Bozzuto, Kimco Break Ground On Daly City’s First Market-Rate Multifamily Project In 15 Years
Bozzuto and Kimco Realty broke ground on The Chester at Westlake, Daly City’s first market-rate apartments in 15 years.
The 250K SF, seven-story mixed-use project slated to deliver in early 2027 will include 214 units, 13K SF of amenities and 10K SF of ground-floor retail, the San Francisco Business Times reported.
The community is part of Kimco’s Westlake Shopping Center, one of the nation’s earliest planned retail centers, which the REIT has owned and operated since 2002. Bozzuto is serving as lead developer. J.P. Morgan is providing construction financing.
The project will bring Daly City closer to closing the gap on its housing shortage. The city must build 4,383 housing units by 2031 to meet state housing goals. Daly City had previously only greenlighted 72 units as of the end of 2024.
These numbers are determined by California’s Regional Housing Needs Allocation. In the past, it was primarily a planning tool. But as the state’s housing crisis has escalated, it has become a requirement.
A 2023 state Senate bill compels cities and counties falling behind on housing goals to greenlight projects that meet local zoning and include a share of affordable units. The streamlined process lets developers bypass many of the negotiations and environmental reviews that typically slow Bay Area development.
Enforcement is one step towards alleviating the housing crisis. But it does nothing to address other barriers, like high interest rates and construction costs facing housing developers.
A persistent shortage of new supply is driving up rents and tightening occupancy across the Bay Area. In the San Francisco/Peninsula market, demand outpaced new supply by a ratio of 4.3 to 1 in the second quarter, driving vacancy down to 3%, compared to 4.1% nationally.
In Q2, average rents in the submarket climbed to $3,155 per month, up $83 from Q1 and 5.4% year-over-year. Across the Bay Area overall, rents rose 3.7% year-over-year. New deliveries slipped to 1,836 units in Q2, down from 1,993 in the previous quarter, according to CBRE.
