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Walnut Creek Magazine

Housing: What to Expect From Walnut Creek’s Next Wave of Development

Oct 19, 2022 03:53PM ● By Harper Klein

What will Walnut Creek look like in ten years? Neighborhoods with big footprint properties will continue to appeal, but the march to maximize density is here. The “new” suburbia will include multifamily housing, like the townhomes recently approved on Walden Road and on Jerome Court under California’s Senate Bill 9, which streamlines the process for a homeowner to create a duplex or subdivide an existing single family lot into up to four units.

SB9, and a slew of other new legislation, is aimed at developing solutions to the housing crisis, caused in part, from decades of not building enough housing—of all kinds—for the state’s growing population. The new laws give the state government more control over local zoning matters.


Hall Equities Group received approval to move forward with the development of Shadelands Senior Apartments on a 10-acre site at 2800 Mitchell Drive—254 units of housing for adults 55 years and up, plus a 136-unit residential unit named Oakmont of Shadelands at 1925 Oak Grove Road for assisted living and memory care.

 

Some of the reasons for how we got here are complicated, others are unmistakable—rising material, land, and labor costs. Add to that organized neighborhood opposition and regulatory hurdles, plus developer impact fees—close to three times the national average in California—and it elevates the dual challenges of building housing for the poorest citizens and providing housing at a reasonable cost for the middle class. 

While constructing more housing seems like an easy solution, multiple layers of lengthy government reviews, local growth controls, community resistance, land shortage, and CEQA (California Environmental Quality Act) inhibit the process and contribute to the high price of rental development.

699 YVR by Resources for Community Development will add 96-units of affordable housing to Walnut Creek’s portfolio on the corner of YVR & Civic Drive. The project qualified for State Density Bonus concessions under CA-SB35.

 

“Beginning in 2007, we were not permitting enough housing to be built in the state to meet the projected need, hitting crisis mode in 2015 as the population and job market continued to grow, but housing inventory did not keep up with the demand,” said Margot Ernst, former Housing Program Manager for the City of Walnut Creek. “The cost to construct a single unit of subsidized affordable housing in Walnut Creek is roughly $650,000.”

Zumper ranked Walnut Creek as the 10th most expensive Bay Area city to rent in its September 2022 report, with one bedroom units up 4.6% to a median of $2,720 per month, and two bedrooms up 2.3% to $3,170. Redfin reported home prices were up 12.2% in Walnut Creek, compared to last year at this time, selling for a median price of $1.0M. 


Construction is expected to begin soon on 1532 Mt. Diablo by Align Real Estate—a four-story, 30-unit luxury condominium building with ground floor commercial space, a rooftop restaurant, and subterranean garage for valet parking on the property adjacent to Slice House Pizza.

 

“There is a need for more housing, especially work force housing. Companies are leaving the Bay Area to follow their employees who migrated to areas with more affordable housing, such as Sacramento and out of state. City and county control over housing is being restricted,” said Ed Del Beccaro, Managing Partner for San Francisco Bay Area at TRI Commercial. “The state of California is on a mission to enforce RHNA (Regional Housing Needs Allocation)—the mandate requiring all California cities, towns, and counties to plan for the housing needs of residents—regardless of income.” 

RHNA determines the total number of new homes the Bay Area needs to build—and how affordable those homes need to be—to meet the housing needs of people at all income levels.


The property known as Centre Place South—adjacent to Habit Burger and Charles Schwab on S. California Boulevard—was sold to DeNova Homes in 2020. The Bay Area homebuilder has submitted plans for 94-units of multi-family housing on the site, taking advantage of CA-SB35 to increase project height. In exchange, the law requires DeNova to designate 10% of the units as below market housing.

 

Like all cities in California, Walnut Creek is required to produce a voluminous document every eight years, called a Housing Element, that demonstrates how it will plan and zone for development to house its fair share of the state’s growing population. Cities aren’t required to construct the homes, but they must adopt laws and policies that make it easier for the private sector to build market-rate and affordable housing. 


Newly constructed NOMA Apartments at 1910 N. Main Street added 135 units to the city’s housing supply, 11 at very low income rent.

 

In past years, many cities did not make room for development of more homes which has led state lawmakers to assign to regional, county, and city housing quotas for the 2023-2031 housing element cycle. “For Walnut Creek, this means we must identify appropriate sites where developers can build 5,805 units of new housing,” said Senior Planner Andrew Smith at the September 20,2022 city council meeting.

Breakout of 5805 housing units by different levels of affordability based on Average Median Income (AMI) in Contra Costa County:

1657: Extremely Low Income

954: Low Income

890: Moderate

2304: Above Moderate

“State HCD (Housing & Community Development) guidance requires that all cities and counties include more than the required RHNA—typically a buffer of 15 to 30% additional units. With that in mind, we have identified 121 sites with the potential for over 6500 units, many are clustered in the downtown area near mass transit,” said Smith. 


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