San Francisco Chronicle (May 17, 2019 - Joe Garofoli) - All the town leaders in Danville and its state assemblywoman gathered the other day to eat cake and celebrate something that rarely happens in the wealthy Contra Costa County suburb: There’s an apartment building going up, one that will include units for lower-income tenants.
Even the builder was surprised that Danville was receptive to the project. When Bruce Dorfman told his partner at Trammell Crow Residential that there was an opportunity to build in Danville, “he immediately started laughing. Because Danville was not a place, heretofore, that was known for being open to a multifamily project.”
Like many suburban cities, Danville hasn’t skimped just on affordable multiunit housing. This project, dubbed Alexan Downtown Danville, will be the largest multifamily development the town has ever seen: 144 units. Eleven of them will be classified as affordable.
Yes, cake was eaten to celebrate 11 units of affordable housing. While Danville can take a bow for going outside its comfort zone, this project illustrates how long a road California must travel to reach its goal of building 180,000 units annually — the total it must hit just to keep pace with demand.
Places like Danville are under increasing pressure from Sacramento to build more housing. San Francisco state Sen. Scott Wiener’s SB50, which would have made it easier to build dense housing in the suburbs, may have been blocked for the year, but Danville officials have gotten the message that such measures are in play.
More important, said Danville Mayor Robert Storer, they’ve heard Gov. Gavin Newsom’s threat to withhold gas tax revenue from cities that aren’t building enough housing.
“Absolutely,” said Storer, who estimates that penalty could cost Danville $1.8 million.
Projects like this — complete with a business center, pool, spa, fire pits, a walkway to the town’s downtown and easy freeway access — will be hard to replicate on a mass scale, here or elsewhere. But it has made Danville’s leaders think about other ways to reach the housing goals assigned to it by the state. Danville is supposed to plan for 557 homes, 196 of them for very low-income residents, to be built by 2023.
This project is a start.
“One hundred forty-four units!” Assemblywoman Rebecca Bauer-Kahan, D-Orinda, told those gathered Wednesday for the framing ceremony. “Which, when I speak to my colleagues in San Francisco, doesn’t sound like a lot. But for Danville, that is a lot of units.”
It’s a sign, she said, that Danville is “taking the lead on showing our region what housing can look like.”
Approving this project took “incredible fortitude” by the Town Council, said Dorfman, the senior managing partner at Trammell Crow Residential. This is a town of 44,205 people, where the median household income is $152,798 a year. People move to Danville to live in large, single-family homes with sprawling yards and garages that can hold three cars. No one here is storming council meetings to demand that Danville allow more apartment buildings, let alone more affordable housing.
“People prefer the term ‘workforce housing,’” Storer said.
What helped push this project across the finish line was who will be helped besides lower-income people — just about everyone else who is trying to find a place to live in the Bay Area who isn’t rich.
“People who have graduated and want to come back to Danville and haven’t had a place to afford,” said Councilwoman Karen Stepper. “And it would provide for those seniors who can no longer take care of their home. Either they lost their spouse or they’re too old to take care of a house and yard in Danville.”
Also, she said, grandparents who want to live near their grandkids in the area. And “divorced families, because they always need a second home near the kids.”
“But probably the biggest thing,” Stepper said, is “the workforce. There are people who spend 2½ hours a day coming over from the San Joaquin Valley” to work in Danville’s restaurants. “That’s huge. It’s really hard for our restaurants now to get people.”
And still, Stepper said, some residents didn’t want this project built.
“We had people come and complain about putting in these apartments, saying, ‘Oh, they’re going to attract all the wrong people.’ No, they’re not. They’re going to provide all the needs I told you about. For people who live in Danville.”
But it’s only 144 units. Eleven of them classified as affordable.
“For Danville, this is a huge number. We’ve never built anything like this,” Stepper said. “We’re a built-out city. Everything we do is infill” development.
“We’re built out” is an argument that suburbs have long used to avoid building more housing, said Paavo Monkkonen, a professor of urban planning at UCLA. “But what they don’t tell you is that up to 90% of their land is zoned for single-family homes,” he said. If changing that “is not on the table, things aren’t going to change.”
Danville, where land costs roughly $1 million an acre and fewer than two dozen people receive federal housing assistance, is not suddenly going to be eager to allow three-plex units to be built in the middle of its neighborhoods, Storer said.
“We’re not there yet,” he said. It would change the character of the town. The feeling here is that “when you’re moving to a single-family neighborhood, you want your neighbors to be owners, too.”
Of course, Sacramento may have something to say about that. One of the things Wiener’s housing bill would have done is remove some suburbs’ ability to block denser housing in areas that lack it now.
Danville is trying to change in its own way. It has loosened the rules on allowing in-law units to be built in those spacious backyards. If a unit is less than 500 square feet, town officials can grant approval over the counter, Storer said. The idea is proving popular, he said, as more than 100 people have applied for permits.
And both the mayor and Trammell Crow Residential’s Dorfman said the vast amount of parking space in town could provide a place to build more housing — elevated over the lots.
Storer, who owns a construction company that designs and builds housing, acknowledged that small cities could provide more incentives for builders to construct apartment buildings and condos. They could cut red tape and development fees.
Storer’s company recently won approval to build 95 units in neighboring San Ramon, 10 of which will be for “workforce” housing. When it’s done, perhaps cake will be served in San Ramon, too. But there will still be a long way to go to solve California’s housing crisis.
This overview is designed to introduce Crow Holdings and its various operating companies. Crow Holdings Capital is a U.S. SEC registered investment adviser and is the manager to the Crow Holdings Capital Funds. Maple Capital Management, L.L.C. is a U.S. SEC registered investment adviser and is the manager of the Crow Holdings Industrial Build-to-Hold Fund. Crow Holdings Capital, Trammell Crow Residential and Crow Holdings Industrial are operated separately and independently from one another with separate senior leadership and investment committees.