More new multifamily projects for San DiegoReal Estate Thursday, December 8th, 2016
I reported in May on the surge in building activity in San Diego, and in particular the addition of multifamily projects, some quite large. We attributed the demand to the millennials, fans of mixed use communities and lacking an objection to dense infrastructure.
I mentioned the inconsistency of costly modern apartments being built in areas where the unfortunately homeless still persist, but I am happy to report that the need for affordable housing has not been forgotten in the building boom. The 1910 New Palace Hotel at 1814 Fifth Avenue is being re-purposed into 80 low income units by Housing Development Partners, an affiliate of the San Diego Housing Commission. New on the scene will be The Beacon designed by M.W. Steele Group and a development by Wakeland Housing and Development which will house 44 formerly homeless individuals.
On a much larger scale, there is the entry of a full city block development on Broadway, C Street and Seventh and Eighth Avenues. Two towers, 41 and 21 stories will contain a walloping 620 apartment units, over 17,000 square feet of retail and 743 parking spaces. Another Park and Market project, 34 stories and containing 426 market rate apartments and 85 affordable units, will also sport retail space, open public space and even an amphitheater.
And this isn’t the end of it either. Approvals are in for another block-size development in East Village called Streetlights Makers Quarter. Designed by Carrier Johnson and Culture, as the aforementioned 34 story tower, this is a lower rise project and will contribute another 295 residential units, plus retail and parking. Sherman Harmer will be building a 28 story, 150 unit building in Little Italy, this one offering automated robotic parking for 155 cars.
So what’s all this development about? I’ve mentioned the lack of inventory in the single family home market in San Diego in this column, and the lack of building permits being filed for new single families. In the housing boom of 2004, there were over 17,000 residential permits issued; in 2016, just north of 7,000. The strong market and low inventory have driven prices up 8 percent.
Local builders are putting their investment capital into condominiums and apartments over single family homes. Single families saw permitting for new homes down 26 percent while multifamily permits went up 49 percent. It is clear that developers see a lower risk and greater return in this segment of the market.
The reasons are clearly evident. Baby boomers and millennials alike seem to favor being in the thick of urban life, downsizing, and enjoying the easy lifestyle, convenience and proximity of restaurants, trendy shopping, events and other opportunities the city has to offer. Less driving, less expense and not to mention, the escalating cost of those few single families on the market.
The world is changing. Little robots now vacuum our homes while we sit on the couch and watch them spin. Being able to work, play and reside in one area just seems like a good idea. We’re just glad that some of these new units, at least, will be available for some less fortunate. May we all enjoy our beautiful, though considerably more dense, city of San Diego.
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