Staedler: Let’s be realistic about retail in housing development

The unrealistic hopes and dreams for small and vibrant retail uses in housing projects have become a huge deterrent in the development of tragically-needed new housing.

I will continue to use a variation of the word “tragic” when describing our region’s housing situation because we left “crisis” status years ago. We need a massive number of housing units and we as a region have not accepted that reality. Just more and more talk.

One of the most over talked about requests that arises for every housing project proposal is an oversized amount of retail or grocery use in new market-rate and affordable housing projects. An example of this can be seen in the proposed County of Santa Clara Housing Authority development on Santa Clara Street between 14th and 17th streets. (Full disclosure: I live in Naglee Park which is adjacent to this development site).

The Housing Authority and Santa Clara County held a series of community meetings and drafted a masterplan for the area. It consists of 550 to 800 units of housing, 320,000 to 360,000 square feet of office space and between 11,000 to 18,000 square feet of retail. Then came a knee-jerk reaction from San Jose and Mayor Sam Liccardo that it lacked a sufficient amount of retail, along with claims that the county did not listen to the desires of the community.

The criticism of an insufficient amount of retail is yet another hypocritical and uninformed view of the current state of retail. This was not based upon a retail study or any real data, just anecdotal nostalgic rhetoric.

To illustrate this point, San Jose had no problem approving a development on 6th and Jackson streets in Japantown, which it sold to Shea Homes, with only 19,000 square feet of retail in a traditional shopping district.

Why is it appropriate to only have 19,000 square feet in an existing retail corridor, yet 11,000 to 18,000 square feet is woefully inadequate? It’s because the world has changed and we have not come to terms that shopping habits have forever changed. The retail proposed by the Housing Authority seems to be reasonable, and if you take the Japantown project as a comparable, it’s is what the market would recommend.

The city’s Downtown San Jose Retail Strategy, which was drafted in February, said “The retail industry is undergoing a major reorganization in response to online shopping trends.” Even established grocery stores in urban areas are struggling to keep up with new the shopping trends.

It has been widely reported that the Safeway located in Tower 88 located downtown San Jose will close soon. Even with the retraction of the grocery market, a very common request from neighborhoods is a new grocery store.

Where is a fair amount of retail mixed with a housing project a good idea? Let me give what I would consider the best example: Modera The Alameda (immediately adjacent to Whole Foods near Stockton Avenue and The Alameda). It consists of 168 apartments and 18,000 square feet of retail, and it’s within walking distance to Diridon Station. The Shasta Hanchett Park Neighborhood Association made it clear that it wanted this project to add retail that complimented the neighborhood. With that in mind, it was designed with flexibility for various uses and it’s now anchored by an ACE Hardware.

In our previous examples, the Japantown Project is on 5.25 acres and the Housing Authority site is 13.39 acres.

The Mill Creek project on a roughly one-acre site has as much retail as each larger site. That’s because it’s located in a prime location where retail is a no brainer and not forced. We need to focus on developing housing and not using the trope of job creation as an excuse to not add infill housing in San Jose specifically.

Real job creation will occur on sites such as City View Plaza (20,000 potential jobs) and Google (25,000+ jobs), not in vacant or small retail uses in housing projects. We can do both housing and jobs without anchoring development projects with nostalgic era retail that often does not work. Let’s be realistic about what can work in infill projects.

San José Spotlight columnist Bob Staedler is a principal at Silicon Valley Synergy, a San Jose-based land use and development consulting firm. His columns appear every first Monday of the month. Contact Bob at [email protected] or follow @BobStaedler on Twitter.