Major redevelopment projects, upzoning fights, factory-built housing, and conversions from commercial to residential that are reshaping the Bay Area’s housing stock.

The Bay Area’s housing stock is undergoing significant transformation in 2026, driven by a wave of major redevelopment projects, contentious upzoning battles, and innovative supply strategies like factory-built housing and commercial-to-residential conversions. These shifts reflect both the region’s escalating housing demand—especially near transit hubs—and persistent community resistance, alongside policy and financial innovations aimed at scaling supply.

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Large Land Deals, Towers, and Neighborhood-Scale Projects Reshape Bay Area Housing

Several high-profile, large-scale developments are underway across the Bay Area, reflecting a mix of urban densification, suburban infill, and adaptive reuse that together are reshaping neighborhood landscapes and housing availability.

• Northgate Town Square in San Rafael is a flagship transit-oriented development (TOD) featuring 1,422 homes integrated with retail and community amenities. Despite local opposition and appeals, the project recently overcame hurdles, including denial of appeals against a 17-story apartment tower, underscoring the persistent NIMBY challenges in wealthier Marin County.
  (Source: “Northgate Town Square: Massive San Rafael Redevelopment with 1,422 Homes & Retail”; “San Rafael denies appeals against 17-story apartment tower”)

• In Sunnyvale, a notable office-to-residential conversion is progressing on Duane Avenue, repurposing obsolete tech buildings into roughly 450 new residential units, including affordable workforce housing. This project exemplifies how underutilized commercial spaces near Caltrain and light rail are being reimagined to meet housing demand.
  (Source: “Hundreds of residences poised to replace Sunnyvale tech buildings”; “Sunnyvale to replace old tech buildings with new homes”)

• The Bay Meadows redevelopment in San Mateo County continues to add family homes, with recent lease signings signaling strong market interest. This suburban mega-project is part of a broader trend toward densifying formerly single-use sites.
  (Source: “Leases signed for final parcels at Bay Meadows”)

• San José is witnessing increased high-rise development interest downtown, with multiple towers aiming to invigorate the urban core. Hundreds are reportedly on waiting lists for new condominiums, reflecting continuing demand for centrally located housing.
  (Source: “San Jose towers that may invigorate downtown attract brisk interest”)

• A massive 22-acre land deal in an ultra-wealthy Bay Area town has ignited fierce local opposition, turning the site into a housing battleground emblematic of regional tensions between development pressures and community resistance.
  (Source: “A 22-acre land deal is turning this ultra-wealthy Bay Area town into a housing battleground”)

• In Danville, the Planning Commission is poised to vote on a 200-unit apartment complex on a shopping center site, another example of suburban densification attempts amid prevalent local pushback.
  (Source: “Danville Planning Commission to vote on 200-unit apartment complex for shopping center site”)

• The 700 Irwin Street project in Marin County, a fully entitled 262-unit multifamily development, is moving forward after surviving legal challenges, highlighting the protracted battles and eventual breakthroughs typical in high-barrier markets.
  (Source: “Overton Moore Lists for Sale Fully Entitled 262-Unit Multifamily Development Site in South San Francisco”; “Real estate - Marin Independent Journal”)

• The Mission District in San Francisco also remains a focal point for redevelopment and preservation efforts, with market-rate housing developers lining up for available parcels such as Salvation Army land, reflecting a complex mix of historic preservation and new construction.
  (Source: “Salvation Army asks $58M for Mission land. Market-rate housing developers are lining up”; “2061 Mission Street: Preservation”)

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Factory-Built/Modular Housing, Office-to-Residential Conversions, and Financing Innovations Expand Supply Tools

In response to soaring costs, labor shortages, and political resistance, the Bay Area is increasingly embracing innovative construction and financing methods to accelerate housing production.

• Factory-Built and Modular Housing:
  Legislative efforts spearheaded by Assemblymember Buffy Wicks have streamlined approvals and incentivized factory-built construction, making modular housing a growing share of new multifamily starts—estimated at 12-15%, roughly doubling from previous years. Modular projects such as the 700 Irwin Street development benefit from accelerated timelines (up to 30% faster) and cost savings, helping offset high Bay Area construction costs.
  (Source: “Factory-Built Housing Hasn't Taken Off in California Yet, But This Year ...”; “Factory-built housing hasn’t taken off in California yet, but this year might be different • Chico News & Review”; “Real estate - Marin Independent Journal”)

• Office-to-Residential Conversions:
  The repurposing of underutilized tech campuses and office buildings into housing is gaining momentum, exemplified by Sunnyvale’s Duane Avenue project. This approach leverages existing infrastructure and aligns with shifting work patterns post-pandemic, converting roughly 500,000 square feet of obsolete office space into 450 residential units with a focus on affordability and transit access.
  (Source: “Hundreds of residences poised to replace Sunnyvale tech buildings”; “Sunnyvale to replace old tech buildings with new homes”)

• Accessory Dwelling Units (ADUs):
  Despite rising construction costs—between $375 and $460 per square foot in San Jose—and regulatory challenges such as the energy retrofit requirements under AB 628, modular construction methods and pilot streamlined permitting programs are helping maintain ADU production as an important incremental supply source.

• Community Facilities Districts (CFDs) and Infrastructure Financing:
  New financing tools like CFDs are under consideration in cities such as Livermore, aiming to fund infrastructure for large housing projects. However, these come with high per-unit fees, estimated at over $140,000 annually in some cases, raising concerns about their impact on overall housing affordability.
  (Source: “Livermore council sets hearing on proposed special tax district for ...”)

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Persistent Political and Community Resistance Shapes Development Outcomes

Despite these supply-side innovations, political and community opposition remains a formidable barrier in many Bay Area jurisdictions:

• Wealthier communities, notably in Marin County and parts of the Peninsula, continue to employ zoning restrictions, ballot measures, and even charter amendments explicitly designed to circumvent state housing mandates, intensifying the uphill battle for new housing.
  (Source: “Wealthy Bay Area town makes a charter bid to sidestep mandated housing”)

• Nonetheless, some projects demonstrate that sustained legal perseverance and community engagement can yield progress, as seen with the 200-unit multifamily project at 700 Irwin Street overcoming multiple challenges.

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Conclusion

The Bay Area’s housing stock is being actively reshaped through a dynamic mix of large-scale developments, adaptive reuse of commercial spaces, and innovative modular construction, all unfolding amid complex political resistance and financial challenges. Projects spanning from San Rafael’s Northgate Town Square to Sunnyvale’s office-to-residential conversions illustrate the region’s multifaceted approach to addressing its housing crisis.

While factory-built housing and conversions offer promising pathways to accelerate delivery and reduce costs, persistent NIMBY opposition and high infrastructure fees pose ongoing hurdles. Financing mechanisms like CFDs provide critical capital but risk exacerbating affordability pressures.

Achieving meaningful expansion of Bay Area housing supply will require not only continued innovation in development and construction but also strategic policy engagement and community collaboration to balance growth with local concerns.

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Selected Articles Referenced:

• Northgate Town Square: Massive San Rafael Redevelopment with 1,422 Homes & Retail
• Hundreds of residences poised to replace Sunnyvale tech buildings
• Factory-Built Housing Hasn't Taken Off in California Yet, But This Year ...
• Real estate - Marin Independent Journal
• Wealthy Bay Area town makes a charter bid to sidestep mandated housing
• Livermore council sets hearing on proposed special tax district for ...
• San Jose towers that may invigorate downtown attract brisk interest
• A 22-acre land deal is turning this ultra-wealthy Bay Area town into a housing battleground
• Danville Planning Commission to vote on 200-unit apartment complex for shopping center site
• Salvation Army asks $58M for Mission land. Market-rate housing developers are lining up