BART has now approved a development project at the West Oakland Station that will include 762 housing units (!!!) with more than 30% of units being marked specifically for affordable housing. The development will also include more than 50,000 square feet of retail space and 300,000 square feet of office space, along with additional crosswalks and wide sidewalks for pedestrian access, perfect for getting those Fitbit steps in. The hope is that this project will be transformative for West Oakland, providing much needed housing that is more easily accessible to neighborhood amenities and resources.
The average U.S. home costs $240,000. But in San Francisco, a two-bedroom apartment costs around $750,000 to build. The costs of construction in SF are 13% higher than New York, 60% more expensive than Chicago, and 75% more than in Houston. But why is it SO expensive?
For starters, the price of land and labor in California is insanely higher than other states. In SF, a construction worker makes about $90 an hour. (Did you just audibly gasp because you had no idea this was a construction worker's average wage and consider maybe you too could work in construction someday? Because same).
But it’s not just that. There are so many costs that go into building affordable housing. Government fees, permits, hiring consulting companies.... So. Many. Things. It literally took the City Council 6 months just to agree on the financing paperwork alone. More attorneys are involved in projects than actual construction workers. And we wonder why it takes SO long to get any sort of traction on building affordable housing (or any housing at all) in the city. *Insert crying face emoji here.*
In non-Corona-related news (does that even exist anymore?), Kaiser cancelled their plans to build out a 1.6 million square foot tower due to delays and the ever-increasing costs of construction and project-related fees (not because of the pandemic, although the timing couldn't have been worse). This would've been Oakland's biggest commercial project, so this is a huge blow to the development of downtown.
In the midst of the biggest growing phases in downtown Oakland history, another tech giant is hopping on the bandwagon and making the move! Credit Karma opted to lease 5 floors with a rooftop deck at 1100 Broadway. Now with two offices, one in Oakland and one in SF, Credit Karma employees will be able to BART back and forth between two locations. New residential towers, offices, and hotels are also expected to pop up in the area within 6-12 months, proving that downtown Oakland's momentum is just getting started.
The Berkeley Way West building, that is. The tech giant has now taken over its first East Bay office in order to house two artificial intelligence companies it purchased last year, Semantic Machines and Bonsai. We've seen in the past how tech companies in Silicon Valley affected home prices all around the Bay, so TBD on how this will influence home values in the already coveted Berkeley area.
Ever since leading tech companies Amazon, Apple, Facebook and Google all landed on the West Siiiide (did you say that in your best Tupac voice?), affordable housing has been nearly impossible to find. Recently these companies vowed to find solutions to this issue in their local communities. But are their efforts enough? Some say nah.
Despite the billions of dollars they've pledged and initiatives they've started (Amazon literally opened a homeless shelter on their downtown campus), many folks feel that it might be too little too late. With homelessness rising and diversity dwindling in these communities, a lot of people believe that the money being thrown at the problem just isn't enough. Is there a better solution? That’s yet to be seen. But hey, this is a start.
A few months ago, health insurance company Blue Shield of California moved 1,200 of their employees from their old building in San Francisco to a 24-story high rise a few blocks away from the Oakland City Center BART Station. And it appears this is just the beginning. There's a whole movement happening—companies want to be based in Oakland.
Kaiser Permanente plans to build a $900 million headquarters, BART plans to create a new headquarters, and tech companies Square and Credit Karma have already signed major plans to expand their SF-based offices to The Town. And let's not forget to mention the most important development of all: FOOD. The new launch of Oakland Assembly, a 14,000 square foot, two-level market hall located at Jack London's waterfront will bring in star chefs who will be sure to fill your bellies while emptying your wallets.
All of these developments have made one thing abundantly clear: Downtown Oakland is about to see one of its biggest building booms in decades, and I'm here for it.
All things real estate.