Famed Bay Area Co-Op Getting Into the Housing Game – Next City

Famed Bay Area Co-Op Getting Into the Housing Game

(Courtesy of Roots and Returns)

California has seen the worst of the nation’s developing affordable housing crisis. In the Bay Area, the combination of limited housing stock, outdated zoning, and the influx of high income tech employees has been linked to the median rent increasing by as much as 50 percent since 2012. This unprecedented rise in housing costs has exacerbated homelessness and intensified migration out of the Bay’s gentrifying urban metro areas. Many people have found themselves moving out of the state, or moving into less populated, more topographically rugged areas more likely to experience power outages and wildfires. For those in lower income brackets who want to stay in the Bay, few options exist. Fortunately, opportune changes to California zoning laws have produced a possible solution to housing scarcity in Oakland.

In January 2017, the California State Senate passed legislation legalizing the construction of accessory dwelling units (ADU) without special zoning board approval (often referred to as “as-of-right” zoning). This legal change encouraged CoEverything, an affordable housing-focused design build cooperative, and the Arizmendi Association of Cooperatives — which runs six worker-owned Bay Area bakeries — to work together to start creating backyard homes in Oakland to slow the exodus of native Oaklanders out of the city.

Miriam Gee, a co-founder of CoEverything, saw this as the perfect opportunity for Arizmendi and CoEverything to work together to create Roots and Returns to provide high quality, environmentally friendly, long-term affordable housing.

“You come to [homeowners] and you say, ‘Hey we’ve designed an ADU, which is a small home in your backyard that we would own and build and finance, and in return we would like to rent some of your backyard as if you were, say, a community land trust,” she said.

In order to proceed with construction, 99-year leases are signed with interested homeowners – ensuring relative permanence of the housing. The affordability of these backyard homes is based on the premise that, accounting for construction and other costs, the ADUs can be rented for at least 25 to 30 percent — or more — below market rate. In the case of a two-bedroom, 600-square-foot unit (which has a market rate of $3,400 per month) the ideal projected rent would be $1,900 per month. Of this $1,900, $500 would be paid to the lessor, while the rest would go toward paying off the unit’s construction expenses. Once the developments are fully paid off, there’s an expectation that the enterprise will become self-sustaining.

“Hopefully, in the long run we pay off the development, and then we’re starting to build income into a fund to create more housing,” Tim Huet, a worker-owner at Arizmendi who helped spearhead the project, says.

So far, Huet says, there are plenty of backyards available. He has seen many people, unprompted, reach out to contribute their backyard space. Often, these same property owners lack the financial resources to develop this housing themselves, or are not familiar enough with zoning, permitting, and design regulations to proceed with construction.

The project was originally developed to help Arizmendi bakers. While worker-owners at Arizmendi bakeries often make over three times more than the average baker in Oakland, a $40- per-hour wage still puts them a few income brackets away from the tech employees moving into Oakland.

“Tim [Huet] has told me, ‘I have an entire contingent of bakers who have moved to Portland, Oregon,’” Miriam Gee, a co-founder of CoEverything, recounts. “There could be a whole other Arizmendi in Oregon based on the people who’ve been like, ‘I can’t afford to live in California anymore.’”

The project has now shifted to focus more generally on comfortably housing Oaklanders who work traditionally less lucrative industries — namely food service or retail. Units are reserved for those making less than 80 percent of area median income.

Given growing environmental concerns nationwide, especially in California, comfort and environmental sustainability are prominent elements of CoEverything’s design considerations.

Aesthetically, the interior design of these ADUs is intended to be somewhat minimalist, but dignified and comfortable – for both tenants and the homeowners. Huet explained that the goal is to “build [the] smallest unit that we can that still feels like a comfortable two-bedroom for people.”

The planned ADUs add bedrooms modularly to make construction easier. (Floor plan courtesy of Roots and Returns)

The units are being designed to be net-zero energy, but won’t be LEED certified. Gee says they calculated that at the scale of individual units, this certification could incur superfluous permitting costs.

“I think that if we can prove it by having net-zero energy bills, and build to those same standards – that are already very high performance practices like healthy buildings – I think that’s the way to go,” she says. “I also believe that our construction co-op and landscape design build co-op have values toward ecological design.”

Beyond the co-ops’ internal green design practices, adherence to California Title 24 Regulations for buildings forces the backyard homes to comply with some of the strictest state-mandated environmental building guidelines in America.

Although the project designers are, in part, thinking about comfort and affordability as the major draws for prospective tenants, the Arizmendi brand has been attracting interest before the finished product is even completed. Ashley Ortiz, a worker-owner at Arizmendi, has witnessed interest from Oaklanders who are just excited at the prospect of Arizmendi getting into housing management.

“When people do know Arizmendi and know the history of our cooperative movement they get excited to think that we can be a landlord, ”she says. “That we would actually be able to be the entity of creating and monitoring and overseeing the housing that they could live in that sort of seemed like an extra perk.”

Though this enterprise will be ready to break ground in one of four Oakland locations this April, expanding it to other municipalities – notably those outside of California – may not be feasible. So far, Arizmendi and CoEverything have identified El Cerrito, Alameda, and Berkeley as having zoning ordinances compatible with their ADU design. However, Gee stresses, “If it’s not the right solution tailored to the right zoning and the right city, we shouldn’t try to force that solution on that place.”

This is especially true in places like New York City where housing is scarce, but ADUs are illegal. In other cities, like Philadelphia, ADUs can only be constructed as extensions to existing buildings (often in the form of expanding homes upward as duplexes or triplexes)

Ultimately, solving America’s intensifying housing crisis will take a collection of varied solutions. Gee sees Arizmendi’s and CoEverything’s approach in Oakland as just one unique, yet minimalist, approach.

“This is a response to how wonderful and dignified a space can you make as small as you can and as affordable as you can.”

Chad Small is a New York City based freelance reporter who primarily writes as the Environmental Reporter for Blavity: Politics. He is also a New Economies Reporting Project‘s Finance Solutions Fellows with the New Economy Coalition. His reporting principally covers the economic, social, and public health effects of Environmental Racism in the United States, and throughout the African diaspora.

Tags: affordable housingoaklandworker cooperativesaccessory dwelling units

×