San Jose OKs Hanover for 377 apartments, townhomes near light rail

Gives developer almost 1,400 resi units completed or planned across city

A rendering of 905 North Capitol Avenue and Hanover Company (KTGY Architecture + Planning, LinkedIn)
A rendering of the apartment portion of 905 North Capitol Avenue and Hanover Company's Scott Youdall (KTGY Architecture + Planning, LinkedIn)

Upscale multifamily developer Hanover Company has gotten approval to build a mix of apartments and townhomes near a light-rail station in San Jose, a project that will take its residential portfolio in the city to about 1,400 units.

Robert Manford, San Jose’s deputy planning director, gave the go-ahead on Houston-based Hanover’s proposal to redevelop a 3.5-acre site at and around 905 North Capitol Avenue. Plans call for a seven-story building with 345 apartments and four separate three-story townhome structures each containing eight units. Hanover will need to pull demolition, grading and building permits before it can break ground on the project.

The company will demolish a single-family home and two accessory structures and remove 42 trees under its plan, replacing them with 377 new homes and 55 box trees within 500 feet, or a tenth of a mile, of the Penitencia Creek Light Rail Station. It aims to begin building the project’s apartments by the fourth quarter of this year, Erik Schoennauer, a local land-use consultant who worked with Hanover to entitle the project, told The Real Deal. If it does, those units would be completed in the fourth quarter of 2024.

While a separate homebuilder will be responsible for the development’s townhomes, they will probably be under construction at the same time as the apartments, Schoennauer said. He didn’t say who that homebuilder would be.

The project is Hanover’s fourth in San Jose. In 2018, the developer completed a 403-unit apartment building and an adjacent one-acre park on the site of a former cannery complex in the city’s Japantown.  Its second development, completed last summer and just west of downtown, consists of 249 high-end apartments and 26,000 square feet of room for shops, restaurants or offices. The company broke ground on its third project in the city in August, a seven-story, 366-unit apartment complex at 500 Charles Cali Drive, between the Winchester Mystery House and Interstate 280. The structure — which recently topped out, according to SF YIMBY — is slated for completion next year.

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Hanover’s freshly approved North Capitol Avenue plans in northeast San Jose dovetail with two of the city’s goals: adding to its housing stock, and doing so near public transit. San Jose, which is Northern California’s largest city with a population of just under 1 million, must plan for 62,200 new housing units from 2023 through 2031, according to the Association of Bay Area Governments’ final Regional Housing Needs Allocation. That number represents a 77 percent increase from the previous cycle’s allocation.

During the first seven years of the most recent 8.8-year cycle, the city approved 53 percent of the total number of building permits needed to meet its assigned goal, according to its latest progress report. Many more projects like Hanover’s will need to be proposed and approved for San Jose to get anywhere close to meeting its 2023-2031 RHNA goal.

CORRECTION, July 1, 4:55 p.m. PT: This story has been corrected to reflect that the North Capitol Avenue project is Hanover’s fourth in San Jose.

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