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Why is the Combination of a Costco and 800 Rental Units Such Big News?

 

Featured image credit: Thrive Living

Battling it out for spots in the Costco parking lot is about to become a thing of the past for the tenants of 800 rental units in Baldwin Hills. In a pioneering collaboration between privately-owned developer Thrive Living and the city of Los Angeles, a new Costco will host 800 units of living space above its store. Builders officially broke ground on the development on September 18 with LA Mayor Karen Bass in attendance. But why is this story such big news, even a year after its announcement? 

A First in a Couple of Ways

Photo credit: Thrive Living

The combination of a Costco location and rental units has been planned since last year. Yet, it remains a hot topic for multiple reasons. For one, it’s the first Costco to host rental units above a retail location in the country. But perhaps more importantly, it’s the first Los Angeles-based project to take advantage of the new Affordable Housing and High Road Jobs Act, signed into law by Governor Gavin Newsom in 2022. Officials designed the law specifically to address California’s housing crisis by developing mixed-use and housing projects in the city’s many infill commercial zones. 

A Growing Trend of Combining Commercial Space with Rental Units

The combination of a Costco and 800 rental units also underscores a growing trend across the state of transforming underperforming commercial sites into opportunities for living space. People have shown an increased demand for convenience and neighborhood walkability in the wake of the COVID-19 pandemic. By placing tenants in rental units and living spaces directly above commercial businesses, developers are feeding a natural symbiosis that promotes tighter communities and a heightened sense of security. The enthusiasm for the first Costco to accommodate rental units directly above it further illustrates the power of this trend.  

Living More Conveniently

The tenants of the new development will have plenty of conveniences to look forward to. Tenant amenities will include:

  • Common areas
  • Community study areas
  • Community workspaces
  • Fitness center
  • Rooftop swimming pool

Meanwhile, a Costco will be located on the ground floor, providing groceries and other products as well as a pharmacy, optical service, and delivery options. Tenants will also enjoy the premium location, just a short walk from the La Brea Metro E line station.

Bringing Relief to Baldwin Hills

Photo credit: Thrive Living

The development introduces 800 rental units to the high-demand Baldwin Hills area, a community sorely in need of affordable housing and supermarket options. Construction is currently underway at 5035 Coliseum Street, the former location of View Park Community Hospital. When complete, the Costco could employ as many as 400 workers. 

But the ambitious project will relieve more than the unemployment rate in Baldwin Hills. Thrive Living has confirmed that 180 of the project’s rental units will be reserved for low-income renters with the rest available as unsubsidized workforce housing. It’s a step in the right direction for the state which still struggles to meet housing demands. Supply in California needs to increase by 180,000 homes annually but currently averages around 80,000 new homes a year.   

About Thrive Living

Thrive Living is a privately owned national firm focusing on repurposing underutilized space into rental units and living space. They are an affiliate of New York’s Magnum Real Estate Group. The city of Los Angeles has worked closely with Thrive Living throughout the process of bringing the mixed-use Costco project to reality. 

Timeline for Completion

Photo credit: Mds08011

Though the project has been discussed since last year, it likely won’t be complete until early 2027. However, this still seems relatively quick in a city where regulations and red tape often mire developments into stagnation. Similar projects are being proposed with greater frequency in the wake of the Affordable Housing and High Road Jobs Act. With any luck, a story like this won’t be such hot news a few years from now. 

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