‘Micro-ish’ Units Planned for San Jose’s West San Carlos Corridor

 In Real Estate
For several years, micro units — efficiency studios as small as 250 square feet — have been touted as a solution for the region’s housing crisis, allowing developers to wring more units from ever dwindling supplies of land.

But the concept has been absent in the South Bay’s market-rate apartment pipeline, despite thousands of units developed during the recovery. Instead, micro units have remained something that happens up in San Francisco, like $4 toast and artisanal pickle boutiques.

Now a developer is proposing something kind of — but not quite — micro for a sliver of land on West San Carlos Street.

Shad Design has turned in preliminary plans for 81 units on a .4-acre lot at 1470 West San Carlos. The developer is in contract on the land, which is currently a car lot.

Units would include 379 square feet of living space on the main level plus a 162-square foot mezzanine/loft and a 32-square-foot closet, for a total of 573 square feet of usable space per unit.

That’s not exactly teeny tiny, but it’s a different kind of product for Silicon Valley, where apartments are traditionally a little roomier than in dense urban cores.

The $25 million project — which would include 7,200 square feet of ground floor retail — is being driven “because of the demand and the scarcity of adequate land for development,” said Michael Shadman, president of San Jose-based Shad Design, an architecture and engineering firm. “San Jose has grown quite a bit and demand for residential has gone through the roof. Oakland has gone the same way, and they’re also looking at micro units. San Jose hasn’t seen it, but the demand is there.”

Mahnaz Khazen is developing the project with Shadman and says shefƒ was attracted to the concept after she developed a student housing project in Oakland.

“After graduating, they really got a rent shock,” she said. “I was looking for something with smaller footprints that can be more accessible to young professionals. Michael really embraced it.”

In addition to young professionals, she said corporations looking for transitional housing for new recruits could also be a market. Shadman estimates that the units could rent for a 30 percent discount compared to traditional apartments. Despite the petite size, units would have full kitchens, bathrooms and washers and dryers.

What makes the design work? Making every square foot count.

“Most people think of horizontal space, and then you have an 8, 9 foot ceiling and I’m done,” Shadman said. “But when you have a site that gives you more density, you have to take advantage of the height.”

Cue the loft-level layout, made possible by 15-foot ceilings, floor to floor. “You have your private space, but if you have a guest downstairs, you won’t see a bedroom,” he said. “From the bedroom, you can see below.” Khazen calls the idea “micro plus.”

This is just the latest proposal on the fast-changing West San Carlos corridor, where Republic Urban Properties recently completed Meridian at Midtown, a 218-unit complex. Republic is also working to develop the Ohlone, which at full buildout could include up to 800 units. Next door to that, Fairfield Residential is working on a 315-unit project on a former lumber yard.

Still, the 1470 West San Carlos project faces some challenges, including parking. The city’s parking requirements mandate 1.25 parking spaces per unit, or 102 stalls in total, plus another 18 for the retail. San Jose allows a 50-percent reduction in the parking requirement, if a developer includes an acceptable transportation demand management program that will cut down on car use. But so far, the project is proposing only 50 stalls, so it’s still a few short. Khazen said she’s interested in parking systems that allow cars to be stacked on top of each other — kind of like the loft design, but for autos.

Also: Residential uses are actually not permitted on the parcel under current planning guidelines. That is expected to change when the San Jose City Council approves the West San Carlos Urban Village Plan, likely sometime later this year. (The plan will allow more than 1,200 units to be built in the village plan area.)

“As soon as it’s approved, then the possibility of residential is activated,” said Matthew VanOosten in the city’s planning department. “At least in the draft plan, which is still not approved, a project like this is something we’d kind of want to see for that space. The parking is the main factor right now, as well as a few other things.”

The proposal is in the early stages, and is likely to be adjusted before the developer submits a formal application. Meanwhile, Khazen said she’s already lining up financing. About $2 million will likely come through EB-5 investors, the federal program that streamlines green cards for immigrant investors. But the majority will come from traditional financing.

“Our market is very strong, interest rates are low and demand for EB5 is not as much,” she said. “And this is a low risk investment. Because of that we don’t have issues raising funds locally.”



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