New home construction to ease Petaluma’s housing crunch

Developments in construction or in the planning process will add more than 1,700 units to the city where vacancy rates are near zero.|

Projects amounting to more than 1,700 units of housing in Petaluma are either currently under construction or in the city’s development pipeline, signaling accelerating interest by builders after the recent recession and the longer-term prospect of boosting the community’s limited housing stock.

The mix of new apartments, rental housing and single-family homes are expected to relieve some of the pressure driving low availability and high costs throughout the city, said Sue Castellucci, Petaluma’s housing coordinator. Some of those units will be completed as soon as this year.

“The economy has gotten better, so developers might be ready to go forward,” she said.

Four projects are currently under construction in Petaluma, which together account for 471 units of housing, according to a report by the city’s Community Development Department. They include a 144-unit apartment complex on Maria Drive, a mix of 34 rental units on North McDowell Boulevard, 21 single-family homes on Yardberry Drive and the ongoing build-out of the 272-unit Quarry Heights development off of Petaluma Boulevard South.

First to open its doors will be The Artisan at Petaluma, where the first tenants are expected to move in before the end of the year, said Tom Messervy, CEO of San Francisco-based developer JDA West. Located at 55 Maria Drive, the luxury development will be the first large, market-rate apartments built in Petaluma since 2007.

A pent-up demand for luxury housing in Petaluma, along with a strong local job base and regional amenities like highly rated restaurants and public parks, helped attract JDA to the market, Messervy said. Maria Drive will feature floor plans ranging from studio to two-bedroom, with rents ranging from around $2,000 for a one-bedroom unit to $3,000 for a large three-bedroom.

“We are very excited to be opening a luxury apartment community in Petaluma,” said Messervy, adding, “We feel that Petaluma’s existing scarcity of luxury apartments has not been able to meet the demand.”

Occupancy of the 34-unit North McDowell Commons project on North McDowell Boulevard is expected to begin early next year, according to the developer, Santa Rosa-based Hugh Futrell Corporation. The all-rental development will offer a mix of eight detached homes and 13 duplexes, and will include the rehabilitation and sale of a historic home on the property.

Walnut Creek-based Ryder Homes is also nearing completion of the Yarberry Lane single-family development, where the final nine of 21 homes will be completed before the end of this year, said North Bay Sales Manager Elli Kecherside. All of the homes, located off of Yarberry Drive, were sold by May of this year.

“This project was a great opportunity to provide an infill of much-needed housing at an affordable price in a highly desirable area of East Petaluma,” Kecherside said.

A spokesman for KB Home, the Los Angeles-based developer of the Quarry Heights subdivision, declined to comment on the project’s status due to a quiet period in advance of the company’s upcoming earnings announcement for shareholders. The project is ongoing, with around half of units complete.

Projects in the pipeline

Hundreds of units in additional housing are in various stages of development, including several larger, multi-family infill projects that are slated for various pockets of vacant land located throughout the city.

Seeing favorable economic conditions, Stockton-based A.G. Spanos Companies submitted an application to build 272 luxury units on Petaluma Boulevard North in June, said Alexandros Economou, the company vice president heading multi-family development in the western United States. The proximity to Petaluma’s downtown and the future Sonoma Marin Area Rail Transit station helped make it an attractive project, and construction could begin as soon as 2016, he said.

“We think this is definitely a good time to move forward on a project like this,” he said.

A final subdivision map and architectural review for a 273-unit, mixed-use development at 500 Hopper Street is also currently in the works, a project including 100 units of apartment housing that could be completed as soon as 2017, said Paul Andronico, general counsel for the developer, Basin Street Properties. Apartments are expected to be similar to the residences Basin Street built as part of the Theatre Square Development in Petaluma’s downtown, while the remaining units will be built gradually as single-family housing by another company.

In addition, an application has been submitted to add 100 multi-family units at Addison Ranch, formerly known as Greenbriar Apartments, according to the city’s Community Development Department. The 282-unit Sid Commons project at the end of Graylawn Avenue is currently moving through the environmental review process, and an application to build 80 apartment units near the Petaluma Marina was submitted in June. A revised environmental review is also currently underway for a single-family home development at the Scott Ranch property, located at the intersection of Windsor Lane and D Street.

More projects planned

Others projects are not formally in the application pipeline but are nonetheless under consideration, including a San Diego developer’s plans to build a 140-unit, mixed-use development on Weller Street. A proposal to build 31 single-family homes just outside of current city limits on Corona Road has been in the works for several years, though the project was postponed indefinitely in April.

Many of those proposals reflect the vision set forth in the urban growth boundary that Petaluma voters approved in 1998, as they are set to rise from vacant lots nestled within existing development throughout the city while avoiding outward sprawl, noted Councilman Mike Healy.

They also point to a contrast with the conditions driving the housing shortage facing Petaluma’s larger northern neighbor, Santa Rosa. An ongoing study in that city recently found rental rates to be too low in Santa Rosa, relative to other Bay Area locations, to spur interest from private developers.

“What this tells me is rents here are high enough to attract developers that want to add product,” Healy said.

While the bevy of new developments won’t directly address the high cost of living in Petaluma, the addition of new housing stock could well relieve some of the upward pressure on prices, Castellucci said. Market-rate rent in Petaluma is around $1,700 per month for a one-bedroom apartment and $2,300 for a two-bedroom rental, according to the city.

“Any kind of housing, whether it’s affordable or market-rate, helps the people in Petaluma,” she said.

Looming decisions made by city officials during the uptick in development activity over the next few years stand to reverberate for decades to come, as many areas will be permanently reshaped by new infill development, said Councilwoman Teresa Barrett. Impacts on water use, traffic and overall aesthetics are likely to headline those discussions.

“Once they are built, they are part of our fabric,” she said. “We want to make them as good as possible.”

(Contact Eric Gneckow at eric.gneckow@arguscourier.com. On Twitter @Eric_Reports.)

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