Industrial Land Use Policy: How did we get here?

The LUTE, as I explained last week, divides Oakland’s land into 14 different categories, two of which are reserved for industrial uses. Of course, zoning for something is no guarantee of creating it, and Oakland has been struggling with a dwindling manufacturing base for decades. In recent years, more and more longtime local employers have been disappearing. Some, like Mi Rancho, went to cheaper parts of the Bay Area. Some, like Red Star Yeast, shut down over environmental issues. Others, like Granny Goose, shifted production to cheaper domestic locations. And outsourcing and off-shoring continued eating at the industrial base – quota elimination in the textile and apparel industries resulted in the loss of much of Oakland’s garment industry earlier this decade. A 2005 study from McKinsey & Co. (PDF!) paints a grim picture for the future potential of heavy industrial activities (and the low-skilled jobs that accompanied them) in the region. Much of our industrial land has sat vacant or underutilized for years, and remains so today. Nonetheless, Oakland, because of our Port, remains a potentially attractive location for those industrial businesses that do wish to remain in the Bay Area, and the current supply of industrially zoned land provides room to accommodate growth in the sector.

Meanwhile, Oakland struggles with an ever more pressing need to create new housing units in order to meet our regional housing allocations. As housing prices (and therefore land values) rise, it has become increasingly difficult for developers to profitably deliver moderately priced new housing. Our ample supply of underutilized industrial land presents an opportunity to for developers to employ economies of scale, and produce more reasonably priced units in significant numbers on the large and comparatively cheap parcels in industrial areas.

By 2005, the City was looking at proposals for rezoning industrial land for several large housing developments, including Wood Street in West Oakland, Arcadia Park in East Oakland, and Fruitvale Gateway in Central Oakland. As more residential developers expressed interest in industrial parcels, planning staff sought direction from the City Council about how to respond, resulting in a discussion of industrial land use at the June 14, 2005 meeting of the Council’s Community and Economic Development Committee (CED). The staff report (PDF!) for the item discussed the dual pressures of providing space for jobs and business attraction as well as housing production, particularly if we hoped to attract more retail.

CED agreed that something should be done, and asked staff to return with a more detailed report and some specific recommendations regarding industrial land conversions, and staff returned to the Committee on November 8, 2005 with more information as requested. Recognizing that there was no one solution that made sense everywhere, staff divided the land in question into 17 distinct subareas, grouped by existing land use characteristics and major street boundaries. The maps below show the location of each subareas, although they’re a bit difficult to read.

West Oakland

Central Oakland

East Oakland

The subareas ranged widely in size, from a meager 26 acres to almost 400, some supporting thousands of jobs, and some barely over 100. The table below displays the size of each subarea in acres as well as the number of existing jobs in it.

Staff also mapped the current land use in the area. Industrially zoned areas ranged from successful, with as much as 97% of land being currently used for industrial purposes, to weak, with as much as 34% of land currently vacant.

By September 2006, the Council had reached relative consensus about what to do with at least some of the land. The Council voted keep subareas 2, 6, 7, and 14 solely as industrial, keep 3 and 13 industrial except for allowing retail along the freeway, and keeping area 4 industrial between the freeway and Tidewater, but could not reach agreement about subareas 1, the other half of 4, 5. 8, 9, 10 , 11, 11a, 15, 16, and 17. They decided that all these areas needed more analysis, and kicked them back to the Planning Commission’s Zoning Update Committee, who held hearings between December 2006 and July 2007 on the items. The Zoning Update Committee declined to make recommendations for each subarea, instead suggesting the requests for General Plan amendments in these areas should be considered projected by project.

And this is where we stood until a few weeks ago. Check back tomorrow to find out what we actually did (with video!).