INFILL IN SOME AREAS is being driven by the availability of project financing. Investors have flocked to such groups as CityView and Phoenix Realty Group, which are geared toward providing financing for urban workforce housing. Their investment strategies have proved to be so successful that they're expanding. CityView recently added CityView America, based in Texas, to the existing CityView West, focusing on the western United States. Phoenix Realty announced plans for a fund focused on other urban areas in California after capping its $100 million Los Angeles fund and $90 million San Diego fund.
But the question lingers: Will the bubble talk scare off investors? James Pugash, CEO of Hearthstone, the country's largest institutional investor in residential development, says no. “Our investors make decisions over a one- to two-year time period. They don't make what they would call ‘tactical changes' based on where they think the market is going, because they are these enormous ships that turn slowly,” he says. “They continue to express confidence in the residential sector.”