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In The News

Peninsula keeps adding housing, but few moving in

By Mike Rosenberg
Bay Area News Group, 3/13/11

For decades, the prosperous Peninsula has been a landing spot for young families looking for good schools and safe neighborhoods, and professionals looking for a shorter commute to Silicon Valley and San Francisco. When new housing was built in San Mateo County, it was often snapped up in a heartbeat despite some of the highest price tags in the nation.

But for the time being, at least, that's no longer the case. The 2010 U.S. Census report released last week shows that San Mateo County added just 10,453 housing units in the past decade, and two-thirds of the extra homes are empty. That was a far cry from the booming '90s and earlier decades, when man-made communities such as Foster City quickly sprung up, and others expanded with ease.

Nevertheless, the housing proposals keep coming -- including three major projects that would add up to 17,600 homes across 2,200 acres.

When adding in several smaller proposals around the county, the amount of planned housing units likely surpasses 20,000. Yet only 2,700 households moved into the county in the past 10 years.

The projects, which include the Bay Meadows racetrack redevelopment already under way in San Mateo, the Saltworks development in Redwood City and the Baylands development in Brisbane, have already come under fire because they could add thousands of cars to busy roads, take away open space and otherwise harm the environment.

So why keep building when all of the county's major cities except Foster City and South San Francisco actually added more vacant housing units than occupied ones in the past decade?

The thinking among officials and developers is that the growth will regain steam after its recent slowdown.

Indeed, Bay Area planning officials on Friday released new growth projections that forecast San Mateo County adding 93,800 households through 2035, an increase of 35 percent, with the most housing to come in San Mateo, followed by Daly City, Redwood City and South San Francisco.

"I think you'd be hard-pressed to find anybody in the region that would take the position that there's an oversupply of housing in the Peninsula," said David Smith, senior vice president of DMB, the developer for the Saltworks project. "Yes, I believe the growth will continue on the Peninsula, and it will be robust."

But for that to happen, things will have to pick up quite a bit. Bay Area officials essentially predict the number of households moving into the county will jump 35 percent in the next 25 years, after it increased just 1.5 percent in the past 10 years. Meanwhile, the county spent the past 10 years doubling its stock of vacant homes.

The data doesn't say which homes are empty -- that is, if the new homes are sitting untouched, or if people are moving into the newer homes and out of the older ones. Either way, San Mateo County's growth rate dipped to its slowest rate in history, with the population rising just 1.4 percent since 2000.

In fact, a few cities -- including Burlingame, Atherton, Menlo Park, Pacifica and East Palo Alto -- added more housing units in the past decade, only to see their overall number of occupied homes drop. In Burlingame, for instance, the city's rate of occupied homes dipped from 97.2 percent in 2000 to 94.9 percent in 2010 after the city added 160 housing units.

The most drastic example was East Palo Alto, where the number of vacant homes climbed an astonishing 664 percent, from 115 to 879, amid a jump in foreclosures.

Or consider Redwood City, which built about 250 new housing units in the past decade, only to see the overall number of vacant housing units jump by 350. Yet developers there are planning to add 8,000 to 12,000 more homes by the bay.

Smith noted the full Saltworks project, which also includes commercial buildings, will be built over two or three decades, which would allow developers to overcome the rocky times in a "cyclical" housing market.
Jonathan Scharfman, general manager of Universal Paragon, which is planning the Baylands project, said they still think the Peninsula "is a good long-term bet" for more housing.

"In any given year, market conditions might dictate that we slow down or speed up," Scharfman said. "But we're talking about a program for the next generation."

And not all cities were hammered during the recession. Foster City, for instance, kept its high housing occupancy rate steady even after adding 450 homes.

South San Francisco filled 1,261 new homes, the most in the county, but it came at a price: They also added 415 empty housing units.

The small town of Brisbane, where the Baylands project is slated, actually saw its housing occupancy rate go up in the past 10 years. It's also the only town in the county that now has fewer vacant units than it did a decade ago.

San Mateo County housing changes
2000                                         2010                            Change
Total housing units                    260,578 271,031            4% increase
Occupied housing units           254,104 257,837            3.4% decrease
Vacant housing units                6,474 13,194                103.8% increase
*Source: State analysis of 2010 U.S. Census

Planned mega projects
Development                            City                 Housing units planned
Saltworks                                  Redwood City   8,000-12,000
Baylands                                 Brisbane           4,434
Bay Meadows                           San Mateo        1,171
*Source: County Times reporting

 

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