People’s Park housing developer abandons UC Berkeley project, citing lost federal funding

The developer slated to build permanent supportive housing for UC Berkeley’s controversial project at People’s Park has backed out, after ongoing lawsuits jeopardized crucial federal funding late last year.

Resources for Community Development, a Berkeley-based nonprofit, recanted its commitment to build 125 units on the site for extremely low-income, unhoused or formerly housed people, the organization confirmed in a statement Friday. In a separate building, UC Berkeley is also hoping to construct 1,100 beds for students.

After a state appellate court ruled that UC’s housing plans violated the California Environmental Quality Act (CEQA), the ongoing delays and challenges of keeping the project alive proved too much for the nonprofit to continue moving forward with financing, according to Lauren Lyon, RCD’s director of marketing and communications.

In February, the First District Court of Appeals in San Francisco overturned approvals of the development, which were originally greenlit by the UC Regents in September of 2021. The judges ruled that UC Berkeley failed to adequately study how noise from tenants would impact on the surrounding neighborhood and justify why it could not meet self-prescribed, non-binding housing goals without demolishing the storied park.

RCD will continue supporting UC Berkeley’s ongoing plans for People’s Park, Lyon said. The nonprofit admonished the community members who first brought the CEQA lawsuit to court, blaming those “costly and time-consuming” legal battles for exacerbating problems already facing development of affordable and supportive housing in the state.

“We believe the (February) ruling sets a dangerous precedent for housing development, especially for the creation of new affordable housing which is so desperately needed,” Lyon said in a statement. “RCD continues to be deeply committed to providing housing solutions for low-income individuals and families, unhoused people, and those at risk of being unhoused. With this commitment in mind, RCD is reallocating our non-profit organization’s limited resources to other developments.”

UC Berkeley spokesperson Dan Mogulof said the university regrets losing RCD’s partnership, but will work to secure a new developer to bring that element of the project to fruition — in addition to open green space, commemoration of the site’s storied past and “urgently” needed student housing. Only 23% of students at UC Berkeley live in university housing — the lowest rate across all UC campuses.

“The university’s commitment to donate a significant portion of the site for the construction of supportive housing is unwavering,” Mogulof said in a statement, adding that the federal funding RCD unsuccessfully pursued was intended for services that future tenants that would use onsite, rather than construction costs. “We are confident that the campus will secure the partnerships and funding necessary to honor our commitment to unhoused people in our community who have an urgent need for all that a new supportive housing facility can provide.”

The city of Berkeley allocated $14.4 million to its supportive housing component after the University of California approved the $312 million project almost two years ago.

Councilmember Rigel Robinson, who represents the park in District 7, said it is imperative that the city maintains that investment for whichever affordable housing partner takes over the project in the future.

Robinson said that while the news about RCD is disappointing, he understands why the nonprofit — which he called a “phenomenal partner” — made that decision.

“Affordable housing providers cannot be dragged along forever without certainty about project timelines,” Robinson said in a statement. “Make no mistake, this unfortunate decision by RCD is the direct consequence of the actions of those advocates in Berkeley who have sought to obstruct the People’s Park project, ostensibly in the name of preventing gentrification in Berkeley.

“The fruits of their labor are that it will be harder and take longer to build the affordable housing our community so desperately needs.”

But Harvey Smith, president of the People’s Park Historic District Advocacy Group, pushed back on the idea that the neighborhood group is the reason the project is still stuck in legal limbo. He said the group supports housing construction, just not on the historic 2.8-acre park.

Instead, he suggested that the developer’s decision to withdraw from the project is just the latest consequence of UC Berkeley’s failure to adequately plan for the legal complexities of the project, and the amount of opposition to it.

“They’ve already built a lot, and continue to build — both on land they own or have recently acquired,” Smith said. “If you’re really sincere about building student housing, why would you pick the most contentious, complicated site as the (university’s) second project?”