentive to do so. In other words, a local convenience store is ineligible to lease a rental space unless it has a business management plan including expected growth over the next 3 financial years. Bridge reports that if local businesses do not lease space soon, they will start advertising for larger, commercial chains, and have only recently announced the lease of one site to Walgreen’s Pharmacy, part of the Wal-Mart chain. Bridge has conceded to the lease agreement because of the necessity to maintain a profit from the rental space – mostly to pay for the running and management of Mandela Gateway and any other future projects overseen by Bridge. Therefore, if the commercial space is so heavily dependent on maintaining profit, how can small local businesses have the ability to convince Bridge that they are worthy of leasing prime retail space?

The inaccessibility of rental property for small local businesses exacerbates the problems of the local economy of West Oakland and again hinders the chances of the area revitalising.

In review, Mandela Gateway has undoubtedly provided housing for a social demographic struggling to obtain suitable and affordable housing. Considering the very tight restrictions and budget, Bridge Housing Association has managed to construct a relatively successful project. However, when analysing the broader social implications of Mandela Gateway — that in the long term, are of greater significance — the project unsurprisingly fails. Once again, the Mandela Gateway, like its predecessors, fails to engage with the surrounding community. Instead the project is now introducing a new, middle-class demographic to the area and in some way, encourages area gentrification. In the case of Mandela Gateway, the dependence on residents’ financial stability is the primary reason for the scheme’s social failure and can be traced all the way back to the outset of funds for its conception. The policy of HOPE VI funding schemes has forced public housing to act like and engage with market housing forces. Housing associations like Bridge are being forced to compete for funds and attract decent, economically stable residents, and thus simply cannot fulfil their role of housing provision for all in need. The government’s role in providing and maintaining housing for those who have been excluded from the private market – indiscriminately of their past, income, or social standing – is not being executed. Decentralization of funds has distanced the government from housing provision and seems to be decentralizing the blame as well. While Bridge Housing Association continues to build ‘Affordable Housing’ schemes, the character of West Oakland continues to decay, the Bay Area maintains one of the highest mean property prices in the USA and homelessness is greater in no other state than sunny California.

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