SLO’s San Luis Ranch is taking shape. Get a look at the homes and see how much they cost
Homeowners are starting to move into San Luis Ranch, a new mixed-use development in San Luis Obispo County.
The housing project, which broke ground in 2020, is taking shape on a 131-acre site on Madonna Road, bordered by Highway 101 and Dalidio Drive. Several single-family houses and attached-wall housing units are now visible from the nearby roadway.
Although builders have approval to construct 577 homes, fewer than 100 have been built so far. They will be sold in phases as buyers pre-qualify and work with project sales teams to line up their new digs.
Home costs are expected to range from the high $300,000s or low $400,000s for the smallest units to the $900,000s for the largest homes. That’s higher than initial estimates a few years ago, which put prices at the $300,000s to $600,000s.
At the peak of the current price scale are three- and four-bedroom single-family residences with high-end finishes, some in prime locations with views of surrounding hills, said Josh Bivin, a representative of Merced, a Minnesota-based real estate firm that is financing large portions of San Luis Ranch.
A total of 68 homes are designated as affordable housing units with cost restrictions under the city’s inclusionary housing policy.
The approximate price median, after all of the homes are built, is expected to be in the high $500,000s to low $600,000s, Bivin said.
“At the end of the day, we will have settled at the low $600,000s (for the median), and I will challenge anybody to find me another project of 580 homes in this town that can offer homes at that price,” said Bivin, who is Merced’s chief financial officer for the project. “It’s not going to happen.”
Bivin acknowledged that market rates can change over time and prices may fluctuate based on the economy and real estate trends.
Merced is financing a large section of the single-family homes and condominiums in partnership with Gary Grossman’s Coastal Community Builders in Pismo Beach.
Merced has also partnered with Santa Clarita-based Williams Homes, which is building some of the single-family homes and townhomes at San Luis Ranch. Williams Homes individually is building a collection of studios.
Housing prices, progress at SLO development
As of late October, four households had already moved into their new homes at San Luis Ranch, which was approved by the San Luis Obispo City Council in 2017.
Developers plan to build 281 single-family homes and 296 multifamily units.
In addition to 198 three- and four-bedroom homes on 3,200-square-foot lots, plans call for 83 three-bedroom homes on 2,400-square-foot lots and 80 two- to three-bedroom townhomes.
There will also be 96 stacked flat condos, or, attached dwellings, featuring two to three bedrooms each, and 120 stacked flat efficiency studio and one-bedroom homes.
The development is being built in phases, and homes are coming up for sale as the construction rolls out, Bivin said.
Merced is partnering with Coastal Community Builders to build 198 two- to four- bedroom homes, 33 of which are currently under construction, as part of its Legacy Collection.
Those homes have seven different floor plans from which buyers can choose. Some two-story homes offer views of nearby Laguna Lake and Cerro San Luis Obispo.
Legacy Collection homes range in size from 1,339 square feet to 2,170 square feet, with optional accessory dwelling units.
Featured model homes have all-electric appliances, quartz counter tops, kitchen islands and tiled showers and bathrooms, plus two-car garages. They offer second-story views of the surrounding hills.
Buyers can choose from base price fixtures or higher-end upgrades.
The Orchard is a collection of multi-family homes with three-bedroom units that are available for sale to local workers under the project’s local preference policy. Anyone who wants to buy a home must already live or work in the city to have first dibs, and those who live in San Luis Obispo County are next up.
Three-bedroom condominiums in The Fig neighborhood are available for sale in the mid-$600,000s, and Harvest Vista condominiums featuring two or three bedrooms are being offered from the low $500,000s, according to a San Luis Ranch group email to those signed up on the interest list.
People who work in San Luis Obispo are the first ones eligible to pre-qualify for a home. Once prospective buyers are pre-qualified, they can contact a sales team and move forward with the sales process.
According to Bivin, 88% of the San Luis Ranch homes purchased so far have been bought people who work in the city of San Luis Obispo or San Luis Obispo County.
“I can’t release them fast enough,” Bivin said. “I released five homes and had all five in contract within seven days. We have a waiting list. We’re working through that waiting list.”
Citywide, Bivin said, there are more interested buyers than homes available.
“It’s 100% a seller’s market right now, but it is slowing a little bit,” he said.
“Some builders (countywide) have been saying we used to have five buyers for every home. Now we have three, so still there’s still not enough supply,” Bivin said, adding that as soon “as some of the new homes under construction come out, they will be spoken for.”
Bivin said that supply chain challenges have been “wreaking havoc with everybody,” which have meant delays for installations of garage doors, windows, appliances and more at San Luis Ranch.
Affordable housing at San Luis Ranch
Of the homes available for sale at San Luis Ranch, the cheapest properties include efficiency studios and one-bedroom units under construction by Williams Homes.
“I don’t know the price on those because I’m not involved (as a financial partner), so I have no say in pricing or anything on those,” Bivin said. “But I would imagine they’ll come out in the low $400,000s, possibly the high $300,000s.”
“We’re trying to hit every price point you can think about here,” he said.
Like the market-rate homes, the inclusionary homes, which are restricted in price by tenant income, will be released in phases.
The San Luis Ranch project was approved under the city’s affordable housing standards, which set pricing based on ranges of “extremely low” to “moderate” income levels.
Local nonprofit Peoples’ Self-Help Housing is managing a lottery application process for the deed-restricted, affordable homes.
Four of the homes for sale are for people with moderate incomes, while four are available for those with low incomes.
There will be 26 homes for rent for very low-income people, to be constructed by Peoples’ Self-Help Housing through in-lieu fees.
The nonprofit plans to build an additional 34 homes for rent — four for moderate-income households, four for low-income households and 26 for very low-income households.
In addition, there will be 14 workforce units for sale.
“Additional affordable units may be constructed by Peoples’ Self Help,” said Michael Codron, San Luis Obispo community development director. “A Planning Commission use permit is required for that project.”
A household of four in the very low-income category would need to earn $48,900 per year or less. A very low-income two-bedroom unit would rent for a maximum of $1,100 or could be purchased for a maximum of $132,150.
A family of four in the moderate-income category would need to make $117,350 per year or less. They could rent a home for $1,833 per month or buy one for $369,600.
Workforce housing isn’t considered inclusionary housing by the city, but it is below market rate, as eligible households can’t earn more than 160% of the area median income (AMI), Codron said.
Workforce housing sales prices are designed so that the cost of housing is no more than 25% of monthly income for a household earning 140% of AMI, Codron said.
Community members call for cheaper housing
During San Luis Obispo City Council meetings, multiple commenters have called for more action to make the city an affordable place to live.
“Wages in San Luis Obispo have not kept pace with the cost of living,” Deb Donig, a Cal Poly associate English professor, said during a homeless response plan discussion on Tuesday. “Wages are disproportionate to the cost of housing.”
Donig said she currently lives in the Bay Area because of the cost of living in San Luis Obispo. She believes more housing that can accommodate workers should be built either by Cal Poly or through city-directed housing affordability policies.
“Having lived in Los Angeles and San Francisco, I was surprised to learn that my cost of living in SLO was more expensive than what I could find in L.A. or San Francisco,” Donig said. “Attracting a workforce is necessary for San Luis Obispo and particularly those of us who come to the community without inherited wealth or other forms of paying our bills. It’s really challenging to be in the community.”
Another Cal Poly faculty member, Shanae Aurora Martinez, said that housing in San Luis Obispo has become for the wealthy or parents of Cal Poly students looking for temporary investment property from rentals.
“The market cannot drive housing here,” Martinez said. “We need rent control. We need very low-income housing. I am considered low income for this area. We need to regulate the cost of housing.”
Project to feature restaurant, retail
At an Oct. 27 meeting, the city Planning Commission approved a proposed Agricultural Heritage and Learning Center, which includes 31,236 square feet of the building area.
The plan calls for a farmers market, restaurant, general retail and agricultural processing buildings, which all were part of the San Luis Ranch Specific Plan adopted by the City Council in 2017, according to a city staff report.
The project will incorporate two relocated historic buildings — a ranch house and barn.
“The applicant estimates that construction will start in February 2022 and have a grand opening in early 2023,” said Tyler Corey, San Luis Obispo deputy director of community development.
The project is not tied to completion of the long-planned Prado Road overpass, which will connect the site to the Highway 101 freeway.
Infrastructure on Froom Ranch Way and bike lanes on Madonna Road have been completed, as well as a bridge connecting the San Luis Ranch neighborhoods to the shopping center that includes Target and Dick’s Sporting Goods.
People aren’t allowed to casually drive around San Luis Ranch and explore the development, according to project officials. Instead, they should make an appointment to tour the site and model homes.
For more information about San Luis Ranch, go to sanluisranch.com.
This story was originally published November 23, 2021 at 9:00 AM.
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