By Meghan Hall
Large-scale residential development is increasingly working its way beyond the limits of downtown San Jose and into neighborhoods along major commercial corridors throughout the city as demand for housing in California’s largest city continues to surge. Properties that were originally modestly developed with single-family homes are being bought up by developers and transformed into mixed-use developments. Such is the development strategy for Santa Clara, Calif.-based ROEM Corporation, who has proposed taking several low-density parcels, located at 961-971 Meridian Ave., and constructing a six-story, 230-unit residential complex, replacing the parcels’ existing family homes.
Currently, the project site is developed with two one-story single-family residences. The 2,194 square foot residence at 961 Meridian was constructed in 1951, while the second home, which totals 2,277 square feet, was built in 1925. Adjacent development includes a mix of single-story commercial buildings and two-story multifamily complexes. The 2.1-acre site is located about 15 minutes from downtown San Jose, outside of the city’s dense urban core. However, the property’s location on Meridian Ave., a major thoroughfare that runs from Interstate 280 through South San Jose and near San Jose’s Fruitdale Lightrail Station, makes the site attractive for redevelopment.
Downtown Campbell, as well as Santana Row, the Westfield Valley Fair Mall and the Winchester Mystery House are all also located within a short drive of the site, providing future residents with plenty of options for entertainment, dining and shopping.
According to project documents, all 230 will be low-income. The project will also include roughly 1,780 square feet of ground floor retail, located at the northeastern corner of the site facing Meridian Ave. ROEM has also proposed a community room, a fitness room and two courtyards on the second floor. One level of below-grade and one level of at-grade parking are also indicated in the project’s plans.
ROEM Corporation, established in 1988, is well-seasoned in the construction of multifamily developments throughout California. Currently, the company is pursuing third party multifamily and preconstruction opportunities throughout the state and has more than 30 multi-family properties of varying product types in its portfolio throughout the greater San Francisco Bay Area. ROEM owns the REVERE Apartment complex in Campbell, a 168-unit market rate development recently constructed and designed by BDE architecture. ROEM also owns and operates Monte Vista Senior, a 49-unit senior housing community located at 2600 Neustra Castillo Ct. in San Jose.
Housing product throughout San Jose, from multifamily to affordable units to senior accommodations, has become increasingly scarce as the city grapples with unprecedented levels of growth spurred on by the world’s largest tech companies and the region’s multitude of unicorns. Despite a healthy development pipeline, rents continue to rise and tenants continue to place a premium on developments near transit centers and amenities. According to Kidder Mathews’ First Quarter Bay Area Multifamily report, Bay Area deliveries have increased by 87 percent year-over-year.
A little more than 28,000 units are currently under construction in the Bay Area, with the majority concentrated in Santa Clara County, where San Jose is located. San Jose itself is set to deliver 3,548 units in 2019, above the 2015 year peak when 3,258 units were delivered, according to Kidder Mathews. Across Santa Clara County, there are currently 10,889 units under construction and 15,792 additional units in planning. Demand for housing—and new development—Kidder Mathews states, will remain strong as several major companies such as Lyft and Uber go public, adding substantial capital to the Bay Area. With these factors in mind, rents are forecasted to rise by 2.2 percent in the coming year as construction deliveries slow and unemployment continues to decline.