Decision looms on plan to build more than 200 housing units in West Oakland

The neighborhood surrounding the West Oakland BART station could be described as a microcosm of the city’s growing housing inequality: Unhoused residents live in camps alongside new apartments and condos that cater primarily to transplants and commuters.

The area is set to undergo even more changes in the next few years. As part of a larger West Oakland Specific Plan launched by the city in 2014, hundreds of market-rate units, stores and workspaces are expected, which would change West Oakland’s skyline permanently. 

The projects have ignited a debate over development and displacement in West Oakland. One development in particular — “Golden West,” a proposed eight-story apartment complex, would add 222 market-rate units and 16 low-income units on what is currently an empty 1-acre lot across from the BART station at 1396 Fifth St. It received the green light from the Oakland Planning Commission on March 3. 

But the project hit a wall on March 12 when a coalition of labor groups, East Bay Residents for Responsible Development, filed an appeal with the City Council, requesting an environmental review and saying hazardous materials such as benzene, lead, and diesel make the site unfit for housing unless removed.

The council held a public hearing on Sept. 21 where residents on both sides of the issue weighed in.  

“I don’t believe that their appeal aligns with the feelings of myself or our neighbors in South Prescott, who in my experience are uniformly positive about the project,” said, Sean Taylor, who lives two blocks from the site. 

John Dalrymple, a spokesperson for EBRRD, said the goal isn’t to interrupt the project but to protect the people who may someday be living in the buildings. “This doesn’t in any way impact the project being built,” Dalrymple said, “it just means that we build safer.” A new environmental report, he added, could take six to eight months.

Councilmember Carroll Fife, who represents District 3, was more apprehensive. “I’m really concerned about the historic harm of the pollution in the air and the water and the ground in West Oakland,” she said.

At Fife’s request, the council agreed to take more time to review the project. 

The issue is now expected to return to the council in late January or early February for another public hearing. Members could decide to either support the Planning Commission’s decision to approve the project or uphold the appeal and require further environmental review. 

A history of pollution

The Michaels Organization, a New Jersey-based developer that creates housing across all markets, from affordable units to luxury apartments, has been trying to develop the site for more than a decade. The Red Star yeast factory operated there for over a century until it closed in 2003 under pressure from environmentalists. It had been called “the largest polluter in West Oakland” and its closure was considered a major win by activists.

Constructing something new on the site proved challenging — at one point, private owners bought the land to build housing but found a buried fuel tank and other environmental issues. Then, in 2011, the Michaels Organization broke ground on a 119-unit senior housing complex called the Red Star Senior Apartments, in partnership with the nonprofit LINC Housing of Long Beach. The complex would provide apartments to lower-income seniors, along with retail space. However, the construction site burned down in 2012 in what was later ruled an arson.

Since then, Michaels has been working on its current plan: the Golden West project, named after the Golden West Brewing Co., Oakland’s longest-running brewery, which shuttered in West Oakland in 1959. Plans include 49 studios, 132 one-bedroom, and 41 two-bedroom units. It also includes off-street parking and secured bike storage for its residents. 

Golden West is just one of the major projects planned around the West Oakland BART station. In 2019 the Planning Commission also approved preliminary plans to develop what is currently the BART parking lot into the Mandela Station, a transit-oriented development that includes 762 residential units, 382,460 square feet of office space, and 75,000 square feet of ground-floor retail.

A bigger housing debate

West Oakland residents appear split on Golden West and larger development efforts. Some consider such development a welcome and much-needed addition to the neighborhood, while others see it as part of a “gentrification agenda” that has locked out many Oaklanders. It brings up the debate over whether the city should focus on affordable housing or building more housing overall. 

“We’re just surrounded by too many vacant lots,” said Taylor, the West Oakland homeowner who spoke at the recent public hearing. “Delaying projects like this one are keeping us from building the housing we need to support the growth of our city.”

But market-rate housing isn’t what the city needs, and building that would create a “ripple effect,” said Dominique Mouton, writer and creator of “The Lower Bottoms,” a fictional podcast about the tensions in a gentrifying West Oakland neighborhood.

“Landlords and other people will take it as their cue to raise prices on everybody,” Mouton said.

In 2012, Mouton lived in a two-bedroom apartment bordering West Oakland for $1,200 a month. Two years later, her landlord upped the rent for new tenants to $2,700, she said.  

That price is more the norm today. According to Rent Cafe, a nationwide apartment listing service, 81% of Oakland renters pay more than $2,000 a month in rent, with $2,830 being average. Only 1% of rents are below $1,000. Census data shows the average per-capita income is $47,783, meaning the typical Oakland renter would have to spend 71% of their monthly income on rent, making them financially unstable. 

Proponents of the Michaels project note that 16 units would be designated as very low-income housing. (In Alameda County, very low income is defined as $47,950 for a single person and $68,500 for a family of four). That low-income unit number earned the development a density bonus, a city incentive that enables the developer to add more overall units than would typically be allowed on a specific parcel. 

Building market-rate housing is among the strategies cities can use to address a supply shortage, said Corey Smith, deputy director at the Housing Action Coalition, which advocates for all levels of housing. If supply meets demand, the theory is that rents will flatten, he said. 

But opponents of the project say that building for high-income earners that can afford market-rate housing without building proportional affordable housing isn’t a solution. 

“That’s not an anti-displacement strategy. That’s a strategy for resegregation,” said Tony Roshan Samara, a program director at Urban Habitat, which advocates for affordable housing in the Bay Area. “When you build market rate, which is very high-end compared to most people’s incomes, you’re basically driving up property values and creating displacement pressures.”

Sticking points

In its appeal, East Bay Residents for Responsible Development claimed that an earlier environmental impact report on the site, which was released in 2014 as part of the West Oakland Specific Plan, was inadequate and that a second one should be done. The East Bay group contracted the consulting firm Soil Water Air Protection Enterprise, which found the tract unfit for residential development. The report stated that the project would have new and more severe impacts than previously analyzed in the earlier environmental report which cannot be substantially mitigated. In particular, it stated that the level of contaminants on-site is still significant by Bay Area Air Quality Management District standards, putting it in violation of the California Environmental Quality Act.  

Soil Water Air Protection Enterprise declined to comment for this story.

Scott Cooper, vice president of development with Michaels, said that invalidating the site’s environmental impact report would invalidate the entire West Oakland Specific Plan because the report was completed under the umbrella of the plan’s environmental analysis. He also said years of environmental remediation have already been done on-site, including removing 8,600 cubic yards of contaminated soil and three underground storage tanks. 

As part of the development process, Cooper said the Alameda County Department of Environmental Health must review the site before construction. Typically, that happens after the development has been approved but before building permits are issued. If the site is found to be contaminated, it will be remediated before construction begins, Cooper added.

Labor unions and residents opposed to development in their neighborhoods have tried to use the California Environmental Quality Act to kill projects through excessive delays, said Rafa Sonnenfeld, a paralegal at YIMBY Law, a San Francisco nonprofit focused on development. “That’s exactly what they’re doing in this case,” he said.

The Golden West project does not violate CEQA, Sonnenfeld argued. But by not approving it, Oakland may be violating state housing laws that prohibit cities from denying projects unless they pose health and safety issues that can’t be mitigated, he said. 

“We strongly believe that the city of Oakland is violating the law because it’s not legal for them to have even heard this CEQA appeal,” Sonnenfeld said. 

Sonnenfeld said YIMBY’s lawyers suspect the dispute is more about labor than the environment and that the East Bay Residents For Responsible Development halted plans because it was angry with the developer for not agreeing to bid to only union subcontractors. 

“They’re trying to make it so that the cost to the developer is so great that they just have to abandon their project and sell it to someone else,” Sonnenfeld said.

Dalrymple, a spokesperson for the union group, acknowledged that he believes local projects should use union workers who are paid a living wage. But he said that’s not what the appeal is about. 

“There’s no dispute that there’s benzene, lead, and other cancer-causing materials in the soil,” he said. “If they don’t go back and do the right remediations, those things become airborne and they’re cancer-producing.”

Cooper, the vice president of development with Michaels, said the group offered to drop the appeal if the developer agreed to use only union workers. Cooper said paying union wages for mechanical, electrical, plumbing and fire sprinkler tradespeople would add $55,000 to per-unit costs for a project that is “barely financially feasible.”

Dalrymple responded, saying that EBRRD never offered to drop the appeal and that if it did, there would have to be a settlement that involved mitigation of the contaminants on the site.  

According to Cooper, if City Council approves the project this month, the Michaels Organization could break ground by next fall. But If the appeal is upheld, there is a risk of the project being abandoned due to financial pressures. 

The story was published in collaboration with The Oaklandside.