CUPERTINO (KPIX 5) – The Bay Area earned a new title this year: the region is officially the most expensive place to build in the world. A new survey shows developers also claim they’re afraid to build in the Bay Area.
Developer Candice Gonzalez knows why. While working as an affordable housing developer for Palo Alto Housing, she says she was harassed by community members for trying to build affordable housing for seniors several years ago.
“We — me and some other staff members — we got death threats. We got cars keyed, tires slashed, harassed for trying to build low-income senior housing. I have to say this, because a lot of times people think, ‘Oh you’re low income, non-profit developers. You’re the angels. It’s for profit developers are the devils.’ But everybody’s villainized,” Gonzalez said.
That project failed. It would have created 60 affordable homes for seniors and 12 market rate homes to offset the cost of the build. Now instead 16 $6 million homes stand in its place.
Gonzalez has a new project, and works for a new company, she’s now the Chief Housing Officer at Sand Hill Property Company, the developer that’s trying to redevelop the dead Vallco Mall in Cupertino.
“It was dying a slow death since the ’90s. Retail has changed; store owners weren’t surviving,” Gonzalez said.
It’s a $4 billion dollar plan to bring Vallco back to life. Sand Hill has been fighting an uphill battle trying to redevelop this 51-acre site in Silicon Valley into much needed affordable housing and office space to offset the cost of the build.
“We have an opportunity to build about 2 million square feet of office, 400,000 square feet of retail, 2,402 housing units with 50 percent affordable,” Gonzalez said.
Community activists like Jim Moore, who volunteers with slow growth group, Friends of a Better Cupertino, have been fighting this project every step of the way.
“I’ve been here for 42 years and I remember the good old days,” Moore said.
Moore and his wife raised their daughters in Cupertino and watched as Apple took over their once quiet community.
“Everyone is in a hurry, with all the offices that have been built in the area. There’s so many people that can’t afford to live here that are driving in from, in some cases, great distances,” Moore said.
Most young adults who grew up in Cupertino can no longer afford to stay because tech company employees have contributed to rising rents, and priced them out. Moore says he sees the Vallco project as just another way to add jobs here.
“The group I am with wants housing. We don’t want more office because that just compounds the housing problem,” Moore said.
“2,400 units is not a small amount. And we’re building the office to help subsidize the housing, subsidize the retail that the community still wants to see, so it has to be a compromise,” Gonzalez said.
Gonzalez says Sand Hill expected a fight, so they gave Cupertino two options more than two years ago, either the city could approve their plan or they’d invoke SB35, a new state law that allows developers to go around communities to get affordable housing projects built.
The city of Cupertino and Friends of a Better Cupertino fought the project, so Sand Hill invoked SB35. In the past year, state leaders have threatened to sue Cupertino for blocking the project.
Meanwhile Friends of a Better Cupertino is suing Sand Hill, alleging it violated SB35. Sand Hill has filed its own lawsuit against the city.
“I mean it’s a perfect example of using every tool out there to kill a housing project,” Gonzalez said.
The lawsuit from FOBC alleges Sand Hill is actually out of compliance with SB35, because office space makes up more than half the square footage here, FOBC alleges this is not an affordable housing development. A judge is expected to rule on whether that case moves forward on November 1st.
Consultant Group Turner & Townsend named the Bay Area the most expensive place to build in the world on its annual construction market survey this year.
Construction costs hit $417 per square foot compared to $368 per square foot in second place New York City. Because the cost of living is so high, wages for workers are also up, as are costs of materials. Some developers say they have to budget in community fights too.
UCLA’s Anderson School of Management found the Bay Area is also the only place where developers surveyed say they’re afraid to build. They say it’s too expensive and worry rent control will make it more difficult to recoup costs.
50 percent of developers surveyed said they won’t build in the region in the next 12 months. UCLA’s study predicts this pull back will exacerbate the housing shortage.
Meanwhile neighbors along the Peninsula say they feel taken advantage of, watching the life they invested in get torn to pieces. Jim Moore says he worries these projects threaten the middle class.
“The middle class — of which I am a member — a lot of our net worth is in homes where we live. And if you take the homes away, then everyone in the middle class gets poorer and all that money goes to the top ten or top one percent. And I don’t want that,” Moore said.
Both sides say they want more housing. But they can’t agree on how to build it and the back and forth only makes it more expensive for everyone.