Coastal California, with its high property costs, unique geography, and acute local political and physical land-use constraints, presents among the most challenging market dynamics for homebuilding. Amid these difficulties, there are also opportunities to repurpose underutilized land in innovative ways.
Converting parcels that are hard to entitle and develop is a homebuilding secret-sauce skillset, capable of both putting firms on the map and building them into sustainably profitable enterprises.
City Ventures, a California-based infill builder, operates exclusively in the Golden State’s coastal regions, specifically in the Los Angeles metro and the Bay Area.
These markets are land-constrained, with the ocean on one side and undevelopable mountainous and hilly areas dispersed throughout. Southern California, in particular, is constrained by the Pacific Ocean to the west and mountains to the east, with little vacant, developable land available in between due to decades of suburban sprawl.
“I grew up in Central Ohio, in the Columbus market, where you have a thriving city and economic region, and there’s just no land constraint. You can kind of keep going out and out and out. Where in California, Southern California in particular…you just have all of these physical constraints,” said Ryan Aeh, Partner and Executive VP at City Ventures, whose offices are in San Francisco and Irvine, CA.
These physical constraints are precisely why City Ventures focuses on redeveloping underutilized sites with medium-density housing, often in centrally located areas near job centers. What’s more, topography and other physical barriers are only the half of it.
The other half of the challenge is winning over local community members whose first impulse is to oppose any new development “anywhere near anything.” The skillset operators like City Ventures bring to bear on such challenges is both engineering and land planning know-how, and a track record of local community persuasion.
“We think this is just a really strong model for providing those first-time home ownership opportunities in a supply-constrained, expensive market like Southern California,” Aeh said.
While there is no universal estimate, most experts agree that California has a major housing shortage that only exacerbates what are already high housing prices. A 2024 report from housing policy nonprofit Up For Growth estimated a deficit of 840,00 residential units. Freddie Mac similarly estimated a supply shortage of 820,000 units in 2020.
City Ventures develops underutilized or vacant sites such as parking lots, outdated auto repair shops and car dealerships, or dilapidated industrial or office buildings in need of investment.
“The community generally doesn’t like those buildings to exist. They’re tired. They’re ready for something new. So then it’s our job to go in there, work with the property owner, work with the city, to kind of reimagine those two acres, three acres, or five acres,” Aeh said.
One of City Ventures’ latest projects, Eginhouse, replaced an underutilized commercial property with 59 townhomes.
Eginhouse, located in the Los Angeles suburb of Artesia, also includes an interesting design feature — the development’s more than 4,000 square feet of retail space is located in front of and below several three-story townhomes. City Ventures recently announced that a coffee shop will open in one of the retail spaces in 2026.
“I think when you are designing communities, it’s always kind of trying to marry what the market wants to see, and what the municipality that controls the land use wants to see,” Aeh said.
The property is located off a main thoroughfare and has commercial zoning, but is also situated directly next to single-family homes, and is within walking distance to a school. Eginhouse gave the city some of the commercial activity that they envisioned for the site, while also providing a use that enhanced neighborhood cohesiveness.
Eginhouse is a phased development that is expected to be complete next year, and is about halfway sold out. Townhomes range from approximately 1,342 to 1,899 square feet and start in the low $700,000s, a competitive price in what is one of the country’s most expensive markets.
According to Aeh, Eginhouse features solar-powered homes, just like all other City Ventures developments. This complies with California’s building code, which now requires most new residential construction to include solar panels. ‘
Many homebuilders will work around that requirement by creating a lease structure where buyers will purchase a home but lease the solar panels. This makes the sales price a bit more affordable, but adds longer-term costs for the buyers.
However, City Ventures always includes the solar panels in the initial sale. While this can elevate the initial sales price, the energy-efficient homes also make homeownership more attainable in the long run.
“We totally eliminate the gas bill, and now your electric bill is significantly lower due to your solar panels,” he said.
English