EXHIBIT 1

bae urban economics

CITY OF ALAMEDA RENT STUDY October 27, 2015
TABLE OF CONTENTS

Introduction 4 Renter Households by Length of Residency 18

Overview of Alameda Demographic Trends 6 Alameda Rental Housing Supply 19

Population Growth 7 Mix of Renter-Occupied Housing 20

Average Household Size 8 Change in Alameda Renter-Occupied Units 21

Profile of Alameda Households 9 Ownership of Rental Units in Alameda 22

Total Housing Unit Composition by Tenure 10 Ownership of Large Rental Properties in 23

Alameda
Household Tenure 11
Rental Vacancy Trends 24
Median Household Income by Tenure 12
Median Rents 25
Change in Median Household Income by Tenure 13
Recent Market-Rate Rent Trends (50+ Units) 26
Renter Households by Income 14
Comparison to Other Cities for 50+ Units 27
Renter Households by Type 15
Building Permit Trends 28
Renter Households by Income and Household 16
Type Multifamily Building Permits 29

Renter Households by Age 17 Subsidized Affordable Housing 30

2
TABLE OF CONTENTS, CONTINUED

Alameda Units Potentially Subject to Rent 31

Stabilization
Airbnb Rental Activity in Alameda 32

Affordable Rental Housing Need 33

Overview of Affordable Rental Housing Need 34

Affordable Rental Housing Need 35

Affordable Rental Housing Need by Household 36

Type
Summary of Rental Housing in Alameda 37

Policy Options 39

Overview of Potential Policies 40

Waiver of Local Transfer Taxes 41

Refinancing with Low Income Housing Tax 42

Credits
Direct Subsidy/Housing Trust Fund 44

3
INTRODUCTION

In June 2015, the City of Alameda engaged BAE Report Purpose

Urban Economics to conduct the Alameda Rent
This report summarizes an analysis of available
Study. For several years, local elected officials,
data to describe Alameda’s renter households,
residents, and business owners have been
rental units, and the affordability of rental
concerned that Alameda is experiencing a strong
housing for Alameda residents. The report also
rental housing market recovery after the Great
assesses policy options for preserving and
Recession of 2008-2012, leading to rapidly rising
expanding the City’s supply of affordable housing.
rents that may be impacting long-time Alameda
residents. Key findings are summarized and graphed in this
report.
As the City prepared its most recent 2015-2023
Housing Element Update, these concerns grew,
leading to discussions of ways that City housing
policies could further address this issue. A
citizen-led series of community discussions, held
during 2014, led to a recent ordinance to
strengthen the City’s Rent Review Advisory
Committee (RRAC).

4
INTRODUCTION

Data Sources sources differ, certain data points may differ

slightly between sections of this report that rely
The report utilizes numerous data sources
on different data sources. Most notably, the
including the US decennial Census (for 2000 and
number of renter households in Alameda is
2010), the American Community Survey (ACS) for
reported to total 16,518 according to 2011-2013
2011-2013 (the 3-year sample), the California
ACS data and 15,275 according to 2008-2012
Department of Finance, real ANSWERS (a private
ACS data used for HUD tabulations.
data vendor that tracks rents for 50+ unit rental
projects), and special tabulations from the US This report compares data for the City of
Department of Housing and Urban Development Alameda, with Oakland, Alameda County, and the
(HUD) on housing needs that are based on ACS nine-county Bay Area region (Alameda, Contra
data collected between 2008 and 2012. Costa, San Francisco, Marin, Solano, Sonoma,
San Mateo, and Santa Clara Counties). Oakland
The most current data are used where possible;
information is provided since Alameda is adjacent
however, some of the data shown in this report,
to Oakland, and affected by its housing market.
such as ACS data and HUD housing needs
The County and regional data are provided for
tabulations, are published a year or more after
broader comparison purposes, as many City of
the data are collected, and therefore are not
Alameda trends are also being experienced
available for the current year. To the extent that
across the larger areas’ housing markets.
the time periods captured by various data
5
OVERVIEW OF ALAMEDA
DEMOGRAPHIC TRENDS
6
POPULATION GROWTH 2000 - 2015

Alameda has grown modestly compared to the City of Alameda Population

County and region in the past 15 years. 2000 - 2015
80,000
76,638
73,812
The City of Alameda has seen relatively modest 75,000
72,259
70,000
population growth in the past 15 years,
65,000
increasing from 72,259 residents in 2000, to
60,000
76,638 in 2015. This means that an estimated 55,000
4,379 residents were added during the period. 50,000
2000 2010 2015

This translates to 6.1% growth during this period Comparison of Population Growth
in Alameda, compared to a more sluggish 2.8% 2000-2015
growth for Oakland, but a robust 10.4% 12.0%
10.4% 10.7%
population increase for the County, and a 10.8% 10.0%

increase for the Bay Area. 8.0%

6.1%
6.0%
4.0%
2.8%
2.0%
0.0%
City of Alameda City of Oakland Alameda County Bay Area

Source: California Department of Finance, BAE 2015.

7
AVERAGE HOUSEHOLD SIZE
2000 - 2015

Alameda’s average household size has grown to Comparison of Average Household Sizes
accommodate new population. 2000 - 2015
2.90
Alameda’s average household size grew between 2.80
2000 and 2015, accommodating the City’s 2.80
2.75
increased population within the almost flat 2.71 2.69
2.70
number of households.
2.60
2.60 2.58
Alameda’s average household size in 2015, at
2.49, is significantly smaller than for Oakland, the 2.50 2.49

County, or the Bay Area overall.

2.40
2.35
In Oakland, with more sluggish population growth
but more robust household growth than Alameda, 2.30

average household size declined. In the County

2.20
and the region, robust population growth, with
slightly less robust household growth, resulted in 2.10
City of Alameda City of Oakland Alameda County Bay Area
a rise in average household size to accommodate
2000 2015
the increased residents.

Source: California Department of Finance, BAE 2015.

8
PROFILE OF ALAMEDA
RENTER HOUSEHOLDS
9
TOTAL HOUSING UNIT COMPOSITION
BY TENURE, 2013

Approximately 16,793 units, or more than 53% of Housing Units by Tenure, Alameda, 2013
Alameda’s total housing stock, are rental units. 35,000

In 2013, Alameda had a total of 31,575 housing

30,000
units (both occupied and vacant), including
13,585 units classified as owner housing (i.e.,
25,000 13,585
both occupied by owners and available for sale),
and 16,793 units classified as rental (i.e., renter-
occupied and vacant rental units). 20,000
Owner
Rental
Alameda also had 1,197 units classified as
15,000 Other/NA
Other/NA, including units held for seasonal use
or held vacant for other purposes.
10,000 16,793

5,000

- 1,197
2013

Sources: ACS, 2011-2013; BAE, 2015.

10
HOUSEHOLD TENURE, 2013

Alameda has a high proportion of renter Tenure Rates for Occupied Units, 2013
households compared to the County and the
region.
Bay Area 45.1% 54.9%
Alameda has a relatively high concentration of
renter households compared to the County and
the Bay Area. Of Alameda’s total households,
Alameda County 48.1% 51.9%
55% were renters in 2013, and just under 45%
were owners. Overall in Alameda County and the
Bay Area, the proportion of renter households is
substantially lower, at 48% and 45% respectively. Oakland 59.8% 40.2%
This means both the County and the Bay Area
have correspondingly higher owner household
proportions, at 52% and 55% respectively.
City of Alameda 55.3% 44.7%

For Oakland, the renter proportion of total

households is higher than Alameda, at almost 0% 20% 40% 60% 80% 100%
60%. Renter Households Owner Households

Sources: US Census, 2000; ACS, 2013; BAE, 2015.

11
MEDIAN HOUSEHOLD INCOME BY
TENURE, 2013

Alameda renter households earn less than half Median Household Income by Tenure
the income of Alameda owner households. 2013
$140,000
The City of Alameda’s median annual renter
household income, at just under $55,000 in $120,000

2013, was slightly less than half of the median

$114,820

$107,843
for owner households, at almost $115,000. $100,000

$105,265
$96,329
Households earning $55,000 can afford to pay
$80,000
approximately $1,370 per month in rent,
including utilities.
$60,000

This same pattern - with lower renter household

$54,773

$54,027
$46,369
$40,000
incomes than owner household incomes – was

$36,963
also true for Oakland, the County, and the Bay
$20,000
Area. Compared to other areas, Alameda’s renter
households are more affluent; at just under $0
$56,000, Alameda’s annual renter household Alameda Oakland Alameda
County
Bay Area

income far surpassed Oakland’s $38,000 and Renter Owner

the County’s $47,000 median in 2013.
Sources: ACS, 2013; BAE, 2015.

12
CHANGE IN MEDIAN HOUSEHOLD
INCOME BY TENURE, 2000 – 2013

Renter household incomes have risen less than Percent Change in Median HH Income by
owner household incomes in recent years. Tenure, 2000-2013
60.0%
The median income for Alameda renter
households increased by 29% between 2000 and
50.0%

51.9%
2013 (on an uninflated basis). This was larger

50.6%
than the increase in median renter household
40.0%
incomes in Oakland, Alameda County, and the

39.7%
Bay Area, but less than the rate of inflation (35%

36.1%
between 2000 and 2013). 30.0%

29.2%

26.2%
During the same period, self-reported gross rents

23.9%
20.0%

21.1%
increased by 54% in Alameda, significantly more
than renter household incomes. Rental rate
10.0%
trends are discussed in more detail in a later
section of this report.
0.0%
City of Alameda City of Oakland Alameda County Bay Area
Meanwhile, owner household incomes increased
Renters Owners
by 52% between 2000 and 2013.
Sources: ACS, 2013; BAE, 2015.

13
RENTER HOUSEHOLDS BY INCOME,
2013

Approximately 25 % of Alameda renter Household Income Distribution for

households earned less than $25,000 in 2013. Alameda Renter Households 2013
100%
Alameda’s renter households are distributed 1,473
90% $150,000+
across the income spectrum.
1,857
80% $100,000-$149,999
In 2013, a total of 4,109 Alameda renter
households earned less than $25,000 (equating 70% 3,032
$75,000-$99,999
to nearly 25% of all renter households).
60%
$50,000-$74,999
At the other end of the income spectrum, 3,330 2,490
50%
Alameda renter households (just over 20% of
$35,000-$49,999
renter households), earned $100,000 or more in 40% 2,077

2013. $25,000-$34,999
30% 1,480

20% 1,302
$15,000-$24,999

10% 2,807 Less than $15,000

0%

Sources: ACS, 2013; BAE, 2015.

14
RENTER HOUSEHOLDS BY TYPE,
2013

One-third of Alameda renter households are Percent of Total Renter Households by

single people. Half of Alameda renter Type, 2013
households are families with related individuals. 100%

90%
In Alameda in 2013, just over 51% of all renter
households were comprised of related individuals 80%
46.8%
51.1% 52.6% 53.7%
(families). In addition, just over 34% were single- 70%
person households, and just under 15% were two
60%
or more unrelated individuals (for example,
roommates). 50%
13.8%
40% 14.8% 13.4% 13.5%
Alameda’s household composition was very
similar to the County and the region. Oakland’s 30%

composition varied slightly, with fewer renter 20% 39.4%

34.1% 34.0% 32.9%
households categorized as related (families), and
10%
substantially slightly more renter households
0%
containing single persons. City of Alameda City of Oakland Alameda County Bay Area

Single-Person HH Non-Family HH, 2+ Persons Family HH

Sources: ACS, 2013; BAE, 2015.

15
 RENTER HOUSEHOLDS BY INCOME
AND HOUSEHOLD TYPE, 2008-2012
Overall, 19% of renter households have extremely
low incomes. Approximately 28% of elderly Renter Household Income by Household
renter households have extremely low incomes. Type, 2008-2012
100%

Overall, 2,920 renter households (19% of total) 90%

80% 945 310
in Alameda had extremely low incomes in 2012. 3,210 3,485 7,955
70%
Another 2,205 renter households were 60%
95
375
considered very low income, and another 2,195 50%
40% 2,195
were considered low income. To the extent that 390 840
270 885
30%
these 7,320 renter households live in market-rate 20%
970 575 2,205

680
units, this group represents the population most 10% 940 140 1,160 2,920
affected by rapidly rising rents. Increases in 0%
Elderly HH Small Large All Other All
market-rate rents do not typically impact those (a) Family (b) Family (c)
with Section 8 Vouchers or living in units with Extremely Low Income Very Low Income
affordability restrictions (discussed in more detail Low Income Moderate Income
Notes:
on page 30). The data shown in this chart are based on ACS data collected continuously
between 2008 and 2012.
(a) Elderly family (two related persons with at least one person over age 62)
Just under 30% of all elderly renters were and elderly non-family households.
(b) Small family households are comprised of two to four people related by
extremely low income in 2012. birth, marriage, or adoption.
(c) Large family households are comprised of five or more people related by
Note: Figures shown here are based on ACS data collected in 2008 - 2012 (the most birth, marriage, or adoption.
recent period for which these tabulations are available) and therefore differ from 2011- Source: HUD, CHAS special tabulations from the American Community
Survey, 2008-2012; BAE, 2015. 16
2013 ACS data reported elsewhere in this report.
RENTER HOUSEHOLDS BY AGE
2000- 2013

The number of senior households in Alameda grew Alameda Renter Households by Age
from 1,868 to in 2000, to 3,057 in 2013 (an 2000 & 2013
18,000
increase of 1,189 senior households).
346
16,000
237 999 85 years and over
This data is about the age of “householder,” which 680
951 1,712
means the person who answered the survey. 14,000
75 to 84 years
1,435

In 2000, 1,868 of Alameda’s 15,740 renter 12,000 2,931

65 to 74 years
householders were age 65 or older (i.e., seniors). 3,065
10,000
This represented just under 12% of all renter 55 to 64 years
3,391
householders. The number of senior householders 8,000
grew over the next 13 years to 3,057 (19% of total 4,291 45 to 54 years

householders). This trend is typical, as the large baby 6,000

3,142 35 to 44 years
boomer age cohort began to enter the senior age
4,000
category by 2013. 25 to 34 years
4,213
2,000 3,603
There were 1,345 household over age 75 in Alameda 15 to 24 years
in 2013. These older seniors may face more difficulty -
868 394
than other households if they need to move from their 2000 2013

current homes. Sources: US Census, 2000; ACS, 2013; BAE, 2015.

17
RENTER HOUSEHOLDS BY LENGTH
OF RESIDENCY, 2013

Many Alameda renter households are long-time Renter Households’ Date of Last Move
residents of the community. 100%

These data shows the year that renter 90%

households moved to the location where they 80%

47.5%
lived when the data was collected (between 2011 55.1%
70% 59.5% 57.6%
and 2013).
60%
Almost 48% of Alameda’s renter households had
50%
moved to their current Alameda address in 2010
or later (one to three years before the date 40%
surveyed). At the other end of the spectrum, just 39.4%
30%
over 13% of Alameda renter households had 33.2%
31.3% 32.4%
moved into their current rental unit in 1999 or 20%

earlier (12 to 14 years before the date surveyed). 10%

13.1% 11.6% 10.1%
9.2%
The comparison locations had similar patterns, 0%
City of Alameda Oakland Alameda County Bay Area
although none of the other areas had as
1999 or earlier 2000 to 2009 2010 or later
proportionately many renter households in the
longtime category of 1999 or earlier. Note: The ACS data shown in this chart are from surveys conducted
between 2011 and 2013.
18
Sources: ACS, 2013; BAE, 2015.
ALAMEDA RENTAL
HOUSING SUPPLY
19
MIX OF RENTER-OCCUPIED
HOUSING, 2013

About 25% of Alameda’s 16,518 renter Renter-Occupied Housing Units by Type,

households live in single family homes. 2013
100.0%
One aspect of rental housing that is not typically
90.0%
discussed is that single family units are often
80.0%
renter-occupied. Even in a largely single family
community, numerous renter households are 70.0%
69.9% 67.0%
often present. In Alameda, of the 16,518 total 60.0%
75.1% 76.3%

renter households (i.e., occupied rental units) in

50.0%
2013, almost 25% lived in single family homes.
40.0%
This proportion was similar to Oakland, and lower
1.1%
than in the County (29%) and the Bay Area (32%). 30.0% 0.6%
0.4% 0.2%
20.0%
The single family rental market tends to be 29.4% 31.9%
24.5% 23.5%
10.0%
informal and not well documented, meaning that
rents for single family units are difficult to track 0.0%
City of City of Alameda Bay Area
and analyze. Under California State law, rent Alameda Oakland County
stabilization cannot be applied to single family Single-Family Mobile Home Multi-Family
homes.
Sources: ACS, 2013; BAE, 2015.
20
CHANGE IN ALAMEDA RENTER-
OCCUPIED HOUSING UNITS, 2000 -
2013
The mix of rental housing supply has changed Compostion of Alameda's Renter-
slightly since 2000, with more renter households Occupied Housing, 2000 & 2013
living in single family and small apartment
buildings and fewer in large complexes. 50+ Units
2,313
2,157

This chart shows the number of renter-occupied 2000

2,564
units in Alameda in 2000, and 2013, by size of 20-49 Units
2,550 2013
structure. The most predominant category, the 2-
to 4-unit structure, represented 28% of the

Size of Structure
3,264
5-19 Units
3,044
occupied rental housing stock in 2013. The next
most common category was the single family 4,023
2-4 Units
home (both attached – i.e. units that share at 4,648

least one wall with an adjacent unit – and

Single Family (Det + 3,552
detached – i.e. with no shared walls). Since Attached) 4,049
2000, both single family and small rental
buildings have increased their contribution to Other
19
70
Alameda’s rental housing stock, while the larger
structure categories all declined slightly over the - 2,000 4,000 6,000

period (due to loss of units or decrease in Note: 2000 total shown above differs slightly from 2000 total shown on
page 17 due to use of SF1 data on page 17 and SF3 data on chart above.
occupancy). Sources: US Census, 2000; ACS, 2013; BAE, 2015.
21
OWNERSHIP OF RENTAL UNITS IN
ALAMEDA

Most Alameda rental units are owned by locally Rental Property Owners' Place of
based landlords. Business By Unit Count, 2015
486
1,221
City of Alameda
For this report, a special tabulation of the
Alameda County,
addresses of Alameda’s rental property owners outside City of Alameda
3,812 7,681
was conducted. This data was drawn from the Other Bay Area (a)

Alameda County Assessor’s database for Other California,

Outside of Bay Area
residential properties, excluding those units with 2,383
Out of State
a homeowner exemption. All other units,
assumed to be rental units, were tabulated by the Rental Property Owners' Place of
owner’s address of record. As shown, just under Business By Property, 2015
240
City of Alameda
half of all units are owned by City of Alameda- 309

based landlords. Just 3% of units are owned by Alameda County,

632
outside City of Alameda
out-of-state landlords.
Other Bay Area (a)
2,549
622
A similar pattern holds when evaluated by Other California,
Outside of Bay Area
number of properties, with 59% of rental Out of State

properties owned by entities in Alameda. Note:

(a) Other Bay is comprised of Contra Costa, Marin, Napa, San Francisco,
San Mateo, Santa Clara, Solano, and Sonoma Counties.
Source: City of Alameda Assessor's Office; BAE, 2015 22
OWNERSHIP OF LARGE RENTAL
PROPERTIES IN ALAMEDA
50+ Unit Rental Property Owners' Place of
The owners of Alameda’s larger rental properties Business By Unit Count, 2015
are also mostly regionally based businesses.
307 City of Alameda
665 10%
Similar to the findings for all rental properties in 23% 260
9% Alameda County, outside
Alameda, most owners of larger (50+ units) rental City of Alameda
Other Bay Area
properties in Alameda are located within the Bay
Area. Alameda-based property owners own four Other California, Outside of
1,721 Bay Area
of the 20 50+ unit properties tracked by real 58%

ANSWERS, representing 10% of units in these

50+ Unit Rental Property Owners' Place
properties. Only two properties, which accounted
of Business By Property Count, 2015
for 23% of these units, were owned by entities
outside of the Bay Area, both of which were
2 City of Alameda
4
located within California. 10%
20%
Alameda County,
outside City of Alameda
2
10% Other Bay Area

Other California,
12
Outside of Bay Area
60%

Source: real ANSWERS; BAE, 2015.

23
RENTAL VACANCY TRENDS
2000-2013

Alameda has an extremely low vacancy rate, Rental Unit Vacancy Trends
indicating high demand for rental units. 2000 - 2013
9.0%
Alameda has had a consistently lower vacancy

8.5%
8.0%
rate than comparison jurisdictions. In 2000, all
geographies shown had a very low rental vacancy 7.0%
rate, with Alameda at 2.4%, similar to Oakland,

6.4%
6.0%
the County, and the Bay Area. By 2010, during

5.7%

5.6%
the Great Recession, all vacancy rates were 5.0%

5.4%
higher, with Alameda’s at 5.7%, similar to the Bay
4.0%
Area, but lower than Oakland’s 8.5% and the

3.8%
3.6%
County’s 6.4%. 3.0%

2.7%
2.5%
2.0%
2.4%

2.4%
In 2013, Alameda showed an extremely low 1.4%
vacancy rate, compared to a County rate of 3.8% 1.0%

1.4%
and a Bay Area rate of 3.6%. Analysts consider
0.0%
5.0% a healthy vacancy rate that provides 2000 2010 2013
adequate availability of units for renters while City of Alameda Oakland Alameda County Bay Area
maintaining a strong market for property owners.
Source: US Census 2000, 2010; ACS, 2011-2013; BAE, 2015
24
MEDIAN RENTS 2000 -2013

Alameda has relatively high rents, and these rose Median Gross Monthly Rent
rapidly by 54% between 2000 and 2013. (Self-Reported) 2000 - 2013
$1,600
One measure of rental rates is gross rent
$1,400
(including utilities) collected by the US Census. It

$1,459
$1,383

$1,335
is important to note that these data are self-

$1,325
$1,200

$1,234
reported, which may result in underestimating

$1,198

$1,117
$1,000
gross rent, and the data includes both market-

$991
$970
rate and subsidized units.

$899
$800

$852
Alameda’s median rent in 2000, at $899, was

$696
$600
higher than Oakland or the County, but lower than
$400
the Bay Area. This pattern held throughout the
period. Alameda’s median gross rent in 2013, $200
was reported at $1,383, a 54% increase from
$-
2000, outpacing the 29% increase in renter 2000 2010 2013
household income during this period. Based on
City of Alameda City of Oakland Alameda County Bay Area
these figures, the household income needed to
afford the median rent increased from $36,000 Source: US Census, 2000; ACS, 2010, ACS, 2013; BAE, 2015.

in 2000 to $55,300 in 2013.

25
RECENT MARKET-RATE RENT
TRENDS (50+ UNITS)

Rents for Alameda’s larger market-rate rental Alameda Market-Rate Rent & Occupancy for 50+
Unit Properties 2007-2015
properties have jumped 52% since 2011.
$2,500 97.3% 100%
95.7%
A more recent data source for just market-rate
86.9%
units in Alameda is real ANSWERS, a private data 90%

vendor which tracks rent and occupancy data for $2,000

80%

properties with 50 units or more. This vendor

70%
tracks 20 larger properties with a total of 2,953

Average Occupancy
$1,500

Average Rent
units in Alameda (approximately 17% of all 60%

Alameda rental units). 50%

$2,152
$1,000

These data show that Alameda’s market-rate unit 40%

$1,410 $1,412
rents, on average, remained flat between 2007 30%
$500
and 2011. From 2011 to 2015 (3rd quarter), rents
rose from $1,412 to $2,152 per month, a 52% 20%

jump in just over four years, far outpacing the rate $0 10%
2007 2011 2015
of inflation (less than 6% between 2011 and
2015). Occupancies correspondingly rose in Average Rent Trends Average Occupancy Rate
these properties, from just under 87% in 2007, to
Source: real ANSWERS; BAE, 2015.
over 97% by 3rd quarter of 2015.
26
COMPARISON TO OTHER CITIES FOR
50+ UNITS
Average Occupancy, Alameda County Cities, Q3 2015

98.9%

98.5%
Alameda has the 7th highest occupancy rates and

98.2%
100.0%

98.1%

97.4%

97.3%

97.3%
99.0%

97.0%

97.0%
8h highest rents of all cities in Alameda County 98.0%

96.1%

95.9%

95.4%

95.3%
for larger market-rate rental projects. 97.0%
96.0%
95.0%
Among larger rental properties (50+ units) 94.0%
Alameda had the 7th highest average occupancy 93.0%

rates and 8th highest average rent compared to

other cities in Alameda County (Q3 2015).

Due to the very low vacancy rates, Alameda’s Average Rent, Alameda County Cities, Q3 2015

$3,019
rental rates are likely to continue to rise to the

$2,846

$2,841
$3,500

$2,510

$2,439

$2,384

$2,317

$2,251
levels seen in the higher-cost cities.

$2,225
$3,000

$2,001

$1,910

$1,863

$1,580
$2,500
$2,000
$1,500
$1,000
$500
$0

Note: Data are for rental properties with 50 units or more.

Source: real ANSWERS; BAE, 2015.
27
BUILDING PERMIT TRENDS 2000-
2014

Alameda’s housing permits have not recovered to Alameda Building Permit Trends
pre-recession levels. Multifamily development 160 2000 - 2014
was very limited until 2013.
140
Alameda’s new housing construction, as reflected
by building permits, has been somewhat limited 120

over the past 15 years. From 2000 through

100
2014, permits were issued for a total of 776 new
residential units, including 664 single family and 80
112 multifamily units (almost exclusively
ownership units). Almost all of the multifamily 60

permits were issued in the past two years due to

40
the 2010 Density Bonus Ordinance and 2012
Multifamily Housing Overlay Zone. 20

The pattern of increased permits from 2002 0

through 2007, and then a dramatic decline from
2008 onward, reflects the Great Recession, Single Family Multifamily
experienced throughout the Bay Area.
Source: Census Building Permits, BAE, 2015
28
MULTIFAMILY BUILDING PERMITS,
2000 – YTD 2015

Alameda has built far fewer multifamily units Multifamily Units Permitted per 1,000
than other comparison areas since 2000. Residents,
January 2000 - June 2015
In order to evaluate the pace of new multifamily 30

Multifamily Units Permitted Per 1,000 residents in

unit construction in Alameda compared to other
25.00
locations, the ratio of new units permitted to the 25
population of each location in the base year of
20.96
2000, was calculated. 20
18.67

The chart shows this ratio. In Alameda, due to

Measure A, which prohibits new multifamily 15

construction, the city saw just 1.49 multifamily 2000

units developed per 1,000 residents for the 14+ 10

year period. In contrast, Oakland, the County,

and the Bay Area all approached or exceeded a 5
ratio of 20 multifamily units per 1,000 residents 1.49
during the same period. 0
City of City of Alameda Bay Area
Alameda Oakland County

Source: Census Building Permits, BAE, 2015

29
SUBSIDIZED AFFORDABLE HOUSING

There are approximately 2,061 lower-income In addition to operating a portion of the City’s
Alameda households living in subsidized rental affordable units, the Alameda Housing Authority
units. administers programs that provide rental
subsidies to 1,075 income-qualified households
There are 986 subsidized rental units in
in market-rate units. This includes 14 Shelter
Alameda. This inventory is comprised of 572
Plus Care Vouchers and 1,061 households with
units owned and operated by the Alameda
Section 8 Housing Choice Vouchers. Additional
Housing Authority and an estimated 414 units
households with Section 8 Housing Choice
owned and operated by nonprofits or other
Vouchers live in some of the units 572 units that
private entities. Units owned by nonprofits or
are owned and operated by the Housing Authority.
other private entities include the Alameda Point
Collaborative and recent tax credit projects
developed by Resources for Community
Development and Satellite Affordable Housing
Associates.

30
ALAMEDA UNITS POTENTIALLY
SUBJECT TO RENT STABILIZATION,
2015
There are up to 11,872 rental units in Alameda Units Potential Subject to Rent
that could potentially be legally subject to a rent Stabilization (estimate)
stabilization ordinance.
4,049
Under California State law, some types of units
are exempt from rent stabilization ordinances.
Exempt units include single family homes,
67
condominiums, rental housing with affordability
241
restrictions, and all rental units built after 1995.
564
Units rented to Section 8 voucher holders are
also exempt because they are subject to HUD rent
11,872
limits (Fair Market Rent).

Of the 16,793 rental units in Alameda in 2013, at

least 4,921 units would be exempt, including:
- 4,049 single family rental units
- 67 multifamily units built after 1995
- 241 Coast Guard units
- 564 subsidized units built before 1995
Renter-occupied single family homes
Multi-family built after 1995
Coast Guard Housing
Subsidized units built before 1995
Units Potentially Subject to Rent Stabilization
Source: ACS 2011-2013; City of Alameda, 2015; BAE, 2015.
31
AIRBNB RENTAL ACTIVITY IN
ALAMEDA

Airbnb does not have an impact on Alameda’s The median number of nights that these properties
rental housing supply in any substantial way. were booked during the past year was 44. The
median income earned through Airbnb rentals of
Overall, information on Airbnb rentals indicates
these properties was $3,800 in the past year,
that few (if any) units in Alameda are used solely
significantly less than the income that would be
for short-term rental purposes. Data suggest that
needed to support full-time use of a property for
the number of units in Alameda that are rented
short-term rental purposes.
through Airbnb is relatively modest, and that most
of these units serve as households’ primary
residences, with short-term rentals supplementing
household income.

For example, data provided by Airbnb indicate that

there are 100 active hosts in Alameda,
representing approximately 0.3% of the City’s
housing supply. This figure includes hosts renting
rooms in their primary residence, hosts that rent
their homes while on vacation, and hosts with a
second home in Alameda for their personal use
that they also rent to earn extra income.
32
AFFORDABLE RENTAL
HOUSING NEED
33
OVERVIEW OF AFFORDABLE RENTAL
HOUSING NEED

Housing cost burden, or the share of household
income that is spent on rent, is one indicator of
housing need. According to definitions from HUD,
households with housing costs that exceed 30%
of household income have a high housing cost-
burden; those with housing costs that exceed
50% of household income are severely cost-
burdened.
CHAS (Comprehensive Housing Affordability
Strategy ) data, special tabulations of ACS data,
provide information on housing cost burden by
household income level. CHAS data define
household income in terms of a percent of the
median family income (MFI) for households of
various sizes.
Extremely low- and very low-income (i.e.
household income equal to or less than 50% of
MFI) renter households with high housing cost
burden likely face difficulties affording rent or
have limited remaining income for other essential
goods and services such as health care,
transportation, and food, due to their high
housing costs. These households may also be at
risk of displacement if they face unexpected
expenses or if their rents increase, and would
likely be unable to afford current market-rate
rents in Alameda.

34
AFFORDABLE RENTAL HOUSING
NEED

Almost 3,000 very low-income renter households Housing Cost Burden for Very Low-Income
(<50% AMI) Renter Households, City of
in Alameda pay more than half their income for Alameda
housing, meaning these residents risk 4,500
homelessness or displacement.
4,000

3,500
According to 2008-2012 CHAS data, 4,140
1,910
Alameda renter households earning less than 3,000

50% AMI face a housing cost burden, meaning 2,500 1,050

they pay more than 30% of their income for 2,000
housing, which is considered not affordable.
1,500

2,230
Among these households, 2,975 households face 1,000 1,925

a severe housing cost burden (pay more than 500

50% of income for housing). These households 0

High Cost Burden (>30%) Severe Cost Burden (>50%)
are at risk of homelessness or displacement.
Extremely Low Income Very Low Income

Notes: The data shown in this table are based on ACS data collected continuously
between 2008 and 2012.
Source: HUD, CHAS special tabulations from the American Community Survey, 2008-
2012; BAE, 2015.

35
AFFORDABLE RENTAL HOUSING
NEED BY HOUSEHOLD TYPE

There is significant affordable housing need Housing Cost Burden for Very Low-Income Renter
Households (<50% AM(), Alameda
across household types in Alameda.
5,000
985
Among very low-income (50% MFI or less) renter Cost Burden <30%

households in Alameda, small families constitute 4,000

Cost Burden >30% and <50%
1,165
the largest group with affordable housing need,
Cost Burden >50%
with 1,545 households paying more than 30% of 3,000

their income on rent, 970 of whom pay more than

50% of their income on rent. There are 835 cost- 2,000
365
295
burdened very low-income elderly households in 240
2,975
575
Alameda, including 610 who pay more than 50% 1,000 235
225
1,200
of their income on housing. Among very low- 610
970 90
125
income large family renter households, 410 are 0 195
Elderly (a) Small Family Large Family All Other All
cost-burdened, representing 78 percent of these (b) (c) Households

households. There are 1,440 very low-income

renter households of other types with high
housing cost burden, including 1,200 with severe
housing cost burden.
Notes: The data shown in this table are for households with incomes equal to or less
than 50 % AMI. Data based on ACS data collected continuously between 2008 and
2012.
(a) Elderly HHs with at least 1 member over age 62.
(b) Small family households = 2 to 4 members related by birth, marriage, or adoption.
(c) Large family households = 5+ members related by birth, marriage, or adoption.
Source: HUD, CHAS special tabulations from the American Community Survey, 2008-
2012; BAE, 2015. 36
SUMMARY OF RENTAL HOUSING IN
ALAMEDA
Who are Alameda’s renters?
More than half of Alameda’s households rent
their homes. About 25% of these renter
households live in single family homes, which are
exempt from rent stabilization per state law.
On average, renter household incomes are
roughly half of owner household incomes, but
renter household incomes cover a broad
spectrum. Nearly 25% of Alameda renter
households earned less than $25,000 in 2013,
while over 20% of renter households earned
$100,000 or more in that same year,
Some Alameda renters have lived in the
community for a long time (more than 13% have
lived in their unit since 1999 or earlier).
Almost 19% of Alameda renter households are
elderly (age 65+).
What is status of Alameda’s rental housing?
The vacancy rate for all rental units in Alameda,
last assessed in 2013, was very low, at 1.4%.
More recent information for large properties (50+
units), shows vacancy at 2.7% in Q3 2015.
Average rents in these same larger properties
have risen 52% in the past four years, as the
economy has strengthened and housing costs
have risen across the Bay Area.
This combination of rapidly rising rents and a
minimal amount of vacancy is being experienced
throughout Alameda County; Alameda ranks 7th in
occupancy rates and 8th in average market-rate
rents among the cities in the County.
The low vacancy rate/high occupancy rate in the
City of Alameda mean that market-rate rents are
likely to continue to rise rapidly.
37
SUMMARY OF RENTAL HOUSING IN
ALAMEDA
What are the unique characteristics of Alameda’s
rental housing market?
One unique aspect of Alameda is the effect of
Measure A, which limited multifamily construction
for many years. The effects of this supply
constraint can be seen when measured as a ratio
of new multifamily construction for the past 15
years compared to total population in 2000.
Alameda has built just 1.49 multifamily units per
1,000 population, compared to 20.96 multifamily
units per 1,000 population throughout the Bay
Area.
In recent years, Alameda has adopted a Density
Bonus Ordinance and Multifamily Overlay Zoning
District, which have supported development of
multifamily projects in Alameda.
How is the rental market affecting Alameda’s low
income renters?
During the 2008-2012 period, 48% of Alameda’s
renter households were considered low income.
Of these, 5,125 had extremely low or very low
incomes, and most of these households (4,140
households) could not afford their rent (paid
more than 30% of income to rent) in 2012.
The most acute affordability need was faced by
the 2,975 very low-income renter households
who paid more than half of their income to rent.
These households are typically considered at risk
of homelessness.
Due to rising rents and lagging incomes, it is likely
that more Alameda renter households face this
severe cost burden today.
38
POLICY OPTIONS
39
OVERVIEW OF POTENTIAL POLICIES
TO PRESERVE & INCREASE THE
SUPPLY OF AFFORDABLE HOUSING
The City Council requested exploration of
additional policies that could mitigate the impact
of Alameda’s rising rents on its renter households
and/or increase the supply of affordable housing
as part of approving the rent study.

The following pages review these additional

policies:
• Waiving the City’s local transfer tax under
certain conditions to allow for creation of
permanently affordable rental units;
• Providing direct local subsidy to finance
affordable housing production and
preservation; and
• Refinancing properties with Low Income
Housing Tax Credits, including use of Section
236 of the State Tax Code.

40
WAIVER OF LOCAL TRANSFER TAXES
Background
Alameda charges a one-time local transfer tax on
the sale of residential and commercial property at
a rate of $12.00 per $1,000 of sale price. This
translates into, for example, a total of $12,000
on a $1 M property sale. In this example, waiver
of $12,000 on a $1 M duplex would yield a
savings of $6,000 per unit.
The City’s General Fund receives this revenue.
The current FY 15-16 City budget estimates that
property transfer taxes will contribute almost $7
M to the General Fund this fiscal year. This
contribution represents approximately 8.5% of
the total of $82 M General Fund revenues.
Analysis of Local Transfer Tax Waiver
A program could be developed that would allow a
property owner, on purchase, to voluntarily
dedicate a percentage of total units to remain
affordable to low- or moderate-income
households, in exchange for not paying the
transfer tax to the City’s General Fund.
It is likely that the economic value of this waiver
may enable dedication of a rent limit matched to
affordable levels, for a certain period of time, but
is not likely to create enough incentive for a
permanent unit restriction.
41
REFINANCING WITH LOW INCOME
HOUSING TAX CREDITS (LIHTCS)
Background
Alameda has numerous older multifamily rental
properties. One mechanism to create rental units
with rent restrictions for low-income households
is to utilize the Low Income Housing Tax Credit
(LIHTC) program, which raises investment equity
for private ownership through a tax credit
mechanism. While LIHTCs are more frequently
used to finance new construction of affordable
multifamily units, the same mechanism can be
used to acquire and rehabilitate existing units,
provided the rehabilitation work is considered
“substantial.” For most properties, this
requirement is a rehabilitation budget of
$15,000 or more per unit.
Applicability to Alameda
This mechanism has broad applicability in the
East Bay, where many non-profit housing
development organizations are operating and
have the skills to acquire and renovate
properties.
It should be noted that the economics of these
projects sometimes require multiple other
subsidies to make the project “pencil.” Many
local jurisdictions contribute gap financing or
other financial assistance to these specialized
non-profits who then acquire properties through
the private marketplace, renovate existing units,
place rent restrictions that are affordable to low-
income households, and manage the units to
ensure positive outcomes for working families
and other low-income households.
42
In addition to obtaining Low Income Housing Tax
Credits which can be sold to raise equity funding
for properties, a benefit available to non-profit
housing developers and other faith-based and
charitable organizations is an exemption from
property taxes. Section 236 of the California Tax
Code, and several other related sections, outline
property tax exemptions available to 501(c)(3)s
and other non-profit organizations providing
affordable housing units through either
ownership or long-term master leasing of
properties. Coupled with other funding sources,
this property tax exemption (often referred to as
the “welfare” exemption) can help to make
affordable housing developments financially
feasible, but on its own it is not sufficient to result
in a permanent rent limit on units.

43
DIRECT SUBSIDY/HOUSING TRUST
FUND
Background
Many cities use local funding sources to directly
support the development, rehabilitation, and
preservation of affordable housing units. Cities
often establish local Housing Trust Funds to
support these activities, which are typically
funded by commercial linkage fees, housing
impact fees charged on market-rate units, and/or
General Fund revenues. Housing Trust Funds are
often used to provide gap financing for affordable
housing projects, supplementing LIHTCs and
other funding sources, and can be an essential
funding source to make projects feasible.
Applicability to Alameda
The City of Alameda has an ongoing history of
providing direct assistance to support the
development and preservation of affordable
housing. Alameda has a commercial linkage fee
as well as an in lieu fee for market-rate
residential projects of less than nine units. These
funds are administered by the Housing Authority
to preserve and expand the City’s supply of
affordable housing. In addition, the City has
worked closely with nonprofits to support
affordable housing development, including
providing land to assist in the development of
LIHTC projects. Lastly, the City’s CDBG and HOME
funds are used for a variety of residential
rehabilitation programs, tenant-based assistance,
and as gap financing for new affordable housing.
44
Source of Funds for Direct Subsidy

One source of funding which Alameda could

dedicate to a Housing Trust Fund is former
redevelopment funds, a portion of which, since
2011, have been returned to the City’s General
Fund. According to a recent forecast prepared for
the City, over the next 10 fiscal years, Alameda
will receive a total of $16 M in boomerang funds.

45