Chula Vista Bayfront: What Landlords Need to Know

Chula Vista Bayfront: What Landlords Need to Know

With a portion of the massive 535-acre Chula Vista Bayfront scheduled to open in the summer of 2025, what exactly will the redevelopment mean for Chula Vista landlords?

The Project in a Nutshell

To answer that question, lets first wrap our arms around the Bayfront. The first leg of this massive undertaking involves the construction of a 1,600 room Gaylord Pacific resort hotel and a 275,000 square foot convention center, situated on a 36-acre parcel.[1]

The $1.2bn resort and convention center is spearheaded by RIDA Development Corporation, a Texas developer, and a joint venture between two of the largest general contractors in the United States, M.A. Mortenson Company and McCarthy Building Companies.[2]

In June 2024, Pacifica Companies officially broke ground on their portion of the Bayfront project, where we will see the construction of a 7-tower condominium project consisting of 1,500 condominium units, 400,000 square feet of commercial office space, and a 250-room hotel.[3]

Finally, a remaining 230 acres will be dedicated to parks, open space, and habitat restoration areas.

The Path of Progress

The “path of progress” describes forces that cause positive economic and demographic changes to a region. The economic and demographic changes here are eye-popping.

According to a 2018 Economic Development Subsidy Report by the San Diego Unified Port District, City of Chula Vista, and RIDA, a number of findings are noteworthy about the demographic and economic impact.[4]

• Annual Economic Output of $329,238,000: Economic output in this dollar amount means the total annual spending by overnight and day visitors to the resort and convention center. In other words, adding up all of the transportation, rental cars, meals and beverages, recreation, retail, convenience purchases, and event expenditures by visitors.

• Total employment of 3,300: to keep pace with the influx of visitors and spending, the report anticipates the creation of 3,300 jobs in Chula Vista

 

What this means for Chula Vista Investors

As the resort and convention center reach their annual economic output figures, there will likely be higher demand for rental housing for several reasons:

(1) The influx of workers moving into the city to take advantage of the new employment opportunities.

(2) The annual economic output by the redevelopment will likely lead to higher incomes for existing tenants, who in turn, will seek better housing conditions with their new spending power.

(3) Those living with family or friends may now afford the benefit of moving into their own rental unit.

 

If higher demand for rental units begets higher rental rates, can property owners adjust their rents accordingly in the upcoming years? Perhaps not. California’s Assembly Bill 1482 still influences a landlord’s ability to raise rents.[1] While there are exemptions for single family homes, non-corporate entity owners, newer buildings, and for affordable housing units, many are still subject to the state’s oversight.

Additionally, the City of Chula Vista’s complementary rules to AB 1482 (i.e. the Residential Tenant Protection Ordinance), which became effective on March 1, 2023, further enhances tenant rights. [2]

With a unique blend of the Bayfront’s economic tailwinds likely to drive rental demand upward, and local and state laws trending to cap rents and shore-up tenant rights, Chula Vista landlords may find themselves on unfamiliar ground in the coming years. As the Bayfront’s path of progress makes its way through various segments of the city, it will be vital for landlords to remain informed and seek guidance from experienced multifamily investment property advisors.

 

[1] Economic Development Subsidy Report: Chula Vista Bayfront – Resort Hotel and Convention Center Project, April 2018

[2] Gaylord Pacific Hotel and Convention center is Rising in Chula Vista,” March 13, 2024

[3] “Pacifica Companies Breaks Ground on Public Improvements for Ambitious Amara Bay Project,” June 26, 2024

[4] Port of San Diego Bayfront Economic Impact Analysis, by Keysar Marston Associates, Inc., April 11, 2018

[5] Assembly Bill No. 1482: Tenant Protection Act of 201

[6] TENANT PROTECTION ORDINANCE: Ordinance increases tenant protections for those renting a room, apartment, or house, March 7, 2023