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Mixed-Use Costco development combines retail and modular apartments.
Costco, in partnership with Thrive Living, a US investment and real estate development company, has started work on a mixed-use project in South Los Angeles, USA. The modular development combines a Costco warehouse with 800 residential apartments, offering a mix of modular housing and retail under one roof. Slated for completion by 2027, the project is being developed within California’s AB 2011 housing legislation, designed to fast-track developments addressing the housing crisis. (Image Credit: Thrive Living)
Of the 800 units, 184 will be designated as affordable housing, with the remainder providing workforce and market-rate options. Located in a neighbourhood with higher-than-average poverty levels, this project aims to deliver much-needed housing solutions.
Costco leverages modular housing to navigate AB2011 requirements
Costco’s decision to incorporate modular housing in its development is closely tied to the requirements of California’s AB2011 legislation. A key provision of this law mandates a prevailing wage for onsite construction labour, ensuring union workers remain cost-competitive.
By setting a minimum pay threshold, the legislation prevents non-union labour from undercutting union rates, intended to level the playing field in the construction industry.
Interestingly, this prevailing wage requirement does not extend to work completed offsite. Developers are free to negotiate wages for offsite manufacturing, which can significantly reduce overall labour costs. To take advantage of this provision, Costco plans to use prefabricated modular units constructed in factories away from the development site.
Features to serve both residents and shoppers
Situated on a five-acre site, the building will house a 185,000-square-metre Costco warehouse alongside various residential amenities. These include a rooftop pool, fitness centre, landscaped courtyards, and urban gardens. A parking structure is also planned, accommodating the needs of residents and Costco shoppers alike.
