Lewis Group of Cos. has seen its stake in new homes and retail developments grow from Southern California’s ranches, orchards and dairy farms to the state’s central farm belt and the Bay Area.

Randall Lewis, who is regularly pushed to the forefront of the 70-year-old, family-run company to speak about its vast developments in California and Nevada, is now pivoting from sprawling inland county neighborhoods to “infill” development for residents craving affordable homes in busy urban areas.

With median home prices hitting $1.4 million in the San Francisco area, Lewis says the next big thing is “missing middle” housing.  Such developments typically involve eight to 20 single family homes or townhouses per acre.

Also see: So many reasons to stay put: What’s behind California’s frozen housing market?

Lewis Group says it’s working on projects that could result in more than 20,000 homes or apartments in Northern California.

“So we’ll see more density,” said Lewis, the firm’s senior executive vice president. “Before, if a big developer saw a site that was two or three acres, they wouldn’t touch it, because you could only do 15 houses. But with some of this higher density housing, they could do 50 houses on three acres, or 70 houses. It’s not the only kind of housing, but certainly in infill locations and even in some of the outlying areas, it’s the future.”

The strategic shift in thinking comes after many decades of partnering to develop communities. The Lewis Group has collaborated on more than 58,000 homes, 13,000 apartment units, 40 shopping centers and 24 million square feet of retail, office and industrial space.

Also see: Across the Bay Area, home sellers are dropping their prices as inventory rises

Randall Lewis, who lives in the leafy college community of Claremont, was born in 1951 in South Central Los Angeles.

His parents, Ralph and Goldy Lewis, moved to Whittier a year later where they worked as accountants for several prominent landowners in Orange County, including home builder John Lusk, an Irvine-based development pioneer who founded a $500 million real estate empire.

In 1955, Lewis’s parents were inspired to start up their own homebuilding company.

The company became so successful that, by the late 1990s, Los Angeles-based Kaufman & Broad Home Corp, bought Lewis Homes for $500 million in cash and stock. Today’s Lewis Group, which was splintered off from Lewis Homes and grew over the past few decades on its own, is focused on land development, commercial real estate and apartments. It generates between $400 million and $600 million revenue annually, Lewis said.

Lewis’s impact in Southern California also has been felt in the philanthropic world. He told the Southern California News Group that he has given well in excess of $30 million to universities and other organizations in the areas of education, health care and entrepreneurship. He describes himself as more “liberal and socially conscious than most other developers” — including members of his real estate-centric family.

We asked Lewis about how his company, mentors and outlook in the housing market. His answers have been edited for clarity and length.

Q: Looking ahead, what do you see in the real estate market?

A: We see a softening in the housing market. My world is for the new home market, and not as much the resale market. But I’ll say, on the resale market, what we’ve seen — in a word — I haven’t seen before. It’s called delisting. A lot of people are taking their houses off the market, and saying, ‘Gosh, I don’t think I’m going to get a good offer. I’m just not even going to bother keeping it listed.’

On the new home side, surprisingly, it’s a pretty good time to look for a new home. And the reason is that most of the homebuilders are (offering) incentives. Most home builders will have a pretty attractive incentive process of either interest rate buydowns, where they lower the interest rate, or some sort of financial incentive where they will give you $20,000 off, $30,000 off.

Q: How long will incentives last given labor shortages in homebuilding, tariffs and the January wildfires?

A:  We think housing demand will remain strong in California because of the assets California has.

California still has a lot of challenges, but I think there’s finally awareness, certainly in Sacramento, that something needs to be done. I think there will be a trend for more people to be renters longer. This is partially why our parents (Ralph and Goldy Lewis) always wanted geographic diversity, and why they chose to go to Nevada and Northern California, and have product-type diversity. We try to have a balanced portfolio — which is one of our key strategies as a company, in good times or bad – by developing apartments, homes, shopping centers, industrial and office space.

Q:  Where is the Lewis Group working on infill projects?

A: We’re known as an Inland Empire developer, but we’re currently working on infill projects in Bell, Rosemead, Glendora, La Verne and North Hollywood. I think we’re going to see a lot of changes for how to do housing for people over 65 or 70, at very different stages, with some needing health care, or just some needing ground-level living. It’s not happened as much as is needed.

Q: Does Lewis Group have any new development categories coming down the pike?

A: We’ve got a new line of apartment communities that we’re calling Independence. They’re in a category of housing called build-for-rent. These are residential developments where properties are specifically constructed for long-term rental rather than for sale. They have amenities like pools, gyms, and common areas, similar to apartment complexes, but offer the layout and privacy of single-family homes.

How do you build products that are still for rent, but they’re more like houses? Our model is to build duplexes. You’ve got glass on three sides, and one attached wall, you have a small yard, but you get what feels like a house. Our typical Independence apartment community will have 150 to 250 homes, and average about $100 million to develop. We’re going to do about 10 of those in the next three years in California.

We’re just finishing one in Chino, and had a recent ribbon cutting for another one in Dixon in Northern California. Furthermore, we’re breaking ground on one in West Sacramento, and plan to build more in Riverside, Moreno Valley, Grand Terrace and — I hope — in Montana.

There’s definitely going to be a trend of people renting longer, and the percentage of renters rising in California as well. Rental prices won’t rise as fast as houses. The market sets the prices, so there’s only so much renters can pay.

Q: Does the Trump administration’s new federal tax bill benefit real estate companies like your business? 

A:  It’s not clear if it will encourage broad development. He’s tried to put in some incentives.

There’s a lot coming out of Sacramento, and Sacramento is trying for the first time to encourage more housing.  (In late June, Gov. Gavin Newsom signed into law a pair of measures — Assembly Bill 130 and Senate Bill 131 — to overhaul California’s environmental protection rules that he says are essential to address the state’s critical housing shortage and long-running homeless crisis.)

California is woefully short of housing of all types. There’s always a discussion, should you do infill housing or suburban housing? Should you do just affordable or just high end? I think it’s an all-of-the above response. The state is so short of housing. People are leaving the state because it’s expensive.

About Lewis Group

Employees: 800

Northern California projects: Dixon, Fairfield, Folsom, Hercules, Lincoln, Livermore, Newark, Roseville, Sacramento, West Sacramento, Tracy, Vacaville, Vallejo and Wheatland.

Executives: The company is led by Randall Lewis, senior executive vice president; Richard Lewis, 81, president of California operations and land acquisition; and Robert Lewis, 79, president of Nevada operations. The fourth brother, 77-year-old Roger Lewis, has not officially retired but gradually slowed his involvement in the construction and human resource front since the early 2000s.

Non-family member John Goodman, the 78-year-old chief executive officer who expects to retire in the first half of 2027, will be replaced by his 49-year-old son Bryan Goodman, executive vice president in charge of development.

There also are four younger Lewis family members — including Jennifer Lewis, head of Nevada land acquisition; Sarah Lewis, asset management manager; Riley Lewis, investment performance manager; and Rosie Lewis, corporate marketing manager.

About Randall Lewis

Age: 74

Education: bachelor’s degree in economics in 1973 from Claremont McKenna University

Mentors: Management guru Peter Drucker; John Wooden, basketball coach of the University of California at Los Angeles, who won 10 national championships with the National Collegiate Athletic Association over a 12-year period as head coach of the Bruins in the 1960s and 1970s. Lewis relies on Wooden’s “Pyramid of Success,” a step-by-step process to build a successful organization, in Lewis Group.

Recently read: Abundance, by Ezra Klein and Derek Thompson.

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