San Jose was once set to host the largest co-living building in the world. But financial struggles and a torrent of lawsuits have all but killed that plan. Housing advocates now hope the space can be used for affordable housing.
The lot at 199 Bassett Street in downtown San Jose remains empty after plans to build an 18-story housing tower fell through. The now-shuttered co-living firm Starcity Properties planned to build 803 dorm-style units with shared kitchens, living rooms and laundry facilities.
Common, a rival New York co-living firm, purchased Starcity in June following the Bay Area firm’s legal trouble and financial woes due to low-occupancy rates in existing properties throughout the COVID-19 pandemic.
Starcity faced three lawsuits prior to its acquisition: one from KT Urban, the developer that sold the company the San Jose site, for fraud and breach of contract in May 2020; one from property owner BNN LLC for owing five months in back rent in December 2020; and most recently in April, the company was sued by its own architect, C2K Architecture, for allegedly owing $1.5 million. Starcity denied all allegations from KT Urban. As of June, Starcity owed BNN LLC a total of $342,563.
Common designs and manages co-living properties, but does not develop them, so the downtown San Jose project was left out of the acquisition. The San Francisco Chronicle reported in June that the property was on the market.
The title has yet to change ownership from Starcity affiliate 199 Bassett LLC, and C2K Architecture owner and principal Kevin Sauser told San José Spotlight a 2019 refinancing was the latest activity on the property.
Thai-Chau Le, San Jose’s environmental project manager, said no new development proposals have been submitted for the 199 Bassett site.
With the project at a standstill, local housing advocates are hopeful the property will be used for affordable housing.
Sandy Perry, president of the Affordable Housing Network, does not oppose plans like the now-dormant adult-style dorms project, but said there is room for improvement.
“In general we’re in favor of social housing, public housing that is geared to people’s income,” he told San José Spotlight. “Young people without families may prefer to live in that situation. But dorm-style housing is not the solution to the affordable housing crisis. My understanding is that Starcity was going to be rented out at market rate, but we need housing that is below market rate.”
Fair market rent for a two-bedroom home in the San Jose metro area is about $3,051 a month. According to the National Low Income Housing Coalition, San Jose renters pay the second-highest rent in the country.
A minimum wage worker in California can afford to spend $728 per month on rent if they use one-third of their monthly income for housing. In Santa Clara County, an individual must earn $58,000 or less to be eligible for low-income housing.
“We need to look at every tool we have to create more affordable options for people,” he said. “It’s important to think about what real affordability is. There’s a difference between using design to reduce costs versus creating boutique communities. As long as the end goal is making housing more affordable, I think we should explore more modes of housing development and design.”
Bramson pointed out that co-living plans are nothing new and have been viable solutions in the past.
“People talk about innovation in dorm-style housing, but in the 50s and 60s we had millions of single-resident homes designed just like that,” he said. “Those buildings created options for people at the lower end of the income scale. I think it’s a tool we should look back at and reconsider.”
Contact Kristen Pizzo at [email protected]