Massive Office Complex Receives Approval From City of San Carlos

Last week, San Carlos reached an agreement with developer Windy Hill Property Ventures to construct what will become the city's largest ever office development.  

Meridian 25 - named for its 25 mile distance from San Jose and San Francisco - will be a 528,520 square foot Class A office complex on Industrial Road off Bransten.  It will consist of two 6-story office buildings, and a 6-level (3 underground) parking structure with 1,510 parking spaces.  The site will also include approximately 2-acres of landscaped area with 150 new trees. 

The agreement between San Carlos and Windy Hill also includes $4 million that will go towards building a more pedestrian friendly route from Industrial to Old County.  This, in conjunction with the development of the San Carlos Transit Village - a mixed use residential and commercial project that will be built around the train station - will help better connect San Carlos east of El Camino to the shopping and dining rich Laurel Street.

San Carlos is home to a relatively small supply of office space, which is a large part of the reason they have a hard time attracting and holding on to high profile tenants.  Most notably, in 2009 they lost Tesla Motors to Palo Alto, due in part to their inability to accommodate the company's growth.  However, the city's unanimous approval of the massive Meridian 25 development has likely already placed them on the radar of some big name tenants.

To get an idea of just how transformative Meridian 25 could prove to be for the City of Good Living, all you have to do is look to Redwood City, where their Crossing/900 development was eagerly snatched up for use as the new headquarters of Box Inc.  Over the course of Thanksgiving weekend last year, the cloud file sharing company relocated nearly 1,000 employees from their old Silicon Valley headquarters to their new downtown Redwood City digs.  This made Box downtown Redwood City's largest private employer, without including the additional 800 employees they intend to move in over the next couple of years.

Meridian 25 will dwarf Crossing/900 - exceeding it in size by nearly 200,000 square feet.  It will also possess just as much, if not more commuter appeal as Crossing/900, due to its proximity to Highway 101 and the San Carlos train station (soon to be the San Carlos Transit Village).  The convenience for commuters plays a significant role in attracting large companies, in particular large tech companies, as they typically have a sizable chunk of their workforce commuting from San Francisco.  The shorter commutes and the cheaper rent are why many tech companies are beginning to favor Peninsula office space over the South Bay.

For now it's all speculation as to who might move in, but with city approval of the project, its listing agents can begin to market it aggressively to prospective tenants.  It's possible that it will get leased out in chunks to smaller companies, but it's also possible we see another big tech player like Box step in and grab the bulk of the available office space.  Either way, it will be interesting to watch all of this unfold in a city that has been historically resistant to change and development.

Stay tuned!

Rent Stabilization Ballot Initiative Moves Forward in San Mateo

UPDATE: Election officials announced that enough signatures have been verified and the "San Mateo Community Preservation and Fair Rent Charter Amendment" will be placed on the November ballot.

Come November, San Mateo residents will have their say on rent stabilization.  On Monday, tenant protection advocates turned in over 11,000 signatures calling for a citizens vote on rent control measures - well over the 7,119 required to bring it to the November ballot.   This was a grassroots effort, as it involved nearly 200 volunteers canvassing the city for about 2 months to obtain the 11,000+ signatures.

The "San Mateo Community Preservation and Fair Rent Charter Amendment" would cap rent increases at 4% per year, unless a landlord refrains from rent increases for an additional year, at which point rent could be raised up to 8%.  It also includes a just cause eviction provision, which would prevent tenants from being evicted unless they breach the terms of their lease, break the law, fail to pay rent, are a nuisance, if substantial repairs are needed, if the property will no longer be used as a rental, or if the landlord plans to move in.

Exceptions to the rent increase amendment would include condominium units, or secondary units and duplexes where a landlord lives on site.  Properties built after February 1, 1995 would also be exempted from the rent increase cap.  No rentals would be exempt from the just cause eviction provision.

This amendments's placement on the November ballot is not official yet, as the Elections Office has 30 days to validate the signatures. On August 1st, City Council will meet to discuss the findings of the Elections Office and determine if the amendment will be placed on the ballot.  If it is, a simple majority approval is needed to pass, and in a city where nearly half of its residents are renters, that certainly seems within the realm of possibility.  The question is whether or not enough renters show up to vote.

It will take a strong voter turn out on the part of those in favor of rent stabilization to pass this measure - the opposition will almost certainly be well represented.  The California Apartment Association, which represents homeowners, trade associations, and businesses, is among those fighting against any sort of rent control measures wherever they pop up across the Bay Area.  They are a part of the taskforce assembled to address San Mateo's housing crisis, and their position is essentially that what rent control gives to renters, it takes away from homeowners.   They believe this could end up making the housing crisis worse by pushing some landlords out of this business, and disincentivizing landlords from adequately maintaining their properties and attending to their tenant's needs.

We'll keep you updated as news break.

Crash Course on Eichler Homes

Joseph Eichler was a visionary real estate developer who built thousands of his eponymous homes all across Northern California from roughly 1949-1966.  Here on the San Francisco Peninsula, we are home to some of the largest and oldest Eichler tracts.

According to Joseph Eichler's son, the inspiration for the Eichler design came from a Frank Lloyd Wright designed home in Hillsborough, which the family rented out for a short period of time.  Eichler was attracted to the custom-built modernist architecture, and set to incorporate that look into tract housing that would be affordable to the working class.  Eichler worked closely with a Frank Lloyd Wright disciple, Bob Anshen, and several other architects later on, to cultivate what would ultimately become the most easily recognizable homes of the mid-century modern era of architecture.

A 1950 Eichler we recently sold in the Atherwood tract of Redwood City.  Key Eichler features:  vaulted wood-beam ceilings, floor-to-ceiling windows, wood paneled walls (visible to the left)

The homes are built on the concept of "bringing the outside in", and usually feature glass walls oriented towards the backyard, vaulted wood beam ceilings designed to create a more open and airy living space, and an open floorplan allowing you to look out to the back yard from the front entrance.  Often an atrium would be incorporated into the home, to help further blur the line between outside and in.  Eichlers are also easily recognized from the street by their low sloping (and often A-framed) roofs.

Another shot of the Atherwood Eichler we sold.  Notice the low sloping roof line.  Later Eichlers often incorporated the A-frame roof into their design

The Eichler home came at a time in the post-war era where cookie cutter ranch-style homes were immensely popular, and for many WWII veterans coming home seeking convention rather than innovation, the Eichler design didn't resonate.  Mr. Eichler never profited greatly from Eichler Homes.

Beyond his accomplishments as a real estate developer, Joseph Eichler is highly lauded for his anti-discrimination stance towards housing.  He offered homes for sale to anyone regardless of religion of race, and he actually resigned from the National Association of Home Builders in 1958 when they refused to support a non-discrimination policy.

Notable Eichler Neighborhoods on the Peninsula:

-The Highlands in San Mateo:  Largest contiguous Eichler tract

-Atherwood in Redwood City:  among the oldest Eichler neighborhoods (built in 1950)

The Eichler Effect

In a time of strong economic performance and job growth here on the SF Peninsula, it has become commonplace for new homeowners and real estate investors to tear down and rebuild dilapidated or out of style homes to maximize their market value.  Despite this, the peninsula’s many Eichler tracts have, for the most part, managed to resist these character changing trends.  I attribute this to two factors: activism within Eichler communities to preserve what they believe to be historic neighborhoods, and the Eichler owner’s genuine appreciation for the iconic mid-century modern look.

You’d be hard pressed to find a city more vigilant about preserving their history than Palo Alto.  As such, it comes as no surprise that Palo Alto has been among the most active in fighting to preserve their Eichler neighborhoods.  In 2005, residents of the Green Gables and Greenmeadow Eichler tracts succeeded in having their neighborhoods placed on the national registry of historic places.  While this designation doesn’t expressly prohibit anyone from purchasing and demolishing an Eichler, it establishes a hostile environment towards anyone with those intentions.

But even without a collective effort within a community to preserve them, Eichler neighborhoods seem to resist change more than others.  Take the Atherwood subdivision in Redwood City for example.  Despite being one of the first Eichler tracts (developed in 1950), there have been no major movements to preserve them.  Yet for the most part they remain intact.  We were able to gain some insight as to why that may be recently when we actually purchased one of the Atherwood Eichlers and had a chance to speak with the neighbors.  It was clear that everyone we spoke to felt an attachment to their Eichlers, either for their historical significance, their “bring the outside in” design concept, or a combination of the two.  So when these homeowners decide to renovate, they do so in a manner that is sensitive towards preserving the Eichler style.  They update the homes rather than rebuild them.

Whether or not you appreciate the Eichler style - glass walls and atrium designed to blur the line between outside and in, and vaulted wood beam ceilings over an open floorplan to create an airy living space - these homes represent a unique time in architectural history.  To learn more about Eichler homes, reference my last blog post! Crash Course on Eichler Homes

Huge Proposed Apartment Complex in RWC Faces Pushback From Residents

In early March, Greystar Development submitted a proposal to Redwood City for the redevelopment of 1409 El Camino - a block that is currently home to a Vet Hospital, Hair Salon, and Body Shop.  The proposal calls for the construction of an eight-story 350-unit apartment complex, with 35 units reserved for lower-income families.  At a proposed 300,000 S/F, it would be almost as big as Redwood City's largest building - the new Crossing/900 Development downtown, which totals roughly 330,000 S/F.

The project is still in the early planning stages, but it's already receiving a great deal of pushback from residents who think it is too big and does not include enough below market rate units.  Some of those in opposition had planned to attend a May 31st Architecture Advisory Committee meeting in protest, but the meeting was cancelled due to a revision made to the proposal shortly before the scheduled date.

In the Facebook Group, Redwood City Residents Say: "What?" - a popular forum for the city's residents to voice their concerns - come members commented that the addition of high density housing on an already busy stretch of El Camino (near the Jefferson intersection) would make traffic even worse.  One group member expressed that while he appreciates much of the downtown revitalization that has occurred as a result of the Precise Plan, perhaps the city is taking on too much too fast.  He added that he felt it was time for Redwood City to take a step back, complete the projects that have already been approved, and move forward in a more thoughtful manner.

It's not difficult to see where these concerns about too much development too fast are coming from.  Redwood City's development map shows 4 other major residential developments within a couple blocks of 1409 El Camino that are either under construction, approved, or completed but not yet fully occupied.  These projects total 708 residential units, with a projected 1,300+ resident capacity.  This most recently proposed development would bring the total number of brand new residential units in this few square block area to over 1,000.

Current Proposed, Approved, and Recently Completed Residential Developments Near the busy Jefferson/El Camino intersection:

3 - 299 Franklin Street - Status: Built

• Includes 305 residential units on 6 stories

11 - 103 Wilson Street - Status: Under Construction

• Includes 175 residential units on 7 stories

12 - 1305 El Camino - Status: Approved

• Includes 137 units on 8 stories

13 -  299 Franklin Street - Status: Approved

• Includes 91 residential units on 8 stories

16 - 1409 El Camino - Status: Proposed

• Includes 350 residential units on 8 stories

NOTE: Including the projects mentioned above, the city has already approved or completed the construction of 2,336 residential units of the 2,500 allowed under the Downtown Precise Plan (according to documents obtained from the city planner).  This 2,500 unit maximum allowable development cap applies only to the downtown area, so projects like the recently completed 141-unit Lane on the Boulevard (now called Oakwood Redwood City) would not count towards it.

To share your comments and concerns about this recently proposed development at 1409 El Camino, feel free to reach out to the city planner managing the project: Lindy Chan - lchan@redwoodcity.org.  You can also reach out to city council at council@redwoodcity.org.

Redwood City Docktown Residents to Begin Relocation in 2017

After failing to pass legislation to temporarily preserve Redwood City's Docktown Marina, it's lifespan may have just been shortened from 15 years to about 15 months.  A lawsuit settled in January of this year calls for residents to begin relocating in 2017, and an urgency bill that would have kept the Docktown in operation for the next 15 years was recently dropped because not all residents got behind it.

The floating community (located off Maple St, along the Redwood Creek) has existed since 1964 without any issue, mostly because no one had complained about it.  But late last year someone did, by filing a suit against the city alleging the Docktown was in violation of health and safety code, and that the city has been illegally collecting money for the private use of land that is actually held in trust by the state for the benefit of the people of California.  The city collects somewhere around $750,000/year for renting out slips to Docktown residents.

The suit was filed by Attorney Ted Hannig, who lives right across the creek from the Docktown in One Marina Homes.

State Sen. Jerry Hill (D-San Mateo), and Assemblyman Kevin Mullin (D-South San Francisco) were able to get the bill to preserve the community approved by the State Lands Commission under the conditions that:

1) The city would prohibit new tenants, new liveaboard watercraft and transfer of existing watercraft at Docktown
2) The city would mandate that all liveaboard watercraft be owner-occupied or city owned. No subleases would be allowed.

Some residents possess multiple slips from the city, and rent out or Airbnb their houseboats.  These residents opposed the bill's conditions and consequently it failed to pass - to the dismay of those who would just like the extra 14 years in their homes.  So now, with no legislative action, the future of the Docktown defaults to the agreed upon terms in the Hannig settlement - which is to begin locating residents next year.

There are about 70 liveaboards and 100 residents in Docktown.  The $4.5 million Hannig settlement sets aside $3 million towards cleaning up the creek and assisting residents with relocation.  The remaining $1.5 million goes to Hannig.

Bay Area Real Estate Market: Hot or Cooling Off?

Despite increased talk around the Bay Area that the market seems to be cooling off, the rest of the country continues to rank us as the hottest market for real estate.  Realtor.com released a report at the end of April that ranked the SF area as the top in the country, and just today Inman News published a blog titled, "10 hottest real estate markets for summer 2016", in which we came in at #1.  But how can we be the hottest market in the nation if we're actually cooling off?

Inventory has picked up in many areas across the Bay Area, which has softened competition a bit.  This is especially true in Redwood City, where our inventory of over 60 homes for sale is nearly double what it was this time last year.  As a result, some homes have sat on the market longer than what we had grown accustomed to in recent years, which has spurred much of the conversation about a market cool-down.

But there is one important thing to remember - our real estate market over the past few years was the exception, not the rule.  Average days on market for a listing in Redwood City in May '15 was about 11 days.  Now it's about a week longer.  But inventory was unfathomably low for the majority of 2015, and with our economy booming, demand was very high (as it still is today).  Competition among buyers was so intense that practically every listing received multiple offer inquiries right off the bat - most of them contingency free.  So yes, our real estate market has cooled off a bit from it's white hot 2015 state, but that doesn't mean it's cold.  The more accurate way to describe today's market would be that it has come back down to earth (slightly).  Consistently high demand fueled by a 3.3% unemployment rate will sustain high prices in the Bay Area.

We can't use last year's market as a measuring stick for this year's.  Redwood City's current average DOM of 18 days sound like a long time next to last May's average of 11 days.  But compared to the nationwide average of 67 days (per Realtor.com), I'd say 18 isn't too bad...