East Bay program aims to drive Black homeownership, equity

Faced with historic gentrification in Oakland, the Chan Zuckerberg Initiative has launched a pilot program to help low-income home owners re-develop their properties with in-law units.

The program, backed by a collection of community groups and businesses, aims to primarily help Black homeowners in Oakland get financing and build small, income-producing accessory dwelling units, or ADUs. The goal is to help build affordable housing, boost property values and encourage long-term wealth-building in minority communities long shut-out from many homeownership opportunities.

Ruby Bolaria-Shifrin of CZI said the foundation wanted to build a program that addressed historic racial inequalities in housing. "(ADUs) are not the silver bullet, but they're a tool in the toolbox," she said.

Gentrification and the Bay Area housing crisis have driven home prices in former working class neighborhoods over $1 million, putting pressure on long-term residents. Exclusionary housing policies kept minority residents out of homeownership, the primary path for Americans to create family wealth.

The Black population in Oakland has fallen from 142,000 to 103,000 between 2000 and 2019, according to census data. The share of Black residents in city's population has dropped from 36% to 24%.

The program is a partnership between CZI, Richmond Neighborhood Housing Services, lender Self Help Federal Credit Union and developer WellNest Company. The groups have been 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. The foundation's funding will make it easier for homeowners to secure loans, Bolaria-Shifrin said. Owners will be responsible for repaying the loans.

Homeowners can apply through , a community nonprofit that will evaluate applicants and provide education about ADUs 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 financing, permitting and construction. "We are guiding them every step of the way," she said.

Applicants will have a choice of three ADU designs. WellNest, a family-owned company with deep roots in the city, will serve as general contractor on the projects. The units are either garage conversions or free-standing dwellings, and are expected to cost between $168,000 to $220,000. Homeowners take out loans for the improvements through a specially-designed financing program.

WellNest COO Bobby Arte said the units can be used for family housing or as rentals, allowing homeowners to preserve and expand existing family homes. "These programs are vital to maintaining the diversity and beautiful culture," of the neighborhoods, Arte said.

The goal is to build 60 units in the next three years, primarily in East and West Oakland neighborhoods. The project estimates 20,000 owner-occupied, single family homes could be eligible.

California has taken several steps to make it easier for homeowners to build ADUs, eliminating minimum lot sizes and parking requirements, and prohibiting various city and county ordinances that limited construction.

The state also announced last month a $100 million ADU grant program for low- and moderate-income homeowners. Grants up to $25,000 will help homeowners build backyard units in communities with large Black and Hispanic populations.

Homes in minority communities have appreciated more slowly than those in White communities, said Eric Johnson, spokesman for the California Housing Finance Agency. "These are the places that really need the extra income," he said.

The expense of building an ADU can be prohibitive to homeowners with low equity or incomes. The median cost to build an in-law unit in the Bay Area is about $180,000, according to a survey by the UC Berkeley Center for Community Innovation.

The survey found about half of the units served as rentals, giving homeowners an additional source of income. The median rental price for a Bay Area ADU is $2,200.

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