S.F., San Jose paths differ on experimental developments

One reason developers have been slow to build coliving projects in San Francisco is the city’s 2013 decision to require “group home” projects to meet the same affordable housing requirements as other marketrate developments. The decision killed a project that developer Build Inc. and coliving provider Open Door proposed at 1532 Harrison St. The proposal called for 235 microsuites organized around 28 shared living spaces.

“Overnight the board killing our project — we reverted to traditional multifamily development,” said Michael Yarne of Build Inc. “Killing something before it’s even tried — it’s a tradition in San Francisco.”

In contrast, San Jose — where Starcity is building an 803bedroom project — has unequivocally embraced coliving, according to Sean Milligan, a partner with developer KT Urban, which is working on more than 1,100 coliving rooms in San Jose.

The city of San Jose recently passed legislation creating a special zoning category for coliving, exempting it from requirements dealing with parking, affordable housing and densities. In San Jose, like San Francisco, rising construction costs are making marketrate apartment complexes difficult to finance. Coliving — which generates a higher return per square foot of real estate — could be part of the answer.

“We struggle so greatly just to get a shovel in the ground to get housing in the city, because construction costs are so high right now,” said San Jose Mayor Sam Liccardo. “The fact that (Starcity) has found an approach that could get housing built was a good enough signal to me that we should get any obstacles out of the way.”

J.K. Dineen is a San Francisco Chronicle staff writer. Email: jdineen@sfchronicle.com Twitter: @sfjkdineen