Radical Proposal to Transform Oakland

At the end of any other election, we might share a breath of relief. Oakland’s special election concluded with pretty clear winners after a week. I congratulate Mayor-elect Barbara Lee and District 2 Council member-elect Charlene Wang. Their elections culminate the transition of leadership in Oakland from long-time city council members to a new generation. Unfortunately, for those who will sit in the mayor’s office or city council, a familiar challenge looms large: the city's persistent financial straits. Whether you grew up here or chose Oakland as your home, we all love it and want to see it succeed, yet we find ourselves constantly set back with many community members facing economic uncertainty, crushing costs of living, deteriorating infrastructure, and unsafe streets.

In the spirit of hope, I will propose a radical idea to help Oakland grow its budget, fund services, and increase its political influence. SPUR has written policy briefs on how Oakland can fix its budget and what San Francisco Mayor Lurie should focus on. This is far more radical. The leaders of Oakland should plan to make Oakland a city of three million people and build the housing units to accommodate them.

Political Power

Looking at our current representation and the redistricting process from 2020, we can see what representation could look like for our target population.¹ Currently, Oakland shares two Assembly Members who have other cities in their district, one State Senator, and one Representative in the House. At the State Assembly level, each district should have an ideal population of 494,043, State Senate districts 988,086, and Congressional districts 760,066. Let’s keep things simple, at 3 million residents, Oakland would receive at minimum around three times the current representation. Refer to the table below. Oakland could have more representatives if the surrounding districts don’t have enough population from their cities, meaning potentially more districts would have an influential size of Oakland inside their lines. This would increase Oakland’s influence to advocate for additional resources from the State and Federal governments.

At the local level, things get challenging. The City Council has eight council members. Seven are in districts and one is at-large (citywide). Each district represents about 61,000 to 65,000 people.² With 3 million residents, the seven council districts would grow to 428,571. To maintain a reasonable representation, we could expand the number of council districts. There’s no standard for how large cities with populations close to 3 million address equitable representation.

At the county level, Alameda County currently has a population of about 1.622 million. Our five supervisors represent about 328k to 348k people per district. Three supervisors have Oakland in their district. Not bad considering we only make up a quarter of the county’s population. Adding a net of 2.56 million to Oakland would grow the county to 4.182 million. Supervisor districts would grow to about 836,400 people. If the population in the rest of the county didn’t grow at the same accelerated pace, over 70% of the county’s population would be in Oakland. The board of supervisors could also consider expanding its board to provide better representation.

Political power is important to get resources for basic functions and for innovative ideas. Oakland looms large in the country, for all the wrong reasons. We are often painted as a center of crime despite the strong culture and economic impact. As a major provider of reentry people and supportive services, as well as the historical impacts of white flight (read American Babylon by Robert O. Self), Oakland is also home to the lion’s share of the county’s high-needs populations. This often results in a lot of funding going to Oakland, with a lot of resentment from our others. 

Money

Oakland’s recurring issue is that its revenue is insufficient to cover all of its needs. It isn’t making enough money to deliver the quality of services that its residents need. Unlike the Federal government, cities can not engage in deficit spending, they have to pass a balanced budget. If a city doesn’t have the funding, it needs to reduce its spending, meaning fewer services. Cities get revenue from a few major common sources, such as property taxes, parcel taxes, and sales taxes.

A significant percentage of Oakland’s budget is dependent on real estate. Property taxes, parcel taxes, and real estate transfer taxes. The City of Oakland notes, “Property tax is the largest single source of revenue for the [General Purpose Fund] GPF and represents over one third of all GPF revenues.”³ In 2022, Oakland received $258,968,959 in property taxes. 

SPUR’s first briefing on the budget highlights the huge negative impact of Proposition (Prop) 13 on local budgets. Adding to Oakland’s strain is its low sales tax revenue. Oakland’s actual sales tax revenue in 2023 was slightly over $63 million. Smaller cities like Hayward and Alameda brought in $44 million and $22.7 million, respectively. Sales tax can be increased,  but housing and property taxes are where we can see a transformation in Oakland.

Not all property taxes come from housing units. Office buildings, industrial sites, hotels, and other business-related buildings generate a substantial amount of property taxes. Cities can use their legislative powers to increase property taxes rather than passively allow external forces to shape them. More housing units, newer office buildings, and more businesses mean more property tax revenue for the budget. There is a major demand for housing, not just in Oakland but the entire state, so why not meet the demand?

SPUR highlights that because of Prop 13, many properties are not taxed at their market value. Property taxes are based on the assessed value of the property at a rate of 1% plus the amount necessary to pay other debts incurred by the local governments, such as general obligation bonds. Prop 13 limits the amount you can increase the base value of the property to 2% per year. Properties won’t be reassessed at market value until they change ownership. The lower assessment results in lower property taxes. The best way to increase property taxes is to build more taxable property.

There are some maps, like the one below, that highlight the disparity between property taxes.

Building higher-density residential buildings to house 3 million people would result in millions of dollars in new general funds. The Atlas on 14th Street is 40 stories tall, has 633 residential units, and 17,350 square feet of retail space on a 1.38-acre site. This building paid $5,215,596.04 in property taxes in 2024-2025. That’s roughly one percent of Oakland’s total property taxes paid by one building. If we built 100 buildings similar to the Atlas, we could more than double the amount of property taxes Oakland receives.

Housing

Building any high-rise in general is challenging, but has gotten more difficult because of high interest rates and tariffs, real or threatened. We can use this time to plan the appropriate zoning, change building codes, and reform permitting to have a fair and efficient building process. We need to explore creative financing and development options to keep building during these down cycles. The details for how we can incentivize construction could be their own series of writings, so I’ll stick to the high level of how many units and zoning we need to get to 3 million. 

Just a little bit above the 175,457 number listed in Oakland’s Housing Element.⁸ These units ultimately house 464,821 people. Using Oakland’s average household size of 2.46 people per household,100 new Atlas buildings would only add about 155,700 people. According to the Census, there are 189,941 housing units in Oakland.⁹ To get to 3 million people, Oakland would need to build 1,029,571 housing units. Oakland could single-handedly put a dent in the housing shortage in the state of California. The State is short about three million homes of all income levels.

The Housing Element requires the City to zone for 17,974 units of subsidized affordable housing (AH). State law also requires cities to add a 15% buffer, which brings up our needed AH units to 20,672. Assuming we build 1,029,571 homes over 16 years and have a 5% inclusionary zoning (IZ) requirement, that would generate 51,478 units of subsidized affordable housing. A 15% IZ requirement would generate 154,435 AH units. At minimum, we could generate more than double what is needed from 2023-2031. All without other sources of funding.

There are a few ways to achieve the level of density required to house 3 million people. I’m not saying we need to fill the city with 40-story buildings, we could spread out low rises (up to ten stories) across the city. Let’s legalize and simplify missing middle housing. Duplexes, fourplexes, and courtyard cottages do not mean single-family homes will disappear. Families and others can have the freedom to build housing that allows intergenerational families to live together. Around transit, a few tall buildings can offset the amount of density needed across the city. This will allow residents to have the freedom to choose between a variety of housing options to fit where they are in life.

Major changes to the built environment would need significant improvements for water, wastewater, power, and other services. There are common myths that more density leads to overburdening services, but we’ve known for a while that the opposite is true. More compact, higher-density communities reduce service burdens. 

We can make this a reality by switching our zoning concepts to Japan’s system at a local level. We need single-stair reform to make it less expensive and easier to build on small lots. We need to get the Bay Area Housing Finance Authority( BAHFA) funded. BAHFA would help create more financing for affordable housing, and could provide financing options for market-rate projects during down cycles, and could be a stepping stone to building out social housing, a topic for another day.

Conclusion

Oakland is a diverse home with a strong identity and a lot of needs. It has the opportunity to be a stronger center of culture and a center for experimenting with forward-thinking social policies. Our residents and elected leaders have not lacked imagination or ambition, but too often our city’s budget is insufficient to support many innovative ideas. There are tools to transform Oakland and address its fiscal issues, while addressing issues like the high cost of housing. If there has ever been a time to be bold, that time is now.

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Additional Sources:

1. Oakland budget 23-24: https://stories.opengov.com/oaklandca/9dcfda3a-bb21-495a-a4d9-6f39ba13d111/published/3knoFbc10?currentPageId=66e491e61957622f3b1295ed 

2. Alameda budget: https://www.alamedaca.gov/files/assets/public/v/1/city-manager/documents/fy23-25-biennial-budget-pdf_reduced.pdf 

3. Hayward Budget: https://www.hayward-ca.gov/sites/default/files/documents/FY-2025-Proposed-Operating-Budget.pdf 

4. Long Beach Budget: https://www.longbeach.gov/globalassets/finance/media-library/documents/city-budget-and-finances/budget/budget-documents/fy-25-adopted-budget/fy-25-adopted-book 

5. Fresno Budget: https://www.fresno.gov/wp-content/uploads/2024/05/FY-2023-2024-Adopted-Budget-Copy-2.pdf

6. Irvine Budget: https://online.flippingbook.com/view/1063020982/ 

7. California Property Tax: An Overview: https://www.boe.ca.gov/proptaxes/pdf/pub29.pdf 

8. https://www.officialdata.org/ca-property-tax/#37.803463062419546,-122.26899285335095,18

1  https://wedrawthelines.ca.gov/wp-content/uploads/sites/64/2023/01/Final-Maps-Report-with-Appendices-12.26.21-230-PM-1.pdf

2  https://cao-94612.s3.us-west-2.amazonaws.com/documents/Final-Commission-Charter-Report-with-Color-Sample-20230123-Text-5-081423_2023-09-25-212657_lijc.pdf

3  https://stories.opengov.com/oaklandca/9dcfda3a-bb21-495a-a4d9-6f39ba13d111/published/3knoFbc10?currentPageId=66e491e6e458e929c03039b1

4  https://data.census.gov/profile/Oakland_CCD,_Alameda_County,_California?g=060XX00US0600192230#housing

5  https://cao-94612.s3.us-west-2.amazonaws.com/documents/Appendix-B-Housing-Needs-Assessment-1.12.23-clean.pdf

6  https://uli.org/wp-content/uploads/ULI-Documents/HigherDensity_MythFact.ashx_.pdf

7  https://www.citypopulation.de/

8  https://cao-94612.s3.us-west-2.amazonaws.com/documents/Appendix-B-Housing-Needs-Assessment-1.12.23-clean.pdf

9  https://data.census.gov/profile/Oakland_CCD,_Alameda_County,_California?g=060XX00US0600192230#housing