Apartment construction booming except in Bay Area

condominiums

Rising to the housing crisis, apartment construction is at a 50-year high – except in the Bay Area which is projected to see a sharp decline in 2022. San Francisco will see a 58 percent drop, San José will only bring half as many units online as in 2021 and Oakland will see a drop of 80 percent.

Analysts cite limited land zoned for apartment construction, complicated environmental reviews, and extended approval processes as main factors in creating serious bottlenecks.

While other cities are seeing a boom as workers return to work, the Bay Area has embraced remote work more than any other major metropolis.

Bay Area apartment construction increasing

Green Escrow | Real Estate News

One bit of good news during the pandemic is that Bay Area apartment construction has risen to its highest level in five years. The San José metro area will see an increase in new housing of 79 percent over last year while San Francisco and the East Bay will see 36 percent more new apartments become available this year.

Seventy percent of the new apartments would be considered luxury or a step below. Affordable housing still lags behind is done mostly by non-profit developers using government subsidies.

Those Bay Area cities with the most new units include Oakland 3,168, San José (2,175), Mountain View (1,714), San Francisco (1,521), Fremont (1,185), and Milpitas (717).

Bay Area Apartment Construction Increasing

condominiums

The good news is that major metropolitan areas in the Bay Area – San Jose, Oakland, and San Francisco – are seeing a significant increase in multi-family/apartment construction. For example, the San Jose metro area is seeing an increase of 283 percent – 1,579 units last year to 6,044 this year. Oakland is adding 1850 units and San Francisco, 1204.

The not-so-good news is that other cities such as Seattle and Miami are adding twice the number of units. The Dallas-Fort Worth area is adding 22,000 this year alone!

Although there is still much to be done, experts agreed that the Bay Area is heading in the right direction and noted that building in California is more difficult – and expensive – due to the state’s environmental regulations and the high cost of construction materials.