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Costco has a plan to alleviate California's housing crisis

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If Costco's proposal to build a mixed-use retail and residential development in California succeeds, you won't have to go far to get a rotisserie chicken or a pack of 30 rolls of toilet paper.

The company announced plans in June to open a new store in South Los Angeles with an attached 800-unit apartment complex in partnership with developer Thrive Living. In a press release, Costco also announced that the combined retail and residential project will include 184 affordable housing units.

A Thrive Living representative told the New York Post that the project is still pending permits and it is unknown when construction will begin.

In addition to the ability to purchase oversized bottles of liquor or kegs of whipped cream from the wholesaler, Thrive Living plans to include the following for the apartment complex:

  • Five courtyards and a landscaped walking path.
  • A rooftop pool, a full basketball court and various climbing and play equipment.
  • Indoor and outdoor fitness area.
  • Outdoor area for communal movie nights.
  • Community gardens where residents can grow their own food.
  • Classrooms for community gatherings, tutoring and mentoring.

The location would house a “modern store with fresh products”. [and] “We want to offer healthy food to residents,” Thrive Living told the Los Angeles Times. The store will also include an optical service desk for glasses, a pharmacy and a delivery service.

The multi-purpose complex would replace a vacant five-acre site that was formerly home to a hospital.

Why should Costco enter the multifamily housing business?

Costco did not respond to messages about why the retailer is venturing into a store so far removed from selling bulk goods, but Southern California housing activist Joe Cohen has a theory.

“The problem is that LA has a hard time getting new giant supermarkets approved,” Cohen wrote on X, formerly Twitter. “So Costco did what any good Scooby-Doo villain would do. They put on a mask that says, 'I'm an apartment building, not a supermarket.'”

Gabe Kadosh, vice president of Colliers in Los Angeles, told real estate magazine CoStar that Costco may be testing the concept in California before developing more mixed-use projects in the state and across the country.

“It's definitely intriguing and something people will be watching,” Kadosh told CoStar. “Developers will be paying attention.”

What you should know about Costco

In 1976, Costco opened in San Diego under the name Price Club. In 1983, the company opened a store in Seattle. In 1993, Price Club officially changed its name to Costco. The supermarket chain currently operates 847 warehouses worldwide with 206 stores generating annual sales of $16 billion, with an average size of 13,500 square feet, according to its website.

Today, Costco employs 300,000 people worldwide, has 129.5 million members and generates annual sales of $248 billion.