SAN JOSE—With the explosion of jobs in the tech sector during the past decade, Silicon Valley and San Francisco remain undersupplied in terms of housing. And, from designs for autonomous cars to modular furniture and customizable floor plans, developers are crafting both multifamily and single-family homes to incorporate those aspects, along with personalized wellness and sustainability elements to draw those residents in.
Multifamily developer and manager Greystar hopes to put a significant dent in the pent-up demand for new and improved living experiences, and is committed to exploring innovative ideas and pioneering new ways to serve residents and clients. In addition, Greystar is working closely with city planning commissions, local city officials and key community leaders to make sure neighborhoods are strengthened by development.
Greystar has more than 15 projects in different stages of development in key job markets including San Jose, Redwood City, Mountain View and Menlo Park. Ali Warner, managing director, Greystar, Northern California and Pacific Northwest, recently discussed market trends and shed some light on what to expect from 2018.
GlobeSt.com: Approximately how much inventory is needed to completely serve the pent-up demand for rental housing in Silicon Valley?
Warner: Quoting recently passed legislation, it is estimated that California has accumulated an unmet housing backlog of nearly 2 million units and must provide for at least 180,000 new units annually to keep pace with growth through 2025. Only half of California's households are able to afford the cost of housing in their local region and the majority of California renters pay more than 30% of their income towards rent and one-third pay more than 50% of their income to rent. The solution is to streamline entitlements for high-density infill development near transit.
GlobeSt.com: What are the renter demands that The Duboce and Elan Menlo Park are filling?
Warner: Both Elan Menlo Park and The Duboce provide much-needed housing in jobs-rich Menlo Park and San Francisco respectively. Elan Menlo Park is one of three new housing developments on the East side of 101 in Menlo Park. This area recently completed a planning effort that provides the groundwork for a vibrant live, work and play community. The Duboce is located in one of the great neighborhoods of San Francisco in close proximity to transit, nightlife and restaurants. Each community has a diversity mix of residents that enjoy premier apartment living.
GlobeSt.com: Please provide some examples of how Greystar worked with city planning commissions and officials to create these developments.
Warner: Greystar works hand in hand with city planning commissions and officials to realize the vision that has been thoughtfully laid out through the land use designations. We take great pride in being involved in the local communities where we do business and work hard to ensure we not only provide smart housing solutions but also dedicate time to assist with other community initiatives. In many communities, we get involved very early in any new visioning process to provide guidance as a community explores alternative land uses.
GlobeSt.com: What is your outlook for multifamily housing in the Bay Area in 2018?
Warner: There are definitely headwinds in the multifamily development space as construction costs have doubled since the last peak cycle in 2007. We expect development to continue through 2018 but expect there to be less in the pipeline. That being said, we are still full speed ahead in pursuing new development opportunities.
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Lisa Brown
Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.
