OAKLAND — Although the red-hot housing market has cooled off, construction is under way to build more than 135 single-family homes near the Elmhurst neighborhood in East Oakland.

The Pulte Homes project, also known as Arcadia Park, is part of an effort to transform the area's entrenched urban blight, poverty and crime.

Oakland City Councilmember Larry Reid, whose Elmhurst-East Oakland district includes the project, says his goal is to "revitalize long forgotten areas."

The 17-acre project is on an industrial lot at 98th Avenue and San Leandro Street. The homes are built at the site of the old Fleischmann's Yeast factory and feature single-family homes, detached condominiums and townhomes. Prices for the units range from $380,000 to $460,000. Pulte sales manager Mike Barbieri said the first buyers have started to move in and about 30 families are expected to settled in by the year's end.

"I'm extremely proud that Pulte is continuing to move forward to help change the community," Reid said. "We, as a city, need to make sure the new communities are safe for families to live and raise their children."

The Pulte Homes project is aimed at helping turn vacant industrial land into housing developments. Reid said new homeowners will generate economic growth. Pulte also built Zephyr Gate, a new townhome community in West Oakland.

The Arcadia Park project was approved in September 2005 during the housing boom. It was one of many that sparked concern about Oakland's vanishing industrial areas. Many manufacturing company owners worried that if East Oakland's industrial land was converted to residential it would trigger a wave of similar developments and drive them out of the city. Since then, the city has identified industrial zones and defined areas that could transition to housing.


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Due to the decline in the housing market, however, Arcadia has been scaled back from 366 units. The company said it will build out the project when market conditions improve.

The Arcadia Park homes are 1,200 to 1,800 square feet with two and three bedrooms. The units include upscale features such as granite-slab kitchen counters, travertine tile floors and two-car attached garages.

Neffertice Williams, 27, is a single mother with three children and a first-time home buyer. She works as a fire dispatcher for the city and said purchasing a home is a "dream come true." The family is scheduled to move into Arcadia Park next month.

Williams said she is aware of the area's challenges but said it isn't much different from other parts of the city.

"You go four blocks and you're in the hood and that's everywhere you go in Oakland," she said. "This is a new community in a decent area and I'm excited to be a part of something brand new."

Revitalizing a neighborhood, however, takes not only housing but a boost from retail.

Reid said the area is badly in need of more retail business with only one liquor store and a gas station nearby. Residents now must travel to the Wal-Mart on Hegenberger Road or 10 minutes away to Safeway in San Leandro to go shopping.

Reid is hoping to persuade his colleagues on the City Council to acquire 12 acres adjacent to Arcadia Park to help bring in more retail and projects between 92 and 98th avenues and near Edes Avenue.

"Industrial land can't sit and be underutilized," he said. "Housing and mixed-use projects (are) a way to change things."

Another project in the pipeline expected to rejuvenate the area is the Housing Authority's redevelopment plan for the Tassafaronga complex, between 81st and 85th avenues and E Street to G Street. Tassafaronga is the site of old World War II housing that recently was demolished and will be rebuilt into rental units, townhouses and some low-income housing in the next three years.

"It's not just market-rate housing but quality, affordable housing that gives people a chance to live," Reid said.

He does not believe that San Leandro Street will turn back into a bustling corridor filled with manufacturing and industrial jobs.

Reid said the Pulte project is a sign to other developers and the community that a "major transition" is happening in East Oakland.

Reach Kamika Dunlap at 510-208-6448 or kdunlap@bayareanewsgroup.com.