One of the things you hear from the homeless advocates is that Oakland should provide housing for each of the city’s 4,500 homeless people.
And not just any old housing. The advocates insist that homeless people should have their own apartments, so they can experience privacy and dignity, just like housed folks. Not cramped together, dormitory-style, but in something like a studio apartment.
Well, studio apartments don’t grow on trees. They have to be built. So let’s figure out how much it costs to build 4,500 new studio apartments in Oakland.
There are varying estimates of how much a unit of housing costs to build, but a reputable source is the Bay Area Council’s Economic Institute. They did an analysis of the 2019 housing market, called “How Much Does It Cost to Produce One Unit of Below-Market Housing in the Bay Area?”
This is “below-market,” mind you: not some fancy high-rise condo, but apartments that moderate-income folks can afford. They calculated the total cost of the land, construction costs, architectural and engineering costs, financing plus interest, legal fees, developer fees (meaning profits; no developer builds for free), and other costs that Bay Area municipalities impose (for better or worse) on development. And what did they find?
“In 2019, the average construction cost of new below-market rate housing in the Bay Area was $664,455 per unit.” Yes, you read that right. And that’s for the nine-county Bay Area as a whole. “Counties such as Alameda, San Francisco, San Mateo, and Napa,” the study found, “have higher average per unit costs than the Bay Area as a whole.” The study didn’t say how much higher a unit of housing would cost in Alameda, but we know that it would be more than $664,455.
So let’s grab our calculators and multiply that amount by 4,500, which is the estimated number of homeless people in Oakland. The result is a staggering $3 billion. How does that compare to Oakland’s total budget? Here’s the city’s final budget for the two-year period 2019-2021. It is more than $3.3 billion (keep in mind that’s for two years.) In other words, building single-occupancy units, even at below-market rates, for every homeless person in town would absorb 95% percent of Oakland’s entire budget for two years in a row.
That would leave no money for anything else: no police (and for that matter, no Police Commission). No firefighters. No parks. No street paving. No salary or benefits for workers or retirees. No libraries. No schools. No funding for the arts. No job training for youth or the unemployed. No money for Children’s Fairyland. No money for the Senior Center. No wildfire prevention. I could go on.
Clearly, it’s unrealistic to insist on individual apartments for every homeless person in Oakland. It sounds good; it sounds compassionate; it sounds progressive. But it will never happen. If we’re going to house all the homeless people, it’s going to be under conditions that some of them, and their advocates, object to.