City of San Mateo says it's ready to build, build, build

SAN MATEO, Calif. (KGO) -- Fueled by the region's tech industry growth, the city of San Mateo has overproduced market-rate housing. On the other hand, it has been lagging behind in the production of low and moderate housing income units.

Here's a look at how they are trying to catch up.

In a city lacking high rises, a 12-story building on South El Camino Real in San Mateo can be seen from far away and, it "ain't" that pretty. But it was "desirable" nearly 20 years ago, in 2007, when the office leasing market was booming here.

Today, that market has slowed down, and this office tower is now 80% vacant.

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"This was the type of program and property we wanted to invest in, so when the property became available, we got the call," explained Ben Wong of Tourbineau Real Estate Partners, based in Seattle.

Wong looks at 2121 S. El Camino Real as a diamond in the rough. His company purchased the building last summer for $22 million -- a sign of our times, as the value of many commercial real estate buildings in the Bay Area has dropped dramatically, leading to sharp discounts.

"Especially in light of what the property currently has, is and where it used to be valued. I don't know how much you know about the property, but the property itself had almost $15 million to $16 million invested in it just in the past couple of years," added Wong.

He plans to convert the offices into 156 apartments, a few of them affordable housing units, but mostly studios and one-bedroom apartments to be rented at market rate.

Construction will begin at the end of 2026 with a completion date of 2027.

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San Francisco has a history of these types of conversions. In 2016, 100 Van Ness was named the Best Residential Project in the country by Engineering News-Record for transforming a 29-story office building into 418 residential units.

Marc Babsin of the Emerald Fund was the developer. He thinks the San Mateo project has what it takes to accomplish a conversion.

"It also has the benefit of having windows on all four sides, something you don't necessarily get in a traditional downtown setting where you are often sandwiched between buildings," highlighted Babsin.

The main obstacle would be today's construction costs.

"In the past 12 to 13 years, the costs have gone up about 70%," revealed Babsin.

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While a concern, according to 2025 data from Zillow, San Mateo rents average about 75% higher than the national average, and this year, rents for one and two-bedroom apartments increased by 16%.

"The general income and rent level in this part of San Mateo is relatively high compared to areas across the county, so it justifies the investment," said Wong.

City officials here welcome the conversion as San Mateo still struggles to meet the state-required 7,015 units it must have in the pipeline by 2031.

"By reducing some of the office space we have in our city and converting it to residential, we're able to make a better balance and, in doing so, also allow for more flexibility for new projects," said San Mateo Mayor Adam Loraine.

In June 2024, ABC7 News reported that the Housing Action Coalition was suing San Mateo for not building enough housing. Here's what the attorney representing the coalition told us back then: "As we look a their list of where they they say that is is possible to build housing, they included a lot of sites that are unrealistic," said Tom Mayhew of Farella, Braun and Martel.

Five months later, in November 2024, voters in San Mateo approved Measure T, allowing for increased height and density on land located near transportation hubs and the downtown area.

"Since then, since November we've had about 15 development applications totaling about 6,000 potential units, housing units in our city so from a pipeline perspective we're almost 855 of the way there, but it's still to come in the years ahead," revealed Mayor Loraine.

In just a year because of these policy changes, San Mateo is now considered the most active city in the county when it comes to increasing development.

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