Region/WEST Q: What guides your strategy to remain a regional player?
A: Mostly opportunity. We have been able to build confidence and a business here. We have a better opportunity because we are local and will remain a local developer. San Jose is unique in so far as it has one of the largest redevelopment funding agencies in California. So we have everything a developer needs. I have been tempted to go outside the area. We do work in a few cities around San Jose, but we know the ropes so well here [and] there's so much opportunity, we've decided to stay.
Q: How does San Jose's economy stack up against the rest of the country?
A: According to Apartment Finance Today's analysis of the country's top 50 apartment markets, San Jose is No. 1, ahead of New York in terms of demand. Plus, we currently have the highest job growth rate in the United States. We are [also] seeing big increases in rents—an 18 percent increase over last year—and vacancies are now down well below 5 percent.
Q: Who do you consider your toughest competitors?
A: We don't have any hard competition in the affordable category. In the first-time homebuyer market, we are now facing stiff competition, or we had up until now, from the nationals. When I first came here, we were the only player in urban infill housing. Most of the nationals were out in the suburbs building subdivisions. Now with the shortage of land, they have come into the cities, and we are competing head to head for land acquisitions and sales.
Q: How do you compete against national players?
A: Our ability to keep up with the current trends that the local communities are legislating helps us. Some of the bigger players get put off by that. We also think outside the box a little more. It's easy for us to look at projects that might not otherwise get through the nationals' criteria. We've done senior housing mixed with for-sale housing, retail, even a charter school. Our developments have more community-based community services than the nationals do. They [operate] by a standard blueprint. We are more flexible.
Q: How is your company financially able to build high-quality, low-income housing tax credit projects?
A: To get communities over NIMBYism, the city, in its good graces, has agreed that we have to provide a quality product. So the city has allowed us to spend a little more money on the design, services, and facilities that we build. We are in these for the long term.