San Jose, Santa Clara to end housing cap, allowing 32K homes in North San Jose

Cities to amend agreement, paving the way for thousands of homes, offices and industrial buildings within the “economic engine” of San Jose

San Jose Mayor Sam Liccardo
San Jose Mayor Sam Liccardo (Getty)

The City of San Jose has cut a deal with Santa Clara to end a decade-long housing cap, which clears the way for the construction of 32,000 homes and nearly 30 million square feet of office, industrial and commercial space on the north side of town.

The San Jose City Council voted to approve an amended agreement with the City of Santa Clara, which will free up housing and other development in North San Jose, San Jose Spotlight reported.

The city in 2005 drafted a policy to build up to 32,000 homes and 26.7 million square feet of office or industrial space, and 2.7 million square feet of commercial space in North San Jose, the region between Highway 237, the 101 Freeway and Interstate 880.

But litigation with the City of Santa Clara and Santa Clara County produced a settlement more than a decade ago that effectively capped housing development in the area..

The amended agreement with the City of Santa Clara will eliminate housing restrictions, allowing developers to construct thousands of new homes and commercial projects in the northern part of the city, which Councilmember David Cohen referred to as “the economic engine” of San Jose, according to the Spotlight.

Councilmembers are also pushing for 20 percent of new homes to be affordable, and to have a high capacity for residents. As part of the amended agreement, San Jose will pay for $28 million in traffic improvements.

Mayor Sam Liccardo said it’s imperative San Jose be able to build more homes, given the severe shortage of houses—especially affordable ones—in the region

The state has also imposed strict mandates to reduce greenhouse gas emissions, putting pressure on San Jose to reduce the number of vehicle miles traveled in the city.

A 2020 state law—Senate Bill 330—did away with housing development caps across the state, weakening the justification for local restrictions.

“For a whole host of reasons, we have got to retire this plan,” Liccardo said, referring to the old settlement that restricted growth in North San Jose.

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One party unhappy with the amended agreement is Santa Clara County, which threatened legal action. The county has raised concerns about development exacerbating traffic on the Montague Expressway.

“It is simply not reasonable for the city to expect the county to agree to revised settlement terms without sufficient time to evaluate them,” said James R. Williams, attorney for the County of Santa Clara, who said if the city moves forward, the county will have no choice but to pursue legal remedies.

Councilmember Matt Mahan, who is running for mayor, took an adversarial approach in a memo that criticized the county for trying to obstruct the amended agreement, despite having ample opportunities to discuss plans for the area.

He later told the Spotlight that the county’s saber rattling is unproductive.

“I am extremely disappointed to see the county executive and county counsel threaten legal action over a very reasonable, common-sense agreement between the cities of San Jose and

Santa Clara,” Mahan said. “It’s more than ironic that the county is touting its progress on homelessness when they’ve seen a 3 percent increase since the last point in time count, and they are literally the last obstacle to adding 25,000 homes in San Jose.”

Land use consultant Erik Schoennauer said as long as there are disagreements between local governments there will be a cloud over North San Jose that discourages developers.

“Even if the issues of disagreement are tangential to new development, just the fact that there is that risk of litigation between two public agencies represents risk,” Schoennauer said.

[San Jose Spotlight] – Dana Bartholomew

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