LOS GATOS — More than 100 homes, some of them affordable, could sprout on empty land in Los Gatos on a site that’s near the interchange of two freeways, a new proposal shows.
Urban Catalyst, which is an active developer in downtown San Jose, has widened its area of interest to Los Gatos where the company seeks approval for a project that would produce 128 homes.
Open spaces for a 128-unit residential development that includes affordable homes, located on Oka Road near the interchange of State Routes 85 and 17 in Los Gatos, concept. (Dahlin Group)
“We want to be on the forefront of helping to solve the housing crisis in the Bay Area, which is why we proposed this,” said Erik Hayden, co-founder and managing partner with San Jose-based Urban Catalyst.
Acting through an affiliate, Urban Catalyst has obtained a contract to buy roughly 6.7 acres of land on Oka Road near the interchange of state routes 85 and 17. The development site is a half mile north of Lark Avenue, according to Google Maps.
128-unit residential development on Oka Road in Los Gatos, shown within the outline. The interchange of state routes 85 and 17 is visible in the upper right. Boundaries are approximate. (Google Maps)
Urban Catalyst is using a builder’s remedy approach in an attempt to help speed the proposal through the Los Gatos review process.
Developers can employ a builder’s remedy gambit in municipalities such as Los Gatos that have yet to gain final state certification of their housing element, which is bureaucrat-speak for a long-range plan to approve and build housing, including affordable units.
The general plan for the site envisions five units per acre in that part of Los Gatos, according to Hayden. Urban Catalyst’s proposal would produce a project with a density of 21 units an acre, he estimated.
“There’s a housing crisis in California and cities have not built enough homes,” Hayden said.
Of the 128 units, 20% would be affordable housing, Hayden said. That would equate to about 25 or 26 units at below-market rates.
The residences would be three-story townhouses, according to Hayden.
The proposal is in a preliminary stage and must be scrutinized by Los Gatos officials before a decision.
Urban Catalyst has made its proposal in Los Gatos at a time when the real estate firm seeks to break ground on more projects in downtown San Jose, where the company is active with numerous large development plans, including multiple towers.
Sky-high interest rates and borrowing expenses, complicated by inflation and high labor and materials costs, have made it pricey to build large real estate projects in numerous American cities, including downtown San Jose. Even large housing developments can be tricky to develop.
Plus, the office market remains haunted by record-high vacancy rates and feeble rental levels. This forbidding economic landscape has made it difficult to justify new office construction.
These were among the factors that prodded Urban Catalyst to scout for opportunities outside of downtown San Jose until the financing markets become more attractive.
Despite being able to employ the builder’s remedy for the project on Oka Road in Los Gatos, Urban Catalyst executives didn’t want to proposal a truly massive project for the site.
“It penciled out to be a 600-unit apartment project, but I didn’t want to build that,” Hayden said.
A highrise housing development also could have been possible on the property, according to Hayden.
“We wanted to do something that fits into the community, while also doing a higher-density project that can be part of this neighborhood,” Hayden said.
