Development permits have been filed seeking the approval of a residential project proposed at 4328 Martin Luther King Jr Way in Oakland. The project proposal includes the development of a six-story building offering both market-rate and affordable housing units.
The project will bring 57 residential units into a six-story building. Out of the total units, seven units will be set aside as affordable units for very-low-income levels.
The residences will be built off-site, offering a total of 155 bedrooms. The total residential built-up area will be 57,000 square feet. The building will offer spaces for a podium, lounge, and leasing office on the ground floor, spanning 3,273 square feet.
The cost of construction is estimated at $5,445,020. The project applications have been filed and are pending approvals. The estimated construction timeline has not been announced yet.
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Let’s look at the math: Construction Cost = $95,526/unit (for 57units in this project). Similar Multi-family/student housing development projects in Berkekey (The Durant & The Blake) were sold shortly after completion of the construction @ $937,000/unit & $785,000/unit, respectively or $861,000/unit median.). Since that $95,526/unit already includes all of the various fees and development costs imposed by govt (which is typically estmated @ 11-15% of constrcution costs or let’s say $15,000/unit). Now let’s look at the bottom line: Developer pays govt $15,000/unit up front in fees then pays $80,000/unit for materials and labor over 36 months. Upon completion of the construction, they sell the building and take home say $765,000/unit. Less $105,000/unit to pay back the construction loan = actual profit of $660,000/unit x 57 units = $37,650,000 est. The Takeaway: Your City’s leadership and policy makers are allowing people to come into your City and make off with $37 and half million dollars in exchange for the $855,000 in fees payable to the City. The Solution: Immediately change how permit and development and impact fees are calculated. Base them on anticipated market value—not on anticipated construction costs. Berkeley is not some factory-town in the mid-west plagued by plant-closures and economic desparation. Even if City leaders quadrupled ALL permit and development fees tomorrow morning,, developers from across the county will still compete for land and submit plans, pay however high of permit fees they are told for permitssion to raze, displace, consruct gentrify and harvest maximum profits from every square foot of land they can acquire rights to.
There are impact fees of $26k PER unit for a project like this. The impact fee is on top of the regular permitting fees.
The developer is creating 57 units where there used to be 4 units and paying the city millions in fees.
Look at a map. These units are no where close to Berkeley campus like the 2 projects you mentioned. They would never sell for a premium like the units you listed which are right on campus.