East Bay office building owner takes novel approach to address homelessness

The owner of an East Bay office building is taking a novel approach to homelessness: Turn it into more than 50 rental units.

Overaa Construction and Contra Costa County are teaming up on the San Pablo project, which involves gutting a vacant 25,000-square-foot structure at 2555 El Portal Drive to build 54 studio and one-bedroom apartments, according to the Mercury News. Overaa aims to start work on the $19 million project later this year and wrap it up by September 2023, the newspaper said.

The building will serve as permanent housing for the homeless and disabled, who will pay 30 percent of their income in rent and will have access to services such as mental health support, health care and money management.

Converting office buildings into homes is expensive and labor-intensive, which is why it’s much more common to turn apartments, hotels and dormitories into homeless housing, the Mercury News said. From 2014 to 2019, developers built 9,300 homes on Bay Area land that had been commercial, accounting for less than a tenth of the region’s total housing development.

Yet office vacancies in the Bay Area have spiked since the start of the pandemic, jumping to 18.4 percent at the end of 2021 from 9.9 percent in the first quarter of 2020, according to data from commercial real estate firm JLL. More than 17 million square feet of offices were vacated in that period, making the region ripe for office-to-residential conversions.

“There’s just a ton of opportunity out there to use some of these less than fully occupied buildings and reposition them as part of our broader housing solution,” said David Garcia of the UC Berkeley Terner Center for Housing Innovation, which recently co-authored a report on the subject.

The El Portal Drive building was built in the 1970s as an office for the Pacific Telephone and Telegraph company, which later became AT&T. Contra Costa County’s parole and probation services occupied it before relocating to new digs, and it’s sat empty for the past two and a half years, the Mercury News said.

In addition to gutting the building, Richmond’s Overaa will need to add fire sprinklers and utilities for the kitchenettes and bathroom areas in each apartment. It plans to cut a hole in the building’s center to create a courtyard, allowing for more windows and natural light. It said the project will be up to 25 percent cheaper than demolishing the building and constructing homes from scratch.

Overaa will cover the project’s construction cost, while Contra Costa County will rent the building from it until it has enough money to acquire it. The county plans to submit an application to California Governor Gavin Newsom’s Homekey program later this year. The program helps cities and counties turn buildings into homeless housing. Of the more than 90 projects it financed in 2020, only three were office or commercial conversions, the Mercury News said.

“We see this as a very exciting project,” Lavonna Martin, deputy director of health services for Contra Costa County, told the newspaper. “We’re thrilled about that opportunity to end homelessness for 54 individuals.”

[The Mercury News] — Matthew Niksa

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