Co-living projects being considered in SF and San Jose

Developers have not rushed to build co-living projects in San Francisco mainly because of the city’s 2013 decision that requires “group home” projects to meet the same affordable housing requirements as other market-rate developments.

As reported recently in the San Francisco Chronicle, that decision shutdown a project that developer Build Inc. and co-living provider Open Door proposed at 1532 Harrison St. The proposal entailed to have 235 micro-suites organized around 28 shared living spaces.

“Overnight the board killing our project — we reverted to traditional multifamily development,” said Michael Yarne of Build Inc. “Killing something before it’s even tried — it’s a tradition in San Francisco.”

On the other hand, San Jose — where Starcity is building an 803-bedroom project — has actually embraced co-living, according to Sean Milligan, who is a partner with developer KT Urban, which is working on over 1,100 co-living rooms in San Jose.

Recently, the city of San Jose passed legislation creating a special zoning category for co-living, which exempts it from requirements having to do with parking, affordable housing and densities. Like San Francisco, rising construction costs are making market-rate apartment complexes challenging to finance in San Jose. Co-living, which generates a higher return per square foot of real estate, could be part of the solution.

“We struggle so greatly just to get a shovel in the ground to get housing in the city, because construction costs are so high right now,” said San Jose Mayor Sam Liccardo. “The fact that (Starcity) has found an approach that could get housing built was a good enough signal to me that we should get any obstacles out of the way.”

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