Costco is a great place to buy everything from hot dogs to TVs to vacations — but what if you could live at Costco, too? An innovative new housing development just broke ground in South Los Angeles, and it’s combining Costco’s affordable prices with new affordable housing. And the rent at the new Costco apartments might be less than many people’s monthly credit card bill.
The new housing development is called the 5035 Coliseum project, and it combines 800 apartments built on top of a Costco warehouse. The apartments are not owned by Costco or rented by Costco; Costco’s warehouse will be a retail tenant of the building. But Costco was chosen by the developers in part because of its company values of low prices and fair wages for workers.
Let’s look at what the new Costco apartments in California could mean for the future of housing costs.
Why Costco and affordable housing are a winning team
Los Angeles has one of America’s most severe shortages of affordable housing, with a regional shortage of about 500,000 homes. Like other big cities, there’s just not enough supply of housing to keep up with demand — and this has caused housing prices to skyrocket.
One way to improve the problem of affordable housing is to build more. Some cities also use dedicated affordable housing projects, with rents set at a certain level for people who earn lower incomes.
The new Costco apartment project in Los Angeles is combining market-rate housing with dedicated affordable housing. Of the 800 apartment units, 184 are designated for low-income housing, with monthly rent plus utilities set at $1,040 and available to families earning $41,610 per year.
One of the housing developer partners told CBS News that “Costco’s principles and mission fit seamlessly with our vision for this project.” California housing activist Joe Cohen told SFGate that he is “definitely in support of” the Costco apartment project, and that most of the feedback he’s seen to his social media posts about it have been positive.
“It surprised me to see it being viewed so favorably,” Joe Cohen said. “I think a big part of that is the trust that people have in the Costco brand…Like, if they’re doing it, it must be a good thing.”
Could there be more Costco apartments in the future?
The first Costco apartment complex in Los Angeles is a unique situation. The housing developers are using a new California law, Assembly Bill (AB) 2011, that is intended to speed up the approval of new mixed-use affordable housing projects.
One reason why many places in America have a shortage of affordable housing is because it takes too long (and costs too much) for new housing to be built, with lengthy bureaucratic delays and regulatory approvals. If AB 2011 can speed up the process for approval, development, and construction of new housing like the Costco apartments, this could be a big difference-maker in creating a more abundant supply of housing.
Costco apartments can be a win-win-win for communities like South Los Angeles. Residents get hundreds of new homes, the neighborhood gets a new Costco selling groceries and fresh produce, and the local economy benefits from new jobs and growth.
The neighborhood where Costco’s new apartments are being built in Los Angeles has also been described as a food desert, with a shortage of local grocery stores selling fresh produce and healthy food. This is another reason why the Costco apartment project is such good news — it’s going to make it easier for people in South L.A. to buy fresh fruit and vegetables and eat healthier at home.
Bottom line
America has a huge crisis of affordable housing. Ideas like the Costco apartments project could help more homes get built — and the residents get to live close to Costco. If I lived above Costco, I would shop there everyday! Costco’s new location in South Los Angeles is offering an exciting vision of affordable housing and retail all in one place, in a neighborhood that had been struggling without it.
If Costco and its partners can find other opportunities for affordable mixed-use housing and retail, this could help reduce housing costs and make life better for other communities. Many Costco members believe in shopping at the warehouse store, not just to maximize their Costco rewards, but because they support the vision of Costco as a forward-thinking company and responsible corporate citizen.
Costco’s affordable apartment project in L.A. could strengthen that brand image — with real-world results.