Napa’s approval of apartment projects has pushed the city’s number of housing permits to levels not seen for more than a decade and a half.
The city issued permits for 591 residential units last year, the highest total since it granted 697 permits in 2002, according to Planning Division records. Buoying that total was the launch of The Braydon, the 283-unit rental housing complex west of Soscol Avenue’s Auto Row, that has begun taking in tenants this summer and is set to become one of Napa’s largest additions to a long-cramped and costly housing market.
The jump in housing permits represents not only an end to the building slowdown that took hold in Napa during the Great Recession, but also a jolt in multifamily construction for a city with increasingly scarce land supplies.
Other apartment projects gaining the city’s green light in 2018 included the 50-unit Stoddard West, an income-limited project being built just south of The Braydon, as well as the 30-unit Napa Creek Village on First Street, 20-unit Napa Courtyards on Coombsville Road and the 10-unit Byway East Apartments in north Napa.
The arrival of The Braydon and other housing complexes marks a sharp turnabout from the recession-induced doldrums of a decade ago, when permits for residential construction – and especially multifamily construction – bottomed out into the low double digits.
From a total of 225 in 2007, housing permits slid to 78 a year later and to a mere 20 by 2009. Only twice since then did that number reach triple digits, with Napa issuing just 38 permits in 2017.
Seeing hundreds of apartment units rising from the ground has roused memories for Mayor Jill Techel about her early years on the City Council, when Napa gained nearly 10,000 residents through the 1990s – for a population of 72,385 in the 2000 census – and council members sought an ordinance to curb housing permits at 300 a year. (Population growth has slowed over the past two decades, with the U.S. Census Bureau recording 76,915 residents in 2010 and an estimated 79,263 last year.)
“Most of my early talks (on the council) were about subdivisions, and now it’s hardly ever about subdivisions,” Techel recalled Thursday. But since the recession, she continued, “we really weren’t getting anything built at anything close to 300 a year until last year.”
How far Napa’s new apartment projects go toward slicing into the local housing deficit will not become clear until next summer, when the city conducts its annual survey of rental housing to determine the vacancy rate. The survey, which gathered information from 87 percent of Napa’s rental properties, includes only apartments occupied for at least six months.
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The share of available rental units crept upward from 1 to 2.3 percent in the most recent survey conducted this July, but remained well within the city’s “shortage” level of 5 percent that blocks property owners from converting apartments into condominiums.
But swelling demand, tightening supplies and changing tastes themselves do not necessarily pave an easy road for apartment-style construction, according to Randy Gularte, owner of Crown Realty Property Management, who pointed to generally higher investment returns that prop up the incentive to focus on single-family homes.
“Short-term, I sell, I’m out and I can move on to the next project; for most apartments you build, you hold it and you rent it,” said Gularte, who added that developers often must face resistance from homeowners seeking to keep dense housing at arm’s length from their neighborhoods.
With land prices outrunning even Napa’s elevated rents in recent years, it has taken low interest rates to revive builders’ enthusiasm for denser housing, according to Gularte. “With the feds cutting rates, they’ve put investors back into the market saying, ‘I can get a 4 or 5 percent (annual) return on apartments that’s better than what I can get at the bank,” he said Tuesday.
Gularte described Napa’s housing market, especially for buyers, as being in a gradual transition from mostly freestanding, often upmarket houses to denser development – as much from financial necessity as from taste, as vacant land dwindles and prices continue to rise.
“Who are the people who are flocking to Napa? They do it because they want a single-family home, not so they can be condensed into a little area,” he said. “So now all of a sudden, this new generation will say, ‘I don’t have a choice – I want to live in Napa and I can’t afford an $800,000 house, so I have to go for a $500,000 condo.’ I still believe in everybody’s heart they want the picket fence, the little yard where kids can play and dogs can run. It’ll take a long time for people to accept that that is changing.”
Techel, meanwhile, saw the trend toward more concentrated housing continuing to gain steam – both through a new general plan to encourage such development and in response to those who no longer need spacious floor plans and fenced yards as they grow older.
Downtown and just beyond Napa’s core, she said, “there are opportunities for higher density housing (for) people who don’t want a big yard, people like me in Browns Valley, trying to downsize to something with less upkeep.”