During the second gold rush—also known as the tech boom—Oakland, Calif., struggled as neighboring cities flourished. "The city had to figure out ways to attract new market-rate development," says Allison Brooks, managing director of Reconnecting America, a transit-oriented development (TOD) think tank based in the city. In 1999, then-new mayor Jerry Brown set a goal of attracting 10,000 new residents. With little suburban land available, a strong desire to redevelop a historic downtown, and a huge rapid-transit network, TOD was a natural fit.

"Oakland is now seen as [strategically located] between the job centers of San Francisco and the suburbs," says local architect Michael Pyatok. And little-used Bay Area Rapid Transit (BART) parking lots became developable land. "They are relatively easier to develop since there is one landowner with a somewhat public interest orientation," Pyatok adds. The crown jewel may be MVE & Partners' Fruitvale Village. The 2004 mixed-income project connects with busy International Boulevard and a BART station; offers office, community, retail, and residential uses; and has revitalized a low-income neighborhood. Today, there at least six TOD projects across the city in progress or already completed.

Like any regentrification effort, the developments aren't without thorns. “The concern is [ensuring] that affordable housing is preserved, so that neighborhoods remain economically diverse and culturally vibrant,” says Brooks, adding that new buildings will likely be higher density than the existing area. “The challenge is to create buildings that work together to foster a more walkable, safe, and hospitable environment.”

Population/Employment

Residents: 415,492 in 2007; city projected to add 50,000 jobs in next quarter century.

Office Market

Average asking rate: $2.43/s.f.; vacancy: 10.3%.

Residential Market

August 2008 median home sale price: $310,000, down 47% from a year earlier.

Market Strengths

  • Attractively priced commercial space
  • Culturally diverse
  • Concentrated intellectual and venture capital

Market Concerns

  • Declining home values
  • High cost of living and doing business
  • New development pushing out low-income residents

Forecast

"Oakland will be a great city in 10 years," predicts Ernie Vasquez, partner and vice president at MVE & Partners. "There will be an ongoing renaissance. In the long run, a city with so many amenities will inevitably prosper as our West Coast urban populations densify."