Oakland (Special to ZennieReport.com) – As this is written, the City of Oakland has trimmed its services to near-bare-bones levels and talk of filing for bankruptcy is in the air. But how did Oakland go from a seemingly thriving and fiscally healthy city to where it is today? The answer is that it forgot how to develop its economy.
Oakland Killed Its Export Economy
Urban Economics 101 says that one does not build its entire economic development around housing. But if you think about it, Oakland’s urban fabric, once known for an auto plant where Eastmont Mall is today, and shipbuilding near where the Port of Oakland calls home at Jack London Square, has had no major building dedicated to what would be called an “export economy” activity. That’s another word for a place that makes things that are then sent to buyers elsewhere.
Yeah, Oakland doesn’t have that any more.
The idea of an export economy is that the businesses have products that are in demand around the world, so the money comes here (to Oakland) to buy them. Those dollars go to the employees, which then spend them around town: at the grocery store, or the restaurant, or the gas station or the movie house or the sports stadium. You get the idea. More folks are drawn to live in Oakland and buy housing. And all of that spending winds up in the Oakland General Fund, and city services are maintained and a budget surplus is realized.
Oakland has largely killed that dynamic.
Today, Oakland has one giant economic engine and that’s the Port of Oakland, which includes Oakland International Airport. And that’s it. It’s small businesses are wrecked, not so much because of The Pandemic, but because Oakland did not use tax increment financing legislation like AB464 Mullen to create economic assistance programs to keep them open.
And that’s especially true for the one business that, well-formed, could be Oakland’s modern export economy: its restaurants. Oakland’s content to allow them to be robbed or priced out of business – often both.
Affordable Housing Has Become A Sad Political Tool In Oakland
What does Oakland care about? Building affordable housing. The idea is that by making more affordable housing the homeless problem will be solved. But that has not happened. Why? Simple: people need housing now; affordable housing takes years to get off the ground. People don’t have that kind of time.
But the elected officials chortle on about affordable housing just to give the gullible the idea that they’re solving the problem. Now, the watchword is “cleanup” as in moving the homeless off the street and making them feel like criminals in the process. That’s inhuman, but you do have evil people behind these ideas – no other way to put it.
If you want to stop the homeless problem, give the people who need the money to afford to live in housing what they need. That would help drive up the occupancy rates, clear the streets, and make a lot of people happy, rather than have them wait for the affordable housing pipe dream that will never come.
Jerry Brown’s Oakland Government And Development Plan Isn’t Working – Time To Junk It
I’m not against affordable housing but I am also not for politically-driven urban development either. And that’s what Jerry Brown’s 10 K program combined with his 1998 Measure X “Strong Mayor” system has got us. (And I should know because I worked on 10 K, producing a weekend developer symposium, and covered the Strong Mayor debates for The Montclarion.)
Jerry’s system has given lay people too much power over public professionals, rather than the mix we had with the Council-Manager system. The change from that to strong mayor was not because Oakland’s economy wasn’t working, it was because the Mayor did not have control over the government at all.
So, we went whole-hog the other way, running from the Council-Manager system in 1998. It’s time for a true balance – give the Mayor power to hire the Chief Administrative Officer, but then it takes four votes to fire the CAO. The result? A more stable government with fewer officials jumping ship every election. That will improve our ability to do and implement long-range development planning.
It’s time to admit that Jerry Browns’s plan’s not working. It was fine when we had redevelopment tax increment financing to fuel affordable housing development while the market-rate dwellings were being built – then Jerry killed redevelopment. Why?
Because, as Former Governor Brown stated in 2020, he did not want subsidies for housing in his Downtown Oakland. KQED’s Scott Shafer’s conversations with Jerry Brown which were part of a series then, and the section on his work in Oakland, made it very clear that Mayor Jerry Brown didn’t care about poor people in Oakland.
On top of that, he hated the idea of a Downtown Ballpark for the A’s and fired CAO Robert Bobb, who was on his way to building one. Mr. Bobb went and did it in Washington D.C.
It’s time to junk Jerry Brown’s plan and go back to normal urban economic development in Oakland.
Oakland Needs Manufacturing And MICE Industry Businesses
Normal urban development says we need manufacturing and we need service industry businesses that draw people. In other words, we need to build our very weak MICE Industry; Meetings, Incentives, Conventions and Entertainment. Folks, bragging about having a 150,000 square foot convention center is the height of insanity, but that’s what we do in Oakland. We need 1 million square feet of convention center space, and as soon as possible. We also need at least 5,000 new hotel rooms.
On top of that, while it’s a good idea to focus on the movie industry, the folks involved really need to expand the effort to embrace the content creator. Also, what is needed is a powerful subsidy program to help content creator businesses in Oakland. And attracting YouTube to Oakland to build a new YouTube Creator Space would help, too.
We also need to establish a sports commission and seriously build our once-great major league professional sports team nexus. Sports events are the 21st Century economic tool because of their relationship with television and the Internet. Big draw events are all the rage around the world. Oakland must be part of that and stop our fading image in Google Trends. Then we can bring people to Oakland and the Port of Oakland can have more people to service at the airport.
The Port of Oakland brags about its cargo stats, but where’s the hotel and convention center to bring the maritime world to Oakland? Houston, Texas has them. So does New Orleans. What’s up with Oakland not getting its act together in that area? Simple, we are too political, and don’t have a real plan. We think screwing around with zoning is the plan. That’s zoning, not economic development – we have forgotten the difference.
All the while that tom-foolerly was and has gone on, our Oakland tax-base has shrank. Gone is the best economic development driver we had: our sports teams. And because our city leaders were not thinking of sports teams as economic development (other cities get it), we were thinking of sports teams strictly from a political perspective. In other words, how many ticket we could get to the Super Bowl or the NBA Finals from the Raiders in 2003 or the Warriors during the Coliseum glory years.
Yeah, you want to see the value of sports teams to Oakland public officials? Just check our Alameda County Administrator Susan Muranishi on TV with the cool near-courtside seats at the NBA Western Conference Finals:
Toward An Oakland That Actually Builds Its Economy
We need an economic development reset, and not with a report, but with a true task force of action, with its endgame a series of resolutions that will change Oakland’s economic direction overnight.
Stay tuned for an expanded section here.