146-Unit Mixed-Use Development Planned for Downtown Berkeley as City Grapples With Housing Crisis

By Jack Stubbs

The City of Berkeley, like many Bay Area towns, is doing all it can to keep up with rapid population growth. Over the last several months, a number of proposals for multifamily projects have been filed with the city, reflecting an increased focus on meeting this escalating demand. 

On April 29th, Berkeley-based developer NX Ventures filed a pre-application for the construction of a 16-story, mixed-use building – located at 2420 Shattuck Ave. –  with 146 dwelling units, ground level lobbies and commercial space. Trachtenberg Architects is also on the team for the project, the application for which is currently under review by the City. 

The proposed development is located at Shattuck Avenue between Channing Way and Haste Street, and is just several blocks from the city’s downtown core including prominent landmarks like the Downtown Berkeley BART station, Berkeley Art Museum and Pacific Film Archive, and downtown Berkeley YMCA. The site is also just four blocks from the University of California Berkeley campus. 

Notably, the design team will look to leverage the State of California Density Bonus Program, according to the pre-application, which will allow the project team to build 50 percent more units than zoning typically allows, provided that a certain number of affordable units are included in the plans. The original height limit for residential limits imposed by the city was 75 feet.

The State Density Bonus Program, launched in 2021 and meant to encourage the development of affordable and senior housing, stipulated that residential projects in California with on-site affordable housing could receive a density bonus of up to 50 percent. Previously, the maximum bonus was 35 percent. 

NX Ventures’ project on Shattuck Avenue is not the only multifamily project the company has in the pipeline. In late January, the company – also in partnership with Trachtenberg Architects – filed a pre-application for a 210-unit multifamily development located at 1598 University Avenue, roughly one mile northwest of the project on Shattuck Avenue. The project will also look to take advantage of the California State Density Bonus Program.

Project plans indicate that 21 apartments will be reserved for very-low income residents. Plans also show that 4,780 square feet of ground-level retail and a 34-car garage will be included. Residents will also have access to a fitness center, clubroom and a 5,000 square-foot garden. NX Ventures originally purchased the property for about $5 million in September of 2021.

NX Ventures’ latest proposal comes at a time when rapid population growth continues to afflict the city of Berkeley, which sits in close proximity to both downtown San Francisco and the prominent UC Berkeley campus. In recent years, critics of UC have claimed that the university’s development issues have forced tens of thousands of students into surrounding neighborhoods, creating a chaotic housing crunch.

Despite the broader issues, some relief might be in sight in the coming years. In March, PGIM filed plans to build a 326-unit project – also designed by Trachtenberg Architects – at 2190 Shattuck, where the company had been previously approved to construct 274 units. At 2150 Kittredge, plans are moving ahead to construct a seven-story, 169-unit residential apartment building, which is a collaboration between East Beach Capital, Pinnacle Partners and Kava Massih Architects. Another 10-story project by NX Ventures, at 2920 Shattuck, is also in the works. 

If approved, the projects would add much-needed housing to Berkeley. The supply constrained-community has grown exponentially in recent years but has simultaneously faced a dearth of new projects, driving up rental rates. Cities across the Bay Area are experiencing a similar story. Vacancy and unemployment are trending downward, causing rental rates to rise further, according to a fourth quarter multifamily market report by Kidder Mathews.  Asking rents have increased 6.19 percent year-over-year, from $2,247 in 2020 to $2,386 in 2021. More than 29,000 units were absorbed in 2021, a trend that will continue as job growth persists.

West Coast Commercial Real Estate News