Republic Urban Properties wants to build the Bay Area’s largest “build to rent” housing development in Fairfield, near the city planned by Silicon Valley billionaires in Solano County.
The San Jose unit of Connecticut-based Republic Family of Companies plans to build 400 single-family homes for rent on 19 acres near the Capitol Corridor train station in northeastern Fairfield, the San Francisco Chronicle reported.
Republic Urban bought the site for around $8 million. The developer expects to break ground this spring.
“These are homes designed for people who want to have three bedrooms, but they want to rent,” Michael Van Every, president of Republic Urban Properties, told the Chronicle. “They need an office. They want a two-car garage. They want private open space for their dog, for their child. They want a porch or a backyard where they can stretch out, put out a few lawn chairs and have a BBQ.”
Plans for the development dubbed The Aviatrix call for 400 rental homes from 1,200 to 2,100 square feet, built in multiple phases.
Rents are expected to start at $3,100 a month for a two-bedroom home, and $3,968 a month for a four-bedroom, according to the company, which will own the units. The average rental unit in Solano County is $2,200 a month, according to RentCafe.
The development will cater to families, including military families from nearby Travis Air Force Base, and include a clubhouse, dog parks, sports facilities, a gym and walking trails.
Such “build to rent” projects have seen substantial growth in cities like Phoenix, Dallas, and Atlanta over the past five years, according to the Chronicle. But the Bay Area, with high land costs and zoning restrictions favoring denser neighborhoods, has been largely excluded.
Republic Urban aims to build up to 1,000 build-to-rent houses a year across the state, targeting buyers seeking spacious living without the commitment and high cost of ownership. It’s in talks to buy other sites in Solano County, plus the North Bay and South Bay.
George McCarthy, CEO of the Lincoln Institute of Land Policy, notes that the rise of single-family rentals is driven by the shift away from building three-bedroom starter homes in favor of more lucrative larger homes.
He predicts a potential bubble in the build-to-rent market, anticipating some units being converted to for-sale units, providing affordable starter homes.
The build-to-rent trend started after the Great Recession, as investment groups purchased foreclosed homes in bulk. The pandemic and the growth of remote work further fueled demand for larger homes.
However, some experts foresee a potential dip in the build-to-rent market because of rising interest rates, causing a credit crunch for developers. Despite its growth, the sector is unlikely to significantly impact overall rental prices.
But as the Bay Area anticipates its largest build-to-rent project, other industry analysts predict the trend’s longevity, driven by millennials forming households and baby boomers seeking alternatives to traditional homeownership.
Republic Urban is set to begin construction on several build-to-rent projects in Hollister, emphasizing the appeal of this business plan in an area with limited offerings.
California Forever, a proposed city of the future on 55,000 acres of secretly bought farmland by a group of Silicon Valley billionaires, envisions retro row houses, but is opposed by environmentalists as a “hostile takeover” of agricultural land.
— Dana Bartholomew
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