level of rental rate growth cannot continue."
Downtowns take off
But most of the new construction is geared toward people who can pay a premium for luxury living. "That will flatten rents at the top of the market, but the people (in lower-cost apartments) who need the relief the most will see it last, as it slowly trickles down," Brown said.
A new influx of residents in complexes near town centers means locales once dismissed as suburban bedroom communities are coming into their own.
"From San Bruno to San Jose, downtowns have really taken off," said Rob Parker, chief marketing officer for Sares Regis Group of Northern California, one of the large multiunit developers in Silicon Valley. "They're providing amenities that residents can walk to in vibrant urban neighborhoods. There's a lot of demand for urban-type lifestyles in these locations close to employment."
Sares Regis Group has more than 2,000 rental units in eight locations in the pipeline, ranging from Foster City to San Jose in the Peninsula and South Bay, as well as Pleasanton in Alameda County, a new location for the developer.
Its Plaza in Foster City, a 307-unit luxury complex, opened in January and is about half leased. One-fifth of the units are affordable, as required by the city. Its next project: the Township in Redwood City, a 132-unit apartment complex slated to open in September.
The market research-driven design considerations behind the Plaza shed light on how developers view the young tech workers they hope to attract.
"We have to power (residents') connectivity -- that's almost the most important thing to provide," said Parker, the marketing chief. "When they were living in their high-tech dorms in universities across the country and around the world, they had certain expectations about wireless connectivity, and things like extra outlets or ports in their rooms. We've had to integrate a lot of the technology they're already used to."
Even working out is different these days.
"It used to be we built a big pool with a spa and fitness center, and we were good to go," Parker said. "That's all changed as attitudes toward fitness have changed. People today do Pilates, they do yoga; you can't just have a room with weight machines and some treadmills. So the Plaza has a wellness center with a massage therapist, aesthetician, a classroom for meditation and yoga."
Some basics related to space are changing, too.
"The cost of construction and land is so high that apartments are getting smaller -- they have to be, to make them financially feasible," Parker said. "This new demographic is not arriving with dining room tables and big couches and desks, the things my generation would move into an apartment with. In many cases they don't even have a television set; they watch on their laptop on Hulu."
Inviting public spaces
The developers' response is to make public spaces more enticing, including places where people who work from home can meet with clients.
"We put a big-screen TV at the outdoor kitchen or the bar area by the pool and have events for sports games, Academy Awards, elections," Parker said. "They're not cocooned in their apartments watching these events, they want social interaction. It used to be you had a theater room with a big screen that sat empty most of the time; that was the big hot amenity 10 years ago. Now it's more fun to have an open flexible space that can be used all day long, a cafe with Wi-Fi, coffee, big screens -- it's less static, more flexible."
Perhaps the most important amenities are those for four-legged residents.
"Most of our communities have a 'bark park' -- a grassy area to take dogs outside," Parker said. "We put in self-service dog-wash stations, you've got the hose, the drain; you can rinse off your dog, and the residents love that."
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