$19 million for 23 affordable housing units, and $22 million for a seismic retrofit.

Update: After I published this post on Monday, The City of Berkeley revised the stated cost of the Kenney Center project downward, from $22.4M to $2.4 million (the original figure was apparently a typo).

Along with stacks of campaign flyers in the mail this week, I got Berkeley’s “2018 Annual Report,” highlighting some projects the city had completed recently. Less an annual report and more of a marketing piece, it looked quickly thrown together.

If the goal was to convince voters the city spends money well and can be trusted to spend additional bond money wisely (e.g. proposed measures O and P), it didn’t work… at least for me.

Two $20M projects in particular caught my eye:

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Affordable housing is one of Berkeley’s top priorities, for good reason. But $19 million to build 23 units? That’s $826,000 per unit. At that rate it would cost close to a billion dollars to house all of Berkeley’s 1,000 homeless people.

I did a little research… affordable housing construction costs in California are the highest in the U.S. (CityLab, GAO, Wall Street Journal). The California average is around $320,000 per unit, with LA and SF averaging about $400,000, and the very top of the range at $750,000.

Which makes Berkeley’s Grayson Street project (at $826,000 per unit) potentially the most expensive affordable housing project ever built anywhere. And its final cost almost doubled from an estimated $10M in 2014, according to Berkeleyside… why?  Though the city only put in $2.6 million of the money, it’s hardly convincing evidence that Berkeley can spend money on affordable housing affordably.

And then there’s this $22 million project:

Screenshot 2018-10-20 16.15.47.pngI have no doubt this community center is important and needed the updating. But $22M for a retrofit seems really high – almost like you could build a brand new, totally amazing community center for the same amount. As recently as 2015, according to Berkeleyside, the cost of this project was estimated at $3.7 million.

Did the city get its $22 million worth on this seismic retrofit? And why did the cost jump so dramatically from $3.7 million?

The city of Berkeley spends $20M about every two weeks. So my question is whether we get $20M in value from every $20M of spend, or a lot less? And who’s paying attention to that?

Across the board, we have our heart in the right place (affordable housing, homelessness, education, environment, infrastructure, safety, equity etc). But there doesn’t seem to be much accountability on how the city spends its $450 million-plus annual budget (that’s $450M not including the BUSD schools budget). And as a city, we’re already up to our ears in debt and unfunded liabilities (over $600 million by some estimates).

If the city wants to do an “annual report” to show what it’s accomplished with our $450M annual budget – and how effectively – it should do that.

But if it chooses to send around a glossy document with an upbeat letter from the City Manager and a random selection of projects, it should expect people to use their common sense and be skeptical.

Here’s Berkeley’s full “2018 Annual Report” that came in the mail.

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