New Bay Area suburban starter home comes with elevator, shared walls

The homes Brookfield Properties is building in Dublin are typical of those that draw first-time buyers to the suburbs — 2,200 square feet, two-car garages and enough bedrooms to support a growing family.

But there’s one major difference: shared walls.

In the Bay Area, the single-family home hegemony of the suburbs is crumbling under the weight of prices. As land costs increase, developers looking to rein in expenses must build up and attached, rather than outward.

Welcome to the condo era — the Bay Area’s new starter home.

“We’re going vertical,” said Emily Boyd, director of land acquisition at San Francisco-based Brookfield.

In 1995, single-family detached homes made up 75% of newly built housing units in the Bay Area. Now, that number is just 37%, according to U.S. Census Bureau data.

“Anything in the core Bay Area, we’re really relegated to doing infill projects,” said Josh Santos, president of Landsea, a developer building condos in Alameda, Sunnyvale and Dublin.

For many, the single-family home still remains an American ideal — but these days, the eye-popping $1.27 million median Bay Area price tag has put that dream further out of reach. For those still looking to get a foothold into the real estate market without having to brave a dreaded super-commute, a condo is often the compromise.

“It’s a tradeoff: how much time do you want to spend in a car, versus do you need to have a yard?” Boyd said.

That was the calculus that Yolanda and Byron Shao weighed when they bought a new attached home earlier this year in Sunnyvale, where the median single-family home goes for nearly $2.4 million. After getting outbid twice, the Shaos decided to look into buying new construction. With their budget of $1.7 million, a townhouse was within reach.

“If I didn’t have a budget, of course I would buy something that was spacious, with a great location,” Yolanda Shao said. “But budget is everything in the Bay.”

The couple settled on a four-bedroom townhouse in Landsea’s Lavender community in Sunnyvale. It’s enough space for an office each, plus a bonus room that Yolanda uses for something she’d always dreamed of doing during the seven years she lived in New York, but never had the space — fostering litters of kittens.

“We definitely enjoy the extra room,” she said.

The Shaos sacrificed outdoor space for a closer commute, but they prefer it that way — Yolanda loves her 10-minute bus ride. Plus, after killing a few houseplants they received as housewarming gifts, the Shaos realized they might not be cut out for yard work.

That’s the case for many millennials buying homes in these communities.

“Demographically, we’re shifting away from the traditional grass lawn and white picket fence to something that’s more low maintenance and suits the lifestyles of busy working adults,” Boyd said.

While the yards may be smaller, that’s about all that’s shrunk. New condos average between 2,000 and 2,800 square feet — in line with the median size of all new homes in the Bay Area, according to data from John Burns Real Estate Consulting.

Builders squeeze the extra square footage into these denser lots by going up to three stories, and sometimes even four. Take a typical 2,200 square foot, $1 million condo in Boulevard, the Brookfield community in Dublin: on its first floor is a two-car garage; the second, a living room and kitchen; on the third and fourth floors, the bedrooms and bathrooms. Other condos are set up more like an apartment, with units stacked on top of each other, accessible via elevator.

“These denser condo styles are often the stepping stones for folks that are growing out of an apartment lifestyle,” Boyd said. “It’s not like stairs and elevators are foreign concepts.”

Going dense gets you a discount. Compare the cost of the Boulevard condo — $1 million — to a new detached 2,200 square foot home in Concord, which costs $1.3 million.

Though many single-family homeowners cherish their sense of privacy and large lots, Bay Area developers have been building homes closer and closer together for years. Back in the 1980s when Dublin was still a small community of 13,469 and land was cheap and plentiful, developers built homes on 15,000 square foot lots with grassy backyards and long driveways. By the 2000s, the lots had shrunk to 6,000 square feet, and by the 2010s, they were down to 3,000, with gaps between each house small enough a homeowner could reach out their window to shake a neighbor’s hand.

Eventually, though, even these close-set homes become so outrageously expensive that developers now reason that homebuyers will settle for a more affordable option, even if that means sharing a wall.

“The market for single-family homes has to be priced so high that a three-story townhouse is enough of a bargain against the traditional stuff that people are willing to make the sacrifice,” said Charles McKeag, president of BrightSky Residential.

Beyond the cost of land, increased pressure on cities to build more housing also has spurred vertical development.

Many Bay Area suburbs have long had a buyer pool for denser housing — but by zoning mostly for single-family homes, they have severely limited where it can go. But the state has stepped up enforcement of laws that require cities to plan for more housing and threatened to strip funding and local control if they resist.

To developers, it seems to be working.

“It has absolutely spurred a densification of developable land amongst cities,” Santos said. His firm, Landsea, is currently working on a 54-acre, 500-unit development in Dublin.

That’s the kind of “missing middle” housing options that experts say are necessary to address the years-long affordability crisis plaguing the Bay.