Oakland scraps controversial housing project near Lake Merritt

Oakland scrapped a housing project planned for a lot next to Lake Merritt after its developer sought a sixth extension in seven years.

The city council voted 5-3 to reject the 360-unit two-tower development on East 12th Street and Second Avenue amid criticism that anything built on a city-owned lot should be only affordable housing, the Mercury News reported. The developers had promised 30 percent of the units would be marketed to low- and middle-income residents.

The site is being used as a temporary tiny house village for the homeless. City Council President Nikki Fortunato Bas opened up the village with pallet shelters and electricity for about 60 people last summer after it had become an unofficial homeless encampment.

“They have not yet shown an ability to close this deal,” Bas said. “And so given what I have heard from the residents since I’ve been in office and before I’ve been in office, I do believe this public site should be leased and not sold. It should be used for affordable housing. It should not displace even more residents than have been displaced.”

The project, which would have included one tower of market-rate units and another with affordable housing, never got off the ground due to a lack of funding. Developer UrbanCore recently obtained $250 million for the market-rate tower, company president Michael Johnson said after the vote.

“I think it was absolutely the wrong decision,” Johnson said. “We have demonstrated our commitment to this project by investing $20 million amongst the different partners and working on it for the last six years.”

While the city sold the property to the developers for $8 million, the sale was contingent on the project breaking ground.

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