Costco to Build Full-Size Warehouse Under 800-Unit Affordable Housing Complex in South Los Angeles
Thrive Living plans a first-of-its-kind South Los Angeles development stacking a full-size 185,000‑square‑foot Costco beneath approximately 800 apartments in Baldwin Village/Baldwin Hills, aiming for groundbreaking in 2024 and a target opening in 2027.
Key takeaways
- Mixed-use scale: A roughly 185,000-square-foot Costco will sit under about 800 apartments, plus two levels of below-grade parking.
- Affordability approach: About 184 units (~23%) reserved for low-income households with affordability bands at ~30%, 50% and 80% AMI; remaining units planned as non-subsidized affordable and workforce housing.
- Financing and approvals: Thrive bills the project as largely privately financed with Costco as anchor tenant; the site is the first in California approved under AB 2011.
- Timeline and jobs: Groundbreaking was held in September 2024; construction ~2–2.5 years with Costco targeted to open in 2027; estimated ~$425M development cost, thousands of construction jobs and up to 400 permanent Costco jobs.
Project details: location, size and schedule
Thrive Living plans to redevelop an underused commercial site at 5035 Coliseum Street, Baldwin Village/Baldwin Hills, South Los Angeles, just north of Los Angeles International Airport. The design stacks a full-size Costco under eight stories of housing to fit a dense urban lot.
The retail footprint is about 185,000 square feet — larger than the U.S. Costco average — and the building will include two levels of below-grade parking to handle demand (Entrepreneur).
Leaders marked a formal groundbreaking in September 2024. Thrive and partners estimate construction will take roughly two to two-and-a-half years, putting a likely opening for the Costco and most housing in 2027 (Multifamily Dive).
Program: retail plus affordable housing
The mixed-use plan calls for about 800 apartments above the warehouse. Roughly 184 units — about 23% — will be set aside for low-income households with affordability tied to bands at roughly 30%, 50% and 80% of Area Median Income (AMI). The remaining units are planned as non-subsidized affordable and workforce housing for households earning in the 120%–150% AMI range, although final allocations are still being worked out (Housing Finance; Entrepreneur).
Resident amenities will include a rooftop pool and a fitness center — features Thrive Living says will serve the community while keeping rents below luxury market rates (Fox Business).
Affordability, financing and AB 2011
Thrive has billed the project as a largely privately financed model. The developer says it will not rely on low-income housing tax credits or large public subsidy programs; instead, Costco will act as an anchor tenant and pay rent for the retail space. That rent stream, combined with other private financing, is intended to make the affordable housing economics feasible without traditional government subsidies (Housing Finance; Multifamily Dive).
Regulatory policy was crucial. The Baldwin Village project is the first in California approved under AB 2011, the Affordable Housing and High Road Jobs Act, which allows faster, streamlined approval for qualifying infill or commercial sites. City and industry leaders say pairing anchor tenants like Costco with AB 2011 approvals offers a new pathway to build affordable homes on valuable retail parcels.
Why Costco is trying this format
Costco CEO Ron Vachris discussed the development during the company’s Q1 FY2026 earnings call, framing the project as a creative way to reach dense urban markets where the typical 25‑acre suburban Costco site is impossible to secure. Vachris said the project helps Costco “get closer to our members” and can ease congestion at some of the company’s busiest warehouses by adding capacity near where members live (Fox Business).
“This project helps us get closer to our members,” CEO Ron Vachris said on the earnings call.
Industry observers view the project as strategic: stacking housing over a warehouse reduces the car-dominated footprint of big-box retail, places a job-rich retail anchor inside a neighborhood, and shortens trips for nearby residents. The model could be a template for other cities needing housing while preserving retail jobs (Multifamily Dive).
Developer, partners and jobs
Thrive Living is leading the project with the Housing Authority of the City of Los Angeles (HACLA) listed as a public partner. Mayor Karen Bass joined the groundbreaking and called the project an example of necessary public-private collaboration to address the housing shortage.
Thrive estimates the build will create thousands of construction jobs. After opening, the Costco warehouse could employ as many as 400 permanent workers. Thrive also highlighted Costco’s record of hiring locally as a community benefit (Entrepreneur; Housing Finance).
Neighborhood context and potential trade-offs
Baldwin Hills and Baldwin Village are neighborhoods with persistent housing needs and a poverty rate higher than the national average. The site repurposes an older commercial property into denser housing and retail (Entrepreneur).
The plan draws both praise and questions. Supporters point to new homes, jobs and services placed near residents. Critics raise concerns about traffic, noise, construction impacts, and whether new development fully benefits longtime residents. Thrive and city officials say two levels of underground parking, transit access, and local hiring commitments will help address those risks (Housing Finance; Multifamily Dive).
How unique is it?
Trade outlets describe the Baldwin Village development as the nation’s first project to put a full-size Costco directly beneath roughly 800 apartments and the first in California approved under AB 2011. If it proceeds as planned, it will be the first U.S. residential development with a Costco downstairs at this scale, making the site a test case for other cities (Housing Finance; Entrepreneur).
Broader industry context and comparison
Big-box chains have experimented with urban infill via smaller formats or mixed-use centers. What sets this project apart is the scale of stacking a full warehouse under a large affordable housing block without standard public subsidies. Analysts say the model could be replicated where zoning, markets and policy incentives align (Multifamily Dive).
Implications for United States
Economic and housing policy: The project illustrates a pathway where private capital and major retailers help address housing shortages without relying entirely on public subsidies by using retail rent streams to support affordability (Housing Finance).
Retail strategy and urban planning: Costco’s move signals a potential shift for large retailers to pursue stacked, infill formats to reach inner-city customers, potentially reshaping where retail jobs and services are located and reducing car travel if residents shop nearby (Fox Business).
Political considerations: AB 2011 provided the faster approval path here. Other states and cities weighing similar streamlining laws will watch the site closely; some policymakers may favor private-sector solutions that create housing and jobs without major subsidies while insisting on public accountability for local impacts.
Community effects: If Thrive’s pledge to keep most units affordable holds, the project could add hundreds of lower-cost homes and jobs in a neighborhood with pressing needs. Officials and developers must manage construction impacts and ensure long-term community benefits, including local hiring and protections against displacement (Entrepreneur).
Sources and further reading
- Fox Business: Costco to open new warehouse under affordable housing development in South Los Angeles
- Housing Finance: Costco meets affordable housing
- Multifamily Dive: How big-box retail projects can help support affordable housing
- Entrepreneur: Hundreds of apartments are being built on top of a Costco
Reporting includes information from the developer and public filings cited in the sources above, and comments made by Costco CEO Ron Vachris on the company’s Q1 FY2026 earnings call.
