California infill builder is turning vacant lots into homes in limited acreage coastal markets

California’s coastal region, with its high real estate costs, unique geography, and acute local political and physical land use constraints, presents one of the most challenging market dynamics for residential construction. Amid these difficulties, there are also opportunities to repurpose underutilized land in innovative ways.

Converting hard-to-equity and difficult-to-develop plots of land is a secret sauce for building homes, capable of both putting businesses on the map and developing them into sustainably profitable ventures.

City enterprisesa California-based infill builder, operates exclusively in the coastal areas of the Golden State, primarily in the Los Angeles metro and Bay Area.

These markets are limited in terms of land, with the ocean on one side and undeveloped mountainous and hilly areas spread across the country. Southern California in particular is limited by the Pacific Ocean to the west and mountains to the east, with little undeveloped, buildable land available in between due to decades of suburban sprawl.

“I grew up in Central Ohio, in the Columbus market, where you have a booming city and economic region, and there’s just no land limitation. You can keep going up and down. Where in California, Southern California in particular… you have all these physical limitations,” says Ryan Aeh, Partner and Executive VP at City Ventures, with offices in San Francisco and Irvine, CA.

These physical constraints are precisely why City Ventures focuses on redeveloping underutilized sites with medium-density housing, often in centrally located areas near employment centers. Moreover, topography and other physical barriers are only half the equation.

The other half of the challenge is to win over members of the local community, whose first impulse is to oppose any new development ‘anywhere’. The skills that operators like City Ventures can bring to bear on such challenges include both technical and land planning knowledge, and a track record of persuading the local community.

“We think this is just a really strong model for providing opportunity for first-time homebuyers in an expensive, supply-constrained market like Southern California,” Aeh said.

While there is no universal estimate, most experts agree that California has a major housing shortage that is exacerbating already high home prices. A Report 2024 of housing policy nonprofit Up For Growth estimated a shortage of 840,00 homes. Freddie Mac estimated in the same way a supply shortage of 820,000 units in 2020.

City Ventures develops underutilized or vacant locations, such as parking lots, outdated auto repair shops and car dealerships, or dilapidated industrial or office buildings in need of investment.

“The community generally doesn’t like these buildings to exist. They’re tired. They’re ready for something new. So then our job is to go there, work with the property owner, work with the city, to re-imagine those two acres, three acres or five acres,” Aeh said.

One of City Ventures’ latest projects, Eginhuisreplaced an underutilized commercial property with 59 townhomes.

Located in the Los Angeles suburb of Artesia, Eginhouse also has an interesting design feature: the project’s more than 4,000 square feet of retail space sits in front of and beneath several three-story townhouses. City Ventures recently announced that a coffee shop will open in one of the retail spaces in 2026.

“I think when you design communities, you always try to combine what the market wants to see, and what the municipality that controls land use wants to see,” Aeh said.

The property is located on a main road and has a commercial destination, but is also directly next to single-family homes and within walking distance of a school. Eginhouse gave the city some of the commercial activity they envisioned for the site, while also providing a use that strengthened the neighborhood’s cohesion.

Eginhouse is a phased development expected to be completed next year and is approximately half sold out. Townhomes range from approximately 1,342 to 1,899 square feet and start in the low $700,000s, a competitive price in what is one of the most expensive markets in the country.

According to Aeh, Eginhouse has solar-powered homes, just like all other City Ventures developments. This is in accordance with California’s building code, which now requires most new residential construction to include solar panels. ‘

Many homebuilders will get around that requirement by creating a leasing structure where buyers purchase a home but lease the solar panels. This makes the sales price slightly more affordable, but entails costs for buyers in the longer term.

However, City Ventures always includes the solar panels in the initial sale. While this may increase the initial sales price, the energy-efficient homes also make homeownership more feasible in the long term.

“We are eliminating the gas bill completely, and now your electric bill is significantly lower thanks to your solar panels,” he said.