He came to the Bay Area to form a startup. Now he’s trying to solve the housing crisis

And in the process, Haber, 34, is also hoping to do something that may be just as difficult: rebuild a public image that has been mired in controversy since he burst into the real estate industry nearly a decade ago.

"We are trying to give people exactly what they want at a great price," Haber said. "It's a workforce demographic. It's teachers, blue collar, middle class."

Most developers entering the Bay Area marketplace do so gingerly, tiptoeing around political minefields and hiding behind seasoned land-use attorneys and well-connected lobbyists.

But when Haber came on the scene in 2013, he did so with all the delicacy of a brick crashing through a plate-glass window.

A New Yorker still in his mid-20s, Haber arrived in Silicon Valley with the notion that he would start a tech company. But with the Bay Area rapidly filling up with the next generation of fortune-seekers, Haber quickly came to the realization that there might be more money to be made housing the tech starter-uppers than competing with them.

Haber and a business partner started master leasing residential hotels and other buildings, experimenting with creating themed co-living communities of mostly young professional transplants working in the tech industry.

The problem was that there were already people living in those buildings. From residential hotels on Sixth and Howard streets in San Francisco to warehouses in Oakland, Haber was blamed for driving out residents and for doing work without permits.

He came under attack from the Oakland Warehouse Coalition, the East Bay Community Law Center and the Anti-Eviction Mapping Project . That group, which tracks problematic landlords in the Bay Area, claimed that Haber and his partners "take living spaces from some of the poorest residents of SRO hotels, as well as artists in live-work spaces, and plant tech workers in bunk beds in their place."

Eventually, Haber and his partners settled wrongful-eviction lawsuits filed by displaced tenants in both Oakland and San Francisco. Haber said those days, and that business model, are well behind him.

"What we learned was that co-living was not a good business model," he said. "It's OK if you want to live somewhere with friends and create a community, but it's not a business. I realized that when times changed, and the recession came, Class A apartments would drop their rents and people would move from co-living buildings to Class A apartments. That is exactly what happened."

Haber said he watched in 2018 and 2019 as multiple co-living startups raised billions of dollars only to go belly-up during the pandemic. "Everybody was laughing at me. They were raising more and more money and they were saying, 'You're an idiot. This is working out great.' I said, 'I don't think so.' And I was right."

With co-living in the rearview mirror, Haber started a company called oWow — the name a take on the reported last words of Apple co-founder Steve Jobs.

The company now employs about 40 workers and does it all. There is oWow Construction, oWow Design and oWow Development. While Haber is founder and CEO, he tapped veteran builder Andy Ball to be president. For many years Ball was the CEO of Webcor, California's largest contractor, after which he ran West Coast operations for Suffolk Construction Co., one of the largest contractors in the country.

Eventually, after decades at the top of the construction industry, Ball said he wanted to do something that would help solve one of the Bay Area's most intractable problems: the cost of producing housing. He joined Rad Urban, a modular housing company, which built several successful projects, including the Logan complex in Oakland. But the company dissolved after one of the partners died.

Around that time he met Haber, who started badgering Ball for advice and insisting that he take a look at some of the projects he was working on.

"He asked me what I thought and I said, 'I think they are not very nice and not going anywhere,'" Ball said. "I told Danny when he first started, 'I'm never going to join your organization.'"

But Haber is nothing if not persistent, and he kept at Ball. Eventually, the two agreed on a vision for a development company that would do everything in house: design, development and construction. Just before the pandemic, the two agreed to join forces on a company that would borrow some ideas from modular — pre-built components and simple design with repeatable, no-frills features — while avoiding the overhead of an expensive factory that has contributed to the failure of several modular startups, including Katerra, the construction tech unicorn that filed for Chapter 11 bankruptcy in 2021 after having been valued at $5 billion.

At the time, new building codes were coming online that relaxed regulations around the use of mass timber, which uses technology to create panels, posts and beams out of layered wood products that are glued together.

Haber had already acquired some development sites and with Ball's deep experience they got to work putting together an integrated company focused on using mass timber to bring down the cost of construction.

"Danny is brash and when he came into the industry he made a lot of mistakes," said Ball. "But the great thing about Danny is that he is never afraid to say, 'I'm wrong.' And he is able to get stuff done at a rate I've never seen. Nothing ever defeats him."

Today, oWow has a pipeline of 800 units. It has started construction on a 19-story, 236-unit mass timber building at 1510 Webster St. in downtown Oakland. That will be followed by 269 units at 1523 Harrison, which backs up to the Webster Street property. The two buildings, with a total of 505 units, will share a publicly accessible center plaza, Haber said.

"1510 Webster is a 19-story plywood building," Haber said.

Rents will start around $2,200 and target middle-income households earning between 80% and 120% of area median income, so between $65,000 and $90,000 for a single person.

Haber said he wants to create a public-facing community that embraces its downtown Oakland location. The central courtyard between the two buildings will be lined with cafes so that residents come into contact with neighbors as they come and go from the buildings.

"Being in cities is depressing in the Bay Area because the retail is empty, the lobbies are empty and people are just staying in their units," Haber said. "The buildings are amenity fortresses where people are afraid to walk out at night. That is the opposite of why you want to live in a city. Do you want to live in an urban fortress and not leave your Class A apartment, or do you want to live in a city where you get the benefits of what a city has to offer?"

After experimenting with various layouts, Ball said they arrived at two floor plans — a one-bedroom and a two-bedroom — that would be simple, inexpensive and easily scaled. They also hooked up with Freres Engineered Wood, an Oregon-based manufacturer that had come up with "mass ply panels" designed as a less expensive alternative to trendy cross-laminated timber, which, while beautiful to look at, costs as much as conventional steel or concrete construction. Ball said mass plywood — which can be as thick as 12 inches — is not only less expensive than CLT but stronger and has a higher fire safety rating.

Ball said the Webster Street building would have cost $100 million had it been a typical concrete structure. Using mass plywood, hard costs came in at $70 million, about $300,000 a unit. Altogether, with land and soft costs, the building is projected to come in at about $400,000 a unit. The units are small — one-bedrooms are 450 square feet and the two bedrooms are 680 square feet.

"Everybody has to be more cost-effective — that is what this downturn is telling us," said Ball. "The free money is gone. You have to get your costs down."

Mike Baker, an architect who heads up oWow's nine-person design team, said working as part of a startup has been exhilarating.

"The way we build is different and the way our buildings are designed is outside the mainstream," said Baker. "There is a kind of tenacity in the culture that Danny creates. It's coming from a place of questioning the status quo. You can't walk into a meeting and say, 'This is the way it is.' He is always going to ask why."

While the first building won't be ready for another year, oWow is close to finishing a 27-unit mass plywood project at 316 12th St. in Oakland that sits on top of retail and two floors of office space. Haber's company has treated that project as a prototype for its more ambitious towers. He spent weekends going to places where potential tenants gather — Dolores Park, Alameda Beach, Ikea — and surveying them about everything from layouts to finishes.

"You think you are going to Dolores Park to hang out or going to Ikea to go shopping and here we are saying, 'Hey can we get a minute? Here is a floor plan. Here is a rendering. Here is a Google form.' We probably talked to 1,000 people," Haber said. "Most people are friendly. Some people refuse."

During a recent walk through a unit in the 12th Street project, he pointed out "learning lessons" that will be applied to the next buildings

"The living room needs to be wider. Also in the future version of the (two-bedroom) we made it 30% bigger," said Haber. "A king-size bed is very important to people. Half of them want queen and half of them want king and sometimes it's a deal-breaker."

Haber said that he is often misunderstood because of his New York sarcasm and understands that he rubs people the wrong way.

"Developers have big egos, right? Who doesn't have a big ego? Why do development when you can earn similar returns without the risk of entitlements, permits, and coming out of the ground?" he said "The extra returns you make for doing something brand new is not that much higher so it doesn't make sense."

Meanwhile, oWow continues to acquire sites. It has a 72-unit project lined up in Oakland and a 100-unit building planned for Howard Street in San Francisco.

Ball said the lessons Haber learned in his first foray into San Francisco have not been forgotten.

"Danny did piss people off and I think he has made it clear he is not going to do that anymore," said Ball. "At the same time, it's that kind of brash, can-do attitude that makes him successful. Sometimes you have to piss people off to get something done."

J.K. Dineen is a San Francisco Chronicle staff writer. Email: [email protected] Twitter: @sfjkdineen