Officials in Berkeley have approved what could be the city's tallest residential tower, a display of just how much politics around housing in California have shifted in the past few years.
The 599-unit project would be 312 feet high, taller than the University of California, Berkeley's 307-foot Campanile, which is the world's second-tallest freestanding clock and bell tower and can be seen from miles around the bay. The project could also mark the largest residential tower on a unit basis; it's more than twice the scale of the city's current largest tower, the 259-unit Aquatic Fourth Street building, which spans five stories.
It marks the third project that’s taller than 25 stories to receive the blessing of officials in a town where, a decade ago, apartment buildings of many heights were drawing opposition from neighbors.
But none of those high-density multifamily housing projects — the kind that officials and the rest of the state say Berkeley desperately needs — is likely to get built anytime soon, according to developers.
This delay has nothing to do with resident pushback. Rather, it's because the cost of materials and labor required to build high-rise buildings is simply too high, said Mark Rhoades of Rhoades Planning Group, a firm involved in a number of housing projects Berkeley has greenlighted in the past couple of years. That includes the proposed 28-story project at 1998 Shattuck Ave. in downtown Berkeley approved this month.
Construction on such a project "is very difficult right now, very difficult," Rhoades, who headed Berkeley’s planning department from 1997 to 2007, told CoStar News. He noted that the Trump administration's new tariffs on steel "have put it in the impossible realm."
Development roadblocks
The approved project is designed to span a full city block, including 16,000 square feet of commercial space and a rooftop restaurant. The development team is made up of NX Ventures and Trachtenberg Architects as well as Rhoades Planning.
The Shattuck Avenue project would have 58 apartments set aside for renters who are considered very low income, and would be situated just steps from the downtown Berkeley BART station. It's the type of live-work-play “15-minute lifestyle” housing that officials in the Bay Area have been saying the region desperately needs.
Rents in the East Bay, including Berkeley, climbed 1% in the past year to $2,463 a month, about 40% above the nation's average. Apartments are "seeing robust demand growth alongside a dwindling construction pipeline," a CoStar market report notes.
Despite high rents that point to potential profits for developers, high construction costs, hard-to-obtain financing packages and red tape have hindered the construction of residential units in recent years, industry professionals have told CoStar News.
Andre Bueno, director of housing for Better Angels, a nonprofit that's pursuing unsubsidized affordable housing projects in Los Angeles, said lengthy approval timelines "kill momentum" for such projects even with the help of private capital.
“I don’t know anybody who’s going in to pull building permits right now," Rhoades said.
The fireproofing and extra durability required for any building over eight stories cost $125 to $150 more per square foot than other types of construction, said Rhoades, and that was before factoring in the higher import tariffs President Donald Trump said he was levying on steel as of June 4.
The bottom line is that rents are not high enough in the East Bay — even in a university town like Berkeley where the rental market is famously competitive — to justify the high costs of development, said Rhoades, who predicts it will be two to three years before the apartment tower at 1998 Shattuck breaks ground.
"We'll have to go out and find equity, which will be a difficult thing to do," Rhoades said.
NIMBY history
In the past, Berkeley waged years-long bitter battles to stop housing developments, particularly large apartment buildings. As late as 2017, a Berkeley homeowner wielded a homegrown zucchini at a heated City Council meeting to voice her concerns that a proposed apartment building next door would cast a shadow over her vegetable garden.
A newfound awareness about the high costs associated with California's housing crisis along with a raft of new state laws have unblocked the pipeline. The legislation includes 2019’s SB 330, which streamlines the approval process and limits the number of hearings cities can hold about developments, as well as mandates to speed approvals for affordable housing and backyard cottages, end single-family zoning and allow apartment buildings to be built at public transit stations.
At its June 3 meeting, the Berkeley City Council rejected an appeal from a resident to block the 28-story project at 1998 Shattuck, noting that state laws have dramatically curbed the power of local governments to block or slow down projects. The development would count toward the nearly 9,000 units of new homes Berkeley must plan for by 2031 or risk losing control over its planning approval process.
“This is the place to build a tall building,” said Councilmember Igor Tregub. “It is right in the heart of the downtown core, and I could really see this activating, once fully built, this very important part of my district."
That comment represented a dramatic contrast to Berkeley’s no-growth legacy, which dates back to 1916, when the college town became the first place in the country to enact zoning restrictions that deemed certain neighborhoods off limits to anything but single-family homes. In the 1970s, the city that had become famous for spawning the free speech movement of the 1960s enacted further preservationist measures that blocked new housing.
Rhoades said that between 1970 and 1996, the 26 years before he began leading the city's planning department, Berkeley approved just 126 new homes.
A turning point took place in 2012, when, following fierce debate, Berkeley approved its Downtown Area Plan allowing developers to build seven high-rise apartment buildings in the city’s core. Officials have now given the go-ahead to all of those projects, and thousands of new homes have been built in accordance with the plan.
In early 2023, the city’s zoning board approved a proposal from Georgia-based Landmark Properties to build a 25-story high-rise with 326 apartments at 2190 Shattuck Ave., just a few blocks away. Then last year, officials green-lit a plan from Chicago-based developer Core Spaces to build a 26-story, 456-unit apartment building at 2128 Oxford St.
The largest proposal in the Berkeley housing pipeline is a 739-unit redevelopment of a BART station, CoStar data shows.