Changing rules that allow for more flexible AUD or “average unit density” projects have created a flurry of demand for rental property construction permits in the Santa Barbara market.
Whether the new project will end the rental crunch or provide workforce housing is another question.
A closely watched project is The Marc, near La Cumbre Plaza on upper State Street. The 89 one-, two- and three-bedroom apartments range from 646 to 1,026 square-feet and those still available will rent from $2,900 to $3,125 plus per month.
The Kor Group and REthink Development transformed a former motel site into a $40 million, four-story, upscale development that features what’s billed as “an exceptional opportunity for modern dwellers.”
Some of the units include 11-foot, floor-to-ceiling glass sliding doors. Other features include quartz countertops in the kitchen and bath, an in-home washer and dryer and private patios and balconies. Three outdoor courtyards feature communal fire pits, step seating, horseshoes and bocce ball courts. The project also includes a heated pool and spa with a sundeck, fitness center and electric vehicle charging stations. The ground floor will also eventually include retail shops.
The project comes online as Santa Barbara’s rental vacancy rate is less than 1 percent and the city of Santa Barbara is struggling with how to provide workforce housing. The city’s AUD program was created a few years ago to encourage developers to build smaller, more affordable units.
By allowing developers to build many units on the land, and flexibility for a few larger ones, the projects could financially “pencil out” in a way that pure rental projects historically could not.
According to the Radius Real Estate and Economic Forecast released in October 2016, “even with projects like The Marc, it’s not certain this will fix the area’s housing problem as a one bedroom unit in this new complex is advertised at $2,500 per month.”
Institution Ale co-owner Shaun Smith stands near his Santa Barbara brewery’s controversial neon sign. (Joshua Molina / …
Institution Ale's Ryan Smith and son Shaun Smith at the family's new State Street location. Photo: Paul …
Summary of market insights and analysis from Q2 2019 South Coast commercial sales and leasing activity: Download the complete report here …