Costco and Safeway are getting housing built where others fail. It isn't because a mayor wants it

Governance Cybernetics

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Housing & YIMBYism<br>Costco and Safeway are getting housing built where others fail. It isn't because a mayor wants it<br>The real luxury isn't square footage. It's not driving for onions. Notes on why the building goes up even when the mayor doesn't want it to

Dave Deek<br>May 12, 2026

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Costco Coliseum & Safeway Marina<br>On a clear September morning in 2024, in Baldwin Village, South Los Angeles, Mayor Karen Bass stood on a five-acre lot at the corner of Coliseum Street and La Brea Avenue and turned a ceremonial shovel. Behind her, renderings showed a six-storey building with 800 flats stacked above a Costco warehouse. A local resident, Karen Johnson, told NBC she was excited because “we only have a Ralphs right here.” Governor Newsom sent a statement. Councilmember Heather Hutt sent another. Of the 800 flats, 184 would be reserved for households at 30, 50, and 80% of area median income, with the lowest band renting at $1,040 a month. The project was privately financed. No Low-Income Housing Tax Credits. Just a wholesale club agreeing to be the load-bearing tenant.<br>A year later, Marina residents gathered in the parking lot of an iconic mid-century Safeway at the foot of the Golden Gate Bridge. The store is known to locals as the “Singles Safeway” for its Monday-night dating scene, has been there since 1959, and is a neighbourhood institution. A developer called Align Real Estate had proposed replacing it with a 25-storey, 790-unit residential tower designed by Arquitectonica, with the Safeway returning at 57% larger on the ground floor. Eighty-six of the flats would be deed-restricted to very-low-income households. The protest signs went up. Marina Community Association’s Erin Roach delivered the line: “We’re not anti-housing, we’re anti this development.” The mayor of San Francisco, Daniel Lurie, agreed with her. So did his ally on the Board of Supervisors, Stephen Sherrill, who had quietly removed the parcel from the citywide upzoning plan a month earlier. Both denounced the developer for “gaming the system.”<br>Free subscribers make the writing travel. Paid ones make the writing happen. Likes, Restacks and social media shares do a bit of both, and cost you nothing. I’d be grateful for any of the three, in roughly that order of usefulness

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(On that note: Daniel Lurie is opposing this housing project in his city while polling his weakest on housing, with 78% of San Franciscans saying cost of living has gotten worse.)<br>Two projects. Roughly 800 flats apiece. Both anchored by a major retailer. Both rely on the same state law: California’s AB 2011, the Affordable Housing and High Road Jobs Act. One mayor turned the shovel herself. The other promised to fight.<br>Why does this matter?

The dominant story about American housing politics in 2026 is that the YIMBYs won. State legislatures have passed pre-emption laws. Pro-housing reformers have been elected in major cities. The zoning code is, slowly, being rewritten. We have been here before. We had Tesco’s Spenhill in London in the 2000s. We have had Hong Kong’s Housing Authority since the 1960s. We have had Gavin Newsom’s “3.5 million homes by 2025” pledge. The relevant question is not whether the rhetoric has shifted, but whether the rhetorical shift will translate into actual buildings.<br>This matters because the answer determines whether the United States can build out of its housing crisis or merely talk out of it. If state pre-emption laws hold, then several million flats become possible across underused commercial sites in expensive coastal metros within a decade. If the laws are quietly hollowed out by mayors who run as reformers (especially centrist reformers) and then govern as obstructionists, then the rhetoric was the policy and there is nothing else coming. Misdiagnosing why the Marina Safeway will or will not get built is the difference between betting on the law and betting on the politicians. Bet on the law and the politicians become weather. Bet on the politicians and the law becomes window-dressing. The Marina Safeway is one test of which bet is right. The Coliseum Costco is the other.<br>What’s wrong with the conventional story?

The conventional account of the Coliseum project, repeated by Mayor Bass and most of the friendly coverage, runs as follows: a pragmatic Democratic mayor of a large American city has used a clever new state law to deliver hundreds of units of affordable housing on a previously underused parking lot, in partnership with a beloved retailer and a private developer, all without federal subsidies. This is what good housing politics looks like. It is replicable. It is the future.<br>The strongest version of this story is genuinely compelling. AB 2011 is a remarkable piece of legislation. The Coliseum project is going up. Bass did champion it publicly. The 184 affordable units are at...