"We are not here because Max Harris is a horrible person," prosecutor Autrey James argued. "A mistake was made that cost the lives of 36 people."
James also said that relatives of two victims wrote letters opposing Harris' release on minimal bail. James didn't identify the families.
The judge said he had a legitimate concern that Harris, 27, has lived in Oakland for about four years without steady employment. Harris was arrested in June in Los Angeles.
Smith said it's doubtful Harris can post the reduced bail, but he said a fundraising effort among his friends in the artists community had started. Harris waved to two friends in the gallery, both of whom declined comment outside court.
Harris and Derick Almena, 47, are each charged with 36 counts of involuntary manslaughter for the Dec. 2 fire. Each face 60 years in prison if convicted. Neither man has entered a plea.
Almena's lawyers are scheduled to make the same argument for bail reduction on Aug. 4, when both men are scheduled for an arraignment as well.
Almena rented the warehouse, and prosecutors say Harris helped him sublet living space in the building.
Alameda County District Attorney Nancy O'Malley said the pair turned the warehouse into a "death trap" by illegally converting the building into an entertainment venue and housing for artists.
O'Malley argued that once the men rented living space to tenants, they were responsible for the installation of sprinklers and to ensure the building was safe. Instead, the men cluttered the warehouse with flammable materials, O'Malley said.
Lawyers for the two men argue that the fire should not have resulted in criminal charges. They say that Harris and Almena are being charged to distract from the region's lack of affordable housing.