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Developer Terry Demmon knew he would face challenges in building 163 apartments on a 5-acre parcel in the heart of San Lorenzo, an unincorporated town of sycamore trees, cul-de-sacs and midcentury ranch homes 12 miles south of downtown Oakland.

After all, for decades the town of 23,000 has been on the losing end of commercial real estate transactions. And some residents are afraid it’s happening again, stifling the town’s growth.

The intersection where Demmon is hoping to build — 5 acres of cracked asphalt and weedy lots — has been vacant since a Mervyn’s closed in 1995. There’s also an empty liquor store. To the west, across Hesperian Boulevard, sits San Lorenzo’s most noteworthy structure, a 1947 Art Deco theater that has been shuttered for 37 years.

But it hasn’t been financial or business obstacles that have impeded what would be largest development in unincorporated Alameda County in more than 30 years. It’s been something Demmon didn’t expect: opposition from labor unions.

The Alameda County Planning Commission approved the project in February, but it was appealed to the Alameda County Board of Supervisors by East Bay Residents for Responsible Development, a coalition of building trade groups that for years has used California’s environmental laws to fight nonunion housing projects. Member unions are the International Brotherhood of Electrical Workers Local 595, Sheet Metal Workers’ Local Union 104, Sprinkler Fitters Local 483 and United Association Local Union 342.

The union opposition has sparked criticism that labor is using the California Environmental Quality Act to strong-arm developers into agreeing to hire their members. In a statement, the developer called it “a case study in union opposition to much-needed residential projects in California when a developer can’t or won’t sign a union contract.”

“They told us there was absolutely no compromising, that we have to use all four unions exclusively,” Demmon said.

John Dalrymple, political affairs consultant for the residents group, said the project’s environmental impact report is flawed. He said the EIR doesn’t adequately analyze the impact of relocating a large gas line to make way for the project and that a study of how much particulate matter the development would create is faulty.

He denied that the environmental objections are a tool to force Demmon to use union labor.

“If they correct the environmental deficiencies the project will move forward, whether or not they do right by the community around the workforce issues,” Dalrymple said. “Our appeal doesn’t stop the project — it may delay it for six or eight months.”

San Lorenzo, one of the first planned communities in the country, was developed in the 1940s and 1950s by the Bohannon Organization, which built more than 25,000 homes in San Mateo and Alameda counties. Bohannon still owns most of the retail property in the neighborhood, including the Mervyn’s site, which Demmon has agreed to purchase if the project is approved.

While the 700-seat Lorenzo Theater and Mervyn’s once created something of a commercial center, both have been gone for decades. Demmon’s project, called Village Green, is an effort to create a new focal point for the suburban community, he said. In addition to housing, it would create 12,000 square feet of retail in six spaces.

Demmon said using union labor would increase the cost of the project from $42 million to $49 million and that rents in San Lorenzo won’t support the additional costs.

“Construction costs are the same as downtown Oakland, but I’m going to be getting rents that are 33% less than downtown Oakland,” he said. “That is our problem. I believe in the area long term, but it’s very untested. There is nothing new within miles of this.”

Dalrymple scoffed at the idea that the developer can’t afford to pay union wages.

“They all say they can’t afford it — I’ve never met a developer who said, ‘Sure, this will pencil out for me,’” he said. “They make commitments to their investors first and to the community second. Every developer does.”

The fight has put the future of San Lorenzo in limbo, said Jessica Medina, a real estate agent and lifelong San Lorenzo resident. She said she’s watched past development proposals fizzle and that her hometown is “being left behind.”

“I feel like this is our best chance — we have someone interested in creating housing, and it will be a catalyst to revitalization,” she said. “This developer is taking a gamble. They are the first developer to come in and say, ‘I believe in San Lorenzo.’”

Medina said San Lorenzo’s midcentury ranch homes — relatively affordable for the Bay Area at an average of about $650,000 — are attracting a new generation of buyers, as is the proximity to the Bay Fair BART Station a little more than a mile away. But the lack of shops and restaurants hurts the town.

“The housing market is really hot here,” she said. “It’s definitely a hidden gem. Millennials are buying homes, but they are looking to shop locally. They want a higher walk score, and we are unable to give them that. I really think the future of San Lorenzo is riding on this development.”

The project would complement the Hesperian Boulevard Corridor Improvement Project, which started in March, said Alameda County Planning Director Albert Lopez. That project includes moving utilities underground, wider sidewalks and new bike lanes, trees and landscaping. Hesperian runs through the center of town, parallel to Interstate 880, connecting San Lorenzo to San Leandro to the north and Hayward to the south.

“It’s a good infill site, with bus service and not too far from BART,” Lopez said of Village Green. “This project could bring in other commercial uses in a market that has not seen much investment. This part of downtown is the only big opportunity site in the whole area. If we are going to see any development in San Lorenzo, it’s going to be on this site.”

The Board of Supervisors was scheduled to vote on the appeal this month, but Supervisor Wilma Chan delayed the vote until July to give the developer and the appellant more time to negotiate.

Attorney Rob Selna, whose firm Wendel Rosen represents Demmon, said Chan has warned the developer that the majority of the five-member Board of Supervisors would probably side with the unions. Chan denied having said that, insisting that she doesn’t know how the board would vote.

“I’m going to keep talking to both sides,” she said. “I’m an optimist.”

Chan said she has tried to make the project more economically attractive to the developer by recommending that a county-funded commercial kitchen and culinary education center be located in one of the retail spaces, which would help generate more than $1 million in rent. In addition, she has committed to moving her office into one of Village Green’s retail spaces.

Selna said that denying the project would be a violation of the California Housing Accountability Act, which limits local government’s ability to reject housing.

In addition, he said Alameda County is not meeting its regional housing needs allocation, a state-mandated process to identify the number of housing units each jurisdiction must accommodate in its housing element, which is part of a county’s general development plan.

The county’s 2015 housing element, which identified the Mervyn’s parcel as a priority development site, stipulates that 1,769 housing units should be permitted before 2023. Halfway through the period, only about 400 units, or 22%, have been approved.

J.K. Dineen is a San Francisco Chronicle staff writer. Email: jdineen@sfchronicle.com Twitter: @sfjkdineen

Over the course of almost a decade, Sheila Cassani and Matthew Yungert built a backyard farm in the middle of Oakland. They dug vegetable beds, built a chicken coop of reclaimed wood, installed a beehive and planted fruit trees. They shared vegetables from their lush garden with neighbors and dreamed of someday harvesting them alongside their newborn daughter. Their urban homestead was featured on a farm tour, in the media, even in a book.

Then their landlords gave them notice that their son was moving in. The family and their chickens, bees and vegetable garden all had to go.

For a period starting around 2009, excitement about urban farming was everywhere. The media was agog over backyard bees and chickens. Frothy stories about goat milking proliferated. People in the grips of the recession, newly awakened to acting globally and eating locally, eagerly pursued control of their food through urban farming.

The Bay Area was ground zero for urban homesteading fever. A dedicated cadre of serious urban homesteaders were hard at work here, bringing visibility to urban agriculture. Not only were they creating mind-blowing farms in their backyards, they successfully worked to change laws barring city folk from keeping goats, chickens or bees and to simplify regulations allowing the sale of vegetables grown in urban areas.

But it’s tough maintaining an urban homestead with livestock and a large garden in one of the most expensive areas of the country. And as economic pressures in the Bay Area have increased, many of the original advocates of urban agriculture have left the Bay Area, downsized or even stopped farming.

Some, like Ruby Blume, have escaped to a cooler climate. The founder of the Institute for Urban Homesteading and the moderator of the Bay Area Homesteader’s email listserv left the cauldron of the Bay Area real estate market for a 22-acre farm in Grants Pass, Ore., where she keeps sheep, cows, chickens, rabbits, pigeons and bees. “Many of the people I started out with in urban homesteading are moving out of the Bay Area,” she says. “People who really want that lifestyle are leaving to create it.”

Others, like Rachel Hoff and Tom Ferguson, have downsized. When the 2008 recession hit, their income from construction-industry jobs plummeted and they started growing produce and raising livestock on the land surrounding their Vallejo home. Their family gained national attention when they decided to forgo the grocery store for a year and live on what they were able to grow or buy from local farmers.

A single year turned into three, but the pressure of Bay Area economics and the need to work full-time jobs made a return to the shopping cart inevitable. The rabbits had to go, as did a number of the turkeys, chickens and goats. The vegetable garden was scaled back as the time to harvest and preserve dwindled, though they now run a business providing vegetable seedlings to other local gardeners.

Cassani and Yungert tend a vegetable garden at their new Oakland home, but they haven’t re-created their beloved urban homestead. Cassani, who wrote her undergraduate thesis on Bay Area home food production, says, “We want to do more, but we’re jaded and less motivated because we felt the burn of having to leave all that hard work behind.”

As Shirley Bassey sang, “It’s all just a little bit of history repeating.” According to Eli Zigas, who works in food and agriculture policy for the San Francisco Bay Area Planning and Urban Research Association, we’ve been here before.

“Historically, every few decades there’s a wave of interest around growing food in cities: the victory gardens of the war effort (in World War II), the back-to-the-land movement of the 1970s, and so on,” he says. “We saw a wave of projects get started in the past 10 years. I think some of that interest has waned, but out of each wave we get lasting institutions.”

Last decade’s surge of excitement around urban farming may be following the inevitable arc of history, but the seeds the movement sowed have taken root.

“Urban homestead seeking mature, responsible, delightful roommate,” read Jeannie McKenzie’s advertisement for a room in her Oakland hills home last fall. “We’re a good fit for someone who wants to try their hand at goat milking and cheese making.”

Like other longtime urban farmers who remain in the Bay Area, McKenzie is finding creative ways to maintain an urban homestead. She and her housemates each put in around two hours per week sharing chores and goat-milking duties.

Collective efforts like McKenzie’s are on the rise. “People are being really resilient and creative in maintaining the ability to grow food,” says Yolanda Burrell, who co-founded Oakland’s Pollinate Farm and Garden Supply. “Families have taken down their fences to make collaborative gardens, and there’s lots of chicken co-ops with people who take turns caring for the chickens.” Interest in permaculture, a farming methodology that incorporates long-term edible crops, is increasing, too, as people search for ways to grow food that fits busy Bay Area lifestyles.

Immediately post recession, the breathless media coverage of urban homesteading seemed to depict it as a completely new field dominated by white women, overshadowing the non-white communities who brought their own micro-farming traditions and cultural foodways to the Bay Area.

While there’s still work needed to remedy that imbalance, community and school-based urban farming efforts in communities of color are on the rise.

At Acta Non Verba, where children and families from East Oakland participate in farming activities, the program has a wait list and has added staff to accommodate growth. Other food justice organizations like Valley Verde in San Jose, Phat Beets Farm and City Slicker Farms in Oakland, and Planting Justice in Oakland and El Sobrante are all broadening their reach.

Community- and school-based urban farms are expanding their reach as well. On an early spring day at the University of San Francisco’s urban farm, located on the edge of its campus, oxalis flowers the color of a yellow highlighter nod among rows of fava beans and leafy greens as a cluster of backpack-toting students filters in for their class on community garden outreach. Since the university started offering a minor in urban agriculture in 2010, the school has barely been able to keep up with the demand for classes.

Novella Carpenter, whose bestselling 2009 book “Farm City” helped ignite the urban farming fever, teaches at the university. The pigs, rabbits and goats that she once kept at GhostTown Farm, her West Oakland household, are gone now, though she still keeps chickens. She’s in the process of leasing the farm to a group growing herbs from the African diaspora.

“The urban farming movement isn’t about ‘Hey, look what I’m doing by myself in my own backyard’ anymore,” Carpenter says as she waters baby tomato plants in the USF greenhouse. “It’s about what we’re all building together.”

Samantha Nobles-Block is an East Bay freelance writer. Email: style@sfchronicle.com. Instagram: @radishandfig