Fresno, for all intents and purposes, is a larger version of Stockton. Similar socioeconomic challenges, climate, and cost of living. The same can be said of both city’s downtowns. Both feature rich architectural history, but have been besieged by empty buildings and blight. Given these similarities, Stockton compares much more closely to Fresno than an Oakland or Sacramento. It seems reasonable that success in one city could translate to the other to a certain degree, so you can imagine my reaction when I witnessed nearly fully leased, mixed-use and vibrant residential communities in downtown Fresno recently. While I and many of my colleagues that work on downtown know that there is a very strong demand for downtown Stockton residential, seeing it in practice in a similar market like Fresno provides indisputable proof that Central Valley residents will eagerly occupy urban infill development.
Last Thursday, I paid a visit to Downtown Fresno for the first time ever to attend an affordable housing summit. And while I was there primarily to discuss issues facing affordable housing in the Central Valley, I could not help but notice the proliferation of mixed-use, dense urban housing lining Fulton Street as I drove into downtown. I spent part of my day exploring these projects, and as I wondered the Mural District—as this part of downtown is called—I was pleasantly surprised to see a variety of new housing and occupied retail fronts in an area that was fairly desolate not too long ago.
My conversations with the leasing agents at two of these properties left me even more impressed. A new residential development of three story townhomes and apartments called The Lede was nearing completion, and only a handful of units remained with renters putting down deposits on units that weren’t even complete yet. Another project—the Iron Bird Lofts—had no vacancy at all.
Of course, I had a ton of questions. What are the rental rates? From $825 to about $1,500 a month, depending on unit size/mix. They also require tenants to bring in a monthly income of at least three times their rental rates. What about parking? Units come with assigned spots, and any additional cars find easy street parking. What about crime? Not an issue, outside of the occasional car break in.
The source of all of this development comes not from an innovative urban infill company specializing in downtown revitalization, but from a traditionally suburban developer. Specifically, Granville Homes—which is responsible for a significant amount of Fresno’s suburban development—has actually been the pioneer in downtown housing for that region as well.
I have to admit, I was skeptical. Most suburban developers scoff at the idea of diversifying their portfolios with urban infill. But it appears that not only has Granville taken the plunge, but it has been swimmingly successful. According to the leasing agents I spoke to, one of the Granville family children was able to convince his parents that investing in Downtown Fresno was a worthwhile endeavor. And it appears that he was correct.
Since 2008, Granville has built over 500 new units in the Mural District with occupancy rates in the 90s, and they continue to build more. And these units are not in towering high rises, but more modest two and three story structures across nearly 20 different buildings within a relatively small footprint. This has led to an attractive neighborhood scale while still achieving decent densities.
Retailers appear to be taking hold as well. As I strolled down Fulton, I passed a poke shop, a barber, and a yoga studio, among others. In fact, one of their “live work” units (three story buildings where individuals live in the top two floors while running their business out of the bottom floor) were mostly occupied, even with rents approaching $3,000 a month.
Needless to say, my trip down Fulton Street left me inspired for a couple of reasons. First, if Fresno has found a demand for downtown housing, there is absolutely no reason why there is not a similar demand in Stockton. The demographics are very similar, as are construction costs and other factors. And Granville has succeeded even with fairly high rents (compared to other areas of the city).
Second, the fact that a suburban developer found a way to accomplish quality infill development gives me optimism that perhaps our suburban developers could also one day invest in our downtown. While my company (Ten Space) is pioneering Downtown Stockton development, it’s my sincere hope that we won’t be alone. We need other experienced developers to come downtown. Like I tell people, if we’re still the only ones developing new projects in downtown in a couple of years, then that means we aren’t successful.