Our Stories

Saving Affordable Housing One Building at a Time

A proactive housing save, by a new multi-family affordable housing developer
2.26.2021

It’s no secret that Oakland has seen massive rent hikes in the past several years. It’s also no mystery how it happened--when tenants were priced out of San Francisco, Berkeley, and other increasingly expensive Bay Area neighborhoods, rental occupancy grew feverishly in Oakland, and landlords and market-rate developers responded in kind.

However, to date, East Oakland has not been as heavily impacted. Construction has been limited and rents have largely remained untouched. This means tenants there are safe…for now. It also means that investors are beginning to circle.

Historically, most affordable housing efforts are focused on constructing or preserving homes in an area where options for low- to middle-income earners have already become limited or nonexistent. But what if efforts were made to maintain an area’s housing affordability before prices got out of hand? What if more developers worked to proactively get in front of imminent gentrification rather than try and stem the tide once it has already begun? Nikki Beasley, Executive Director of Richmond Neighborhood Housing Services (RNHS)--a non-profit organization founded in 1981 by local East Bay residents to address affordability, equity, and disparity related to housing--wants to find out.

Foothills Square Apartments, at 10320 MacArthur Boulevard, in the Toler Heights neighborhood of Oakland, is home to 17 families housed within a two-story building. The property has changed hands multiple times over the years but, fortunately, the rents have remained reasonable and the tenants have remained constant. In fact, though unrestricted, in 2019 rents at 10320 MacArthur Boulevard were still affordable to those making 30%-80% AMI; studios were renting for $566, and one bedrooms for $679 to $2,135.

Though rents in the building were stable, Beasley was concerned about the aggressive housing environment surrounding East Oakland and wanted to make sure they stayed that way. When she heard 10320 MacArthur was on the market in 2019, she started investigating what it would take to purchase it in order to lock in its affordability. RNHS didn’t have the necessary funds at that time, but when the City of Oakland announced its new Acquisition and Conversion to Affordable Housing (ACAH) program to help protect affordable housing, Beasley saw her chance. She started the approval process with the City and immediately reached out to other funders to cover the cost of acquisition, as well as the substantial repairs the building would need.

RNHS swiftly received funding through the Bay’s Future Fund (BFF), part of the lending arm of the Partnership for the Bay’s Future. Administered by the Local Initiatives Support Corporation (LISC), BFF is one of the largest housing funds in the nation and is focused entirely on preserving, protecting, and producing affordable housing in the Bay Area.

“It’s exciting to identify a property at point of sale and help make sure it becomes permanently affordable housing, even when it’s not in immediate danger,” says Cindy Wu, Executive Director of LISC Bay Area. “So many times we find ourselves jumping in at the last minute to save a property from becoming market rate housing; all too often it’s the only affordable housing left on a block. We need to protect as much as we can, and this proactive work will truly preserve the Bay Area for future generations.”

With approximately $855,000 from the Bay’s Future Fund, an additional $714,000 from LISC itself, and the loan from the City, RNHS secured the property and began to solicit bids for renovations to be completed by April 2021. Affordability is locked in and all current tenants are invited to stay; when they leave, affordability for future tenants will be capped at 80% AMI for 16 of the units, with one additional unrestricted unit held for an onsite manager.

“We are always excited for the opportunity to add to our rental portfolio when it means getting properties off the speculative market to prevent displacement,” says Beasley. “We are in the game to support affordability for East Bay residents in any way we can. This means sixteen more secure apartments. Sixteen more secure families. That makes us happy.”

And the City of Oakland is very happy to have been able to help get the project off the ground. "We have been so pleased to fund Richmond Neighborhood Housing Services through the City's Acquisition & Conversion to Affordable Housing Program,” says Shola Olatoye, Director of the City of Oakland's Housing and Community Development Department. “The property at 10320 McArthur Boulevard offers us a perfect chance to further the program's goal of protecting and preserving long term housing affordability throughout the City by acquiring existing market rate housing and converting it to affordable housing, and preventing displacement of vulnerable Oakland residents.”

Wu says LISC is particularly excited because the deal brings a new affordable housing developer into the space. Though RNHS has nearly 40 years’ of experience in affordable housing, 10320 MacArthur Blvd. represents the first time the organization will own and operate a multi-family property. And RNHS is run by a woman of color – a group sadly underrepresented in the affordable housing world.

“The problem of affordable housing in the Bay Area is not one that any one organization – or funder – can solve, says Wu. “In order to create real change, we have to raise capacity, and we have to diversify the industry. At BFF and LISC we get extremely excited about working with new affordable housing developers and, in the case of RNHS, to get to work with an organization lead by a strong and diverse team, which is just what we need to bring new ideas and energy into this space.”