A new Costco in South Los Angeles is approaching the city’s housing crisis in an unconventional way. You can buy your chicken bakes, massive bottles of Costco tequila, and then go up to your apartment within the 800 residential units that will be placed above the story, which 184 will be set aside for low-income tenants.

Bloomberg reported that this project features studios, one-bedroom, and two-bedroom apartments, along with amenities like a basketball court, rooftop pool, and community gardens. While mixed-use developments are common, this particular project has attracted significant attention online, with critics dubbing it a “Costco prison” for its uniform modules.

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Why does the “Costco Prison” exist, and why is it designed the way it is?

As often is the case, the answer is regulatory arbitrage!

Costco wanted to build a store in Central/South LA.

The problem is, new massive big-box stores are hard to get approved in LA. They’re subject… pic.twitter.com/Imwb9tO6ql

— Joe Cohen (@CohenSite) June 12, 2024

Los Angeles-based developer Thrive Living and architecture firm AO are behind the design. In a news release, Thrive’s Jordan Brill stated that the project is in response to LA Mayor Karen Bass’ 2022 emergency declaration on homelessness, noting that the company is “answering the call” to provide affordable housing. The development’s modular construction is intended to reduce building costs.

Bloomberg Spoke With Apartment Critics

Despite these intentions, the project has raised concerns among community members about whether it will meet the needs of local families. Gina Fields, chairperson of a South LA neighborhood council, voiced concerns that the small unit sizes may attract students from nearby USC rather than older adults or families.

Draft renderings show the units will range from 350 to 605 square feet. Shane Phillips, head of the Randall Lewis Housing Initiative at UCLA, remarked that the small units may be more appealing to younger individuals with short tenures, rather than long-term residents.

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Councilwoman Heather Hutt, who represents the district, expressed optimism that the project could provide new affordable housing options for seniors living below the poverty line. Thrive Living has promised to create a consortium to market the units to seniors and partner with Costco to offer local job training and employment.

As one of the first projects to utilize a 2022 state law that streamlines approvals for commercial developments with housing, experts like M. Nolan Gray of Yes in My Backyard California see this development as a potential model for future projects. However, community leaders like Fields remain cautiously optimistic, hoping that the development will truly serve the local community.

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“I hope they live up to what they’ve offered and promised,” Fields said.

Read more at Bloomberg.