Costco is partnering with Thrive Living to develop an 800-unit apartment complex in Los Angeles’ Baldwin Village, aiming to address the city’s affordable housing crisis. The project includes 184 units designated for low-income households, with a Costco store on the ground floor offering amenities like a pharmacy and optical services. Residents will have access to a rooftop pool and fitness center. Thrive’s founder, Ben Shaoul, notes that leasing space to Costco reduces reliance on government subsidies for affordable housing. Construction is expected to begin in early 2025, with an estimated cost of $425 million.
Affordable housing is one of the largest issues in Los Angeles, as the city has a growing homeless population and an affordability crisis. Partnering with Costco to use the area above its large stores to build apartments is a smart solution that will expand the available land on which housing can be built. This pilot project could spark a wave of new building that takes advantage of buildable land that did not exit before. Think about the large land footprint that Costco (and stores like it) hold? Opening up that land to build housing above it is a creative way to remove the largest cost to builders…the price of buildable land.
As of 2024, Costco operates 616 warehouses in the United States and California has the highest concentration, with approximately 140 locations, accounting for over 20% of the company’s U.S. warehouses. That’s a whole lot of land to build housing across. Kudos to Costco and Thrive for this innovative partnership.
Source: The Wall Street Journal
