Those wanting to build apartments in Manteca struggled for years to secure financing.
At the same time, most of the land zoned for high density development was tied up by local developers making it difficult for national or even California-wide apartment builders to get a foot in the market.
That is no longer the case.
During August, the City of Manteca received plans for three separate apartment complexes to build a combined 970 apartments.
One — a 288-unit complex proposed by a San Diego developer planned on the westside of the McKinley Avenue/Daniels Street intersection — was the subject of a story in Friday’s Bulletin.
The second is 472 apartments along the westside of Airport Way south of Wawona Avenue dubbed the Wawona Apartments being advanced by Grupe Properties.
The third is 210 apartments on the southeast corner of Atherton Drive and South Street being pursued by the Bay Area-based SOMA group.
What is making Manteca a hot spot — as well as help triggering investments that in the case of the larger proposed complex that can exceed $100 million — is three-fold.
- Rents in the Manteca submarket of the Stockton Metro market that covers San Joaquin and Stanislaus Counties are 20 percent higher than the regional average.
- Manteca, as well as Tracy, are benefitting from a housing squeeze in the job-rich Bay Area where those being hired by tech companies can’t secure housing due to the dearth of land available for development as apartments.
- Manteca has opened up more options through the commercial mixed-use zoning that allows property with such designation to be developed as high density residential or a combination of commercial and residential.
Throughout California, more developers are seeking out such zoning for high density housing as the retail demand for new brick and mortar development has slowed somewhat due to the growth of e-commerce even in areas cities of Tracy and Manteca that are consistently being among the fastest growing cities in California.
As for higher rates for financing projects and fears of a recession most economists expect the hit on Bay Area growth could be fairly minimum especially when it comes to housing due to the acute shortage in some areas of the greater region.
Rents so far are underlining that point.
Atherton Arms — that has 214 apartments and is in the process of building 214 more — on Atherton Drive east of Bass Pro Shops is commanding $1,195 for a 515 square foot studio apartment; $2,265 for a one bedroom, one bathroom apartment with 722 square feet; and $2,495 for a two-bedroom two-bathroom apartment with 1,105 square feet.
The expectation that apartments rents overall will drop as the recession continues is likely wishful thinking.
In the recession that started in 1989, apartment rents did not drop in Manteca.
And when the liar loans triggered the housing meltdown and the recession that started in 2008, apartment rentals — on the whole — did not drop. Instead, annual rent increases stalled.
As housing prices plunged, home rental home prices did drop.
The three new apartment complex project applications in the initial review project are in addition to:
- The 420-unit Prose Apartments along the western extension of Center Street being advanced by US Alliance, a Scottsdale, Ariz., based residential development firm.
- The 62-unit Yosemite Apartments proposed for land at 1919 West Yosemite Avenue west of Kaiser Hospital.
- The 300-unit Union Crossing apartment complex after completing the review process, secured entitlements to build just several months ago southwest of the corner of Union Road and Atherton Drive.
- The 136-unit Luxury Apartments that backups to Del Webb on Lathrop Road west of Union Road.
Between the seven mentioned new projects, it represents 1,888 apartment units.
Toss in the second half of Atherton Arms now under construction that will add 214 units and a small 12-unit complex being built on Stewart Street, there are 2,114 units under construction or moving toward ground breaking.
Based on average apartment yields, once built they will add 6,000 residents to Manteca or almost a 15th of its current population.