San Jose lifts commercial requirement for new affordable housing

Move intended to spur such development in city behind on new affordable homes goal

A view of Villas on the Park, a completed, 84-unit permanent supportive housing development in downtown San Jose. (Dahlin Group Architecture Planning, iStock)
A view of Villas on the Park, a completed, 84-unit permanent supportive housing development in downtown San Jose. (Dahlin Group Architecture Planning, iStock)

The San Jose City Council unanimously voted to end a decades-old policy requiring that 100 percent affordable housing projects in transit-oriented, mixed-use areas include room for shops and restaurants, a move intended to encourage more of that development.

The vote on Tuesday, earlier reported by San Jose Spotlight, comes as California’s third-largest city by population tries to meet its goal to build 10,000 affordable units by 2023. It’s less than one-third of the way there, and affordable housing makes up less than one-fifth of the city’s overall housing production, according to its November 2020 housing crisis workplan update.

“This is long overdue, that we really take a look and prioritize affordable housing,” Council member Pam Foley said during the Tuesday meeting, according to Spotlight. “We’ve heard from affordable housing developers how problematic it is to be required to build commercial property, particularly when they may have to pocket those finances themselves, which makes it difficult.”

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The City Council’s vote covered new, 100 percent affordable housing proposed for so-called urban villages, areas designated by the city as pedestrian-friendly, transit-oriented, and suited for a mix of uses. Early next year, San Jose will look to create a citywide policy lifting the commercial requirement for such projects, Spotlight reported.

It can’t force their developers to include room for restaurants and retail on the ground floor if they request that requirement be waived to reduce costs, the state’s department of housing and community development said in a letter to the city.

The vote could attract out-of-town developers like Allied Housing back to San Jose. Over the past five years, Fremont-based Allied shelved plans to build between 500 and 1,000 affordable units in the city due to its ground-floor commercial requirement, according to Spotlight. It helps explain why affordable housing advocates like SV@Home see the removal of the provision from the city’s general plan as “the most high-impact action that this council can take to remove city-imposed barriers to affordable housing development,” SV@Home’s Mathew Reed told Spotlight.

[San Jose Spotlight] — Matthew Niksa

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