East Bay Leads Bay Area in Multifamily Construction Activity

The East Bay is the most active development market for new apartment units in the San Francisco Bay Area. With more abundant and cheaper land, robust public transportation infrastructure and population movement into suburban areas, the East Bay is poised to continue to lead the region in apartment construction over the next several years.

The East Bay has outpaced new construction activity in neighboring San Francisco and San Jose since 2019 and is now the largest market by unit count in the Bay Area. The nearly 8,500 units under construction in the East Bay is set to increase the total market inventory by about 5%. Those under-construction units will follow the more than 2,500 units delivered in 2021, the second-most units delivered in a year over the past two decades.

In addition, developers capitalized on improving market conditions in 2021 with the trailing year average in the East Bay registering around 1,000 units heading into 2022. Several East Bay areas have caught developers’ attention. Emeryville leads in terms of the percentage of supply under construction compared to existing stock, at over 30%. Other areas with significant activity include Pittsburg Antioch, Walnut Creek San Ramon, Downtown Oakland and Fremont/Newark.

Recent supply pressure has been a critical factor in vacancy rate volatility in the East Bay. But record demand in 2021 brought the vacancy rate back down to pre-pandemic levels. In CoStar’s forecast model, renter demand should effectively match supply growth, keeping vacancy in check and driving the overall rate back down below 5% over the next several years.