The URL can be used to link to this page

Home My WebLink AboutSF Chronicle_ Cal Poly_SLO articleFrom:Courtney Leigh Kienow To:McDonald, Whitney; Hermann, Greg; Collins, Scott; Scott, Rick; Tuggle, Todd; Tway, Timothea (Timmi); Horn, Matt; Szentesi, Whit Subject:SF Chronicle: Cal Poly/SLO article Date:Thursday, April 24, 2025 4:09:07 PM Hi Whitney and city leaders, I’d imagine you already saw this San Francisco Chronicle article. President Armstrong asked me to let you know we are proud of our partnership and grateful for the city’s contributions to the article. Could a CSU’s dorm solution help fix California’s housing crisis? San Francisco Chronicle And here is the text in case you don’t have a subscription to SF Chronicle: Could a CSU’s dorm solution help fix California’s housing crisis? SAN LUIS OBISPO — One of the most ambitious and audacious attempts to solve the state housing shortage is taking shape on a steep grassy hillside overlooking the sprawling 3,000-acre campus of California Polytechnic State University. There, on a former tiered parking lot, between eucalyptus trees and 1960s era “red brick dorms,” a few dozen yellow-vested workers are digging out rocky soil, setting rebar and pouring concrete footings in preparation for what is to be the largest modular housing project in the history of the United States. The $1.2 billion development will add 4,200 student housing units over the next five years, increasing the number of students that can be housed on campus to about 12,200. The steel-framed “mods” will be assembled in a factory operated by the FullStack Modular company in Carson (Los Angeles County) and trucked the 200 miles to San Luis Obispo, or SLO, where they will be stacked in nine buildings ranging from seven to 12 stories in height. The factory is just getting up and running: Components of the prefabricated steel “chassis” come flat packed to the FullStack facility where everything from kitchens and bathrooms to plumbing and electrical are assembled before drywall The first building, about 500 units, has to be ready for students arriving in the fall of 2026. “September 15 is the day we start stacking,” said FullStack Chief Executive Office Roger Krulak. The need for the additional housing is being driven by the increased popularity not just of Cal Poly but San Luis Obispo itself, a laid back Central Coast town with a bustling historic downtown that saw an influx of transplants from both the Bay Area and Los Angeles during the pandemic. Often, those newcomers can afford to pay more for housing than local workers. This year the university, with an enrollment of 22,000, received 82,000 applications for 6,400 spots, a 3.6% increase over 2024, and a 22.7% increase over the 69,429 students who applied in 2022. Mike McCormick, vice president of facilities and development for the university, said California State University trustees are pushing for the school to grow to 25,000 by 2030. He said Cal Poly is “producing the kinds of degrees we need in California.” More than 60 Cal Poly alum work at SpaceX, including Victor Glover, who piloted the first “crew dragon” flight to the international space station. Some 8.3% of graduates land jobs But success has come with growing pains, both for students and city residents. The cost of housing has now exceeded tuition as the steepest expense students face, McCormick said. The situation is exacerbated by the fact that unlike many college towns, SLO is a desirable destination independent of the school. In the summer, when most of the students are gone, the city still buzzes with energy. There is the five-block farmer’s market downtown on Thursday nights, wine tasting rooms and fine dining, proximity to hiking trails and beaches. T he city has about 49,000 residents, which doesn’t include Cal Poly students. Cal Poly houses about 8,000 students, meaning that the majority of students, some 14,000, live off campus in the city, where the vacancy rate for rental housing hovers around 1%. All of the fraternity and sorority houses are off campus, within city limits. “When we talk about growing, adding 3,000 to 5,000 students, we can’t expect the community to house them,” McCormick said. “The community can’t absorb that kind of demand. We have to house them on campus.” The average single-family home in SLO now costs about $1.1 million, up about 50% from $546,000 in 2015, according to Zillow. The average two-bedroom apartment — 62% of SLO’s housing stock is rental — goes for about $3,000 a month. The rising cost of housing, and the crowded conditions many students live in, is creating conflict in the city, according to City Manager Whitney McDonald. Fierce competition for scarce accommodations allows landlords to get top dollar for substandard units, which sometimes have issues like mold and termite damage. Illegal spaces like garages and basements are often leased out. “It’s unhealthy to have such a low vacancy rate,” McDonald said. “Tenants stuck in a bad situation feel they can’t move, and may be reluctant to complain about unsafe or substandard conditions because there are so few options.” While the trustees approved $1 billion in financing for the housing, the phases will be paid for with bonds over the five-year construction period. That is where modular comes in. FullStack estimates that its modular system is about 25% cheaper and 30% faster than conventional construction. While the first building will likely come in at more than $250,000 per unit, the hope is to get costs down to closer to $200,000 per unit in the future. The question of how President Donald Trump’s on-again, off-again tariffs will impact the project remains to be seen, although FullStack has already bought the materials The “value proposition” of modular construction — and manufacturing generally — is repetition and consistency, according to Krulak. The same team doing the same thing together over and over. The first time you build anything in a factory there are likely to be inefficiencies. The second building will be less expensive. The third building will be less expensive than that, he said. “They don’t make 40 different iPhones and hope they come out cost effective,” Krulak said. The project is also set up in a way that all parties involved — Cap Poly, FullStack, general contractor Whiting-Turner, architect Stienberg-Hart and all the subcontractors — are incentivized to make the project as cost-effective as possible because they all share in profits if money is saved. “It’s a situation where we can say, ‘Here’s our goal, here’s the tools we have, and here’s the bucket of gold at the end. How do we achieve that?” Krulak said. Besides speeding up construction and reducing costs, the decision to have the project built in a Southern California factory is being driven by the fact that the Central Coast doesn’t have enough construction workers to staff the job. “The problem we have in this little town is that we don’t have much of a workforce, and we can’t import people because there is no place to house them,” McCormick said. “We would be exacerbating the same problem we’re trying to solve.” While 4,200 units will go a long way toward alleviating the pressure on student housing, the city is also scrambling to build more. The city’s state-mandated “housing element” calls for 3,155 units to be entitled between 2020 and 2028. SLO Community Development Director Timmi Tway said the city is already close to meeting that overall goal, although it is far behind in producing the below market rate units required. Modular development has been a mixed bag in the Bay Area, with several big companies going bankrupt and others struggling. Silicon Valley start-up Katerra, which was valued at more than $4 billion at its peak, went bankrupt. Vallejo-based Factory O/S is still cranking out wooden multifamily buildings on Mare Island, but most of its assets were acquired by a private equity consortium last year. If FullStack can pull off the Cal Poly project it could bode well for other parts of Northern California facing housing shortages. FullStack CEO Krulak has been looking at potential factory sites in San Francisco and the Bay Area along with San Francisco Building Trades Council Secretary-Treasurer Rudy Gonzalez. Krulak said he is scheduled to meet with San Francisco Mayor Daniel Lurie in the coming weeks. At the very least, McCormick said he hopes the Cal Poly project will be a model for other state universities. “We’ve learned a lot from this project,” McCormick said. “We’re creating a model that other universities can look to as they tackle the growing need for affordable housing.” Reach J.K. Dineen: jdineen@sfchronicle.com Sincerely, Courtney Courtney Kienow pronouns she/hers (why is this important?) Director of Community Relations and Economic Development Office of the President Cal Poly, San Luis Obispo, CA _____ office 805-756-6000 direct 805-756-6098 www.calpoly.edu