Facing historic gentrification in Oakland, the Chan Zuckerberg Initiative has launched a pilot program to help low-income homeowners redevelop their properties with in-law units.
The program, supported by a collection of community groups and businesses, aims to help predominantly black homeowners in Oakland obtain financing and build small, income-producing ancillary housing units, or ADUs. The goal is to help create affordable housing, boost property values and encourage long-term wealth-building in minority communities that have long been put off by many homeownership opportunities.
CZI’s Ruby Bolaria-Shifrin said the foundation wants to create a program that addresses historic racial disparities in housing. “(ADUs) are not a silver bullet, but they are a tool in the toolbox,” she said.
Gentrification and the Bay Area housing crisis have raised home prices in former working-class neighborhoods by more than $1 million, putting pressure on long-term residents. Excluded housing policies kept minority residents out of homeownership, the primary route for Americans to build family wealth.
According to census data, the black population in Oakland fell from 142,000 to 103,000 between 2000 and 2019. The share of black residents in the city’s population has fallen from 36% to 24%.
The Keys to Equity program is a partnership between CZI, Richmond Neighborhood Housing Services, lender Self Help Federal Credit Union and developer Wellnest Company. The groups are working with Oakland housing officials to smooth out an application and permitting process for the new units.
CZI initiated and coordinated the program with Oakland-based groups, and backed the measure with $2 million. Bolaria-Shifrin said the foundation’s funding will make it easier for homeowners to secure loans. It will be the responsibility of the owner to repay the loan.
Homeowners can apply through Richmond Neighborhood Housing Services, a community nonprofit that will evaluate applicants and provide education about ADU and property management.
Nikki Beasley, executive director of the nonprofit, said workers will take a “high touch” approach, helping applicants through the sometimes confusing maze of funding, permitting and building. “We are guiding them every step of the way,” she said.
Applicants will have a choice of three edu designs. Wellnest, a family-owned company with roots deep in the city, will act as the general contractor on the projects. The units are either garage conversions or free-standing housing, and are expected to cost between $168,000 and $220,000. Homeowners take out loans for improvements through a specially designed financing program.
Wellnest COO Bobby Arte said the units can be used as family housing or rentals, allowing homeowners to preserve and extend existing family homes. “These programs are vital to maintaining diversity and beautiful culture,” said Arte, of the neighbourhood.
The goal is to build 60 units over the next three years, primarily in East and West Oakland neighborhoods. The project estimates that 20,000 owner-occupied, single family homes may be eligible.
California has taken a number of steps to make it easier for homeowners to build an ADU, eliminate minimum lot size and parking requirements, and have various city and county ordinances prohibiting limited construction.
The state also announced a $100 million ADU grant program for low- and middle-income homeowners last month. Grants of up to $25,000 will help homeowners build backyard units in communities with large black and Hispanic populations.
Eric Johnson, a spokesman for the California Housing Finance Agency, said homes in minority communities have been appreciated more slowly than those in white communities. “These are the places that really need the extra income,” he said.
The expense of building an ADU can be prohibitive for homeowners with low equity or income. According to a survey by the UC Berkeley Center for Community Innovation, the average cost to build an in-laws unit in the Bay Area is about $180,000.
The survey found that nearly half of the units operate as rentals, providing an additional source of income to homeowners. The average rental price for a Bay Area edu is $2,200.