Developer Brookfield Residential is planning a mixed-use residential project in California’s Orange County that would involve one of the region’s priciest land purchases in several years — up to $654 million — as government leaders look to boost the stock of affordable housing. 

The Irvine City Council authorized the city manager to negotiate exclusively with Toronto-based Brookfield for the sale of a 70-acre, city-owned land parcel for a planned new residential development called Gateway Village. 

The land is part of a larger span that was acquired last year by the city after the closure of the All American Asphalt plant, and where Irvine officials hope to develop new residential, commercial and recreational amenities.

Like other Southern California regions, Orange County is looking to deploy surplus land to increase the stock of housing that has been in short supply statewide for several decades relative to demand. California is short some 3 million houses to accommodate the state's population, according to the Public Policy Institute of California.

Housing has become particularly tough to afford in the state’s southern coastal regions. 

“Demand for housing in the Irvine area north of Interstate 5 is extremely strong, with apartment vacancies trending near 3%,” said Jesse Gundersheim, senior director of market analytics for CoStar Group in Orange County. “No apartment buildings have been developed in the area since 2016 and I think virtually any new housing construction in Irvine will be in high demand.” 

City filings show Brookfield would pay Irvine between $601 million and $654 million for the 70-acre parcel, based on submissions from several builders in a competitive proposal process. Brookfield’s preliminary plans for the site include 1,236 residential units, including 927 market-rate single-family houses with an average unit size of 1,844 square feet and average unit price of $1.4 million. 

Also planned are 309 deed-restricted affordable apartments placed in multiple locations within the development rather than consolidated in one complex, with rent pricing to be determined. The city wants at least 25% of housing in the development to be affordable to families making 80% of the region’s median income. 

“We are looking forward to working with the city of Irvine but don’t have anything else to share at this time,” Brookfield spokesperson Christina Salicco told CoStar News in an email. 

CoStar data shows affordable housing in the area is extremely limited, with Orange County market rates ranging from $2,700 for one-bedroom apartments to $3,400 for two-bedroom units and over $4,000 for three-bedroom apartments. 

“Orange County ranks as the fifth most expensive major market in the U.S. and nearly leads the nation in annual rent growth,” Gundersheim said. “Additional housing is needed, but development remains constrained by land availability. Building more housing makes a lot of sense, particularly in Irvine near job centers and retail.” 

Irvine city officials last year approved an agreement to purchase and decommission the asphalt plant and eventually add the parcel under it to existing city-owned land to create a nearly 700-acre open space preserve in northern Irvine known as Gateway Preserve. 

Production at the asphalt plant ceased in November, and the city is in the process of dismantling it and cleaning up the land for eventual redevelopment. Long-term plans for Gateway Preserve include creating a new hub for hiking, biking and other outdoor recreation, serving as an entry point to an existing 20,000-acre open space preserve. 

Gateway Preserve would connect to several nearby canyons and extend to neighborhoods near Cleveland National Forest and area agricultural fields, according to city filings. Officials said the city received seven proposals from builders for the planned new residential development at Gateway Village, including Brookfield and competitors KB Home, Lennar, Lewis Operating Group, Shea, Toll Brothers and Tri-Pointe Homes. 

City council is expected to review the negotiated price for the 70 acres in late spring or early summer this year, after which the development process would begin. Entitlement processes are expected to be completed in 2025, with grading and land preparations expected to begin in 2026 and homes going on sale beginning as early as 2027, according to city filings. 

Brookfield Residential, with regional headquarters in nearby Costa Mesa, is already among the largest homebuilders in Southern California.