PRODUCT: Scott Choppin, The Urban Pacific Group of Companies

Over the next 5 years, the opportunity to provide new, attainable housing for middle income households is about 1 million homes per year. Together, we can make a difference. 

How can we think differently and provide housing solutions for the missing middle? We recently discussed this with our community via think tanks and presentations at the 2019 live round table event in Denver. Scott Choppin, Founder and CEO, of the Urban Pacific Group of Companies (shown below), spoke to the topic of Product, you can find his slide deck here. 


HERE ARE SCOTT’S INSIGHTS ON PRODUCT: households; home size, design + livability; customer relationships + financing

Almost all major urban metros are suffering from a lack of supply across all income categories. At the two ends of the bell curve are affordable housing (usually government subsidies for families and individuals earning at or below 60% of median income), and at the other end is luxury housing. What’s missing is in the middle — from a design standpoint it’s known as the “missing middle,” a term coined by architect Daniel Parolek —  and “the intention is that this type of housing would serve middle income families,” says Scott Choppin, founder and CEO of the Urban Pacific Group of Companies. Choppin oversees business development, capital acquisition and strategic planning.

Urban Pacific, a workforce housing real estate developer, focuses on this “missing middle” in an innovative way by pairing private capital with new-construction workforce housing, called Urban Town House (“UTH”). And Scott is perfectly placed at the helm with his long background in both affordable and market rate housing.


One of Urban Pacific’s latest projects is a UTH located in Fullerton in Southern California. “Right now, the primary conversations in the workforce housing space are about taking older existing apartment assets, capitalizing them, rehabbing and managing them to maintain existing rent levels and to keep middle income families in those units,” Scott says. “UTH stands apart.”

The three-story townhouse rental product is 1,750 square feet with five bedrooms and four bathrooms. There’s two-car garage access on the ground floor. One of the bedrooms is also on the ground floor. The design makes for perfect multi-generational living.


Fits the Market

According to Pew Research 20 percent, or 1 in 5, Americans lives in a multigenerational household. That’s up from 12 percent back in 1980 and just about where this country was in 1950. Choppin understands that the time is right for his company’s product, particularly in his region.

“In California,” he says, “working class predominantly means Hispanic families. There might be six to ten people in a unit. That’s our demographic — two to four wage earners, usually a mom and dad and one or two adult children or an older in-law, aunt, uncle, grandmother. They share income and expenses across the family group. If they’re not in a single unit, they might be living in two two-bedroom units side by side in the same building. Or a block away but still operating as a single economic unit that shares income and expenses and vehicles, rides to and from work. Our UTH units give us a specific residential product that’s coherent with the way they’re already living.”

The How + Why

Urban Pacific is able to build 22 to 25 units per acre. In some municipalities that kind of density doesn’t fly, and there needs to be additional work and cost put into changing zoning regulations. But Urban Pacific focuses on purchasing land that already has this zoning in place. “This is part of the way we produce market superior yields on invested equity,” he says.

The company has three projects completed and one that will be completed by the end of 2019. The first three projects, in what Scott calls their “demonstration phase,” are in downtown and central Long Beach. The fourth is located in Fullerton. Now Urban Pacific has moved to its “production phase” where a typical UTH project is 30 to 100 units, with unit occupancies of six to ten people.

Under the original “merchant built” model, Urban Pacific built, rented, and sold projects to investors — “some 1031 Exchange buyers, high net worth families and small family offices, for example.” But Scott says it’s important more recently that the production phase “is now morphing into a long-term hold capital and ownership structure for both our own beliefs in the idea that we want to own this long-term and for the more coherent social impact model that it’s intended to be.”

By maintaining long-term ownership, UTH projects can be a defensive investment for investors in a downturn scenario, while also allowing Urban Pacific to maintain the asset in its workforce housing configuration for the long term. “Urban Pacific expects to rent these workforce housing units to specific families over a very long-term rental horizon,” he says. “Typically, families in this income category rent for periods of ten years or longer.

Scott Choppin is proud of the work the company is doing. “We’ve always been a niche player. We were building urban housing in 2000 and everyone thought we were crazy. This is a continuation of our anticipation of trends and identifying social needs and pairing that up with a way that can make money.”

More About Scott

Scott Choppin
Founder + CEO
The Urban Group of Companies


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