Orange County Shifts Toward Density as Developers Build Up

Orange County, long defined by master-planned suburbs and car-oriented arterials, is starting to densify. Developers are looking at large parcels once devoted to surface parking and low-rise offices and asking what their highest and best use is, with housing increasingly the answer.

The OCVibe district in Anaheim, a roughly $5 billion, 100-acre mixed-use entertainment and residential project backed by the Samueli family, is a central example. Plans call for rows of five- and six-story apartment buildings, two hotels, and office and retail space, at roughly 100 units per acre. Scott Frick, OCVibe's senior vice president for development, said low-density apartment complexes at about 10 units per acre are being replaced by denser product.

Builders had more than 3,000 apartment units under development through August, up 31.2 percent from a year earlier, according to Yardi Matrix. Larger projects include a roughly $3 billion Santa Ana redevelopment near South Coast Plaza, a $2.5 billion Bolsa Pacific community on the former Westminster Mall site, and continued apartment construction at Tustin Ranch. Some cities, including Huntington Beach and Costa Mesa, still lag state housing goals, and local opposition remains strong.

Brokers note that Orange County has built little new retail, so redevelopment is keeping supply tight. The Irvine Company's concentrated land control is also seen as limiting overbuilding risk.

For developers and lenders, the practical takeaway is that infill and parking-lot redevelopment of older office and retail sites is becoming the main pipeline for new multifamily supply in the county.