By Meghan Hall
The San Francisco Bay Area draws top companies from around the world due in large part to the region’s plethora of top-tier talent. That talent comes in a steady stream thanks to the region’s numerous universities such as University of California, Berkeley, Stanford, Santa Clara University and San Jose State University, to name a few. Many college campuses are struggling as their pace of growth has outstripped housing supply. A newly proposed 316-unit development called Spartan Heights, which has been proposed for downtown San Jose just blocks from San Jose State University, is looking to alleviate some of that pressure. The project application, submitted by Brent Lee, a Saratoga, Calif.-based real estate investor, and San Jose-based Republic Urban, hope to gear the project toward students.
It is unclear exactly how many of the 316 units will be devoted to student housing and how much students will pay to live in the developments. Plans also include 10,733 square feet of commercial space.
The 23-story project, located at N. 4th St. and E. St. John, is currently occupied by two single-family residences, which would be demolished to make way for the new development. The project would also include above-ground parking. The nearly one-acre site is located just a block from St. James Park and the Trinity Cathedral. It is also in a highly popular area of San Jose, blocks from Downtown, San Pedro Square, the San Jose McEnery Convention Center and San Jose State University. San Jose’s Diridon Station, which will be the center of major development over the next several years, is a few blocks away, as well.
Estimated completion for the development is 2020, and the project is just one of about 20 residential projects pending City approval, according to public documents. If approved, those 20 projects would add more than 6,600 residential units to San Jose’s housing stock. During the first six months of the 2018/2019 fiscal year, 1,600 building permits were issued for new residential units. However, the City’s Five-Year Economic Forecast and Revenue Projections for 2020-2024 indicates that the number of new residential units are forecasted to decline based on the number of permits issued in the coming year due to the increasing cost of new construction and flattening rental rates.
However, while the forecast predicts that development will slow in the coming years, San Jose still remains an active market driven by the burgeoning tech industry. At least through 2019, job growth will remain “exceptional” according to Marcus & Millichap’s 2019 Investment Forecast for San Jose. While the increasing housing supply in the city will cause small increases in vacancy, the overall demand for housing will still prompt gains in rent throughout 2019. That demand will be driven by the anticipated 40,000 new positions that will be created in the coming year, the report states.
Republic Urban did not respond to The Registry’s request for comment.