New affordable and workforce projects advance across Bay Area

California’s Next Wave of Housing

The Bay Area’s drive to expand affordable and workforce housing continues to evolve amid a complex interplay of ambitious projects, policy innovation, financial pressures, and socio-political tensions. Recent developments reveal a landscape marked by significant progress on flagship and community-led housing initiatives, intensified legislative efforts, innovative financing mechanisms, and persistent barriers rooted in political opposition and operational challenges. Together, these dynamics highlight the region’s ongoing struggle—and opportunity—to deliver equitable, sustainable housing solutions in one of the nation’s most difficult markets.

Flagship and Community Housing Projects Forge Ahead with Renewed Momentum

Key large-scale housing developments across the Bay Area remain on track, demonstrating integrated approaches that blend transit access, sustainability, and equity:

San Ramon Chevron Campus Redevelopment continues preparing the site to deliver thousands of affordable and workforce housing units. Emphasizing green infrastructure and enhanced transit connectivity, the project remains a national model for repurposing former corporate campuses into vibrant, inclusive neighborhoods.
At Mandela Station in West Oakland, developers are coordinating closely with Caltrans on the upcoming Oakland-Alameda Access Project, scheduled to begin early 2025. This joint effort aims to minimize community disruption by synchronizing transit infrastructure upgrades with housing construction, exemplifying effective public-private and inter-agency collaboration.
The Menlo Park USGS Campus Redevelopment progresses with ongoing stakeholder engagement focused on mixed-income housing tailored to Silicon Valley’s acute affordability challenges. Transit-oriented design and integration with local services continue to be top priorities to enhance livability.
Community-driven projects have reached important milestones:
- Liberation Park in East Oakland broke ground on a 119-unit affordable housing development, a partnership between the Black Cultural Zone and Eden Housing that also prioritizes local job creation and community empowerment.
- Eliza Senior Housing in Uptown Oakland has begun construction on a 96-unit affordable senior residence led by Mercy Housing California, incorporating supportive services tailored to elders.
- New renderings from Ellis Partners and Spirit Living Group unveiled plans for a 203-unit senior living development in Oakland, reinforcing the region’s growing emphasis on thoughtfully designed, affordable senior housing with inclusive amenities.
Shovel-ready opportunities are also emerging:
- A 230-unit site in Downtown Concord recently hit the market, fully entitled and primed for rapid development, representing a rare chance to boost housing supply in a high-demand area.
- In San Jose, a pilot program at The Fay, a 336-unit downtown high-rise opened in 2024, is converting nearly 200 units into middle-income affordable housing, an innovative approach to embedding affordability within existing market-rate stock.
The Metropolitan Transportation Commission (MTC) launched a $45 million Sustainable Communities incentive program, linking funding directly to sustainable development policies for the first time. This initiative aims to accelerate affordable and workforce housing production while advancing climate and equity goals.
Notably, Pankow Builders launched Pankow Wood Structures, expanding mid-rise multifamily construction capabilities across California using mass timber and wood technologies. This innovation promises faster, more sustainable building methods that could help reduce costs and timelines for affordable housing projects.

Policy and Political Dynamics Intensify Amid Rising Friction

Legislative momentum remains robust but increasingly contested, shaping the Bay Area’s housing trajectory:

State bills AB 1997 and AB 2390 continue streamlining ministerial review processes and expanding eligible parcels, including hazardous sites, through 2036 – crucial for accelerating housing production.
Federally, a comprehensive housing reform package championed by San Jose Mayor Sam Liccardo is gaining traction in Congress. The proposal aims to slash permitting timelines and environmental review delays while providing financial incentives for affordable housing in high-demand regions.
Housing affordability has emerged as a defining issue in the 2026 California gubernatorial race. At the recent California YIMBY forum, leading Democratic candidates unveiled bold plans focused on regulatory reform, increased funding, and adoption of innovative construction technologies, signaling strong political will despite growing community tensions.
However, NIMBY activism is intensifying, particularly in affluent Bay Area neighborhoods. Recent mobilizations against development on a 22-acre parcel highlight the ongoing challenge homeowner opposition poses to expanding supply in high-opportunity areas, perpetuating inequities.
Political spending by major landlords is influencing the landscape. A recent report revealed Essex Property Trust spent $60.1 million to oppose tenant rights measures and sway politicians, underscoring the high stakes and contentious nature of housing policy battles in the region.
On the tenant protection front, Alameda County’s Fair Chance ordinance, passed in 2022, has set important precedents for safeguarding renters against discrimination, reflecting growing advocacy for equitable housing access amidst political pushback.
Mayor Liccardo publicly commended Mountain View’s proactive housing policies, highlighting the city’s leadership and community engagement as a model for sustaining development momentum despite political headwinds.

Financial Pressures Mount as Innovations Offer Potential Relief

The Bay Area’s affordable housing sector faces mounting financial challenges even as new approaches gain traction:

Multifamily mortgage delinquencies have surged to their highest levels since the Global Financial Crisis, with nearly $911 million in unpaid loans reported recently. Inflation, rising interest rates, and volatile construction costs exacerbate strains on developers and lenders.
The California Community Reinvestment Corporation (CCRC) reports underwriting and insurance challenges linked to climate risks and soaring costs, which have dampened deal flow. CCRC’s Tia Boatman Patterson emphasizes the urgency of rebuilding lender confidence through better integration of climate risk and underwriting reforms.
Innovative financing is gaining ground:
- Thought leaders including Dick Spotswood and Councilmember Stephen Burke advocate for exploring tax increment financing (TIF) as a dedicated revenue source to fund workforce housing, particularly along key transit corridors, aiming to close critical funding gaps.
- Modular construction and factory-built methods continue to expand, reducing costs and timelines:
  - The East Oakland modular project at 8301 MacArthur Boulevard exemplifies accelerated delivery supported by specialized loans and bridge financing.
  - Acacia Village in Santa Rosa, a modular development, remains a regional exemplar of mitigating onsite delays and inflation-driven cost increases.
- The launch of Pankow Wood Structures expands mid-rise mass timber capabilities, which promise faster, more sustainable multifamily construction across California.
Local and federal incentives supporting modular and office-to-residential conversions are fostering a more diverse production environment, attracting developer interest and potentially increasing housing output.

Persistent Barriers and Operational Challenges Temper Optimism

Despite progress, entrenched obstacles continue to slow delivery and raise equity concerns:

NIMBY opposition persists as a significant barrier, with recent successful campaigns blocking development on sizable parcels in affluent neighborhoods, limiting equitable housing access.
The Salvation Army Mission District property, listed at $58 million, has attracted primarily market-rate developers, raising alarms over potential loss of affordable housing stock and displacement risks in San Francisco’s competitive market.
Legal disputes, such as ongoing litigation delaying Alta Housing in downtown Oakland and stalling San Francisco’s Family Zoning ordinance, create uncertainty and slow reform.
Municipal permitting bottlenecks and staffing shortages remain acute amid surging demand, hampering timely approvals.
Rising construction costs, especially in San Francisco, continue to strain project budgets despite financing innovations.
Operational readiness challenges surfaced starkly with a recently completed Oakland apartment complex for formerly homeless residents remaining vacant due to staffing shortages and coordination issues with supportive services. This underscores the critical need for integrated service models, secure funding, and adequate operational capacity to ensure housing translates into stable homes.

Coordination and Equity-Centered Planning Gain Urgency

The region increasingly recognizes that housing supply depends on integrated infrastructure and equity-focused planning:

The upcoming Caltrans Oakland-Alameda Access Project will cause near-term disruptions around Mandela Station and adjacent developments. Coordinated scheduling among Caltrans, developers, and city planners is essential to minimize community impacts and ensure smooth delivery.
Research such as the “ADU Construction and Racial Equity in California” report informs policy updates aimed at reducing racial and income disparities in housing access. Jurisdictions like Santa Cruz have revised Accessory Dwelling Unit regulations to promote equitable opportunities.
Developers and municipalities emphasize inclusive design principles that balance affordability, sustainability, and livability to serve diverse residents effectively.
The operational difficulties at supportive housing sites reinforce the need for integrated service models, sufficient staffing, and secure funding to ensure vulnerable populations benefit from stable housing.
Active municipal oversight through Planning Board reviews remains vital for accountability and adaptive management amid evolving development and infrastructure demands.

Implications and Next Steps

The Bay Area’s affordable and workforce housing ecosystem stands at a critical crossroads. Flagship projects like the San Ramon Chevron redevelopment, Mandela Station, and Menlo Park USGS campus, alongside community-rooted initiatives such as Liberation Park and Eliza Senior Housing, demonstrate sustained regional commitment. Yet, rising mortgage delinquencies, underwriting complexities, escalating construction costs, and political resistance threaten to stall momentum.

Effective responses will require:

Underwriting and insurance reforms that incorporate climate risk and stabilize capital flows.
Sustained funding commitments and innovative financing tools like TIF to close gaps.
Expanded adoption of modular and mass timber construction to accelerate delivery and contain costs.
Transparent community engagement and leadership models that build broad coalitions to overcome NIMBY opposition.
Integrated planning and operational readiness ensuring housing projects translate into stable homes with supportive services.

Positive examples from Mountain View and emerging state and federal reforms offer pathways forward. Maintaining forward momentum demands visionary leadership, equity-centered policies, and continued innovation to realize a more affordable, inclusive, and sustainable housing future for the Bay Area.

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