San Jose’s Plan to Build 62K Homes Wins State Approval

After a year of repeated attempts, the City of San Jose has finally nailed its state-mandated housing blueprint — shutting the door on a stampede of builder’s remedy projects.

The South Bay city’s plan for 62,200 homes in the next eight years passed muster with state housing regulators just ahead of the Jan. 31 deadline, the Silicon Valley Business Journal reported.

The state Department of Housing and Community Development notified the city that its housing element plan adopted last June was in “substantial compliance,” which shuts off any more outsized builder’s remedy projects.

“We’re glad to receive HCD’s stamp of approval,” San Jose Mayor Matt Mahan said in a statement. “Our community is in desperate need of housing at all affordability levels — we need to grow smart, fast and near transit.”

The builder’s remedy, a legal loophole in state housing law, allows developers to bypass local zoning rules in cities that don’t have a certified housing plan. Such projects required a minimum 20 percent affordable housing.

Before San Jose’s approval, the city had received 29 pre-applications and 14 formal applications under the builder’s remedy provision.

The pre-application locks in development standards at the time it was submitted, requiring a formal application within 180 days. Builder’s remedy projects submitted before San Jose’s date of substantial compliance can still move forward.

Such builder’s remedy projects have also been used to rescale approved projects.

San Jose, like other cities in Santa Clara County, missed the initial deadline of Jan. 31, 2023 to have its housing plan approved for 2023-2031. The Bay Area’s largest city is the ninth local government to win approval of its housing plan, according to the Business Journal.

Other local cities to receive approval include Campbell, Gilroy, Los Altos, Los Altos Hills, Milpitas, Morgan Hill, Mountain View and Sunnyvale.

For the current eight-year housing cycle, San Jose is required to add 62,200 homes, more than half of them affordable, spread in a more “equitable distribution” across town. The homes would add 20 percent to the city’s housing stock, and represent a 77 percent increase from its previous eight-year goal.

San Jose’s plan required the city to take more than 130 policy actions to meet the state’s approval, Planning Director Chris Burton told the Business Journal.

A failure of San Jose to comply with its requirement to plan for tens of thousands of new homes had placed it at risk of losing affordable housing and transportation funds from the state, in addition to builder’s remedy projects.

— Dana Bartholomew