McKinney Capital, in a joint venture with Naturally Affordable Housing LLC, has broken ground on a new workforce housing community, located at 4233 Kansas St. in San Diego. Other partners include utility solutions company TIERRA PP LLC, Civic San Diego, the Middlemarch Fund, which issued an equity investment, and the Bank of Southern California, which provided an undisclosed construction loan.
The community will be located in San Diego’s North Park neighborhood, at the intersection of Kansas and Boundary streets, near many of the town’s retail, dining and recreational attractions and within 5 miles of the city center.
The commencement of the construction of the new development takes place during a time of strong gains for nearly all sectors of San Diego’s multifamily market. The city experienced job growth of 7.4 percent, significantly above the national average of 4.7 percent, and unemployment reached pre-pandemic levels, according to a June 2022 report from Yardi Matrix. The city’s transaction volume continues 2021’s record-setting trend, with $731 being exchanged over the first four months of the year, with demand exceeding 8,445 units in its construction pipeline, data from the same report shows.
San Diego’s larger struggles
Still, the actual housing affordability gap in San Diego remains pronounced, as the city surpassed San Francisco to be the least affordable in the nation, as home prices increased by 14.31 percent, with approximately 70 percent of middle-income households not being able to afford rent, according to the city’s leaders and a February 2022 report from OJO Labs. Seeing the property’s construction in this context, McKinney Capital Managing Director Damian McKinney said in a prepared statement the Kansas Street Workforce Housing development aims to help solve the lack of affordable housing for moderate-income working families and young professionals.
Other San Diego-area market rate transactions include Titan Development’s breaking ground on 4250 Oregon, a 53,905-square-foot Class A multifamily asset, as well as Equity Residential’s purchase of Jefferson Pacific Beach, a 172-unit garden-style development.