Los Altos Hills City Council
February 2, 2026

Town of Los Altos Hills Housing Element
Appendix B: Survey Results B-46
▪ weekly office hours to explain ADU regulations to residents; financial incentives to those interested in ADUs ( lower fees, additional financing); webinars to explain SB 9 to local residents
▪ Don’t let the loud anti-9 voices overwhelm you!! Stay strong and keep up the good fight for more housing units in LAH.
▪ Do not destroy public lands by rezoning them for other purposes, these public reserves and park lands are key to Los Altos Hills enjoyment etc... ▪ Please fight to maintain the semi-rural character of the town that has brought most of here in the first place
▪ LAH should expand municipal sewer to all residents as this is a limiting factor in building a home for bigger families or adding an ADU.
▪ Like any city, leaving property vacant causes blight—there is not enough housing ▪ Tax the LAH population to (1) improve regional transportation and (2) accelerate construction of multi-family units near transportation corridors. ▪ Retain the rural nature of the town.
▪ Beyond institutional sites, if re-zoning for greater density must occur, the town should create a map that shows which properties would most-certainly be off-limits due to fire, slope and environmental concerns. Also, debate whether it's best to spread impact evenly across town or to consolidate it to neighborhoods situated nearest to shopping/public transportation/jobs, ie: downtown Los Altos and El Monte Ave bus route.
▪ The charter of the property owners and the city is to do what is right for us and that is to maintain a beautiful rural look and feel. The state cannot impose on us what to do. That is simply NOT right.
▪ Zoning changes (for affordable housing only) should be considered at the border of town. This will reduce the strain on infrastructure like sewer, roads, power, water etc. and maintain the towns core values. Think of it as changing the rules for all the areas we annexed maintaining the original town to its core values. ▪ repeal SB 9 - preserve the rural character of our community ▪ LAH should fight these state requirements. We want to retain the 1 acre single family community as well as much open space. LAH should make it very difficult to build

Town of Los Altos Hills Housing Element
Appendix B: Survey Results B-47
multi family and lots splits that are not based on our current set. backs. I do not want my next door neighbor to suddenly be a 4 unit property!!! ▪ Consider the impact of greedy property developers who don't live in the area.

Having lived thru mandatory rezoning overseas, the quality of homes and life does not improve just because more homes are permitted.
▪ Kill the bill. California needs two-party system.
▪ SEE MY LAST COMMENT
▪ Avoid multiple family dwellings on existing lots. It would be better to put townhouses on underutilized public land rather the clutter neighborhoods. ▪ Fire safety. Parking.
▪ Maintain open space. Oppose Sacramento & HCD on RHNA numbers. ▪ Provide better wildfire prevention to encourage residents to feel safe in their homes ▪ High turnover at the building department is a big problem.

In our project, onerous fire department requirements completely unrelated to the structure being built have slowed the project materially. Anyone who looks on our property thinks the requirements don't make any sense for our geography. ▪ Yes, don't agree to any changes to current zoning laws. ▪ Please ensure the infrastructure is updated to accommodate the housing policy ▪ Do not allow lots to be split, this will ruin the rural feel of LAH. This land should be not developed it will turn this beautiful area into a parking lot full of traffic jams. ▪ Set backs need to be adhered as they are currently. Views must be protected. ▪ protection and harmony with nature
▪ Fulfill RHNA at FootHill College campus. Follow Atheton's example. They fulfilled their RHNA with Menlo Highschool campus.
▪ Be helpful, not NIMBYs

Town of Los Altos Hills Housing Element
Appendix B: Survey Results B-48
▪ I do not believe Los Altos Hills is equipped to handle an increase of volume based on the infrastructure and the rural nature of the town. This is an example of government overreach that I have to say this in the first place. ▪ Please restrict lot splits to only certain streets where there's enough sewer connection options AND where slope is under 10%.
▪ Reconsider your approach to SB 9. Allowing subdivisions would be among the least impactful ways to add new homes in LAH. Consider creating multi-family designs that look like mansions if you're concerned with "neighborhood character." ▪ SC county fire defies State law and prevents LAH residents from adding ADUs ▪ Maintain our semi -rural charters
▪ Put housing at Foothill for students, teachers, and other support groups. Allow multiple stories in that one spot to solve this problem. Let’s not destroy the character of the town with duplexes and split lots.
▪ Explore all options for handling wastewater for ADUs
▪ Embrace change and consider the greater good. Steer away from NIMBY policies and actions (like the SB 9 Emergency Oridnance).
▪ Preservation of Town characteristics and protection of natural resources ▪ Infrastructure required for the development, wildfire risk. ▪ Don't change one acre minimum lot size for new houses. ▪ Yes, fight this nonsense along with other towns.
▪ Put any high density needs at Football College
▪ Sign Our Neigborhood Voices petition to rescind SB 9 and 10. This is a travesty. If I wanted to live in a condo or have neighbors peering in my windows, I wouldn’t have bought in LAH.
▪ Low income housing needs to be near transit routes. Multiple dwelling units need to be on flat areas, with wider roads for on street parking.

Town of Los Altos Hills Housing Element
Appendix B: Survey Results B-49
▪ Streamline the permitting process. Stop demanding weird easements for no good reason. I know someone who's spent more than a year without a decent roof on their house because the city can't permit things.
▪ The Pink Horse Ranch Property on Tepa is a vacant lot and would be perfect for multi-family housing
▪ The rural character of LAH is no longer popular with the current generation of home buyers. They are looking for modern conveniences that includes sewer connections.

As a result LAH is loosing out to its neighbors like Los Altos, Menlo Park, Palo Alto, etc. These cities have far higher housing density, yet higher real estate values than comparable homes in LAH. In order to protect the value of our housing stock, the City should keep this in mind and develop future housing policies accordingly. ▪ High density housing really doesn't belong in this town. We should work to protect the qualities that make this a desirable place to live. Trashing the town to drive down housing prices does a dis-service to those who live here. For many of us, our houses are our most valuable investment, posing a direct conflict between the financial wellbeing of existing residents and those looking to purchase. ▪ Ensure infrastructure can accommodate any increased population and/or density.

Current infrastructure (emergency egress, power, data, etc.) is questionable for existing population.
▪ Los Altos Hills has a town mandate to have one acre lots for a reason, SB 9 takes that away. I do not want more housing. We don’t have the water, parking or need for more traffic. Evacuation will become harder in case of Earthquakes or fires. ▪ This ADU/affordable housing issue does not take into consideration the fact that LAH is a rural community in a moderate to high fire risk zone, and the home to many species of wildlife. Additional homes/density will put even greater pressure on the Town's ability to 1) protect residents' safety, and 2) ensure we preserve our open spaces, natural habitats, and the ability for wildlife to travel in and around our town. ▪ Retain setback existing law
▪ Make the process easier. It should not take years to start projects. Planning has too much involvement; more work should be by-right.
▪ Keep Los Altos Hills as rural as possible.

Town of Los Altos Hills Housing Element
Appendix B: Survey Results B-50
Q14. Have you or someone you know ever encountered any of the forms of housing discrimination described above?
Answered: 440
Skipped: 98
Other Responses
▪ "affordable" is a relative term even if "Market rate" is prevented. Factoring in land cost and building codes we are 10X+ away from anything being 'affordable.' The debate needs to be numerical, location specific, transportation and services specific, consider risks like evacuations for fire and EQ. The ADU approach is OK on the surface but the implementation is way beyond reasonable costs. ▪ No. Why would you ask this question?
▪ Town won lawsuit against this, but now would lose, because they have violated all the tools once used to created a planned ultimate community ▪ I am tired of this survey at this point.
▪ I haven't but many people including a former president have been racially discriminatory.
0% 0% 0% 0% 4% 2% 5% 3%
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Town of Los Altos Hills Housing Element
Appendix B: Survey Results B-51
▪ Not here but definitely in another state where I lived. Here the prejudices seem most likely to be based on economic snobbishness.
▪ I have faced discrimination in trying to develop housing for people with developmental disabilities in many local communities. Never even tried Los Altos Orr Los Altos hills. We were discouraged right from the beginning. We also faced discrimination in Los Altos in trying to find school site for autistic students ▪ another bullshit question. These laws have been around for decades and every real estate agent has to know them.
▪ Real estate agent discriminating during open house and asking people to leave ▪ BS question- there is no discrimination in LAH.
▪ Realtor jacking up prices to keep buyers out.

Q15. Have you or someone you know ever encountered any of the forms of housing discrimination described above?
Answered: 263
Skipped: 273
6%5% 5%4% 4%2%
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4%

81.59% 83.12%

91.53%
Bay Area Santa Clara
County
Los Altos Hills
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In the last 2 years
In the last 5 years
More than 5 years ago
Not applicable. Not aware of
any discrimination

Town of Los Altos Hills Housing Element
Appendix B: Survey Results B-52
Q16. Please check all of the following forms of housing discrimination that you believe are occurring in Los Altos Hills.

Answered: 359
Skipped: 179
Other Responses
▪ All of the above are possibilities
▪ I don't know
▪ We have a terrific mix of people here by background and income. I'm a "white" minority.
▪ Wealth - are you an all-cash offshore buyer with no intent to live in or contribute to LAH
▪ I do not know
▪ I would be very surprised if there is no discrimination taking place (why I did not mark that box), but I am not directly aware of any specific examples. ▪ Not aware of any discrimination
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Town of Los Altos Hills Housing Element
Appendix B: Survey Results B-53
▪ affordabilty would seem to be the larger issue here
▪ No knowledge or comment
▪ We all know, it's all about having the money to live here ▪ B
▪ Arrogant staff
▪ I have no idea about this question.
▪ None experienced or know of such case.
▪ Wealth
▪ No programs to welcome any of the above, especially people with developmental disabilities
▪ Amount of income
▪ There probably are all kinds of discrimination but I have no experience with any specific incidents.
▪ I am not aware of any discrimination
▪ There is an inherent discrimination against low education and low income. ▪ Unknown
▪ Do not know
▪ Just what you hear
▪ I’m sure there is discrimination. But it’s $$.
▪ I don't know
▪ How would anyone know?
▪ Income/assets
▪ I am always amazed when I walk through town by the diversity of people.

Town of Los Altos Hills Housing Element
Appendix B: Survey Results B-54
▪ We are not a socialist country and some locales (such as LAH) have more expensive property. . . .this is not discrimination. Anyone who can afford to live here is welcome.
▪ None
▪ high costs of housing has priced many groups out of LAH ▪ If it is here, then it is every where
▪ I don't know of any, but I bet there is.
▪ prior to passage of SB8&9, local zoning laws prevented a majority of people from ever living in LAH
▪ I don't know anyone.
▪ DISCRIMINATION AGAINST PEOPLE WITHOUT LARGE INCOMES.
▪ The only discrimination I know of would be economic.
▪ dont know if there is or isnt, such a broad question! ▪ LAH is accessible only to high net worth people.
▪ The only barrier to entry is $$. Anyone with $$ can buy in. ▪ Socio-economic status
▪ High cost of housing is discriminatory but I don't have any knowledge of discrimination based on the above categories.
▪ Income
▪ I have no idea but I see every possible ethnicity and race represented in the hills ▪ I don’t know
▪ wealth
▪ Since people are required to buy or rent two parking spaces for every unit of housing, anyone who does not drive is discriminated against

Town of Los Altos Hills Housing Element
Appendix B: Survey Results B-55
▪ just price
Q17. Please indicate whether you feel Los Altos Hills is: (Select one) Answered: 407
Skipped: 131
Other Responses
▪ ?
▪ I feel that Los Altos Hills is lacking diversity, but I think it is a function of housing cost rather than discrimination
▪ A meaningless question in the hills
▪ The town segregates low income people to other cities because of lack of housing choice in the town.
▪ Don’t know
▪ Never looked at the data but our community appears diverse as I walk abs drive around, and the students at Gardner Bullis appear fairly diverse.

Racially Segregated
(defined as a high
concentration of persons
of a particular race or
ethnicity in a particular
geographic area when
compared to broader the
Bay Area)
Racially Integrated
(defined as not containing
a higher concentration of a
particular protected class
such as race or ethnicity)
Not sure. (please specify)
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Town of Los Altos Hills Housing Element
Appendix B: Survey Results B-56
▪ LAH is segregated by income. Racially the Town is reasonably mixed, but nearly everyone has to have substantial assets, which excludes most Black Americans. ▪ LAH is class/wealth segregated. Because of compounding generations of wealth and race being intertwined, that means that LAH does not have the same racial make up of the as the rest of the Bay Area
▪ Don’t know the percentage of racial or ethnic groups in the town ▪ LAH has always been a great place for everyone to live no matter what race or religion , I hope it stays that way .
▪ Exactly how many African Americans live in LAH?
▪ The only obstacle is owning in LAH is having the income to purchase. Many residents have lived here for a long time and can afford to own. There is no racial segregation.

People don't care what race or religion a neighbor is. Neighbors don't go next door to "visit" but that's because people are not friendly inherently. If there are children, particlularly young children, neighbors are friendlier. Pandemics do not encourage ▪ I don't know the racial mix in LAH to answer
▪ Don’t the demographic comparison between LAH and the broader Bay Area ▪ LAH is segregated by wealth and all that that entails ▪ There are few underrepresented minorities
▪ lots of different nationalities here. Fine with me
▪ Have not experienced or seen racial lines
▪ Not sure
▪ It's segregated due to income of course
▪ NA
▪ don't know breakdown of residents
▪ Not sure means not sure.

Town of Los Altos Hills Housing Element
Appendix B: Survey Results B-57
▪ LAH is mostly white and Asian-American. It would be good to have more racial integration with the Black and Latino communities. (This is related primarily to broader structural issues of racism over generations and therefore different economic situations currently, rather than current overt racism regarding selling properties. However it would be better if our town was more racially integrated, such as with first responders, teachers and health care workers. ▪ Older white folks are set in their ways
▪ People that can afford to buy homes in LAH buy homes. Their race is not relevant. ▪ Very homogenous socio demographic
▪ I don’t know
▪ Definitely income "segregated" but not by race or ethnicity ▪ Segregated with regard to African Americans, not at all with regard to those of Indian or Chinese ancestry
▪ I have no information regarding the existing distribution of any protected calasses in LAH.
▪ There was not any report or news about this subject to learn more. ▪ Does this need to mean black? We are certainly multi racial. ▪ For new comers it is largely based on who can afford to buy a home ▪ Not aware of any incidents.
▪ Don’t know.
▪ walking the hills I see people from various ethnicities and coming from countries all over. The segregation is from affordability not a particular protected class. ▪ Not sure, but sense their is a high concentration of Whites and Asians, and a low concentration of Mexican Americans and African Americans. ▪ Los Altos Hills is economically segregated.
▪ I feel there are a few ethnicities represented, but not all.

Town of Los Altos Hills Housing Element
Appendix B: Survey Results B-58
▪ Segregated because of housing cost.
▪ I don't know enough about Los Altos Hills' history
▪ The high cost of homes has probably made us less integrated but it's a wealth restriction, not a race restriction.
▪ At first glance it seems none but when considering the Bay Area ethnic distribution, a slew to particular ethnic groups seems palpable
▪ Plenty of people from everywhere in India and China. I don’t see many other minorities and wish there were. Pretty verified up here. ▪ Not racial segregated but economic segregated
▪ Los Altos Hills "segregation" is simply on the basis of financial means ▪ LAH seems no more “racially segregated” than other very expensive areas. My impression is that “race” is not directly segregating; instead, income/wealth is the predominant driver. While race certainly related to $, misleading to call a $ problem a race problem.
▪ We might need more black people
▪ How would I know?
▪ Don’t have data
▪ Don’t have demographic data
▪ Everyone in LAH seems to be well eduacated, nod from all over the globe. I don’t care about what ethnicity anyone is!
▪ None apppy
▪ Not relevant unless income is considered
▪ the town is white and asian
▪ I haven't seen any data on this so my narrow observation of the community I don't believe is a good indication to draw a conclusion.
▪ I have not identified such at all.

Town of Los Altos Hills Housing Element
Appendix B: Survey Results B-59
▪ Segregated economically, which has unequal racial representation. ▪ Race is factored into income and LAH is a fairly high income community. ▪ Discrimination can be subtle
▪ How would a citizen without city-wide statistics know? ▪ don't see a issue for now
▪ It seems like there is a high concentration of two races: White and Asian. ▪ Affordability is the issue. Not everyone can live in Los Altos Hills. We don't want our environment to be destroyed.
▪ LAH is a very expensive and unusual town. The demographics make it impossible to achieve any "conventional" standard of racial integration. One can't compare LAH to Portland or Detroit. Living in LAH is self-selected for those who can afford it.

There is no inherent racial bias in that selection beyond the extraordinary demographics of who can afford LAH. Clearly those who have the resources to live in LAH may not appear racially neutral. But for people any race that have access to those resources, I don't see LAH as being discriminatory. ▪ .
▪ In a community like LAH each one lives in their own silo, concept of segregation is not valid.
▪ This is stupid. Is California mandating that you do this? ▪ LAH is home to several groups -- white, AAPI -- but few Hispanic and Black residents.

I believe the primary reason for discrimination is income based but it does create a racially segregated community.
▪ How would I know?
▪ None of the above
▪ jhgljglgj
▪ Certain races dominate but it is more than one

Town of Los Altos Hills Housing Element
Appendix B: Survey Results B-60
▪ Any disparities in racial concentration is most likely due to disparate economic situations than any sort of discriminatory actions.
▪ Unsure of the latest data for "Broader the Bay Area" [sic] above ▪ Don't know where people live
▪ few black---- many Asian
Q18. Have you or someone you know ever seen or been involved with a property that included a racial covenant?
Answered: 436
Skipped: 102
Other Responses
▪ It was ignored, but existed in the covenants in a home I used to own in a neighboring city.
▪ When I lived in Virginia near Washington DC.

No Yes, please describe below:
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Town of Los Altos Hills Housing Element
Appendix B: Survey Results B-61
▪ Disgusting to see this during title insurance paperwork for Los Altos Hills home purchase
▪ my home has an outdated racial covenant in the original CCR's attached to the property.
▪ Yes in ours.
▪ Our home on the buy cycle. The HO association is not even active ▪ I think our deed has a racial covenant and I want to get rid of it! ▪ Racial covenant in previous home in Los Altos. It was accompanied by a document stating the covenant no longer applies, but this was still very insulting to my Latina wife. We should no longer provide these covenants when one buys a home - don't even show them. Hopefully this is no longer done.
▪ In San Mateo, there are old covenants that still remain regarding race. ▪ Just read Palo Alto Title Reports. Shocking Racial Covenants. ▪ Yes, in a Sunnyvale property, but I knew it was unenforceable ▪ Everyone ignores such provisions in my experience.
▪ Old Redwood City house
▪ Almost every property on lah restricts race. Since these restrictions are illegal, everyone ignores them
▪ Before I bought it, my property was in a white-only covenant, but this was clearly negated by the time I purchased in 2003
▪ I believe Redwood City has such a covenant and it is no longer applied but does exist. ▪ The property I had in Los Angeles had such a covenant on it, from the 1920s, i think. ▪ A friend - in Sunnyvale
▪ Purchased a home with a racial covenant in the past
▪ it is in our deed dating back to 1935, but those sections are no longer valid

Town of Los Altos Hills Housing Element
Appendix B: Survey Results B-62
▪ Home purchased in Los Altos had a covenant
▪ As a youth in San Francisco they had CC&R's that were discriminatory...but none of my neighbors abided by them.rs
▪ Covenant in property deed in East Bay
▪ On a old deed to our property. Of course, not valid anymore. ▪ Co-worker’s house had one. Tried to get it removed but couldn’t change history. ▪ Some homes in the City of Santa Clara have unenforceable restrictions by race ▪ Every house I've bought still has racial covenants in the title, they just aren't enforceable anymore so we ignore them
▪ See below on #19 response
▪ Our home was subject to a racial covenant — the cover document was stamped with a notice that invalidates it due to the 1968 Fair Housing Act. ▪ my own CCR's indicate that people of color cannot own my own property. obviously, my CCR is outdated and needs to be thrown out.
▪ Fremont Hills Country Club
▪ A house we owned in another county that was built in the 1940s ▪ Not uncommon for older properties, especially in exclusionary areas ▪ was on a house we owned, but they are unenforcible
▪ When reaching Pathway Easements we found such language. ▪ Yes, deed had racial covenant even though real estate agent confirmed that it was no longer legal. Even being exposed to a defunct racial covenant was highly distasteful.
▪ Palo Alto house
▪ current deed has racial covenants

Town of Los Altos Hills Housing Element
Appendix B: Survey Results B-63
Q19. Have you or someone you know ever experienced discrimination with the purchase or rental of housing?
Answered: 431
Skipped: 107
Other Responses
▪ Our agency serves over 10,000 individuals/year and many face discrimination in rental housing
▪ landlords discriminating against children living in apartments ▪ For many years I worked as an attorney and checker for project sentinel and Midpen citizens for fair housing so saw many .
▪ In the 70s on East Coast
▪ It is common practice to provide a letter to the homeseller when buying a house, especially if the house is a hot property. The white family usually wins if the seller is also white.

No Yes, please describe below:
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Town of Los Altos Hills Housing Element
Appendix B: Survey Results B-64
▪ Yes, I have in-laws who grew up in an area of the East Bay where there were designated "Asian neighborhoods" and realtors would not show homes to Asian families outside out of those neighborhoods.
▪ Asian Senior Client: Called Zillow re: a SFH rental. Zillow Agent ignored her, but immediately picked up after my VM. We concluded it was her accent. This happened in past 3 months.
▪ Black friend was told on phone rental available and when he went to the door was told it was already rented
▪ Growing up on Chicago’s North Shore
▪ It was in another state
▪ Trying to develop housing for people with developmental disabilities ▪ No thanks
▪ I had a property in Los Angeles that had such a covenant, against blacks & Asians.

Ironically, the neighborhood is primarily black & Asian now. ▪ Rental housing in SF
▪ When bought in lah a decade ago
▪ Rental in SF
▪ In San Francisco over 20 years ago.
▪ Tax man
▪ In Phoenix, AZ
▪ Steering toward majority asian neighborhoods
▪ When we were building our house, one of our neighbors came to our public hearing and made negative comments on how their family wished their white family friend would have bought the property instead.
▪ as a Stanford college student, my roomates and I experienced discrimination renting in Palo Alto.

Town of Los Altos Hills Housing Element
Appendix B: Survey Results B-65
▪ A black friend (single woman) had a hard time finding an apt. in SF. ▪ They were not rented to due to ethnicity.
▪ Income discrimination against voucher holders
▪ I know of younger families—all of South Asian descent—who were denied the opportunity to rent because they had multiple children
Q20. Please share any comments or recommendations that will help Los Altos Hills meet our fair share of housing needs of at least 489 units over the next 8 years (2023-2031) including 279 units that are affordable to low- and moderate-income households.

Answered: 166
Skipped: 372
Other Responses
▪ I think upzoning and actively encouraging and helping homeowners divide and renovate their properties and build ADUs could help get us our market rate units, but the affordable units would likely have to be new construction using a combination of public and private funding.
▪ I rent out rooms at below market rate to two tenants, but this “doesn’t count.” Work with the state to refine their definitions of “units.” (The rooms both have private bathrooms and shared kitchen access)
▪ Traffic problem needs to be addressed
▪ With about 3500 SF homes, you could likely do what you need with more ADU's. To get the price down you will need to have a fast pad approach - x slope can have y design for a foundation. Use your satellite and GIS to survey the place. Eliminate anything over 10% slope - cannot economically grade that or safely navigate it.Provide a bonus to a homeowner to design, designate. For properties that were sub LAH, country, or in a grey area, i.e. impacted by 280, consider relief on setbacks for something well engineered. Consider prebuilt - fly in housing modules. Crane or aircraft.
▪ Don’t want low cost housing in the hills. Not the place for it.

Town of Los Altos Hills Housing Element
Appendix B: Survey Results B-66
▪ We're a town of rich white, Indian, and some Asian families. Would love to see us contribute meaningfully to helping teachers, nurses, firefighters, police, all have access and integration into our lovely community.
▪ Partnering with neighboring cities may be a way, also looking at land next to schools/fire stations for housing for local workers in low and mid-incomes. ▪ Make it easier for homeowners to get permits for Duplexes, Lots Splits and ADU's ▪ Streamline permitting. Upzone. Offer city-owned sites to nonprofit housing developers.
▪ We cannot just open applications for the low income units to "friends and family" of LAH. They will look so similar to the current demographic. I hope outreach is done to open applications to the wider bay area region-- so many people would love to live here if they could afford it!
▪ I do not think so
▪ Less restricted zoning to help alleviate housing shortages. ▪ 1. Allow taller buildings. Tall buildings are not evil. They can be beautiful and can hold lots of people. 2. Stop dragging your feet on approving buildings. It should not take years and years to get a design approved. 3. Stop trying to design all the buildings yourself. Let people design buildings how they want to. We do not need building beauty police. 4. Allow smaller lots.
▪ As stated above this is a bogus requirement. What defines affordable ? Low end? Moderate?
▪ Low and moderate-income households must be tied to creation of a "Margueritetype" bus that can take them or others to downtown Los Altos and/or El Camino and the train station.
▪ Please think creatively about finding housing solutions for teachers & first responders...we need them in our community and not commuting from over an hour away! Simply having people build ADUs does not mean that they will rent them out. Some sort of multi-unit housing is necessary to support this need. ▪ Buy land near transportation and build lower-cost, higher-density housing. Increase property taxes on existing homeowners if necessary to fund.

Town of Los Altos Hills Housing Element
Appendix B: Survey Results B-67
▪ Please discourage as much as possible the subdivision of 1 acre lots. I'm concerned that the rural feel of Los Altos Hills will be destroyed by SB 9. I think the best way to build the 489 units is through encouraging small ADUs for young adults who are lowincome and multigenerational families with retired family members who can live in the ADUs, who are also low-income. If necessary, allow institutions in Los Altos Hills to build multiplex units on their property, which is already zoned nonresidential. I don't support allowing developers to subdivide single family home residences and residential properties, thus ruining our beautiful town of Los Altos Hills!! ▪ Dorms for college students at Foothill College. Eliminate property taxes for 8 years and more people can afford to build an ADU. Fund the ADU ▪ Need to build multi-unit apartment/condo buildings with high proportion of affordable units. Current new development in downtown Los Altos currently includes 2 or 3 affordable units, that is not enough
▪ See above for making ADUs simple, no-fee, supported by Town, etc. ▪ Please build higher density housing close to schools, public land, and close to bus stops and busy streets like Arastradero. It is difficult to build housing since we have many areas that are in protected ecological sites that are prone to fires. We also need to ensure that every unit has access to two parking spaces to avoid cluttering streets.
▪ Multi family housing on the Okeefe open space property left over from the construction of 280
▪ Building 6 Story High Density adjacent to Freeway or on Foothill Corridor.

Additionally, build High Rise (shocking I know) on El Camino Real. Make these darn units ONE STORY w/ elevators so local Seniors can live in them without fear of falling on stairs or being isolated by stairs.
▪ Fight SB 9. The financial ability to live in expensive neighborhoods is a privilege based on wealth, not a right. Allow more ADUs, but resist lot division. ▪ Please join Our Neighborhood Voices. Also consider subsidies for qualified workforce (first responders, teachers).
▪ I do not believe the government has the right to dictate housing to any community, including Los Altos Hills. It should be up to the community on how they wish to structure living options. I do not believe Los Altos Hills should be subject to building

Town of Los Altos Hills Housing Element
Appendix B: Survey Results B-68
structures or pricing such structures that are not in alignment with market forces for this area.
▪ Building apartments on Foothill College property for students and faculty. Housing for town staff in town hall property. Turning Pinewood School into afforadable housing for teachers and first responders who service Los Altos Hills. ▪ It is very hard to be optimistic about meeting these mandated goals . I imagine that whatever degree of success that is to be achieved will result from actions taken by individual proprty owners responding to changes in statute and town zoning . ▪ Encourage the building as many ADU dwellings as would meet the quota. Many people may like to move their aging parents in. Could also provide housing for students or local workers with lower paying jobs.
▪ Rezone the Deer Creek area away from business to residential and allow condos to be built where we currently have Tesla, etc. These are areas that can be accessed by public transit and will not impact the rural feeling of other areas of our town. ▪ Use whatever tactics necessary to resist the state in taking over planning for LAH ▪ More ADUs seems like the least disruptive way to do this ▪ I would start by helping existing home owners make expanded or better use of their existing homes and helping home owners create ADUs. Developer driven multi unit housing dilutes the value of the town.
▪ Multi unit housing near freeways and neighboring communities ▪ I believe we all want the beauty of the housing to match the beauty of our natural environment. Garden apartments and townhomes, if properly designed, could easily meet that desire. Like the senior residential homes at the Forum San Antonio ▪ Permitting process is onerous. Particularly with regards to County Fire Dept requirements. Process needs to be less bureaucratic, less time consuming. ▪ Why not put together a deal with another town that has more property available for low income housing.
▪ Reduce setbacks (both side and front) for ADUs. Don't take forever to approve permits.
▪ consider tax policy

Town of Los Altos Hills Housing Element
Appendix B: Survey Results B-69
▪ Hey Siri is getting very boring.
▪ Building more at Foothill College and at religious institutions. ▪ Some multi unit buildings, limit lot size to one acre if single family home ▪ Tax businesses that need to hire the folks that need low-income people ▪ This would be a mistake to add more traffic, more people, and more construction to a bucolic town
▪ Suggest home owners built homes for their married children and sell or re t to them to keep them from moving out of the area for affordable homes. ▪ Only consider areas that already has appropriate infrastructure, roadway, power grid, water, etc. Or seek public funds to remdy them prior to development. ▪ Los Altos Hills should allow condos to be built
▪ Bulldoze the NIMBYs houses
▪ Is there a large plot of land on which a community can be built? Something like The Forum at Rancho San Antonio?
▪ We need to do a better survey of the numbers actually living here, such as in adu's or mini-adus. I don't think the town knows. But do it nonpunitively or it will have the wrong effect. Otherwise ease construction, permitting, inspection (etc) requirements on edus.
▪ who are going to pay for those units?
▪ Shared above
▪ See Question 12, Other.
▪ We do not need these units already have an over supply of new apartments . Utilize them first
▪ No subdividing lots
▪ Overturn SB 9

Town of Los Altos Hills Housing Element
Appendix B: Survey Results B-70
▪ Do an economic and environmental impact study - Excessive building of this nature is not sustainable.
▪ FIle suit against the state. Ignore the mandate.
▪ Allow development of housing for people with developmental disabilities. Or work with Los Altos to develop appropriate housing. These individuals come with services that allow them to participate in the community very nicely ▪ None
▪ ease county septic requirement based on number of bedrooms ▪ The "fair share" rhetoric is Communist propaganda.
▪ Encourage to build ADU or second family unit with limited property tax increase. ▪ Thanks
▪ Housing on baseball diamond. Or in another park.
▪ Allow property owners to build structures that meet their needs. ▪ The roads are too busy with commute traffic already - this will jam them up even more.
▪ In a capitalist country like the USA that runs on a market based system, I do not support the new SB passed mandates. Exception may be given to Emergency workers who need to be close to where they are called on demand to provide services. Creating affording housing them while they remain employed in that capacity as rental housing seems reasonable. This should be done in a manner that does not affect the overall character of the town.
▪ Even if we built more units, they certainly won't be affordable. The law is unrealistic ▪ Encourage ADUs by allowing those who are maxed out on development area and by lowering fees. Reduce fees on new/modified construction. ▪ Good luck with an unpopular and nearly impossible job. ▪ High housing costs have led to racial segregation

Town of Los Altos Hills Housing Element
Appendix B: Survey Results B-71
▪ ADUs and SB 9 units. I think the town should not discourage lot splits because the number and size of units affect the look of the community more than the number of lots. Lot splitting can help fund new homes, and generate property taxes for the town and schools.
▪ Make it easier and cheaper to build ADU's. Also, Foothill College has land used by the baseball and softball fields that can be used for housing. ▪ Resist the mandte. There is no public transport to support low income workers and the price of land makes the "fair share" impossible
▪ No thoughts
▪ Build apartments 4 stories at Dog Park and adjacent strip of land along the freeway ▪ We can ask people who own large lots if they’ll be willing to build an ADU if given some incentives.
▪ Building high density housing (apartments/townhouses/condos) near Foothill College since there is a bus line that comes up to the college and close access to 280 could be a possibility.
▪ Please ensure that the future residents have enough space to experience the beauty of the nature in LAH.
▪ Resist SB 9 and 10, but promote ADU's
▪ Student housing around Foothill & ADU's for the local workforce. Short term rentals make these two items less affordable.
▪ Whatever real estate developers ask for, do the opposite ▪ No idea
▪ I believe LAH and other cities can achieve these recommendations without imposing SB 9 on cities throughout CA!!
▪ Make ADUs and JADUs as easy as possible. Oppose non-market solutions. ▪ I am married in to living up here. It was a tough adjustment. But I know our neighbors now at least superficially. You have to define your community not by where you live. But the beauty and open space compensate.

Town of Los Altos Hills Housing Element
Appendix B: Survey Results B-72
▪ Define "fair share."
▪ Encourage people to build ADU
▪ no additional comments.
▪ ADU is the most sensible option
▪ Make the whole permitting process easier including connection to public sewer or septic approval. Construction during winter should be easier ▪ Provide incentives for adus.
▪ ADU anf if needed density near cities not up in hills ▪ Encourage ADU, Develop affordable housing for service personnel like police, fire service, city staff and teachers in city lands like schools etc. ▪ The best thing that we could do for ourselves (LAH) and for our fellow Californians, would be to contribute to a sustained effort to create more high-quality, low-cost housing in places where the the new residents would have access to the features that they value most...ready access to jobs, transportation, and vibrant local communities (think down-town Mountain View). Turning LAH into something that it isn't, and never really can be, is simply destructive, with no hope of providing the real housing relief that we all recognize needs to occur regionally. ▪ Join with other towns in the state to contest imposition of a statewide policy that ignores town’s safety and rural foundation
▪ It would be interesting to formulate a process for (anonymously?) identifying 'underground' low cost housing which already exists in LAH. ▪ I think beyond Foothill College as a potential site for dense affordable housing, the 41 acres below the old Fenwick Estate have significant potential for smaller 1 to 2 story homes (with 2 ADUs each) for multigenerational family housing. (Ladera in Portola Valley would be a good precedent project for the old Fenwick property.) ▪ ADUs have most potential without negatively impacting property values. Allowing elderly couples to move out of big main house into ADU will free up housing supply for younger families to rent larger main house - help meeting moderate income requirements and attracting new energy to the town

Town of Los Altos Hills Housing Element
Appendix B: Survey Results B-73
▪ I have lived here 60 years. Please don't let this happen to LAH. ▪ Give priority to those who have jobs within the immediate area or are essential to the functioning of our community.
▪ Encourage building of ADUs. Offer affordable to teachers in LAH. ▪ Amend SB 9 Emergency Ordinance to be less restrictive ▪ LAH either needs more land or needs to convert public lands to multi-use affordable housing units or acquire lands that are available currently outside of LAH. Since LAH has no business properties available to rezone, the State mandate should not apply when land is not available. Open space MUST be protected! ▪ The Foothill college parking lots are perfect for dense market rate and truly affordable housing units.
▪ Pursue initiative to maintain local control over housing ▪ Locations with easy access to town, freeways, etc would best serve families & elderly. ▪ got to do it and i support doing it- suspect one approach is not the way to go ▪ Good luck.
▪ Used land that is an owned by private people
▪ I am all for this, but don't do it in a woke manner.
▪ "Fair" is a fake word in this context. It is highly political and smarts of campaign contributors idea
▪ No comment
▪ This is not a reasonable demand by the state.
▪ not an affordable area for this discussion. cut taxes since we get no benefite. ▪ See comment above regarding providing funds for multi-family in nearby cities. ▪ Good luck. With lots worth 6M an acre, it would be impossible to to create something afforable that someone could buy.

Town of Los Altos Hills Housing Element
Appendix B: Survey Results B-74
▪ i like the idea of allowing rental units on existing properties with certain requirements to uphold community standards
▪ ADUs
▪ Can the town do anything to prevent/limit a property tax re-assessment when adding an ADU?
▪ Like the idea of concentrating units at FH college to meet a real need but also keep LAH values intact
▪ Require ADU construction for major remodels and construction of new homes. ▪ Ideas listed in the previous page are good ideas
▪ Check all nonprofits in the area. How are they assisting employees? ▪ make it easy to build ADU, find a designated land to build condo as affordable housing
▪ Lot-splitting would be a death-knell to the relatively tranquil, rural feel of our community. So, my hope is that our institutions, particularly Foothill College, but also other schools, religious institutions, Hidden Villa, Fremont Hills Country Club, the fire department, LAH Town, will step up to create 2/3 of the necessary units. And that homeowners will do the rest with ADUs or homes remodeled into duplexes. I think we should go for the low-hanging fruit this cycle as we don't know how the winds will blow 8 years from now.
▪ Since 99.9% of LAH residents are white, the questions seem self-fulling. Whites haven't faced discrimination in LAH!
▪ Very excited that LAH is supporting more housing!
▪ In a high real estate cost town like ours, the only way to do so is based on deed restrictions and tax benefits to developers as incentive. Tax all parcels in town to fund rebates to deed restricted affordable housing units. ▪ repeal SB 9
▪ If any additions it should be for small inlaw type units. These could either be rented or used by family or caretakers. I am very against additional housing on LAH lots.

Also, just because the housing becomes affordable, everything else in LAH is

Town of Los Altos Hills Housing Element
Appendix B: Survey Results B-75
expensive, from water to garbage. People need to be have the economic means to live in their neighborhood.
▪ Avoid lot splits!
▪ WHILE ALLOWING THESE MULTIDWELLING LOT SPLITS THE TOWN SHOULD WORK

WITH A PUBLIC AGENCY THAT WILL OVERSEE , CONTROL AND MONITER THAT THES

NEW DWELLINGS ARE INDEED BEING INHABITED BY LOW AND MODERATE INCOME PEOPLE. OTHERWISE THE ULTIMATE JOKE WILL BE THAT THE ABOVE 489 UNITS END

UP WITH VERY HIGH RENTS OR RESALE PRICES PAID BY THE VERY WEALTHY PEOPLE THAT THE LAW IS TRYING TO AVOID! A LAH ADDRESS WILL GIVE INSTANT APPRECIATION TO ANY FOUR PLESX OR ADU CONSTRUCTED. THIS IS THE ULTIMATE FLAW IN THESE GOVERNMENT OVER REACH LAW!!
▪ Identifying a site to build ~500 units will be a major problem. Nothing is near transportation, so one might argue that this is a bad plan. Can the house contribution be outside the township on the basis that LAH is inaccessible. Clearly some large space closer to major roads (along 280 or Arastradero?) would be best.

No one would want to give up a major park space or try to displace Poor Clare's.

This is alot of units and would increase the population of LAH by 1500-2000 people (18-24% of the current 8500).
▪ Develop public owned land.
▪ Build high density housing on Foothill College property ▪ Amend property tax assessment laws
▪ Make it easier for more buildings to be developed. The frictions are very painful. ▪ Fight this NOW! Join other towns in fighting this.
▪ Housing in the bay area is very expensive. Putting high density housing in a rural area makes no sense. It should be near public transit and where there already is high density.
▪ Most discrimination happens discretely and is not obvious ▪ high density housing near mass transit
▪ California is saying we are running out of water and to conserve on one hand and then telling us to have more people move in to consume the same water on the other.

Town of Los Altos Hills Housing Element
Appendix B: Survey Results B-76
▪ Let us build JADU's outside of MFA and in 30' setbacks. ▪ Find a lot of land that can have low income apartment housing. ▪ The absence of apartments in LAH is discriminatory. Having only multi-million dollar mansions means that LAH is disproportionately inaccessible to BIPOC, femaleheaded households, people experiencing homelessness, etc. Legalize apartments! ▪ set specific target to add 50 ADUs per year for next 5 years; maintains rural character while adding housing
▪ Use of Foothill College vacant land.
▪ Focus on our local service providers
▪ No public hearings for anything
▪ There's no chance of even making a dent in that goal if the sentiments of the planning office and city council don't dramatically change. LAH's SB 9 emergency ordinance is a perfect example of how the city is fighting tooth and nail against any opportunity for new housing. Stop thinking about property values and density. The "I've got mine" attitudes have to shift. There is a middle ground that will benefit the greater good.
▪ provide student housing at Foothill College
▪ None
▪ Keep us out of this mess.
▪ It is not a fair share.
▪ There are local laws that make housing unaffordable. You could fix them if you wanted to. It's not a mystery.
▪ Look at any vacant lot as a prospective multi family housing development ▪ We will need access to public sewer first before we can attempt this level of housing density. So the City needs to figure out a plan to increase access to this critical utility. ▪ LAH needs to be brave about meeting this need. It can’t try the tricks that of places (see Woodside trying to declare itself mountain lion habitat to avoid SB 9 projects).

If LAH doesn’t take this process seriously, the state will enact more incisive

Town of Los Altos Hills Housing Element
Appendix B: Survey Results B-77
legislation. If we do the Housing Element well, we can improve our tax base without further taxing ourselves
▪ Re-zone 2 acres near a border, build garden apartments and put them all under section 8. Near public transportation.Don’t subdivide the whole town. ▪ Build, build, build. Supply needs to go up fast.
▪ Continue to lobby lawmakers to repeal this requirement under certain conditions. ▪ maybe build apps at Foothill college
▪ Allow more housing, the bay area needs it, every town in the bay area needs to do its part to encourage new and more housing.

Town of Los Altos Hills Housing Element
Appendix C: Owner, Developer Interest C-1
Appendix C: Owner, Developer Interest
This Appendix contains the following materials that documents and demonstrates RHNA site owner and developer interest, and other relevant evidence and support for development of housing on LAH RHNA sites and similar projects in the region.

Contents:

1. 2021-2022 Foothill-DeAnza Community College Board priorities

Town of Los Altos Hills Housing Element
Appendix C: Owner, Developer Interest C-2

Town of Los Altos Hills Housing Element
Appendix C: Owner, Developer Interest C-3

Town of Los Altos Hills Housing Element
Appendix C: Owner, Developer Interest C-4

Town of Los Altos Hills Housing Element
Appendix C: Owner, Developer Interest C-5

Town of Los Altos Hills Housing Element
Appendix C: Owner, Developer Interest C-6

2. Recommended Projects for the 2021-22 Higher Education Student Housing Grant Program Appropriation

Town of Los Altos Hills Housing Element
Appendix C: Owner, Developer Interest C-7

Town of Los Altos Hills Housing Element
Appendix C: Owner, Developer Interest C-8

Town of Los Altos Hills Housing Element
Appendix C: Owner, Developer Interest C-9

Town of Los Altos Hills Housing Element
Appendix C: Owner, Developer Interest C-10

Town of Los Altos Hills Housing Element
Appendix C: Owner, Developer Interest C-11

Town of Los Altos Hills Housing Element
Appendix C: Owner, Developer Interest C-12

Town of Los Altos Hills Housing Element
Appendix C: Owner, Developer Interest C-13

Town of Los Altos Hills Housing Element
Appendix C: Owner, Developer Interest C-14

Town of Los Altos Hills Housing Element
Appendix C: Owner, Developer Interest C-15

3. Letter from Foothill to Town acknowledging affordable housing needs and affirmative steps (Updated correspondence).

Town of Los Altos Hills Housing Element
Appendix C: Owner, Developer Interest C-16

Town of Los Altos Hills Housing Element
Appendix C: Owner, Developer Interest C-17

Town of Los Altos Hills Housing Element
Appendix C: Owner, Developer Interest C-18

4. Examples of faith based and educational institutions are pursuing lower-income housing development across the region and state.
a. Casa del Maestro - Santa Clara County, 30-unit affordable housing project located on a 2-acre underutilized portion of Stratford Elementary, developed through a public-private partnership with the Santa Clara Unified School District.
b. Bethel African Methodist Episcopal Church - San Diego, CA. Yes In God’s Backyard is building 16 units of affordable housing on-site to support seniors and veterans with disabilities.

Town of Los Altos Hills Housing Element
Appendix C: Owner, Developer Interest C-19
c. Cañada Junior College - San Mateo County. Developed apartment complexes on underutilized parking lots on campus.

Town of Los Altos Hills Housing Element
Appendix C: Owner, Developer Interest C-20
d. College of San Mateo - San Mateo County. Developed apartment complexes on underutilized parking lots on campus.

Town of Los Altos Hills Housing Element
Appendix C: Owner, Developer Interest C-21
e. College of the Canyons – Santa Clarita, CA. 100 new single-bedroom affordable housing units were constructed on former parking lot on the COC campus. The Department of Finance approved the CCD for 100 student housing (per 3/1/22 Dept of Finance memo)

Town of Los Altos Hills Housing Element
Appendix C: Owner, Developer Interest C-22

5. Letter from Foothill to Town acknowledging affordable housing needs and affirmative steps (Updated correspondence 12-2-2025).

Town of Los Altos Hills Housing Element
Appendix C: Owner, Developer Interest C-23

Town of Los Altos Hills Housing Element
Appendix C: Owner, Developer Interest C-24

5. Letter from property owner of 27690 Arastradero Rd to Town to request multifamily residential rezoning with commitment to build affordable housing in the next 8 years.

Town of Los Altos Hills Housing Element
Appendix C: Owner, Developer Interest C-25

Town of Los Altos Hills Housing Element
Appendix C: Owner, Developer Interest C-26

Town of Los Altos Hills Housing Element
Appendix C: Owner, Developer Interest C-27

1 6
th CYCLE

HOUSING PLAN
Town of Los Altos Hills
2023–2031 Housing Element
Adopted January 30, 2023
Technical Revisions In Response to March 17, 2023, HCD
Review Letter:

April 10, 2023, April 20, 2023, May 12, 2023
Amended December 2, 2025
Adopted December 9, 2025
Amended January 30, 2026
ITEM 2A, Attachment 2

Town of Los Altos Hills Housing Element
Affirmatively Furthering Fair Housing 141
HE Programs or
Other Activities Specific Commitment Timeline Geographic Targeting 2023 – 2031 Metric The overlay multifamily zones and any
future zones will allow for a variety of
uses as identified in the constrains
analysis of the Housing Element. This
includes allowing for multifamily housing,
SROs, and transitional and supportive
housing as required by state law.

The Town will conduct a mid-cycle review
of development progress and the
effectiveness of the new zone in 2027.

The review will address the availability of
sites, progress toward development and
likelihood of residential development.

Should the mid-cycle review or a
subsequent review in 2029 find that the
zone and sites are not effective in
facilitating residential development in the
planning period, the Town will either
identify additional incentives for existing
sites, or identify and make available
additional sites for multifamily
development for and complete the
overlay zone or rezoning within one year.

Program A-6:

Inclusionary
Housing Ordinance
Conduct an inclusionary zoning feasibility
study to identify appropriate inclusionary
requirements that will not constrain housing
The ordinance will
be adopted by Q1,
2026
Town-wide
With a determination of feasibility
based on inclusionary zoning
study, the Inclusionary Housing

Town of Los Altos Hills Housing Element
Housing Resources 203
rezone sites can be developed feasibly with market-rate rental products at the proposed maximum density of 24 dwelling units per acre (du/ac).

The feasibility study and owner interest in multifamily development of the non-vacant Twin Oaks and Foothill College sites demonstrates that the value of the land at 24 dwelling units per acre with the proposed multifamily zoning is far greater than the existing value of the land improved with a single family house for two of the three lots on the Twin Oaks rezone site and the surface parking lots on the Foothill College rezone site. The two existing singlefamily homes will be removed and replaced by up to 92 new multi-family homes on the Twin Oaks rezone site. Further, an analysis of multifamily projects constructed since 2020 in the region demonstrated that projects constructed on former single-family residential properties averaged 3.6 times more dwelling units than those that were replaced. At a permitted ratio of 45 new multifamily units to each pre-existing single-family unit, the Twin Oaks site will allow 12.5 times the recent industry average in the region, proving that the existing units are not a constraint on future development. The existing surface parking lots on Foothill College will be replaced with new multifamily housing and parking for the new dwellings and replacement of parking for the college uses if needed. There is excess parking for the college uses. Spaces can be eliminated without direct replacement, relocated to other underutilized parking areas, or directly replaced with the construction of new surface or structured parking spaces, if needed.

The construction of units that are affordable to lower-income households is achievable with traditional affordable housing funding mechanisms, such as Low-Income Housing Tax Credits (LIHTC).

Table 66: Lower-Income Site Capacity
Category Units % of Lower-Income RHNA
Low and Very Low Income RHNA 197 100%
50% of Low and Very Low Income RHNA 99 50%
Total Lower-Income Households Units Provided: 129 65%
Lower Income Projected ADUs 96 48%
Lower Income Projected SB 9 + Associated
ADUs 9 5%
Lower Income Capacity - Vacant Sites 24 12%
Excess Capacity beyond 50% 30
The following discusses the non-vacant sites where overlay zones are proposed to allow for multifamily housing to meet the RHNA and housing needs.

Town of Los Altos Hills Housing Element
Programs 229
Number Title Action Responsible
Party
Funding
Source Timeline
and multifamily overlay zone with appropriate and
objective development standards and design guidelines
(see Program B-4B-4).

The overlay multifamily zones and any future zones will allow for a variety of uses as identified in the constrains analysis of the Housing Element. This includes allowing for multifamily housing, SROs, and transitional and
supportive housing as required by state law.

The Town will conduct a mid-cycle review of
development progress and the effectiveness of the new
zone in 2027. The review will address the availability of sites, progress toward development and likelihood of
residential development. Should the mid-cycle review or a subsequent review in 2029 find that the zone and sites are not effective in facilitating residential development in the planning period, the Town will either identify
additional incentives for existing sites, or identify and make available additional sites for multifamily
development for and complete the overlay zone or
rezoning within one year.

Quantified Objective: Provide adequate sites to
accommodate the Town’s entire RHNA allocation.

Selection of consultant by end of Q1 2023. Creation and implementation of multifamily housing zone and overlay
zone by Q1 2026, or as required by state law. Rezone

Town of Los Altos Hills Housing Element
Programs 237
Number Title Action Responsible
Party
Funding
Source Timeline
A-14
Backup and
Replacement Sites
The Town will continue to identify and maintain a list of potential backup and replacement sites, including a web page location where residents can volunteer their
properties for possible future rezone for future
affordable housing and inclusion in the duplex/triplex
conversion program (A-12).

Consistent with Program A-1, the Town will continue to
monitor the opportunity sites zoned for multifamily
development.

PBD General
Fund
Web page for
owners
operational by
Q3 2024
Concurrent
with the
timeline set
forth in
Program A-1
B. Constraint Removal
Number Title Action Responsible
Party
Funding
Source Timeline
B-1
Permit
Streamlining
Establish and implement expedited permit processing for affordable housing projects, including projects that qualify for density bonuses (in compliance with SB 35 and SB
330). Advertise the expedited permit process on the
Town’s website and circulate a notice with the Building Industry Association and Chamber of Commerce.

PBD General
Fund By Q1, 2026
B-2
Zoning and
General Plan
Densities
Amend the Zoning Ordinance to ensure that the
maximum density allowed the General Plan is achievable
(Housing Accountability Act/AB 3194).

PBD General
Fund By Q1, 2024

LEAGUE OF WOMEN VOTERS®
_ OF LOS ALTOS-MOUNTAIN VIEW AREA
February 2, 2026
Re: February 2, 2026, Agenda Item 2.A (Housing Element Amendment) Dear Mayor Bhateja and Los Altos Hills City Council:

The League of Women Voters (LVW) supports actions that increase the stock of housing and particularly affordable housing. It also supports meaningful public participation in land use planning.

The LVW is concerned about the lack of transparency regarding the proposed Housing Element amendment given the short three-day public review period, without review by the Planning Commission, and the City Council meeting being rescheduled a week early with only one day's notice.

The LVW remains concerned that Los Altos Hills is unlikely to meet its housing needs allocation without a multifamily project that can begin construction within the Housing Element cycle. The property owners of the sites identified for multifamily uses have not committed to build in the way listed in the Housing Element Amendment. For example, St. Nicholas remains disinterested in changing the current use of its property and was granted a ten-year extension of its non-housing use in January. Twin Oaks has proposed projects that are not consistent with the proposed amendment. While FoothillDe Anza Community College has expressed an interest in expanding housing, it has not committed to building housing on the Foothill College campus, much less by 2031.

The LWV is also concerned that the town is falling behind on its Housing Element programs. Specifically, E-10 (Incentives for Senior Development) and E-11 (Incentives for Lower-Housing Development) were supposed to have been completed by 2025.

Please send any questions or comments about this letter to Susan Russell, CoChair of the Housing Committee, at [email protected].

C: Jay Bradford
Planning Commission
s'.JMu ~ Katie Zoglin
President
Los Altos-Mountain View Area L VW
ITEM 2A, Supplement1

February 2, 2026
Town of Los Altos Hills
26379 Fremont Road
Los Altos Hills, CA 94022
By email: [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected] Cc: [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]
Re: Amended Los Altos Hills Housing Element, February 2026 Dear Los Altos Hills City Council,
The California Housing Defense Fund (“CalHDF”) submits this correspondence as a comment on the Town’s latest proposed amended Housing Element, calendared as agenda item 2 for tonight’s Council meeting.

The Town should abandon this Housing Element amendment. Town staff and the Council know full well that the St. Nicholas School and Foothill College sites will not be developed during the planning period. Additionally, under the proposed Housing Element amendment and accompanying zoning, the Twin Oaks site will not be developed either. And the entire purpose of this amendment is thwarting the first affordable housing in the Town’s history.

The Rezoning is Inadequate
See our October 16, 2025 comment letter on the rezoning attached.

In addition to this comment letter, we would like to reiterate that the floating zone (“FMFO”) is not a rezoning, as it requires a future legislative action. The Town will be failing to fulfill its commitments under the Housing Element Law if it relies on this action. 2201 Broadway, PH1, Oakland, CA 94612
www.calhdf.org
ITEM 2A, Supplement 2

The Town Cannot Amend the Housing Element Prior to HCD Review The Town adopted its Housing Element amendment on December 9th, 2025. According to the staff report, the amendment will become effective once HCD reviews and signs off on the amendment. This approach is a flagrant violation of procedures for amending housing elements required by state law. Government Code section 65585, subdivision (e) requires that:

Prior to the adoption of its draft element or draft amendment, the legislative body shall consider the findings made by the department. If the department’s findings are not available within the time limits set by this section, the legislative body may act without them.

The Town is required to submit the draft housing element amendment to HCD for official review at least 60 days prior to adoption to allow sufficient time for HCD to review and make findings as to whether the amendment complies. (Id. at subd. (b)(1)(A).) The Town has failed to comply with any of these required procedures. Instead, the Town is seeking to illegally rush through a poorly conceived amendment in order to thwart proposed housing developments under the prior plan.

Additionally, the February 2, 2026 amendment to the Housing Element is dated January 30, 2026. This is not the correct date, as the Council has not yet adopted the amendment as of the sending of this comment letter.

None of the Three Lower-Income Sites Will Be Developed
The Town knows full well that none of its three lower-income sites will be developed. See evidence below for information on why each of the sites will not be developed.

Foothill College and St. Nicholas School Sites
The Town is well aware that neither the St. Nicholas School site nor the Foothill College site will be developed. Together, these two sites account for 110 lower-income units of the Town’s total lower-income RHNA of 197 units.

During the City Council meeting of November 17, 2025, the Mayor stated that neither the Foothill College nor the St. Nicholas School Sites would be developed. At time 1:09 of the video of the proceeding, the Mayor made the following statement:

Foothill College has publicly declared that they will not be building any affordable housing there. They have actually bought a property in Cupertino 1 [sic] in order to
build housing. St. Nicholas School has gone on record to say that they will not be building anything there. So those two [sites] have not panned out. 1 Note: the College has actually bought property in Mountain View, not Cupertino, to build housing. 2 of 12

The Housing Element plans for 40 total units including 30 lower-income units on the St.

Nicholas School site. The Town’s Housing Element pretends that the Diocese will develop the school site: “The Town has been in contact with the school and received positive initial feedback regarding the potential for new housing at the project site.” (p. 209 of the Housing Element)
However, the Town knows full well that the Diocese will not develop the school, and this statement in the Housing Element misrepresents the owner’s intentions. From the attached CalMatters article on the Los Altos Hills housing element:

The Diocese of San José, owner of the [St. Nicholas School site], has “no intention of developing or selling” any part of the school, said spokesperson Cynthia Shaw. “Legal counsel clearly conveyed the Diocese’s opposition to the Town’s submission of the housing plan in 2022.”
The Diocese also clearly stated its opposition to being included in the housing plan in an October 14, 2025 letter to the Town:

The St. Nicholas School sites will simply not be developed during the planning period.

Regarding Foothill College, where the Housing Element calls for 210 units of housing including 80 lower-income units, the Town staff prevailed upon the College to write a December 1, 2025 letter expressing vague support, which is on page C-23 of the amended Housing Element. The pertinent paragraphs are below:

As part of our broader exploration of future housing opportunities, the District has welcomed the Town's interest in identifying the Foothill College campus in its Housing Element as a potential housing opportunity site. In 2023, the District provided correspondence expressing our willingness to remain engaged in conversations that support the Town's Housing Element goals while advancing the District's mission to improve the quality of life for our students, faculty, staff, and the surrounding community.
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We understand the Town is currently undertaking rezoning efforts that would create a multi-family overlay zone and establish associated development standards. While the District is continuing to review these planning efforts, we appreciate the Town's proactive work to expand regional affordable housing options. We are open to exploring how the opportunities envisioned in the Town's planning framework may align with the District's long-term goals for student and employee housing at the Foothill College campus.

These statements fall short of what the Town says they are. On page 278 of the Housing Element, the Town states, “As of November, 2025, Foothill College has expressed continued interest in residential development between 20 and 24 du/ac …” However, “exploring how the opportunities envisioned in the Town's planning framework may align with the District's long-term goals” is not the same as expressing “continued interest in residential development between 20 and 24 du/ac.” Given that the College purchased property (purchase agreement attached) in Mountain View to satisfy its housing requirements (as reflected by the Mayor’s statements and the attached CalMatters article), the December 1, 2025 letter from the College should be viewed as a noncommittal way for the College to maintain cordial relations with the Town, rather than an expression of genuine interest in housing development.

Furthermore, the College prepared an explicit comparison (attached) of developing its own property and the Mountain View development, and it found the Mountain View option superior and therefore elected to pursue that option.

Twin Oaks Sites
Under the amendment’s proposed zoning framework, the Twin Oaks site will not be developed either. This is because the site is more valuable with its current use, single-family homes, than as multifamily housing.

The brief market study produced by the Town is not worth the paper it’s printed on. Its primary assumption is that the sites are vacant and that land cost is therefore one million dollars per acre:
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However, the Twin Oaks site (or at least the remaining portion of it) is not vacant - it has been developed with single-family homes. The Zillow home index for Los Altos Hills is $5.6 million. Even assuming, as the Town avers, that the present homes are “tear-downs,” they should be priced as such, not as vacant land. Even an inferior home in Los Altos Hills is worth much more than vacant land. Research on real estate websites has shown that “tear-downs” sell for about $3.7 million an acre in Los Altos Hills.

If the feasibility study is adjusted to account for this difference in land value, then the residual land value (i.e. the profit) disappears, and the Twin Oaks site is no longer worth developing.

A representative of the landowner testified to that effect during the December 4, 2025 Planning Commission meeting. Furthermore, the owners of the Twin Oaks site submitted a letter to that effect (December 4, 2025 letter from Brian O’Neill to the Town), with the following instructive excerpt:

The development scenario proposed in the HEA is not a feasible development. The owners have previously informed the Town that due to site constraints, limiting housing development to lots 4, 5, and 6 of the Twin Oaks Court site would not be feasible and the owners are not interested in developing a multifamily project on these three lots.

The Town’s February 2, 2026 Housing Element amendment adds the following verbiage to page 203:

Further, an analysis of multifamily projects constructed since 2020 in the region demonstrated that projects constructed on former single-family residential properties averaged 3.6 times more dwelling units than those that were replaced. At a permitted ratio of 45 new multifamily units to each pre-existing single-family unit, the Twin Oaks site will allow 12.5 times the recent industry average in the region, proving that the existing units are not a constraint on future development.

This analysis does not convey what the Town thinks it conveys. Redeveloping single-family homes as townhomes or small lot single-family homes may be financially feasible, but redeveloping them as small-unit multifamily is likely not feasible. Furthermore, the 3.6 figure is an average: the dominant trend in redevelopment of single-family homes is that they are simply replaced by larger single-family homes. See attached a study commissioned by the City of San José demonstrating this dramatic difference in feasibility between townhouses/single-family home and podium-style multifamily construction.

In sum, none of the three lower-income sites will be developed during the planning period. 5 of 12

Failure to Provide Evidence That Existing Uses Will Be Discontinued Government Code section 65583.2, subdivision (g)(2), states:

In addition to the analysis required in paragraph (1), when a city or county is relying on nonvacant sites described in paragraph (3) of subdivision (b) to accommodate 50 percent or more of its housing need for lower income households, the methodology used to determine additional development potential shall demonstrate that the existing use identified pursuant to paragraph (3) of subdivision (b) does not constitute an impediment to additional residential development during the period covered by the housing element. An existing use shall be presumed to impede additional residential development, absent findings based on substantial evidence that the use is likely to be discontinued during the planning period.

The proposed amended Housing Element relies on nonvacant sites (the St. Nicholas school site, the Foothill College site, lots on the Twin Oaks site that include existing single-family homes, and lots with existing single-family homes on which the Town expects ADUs to be constructed) for 50 percent or more of its housing need for lower income households.

However, the proposed amended housing element does not provide the required evidence demonstrating that existing uses on these sites will not impede residential development.

What evidence currently exists in the record, as explained above, is not only inadequate to satisfy this requirement, it conclusively demonstrates that the existing uses on these sites will impede additional residential development.

The Proposed Overlays May Violate the Law
The Housing Element (p. 188) proposes to use zoning overlays to accommodate multifamily on the Foothill College and St. Nicholas school campuses. Zoning overlays leave a base zoning designation in place, allowing for developers to choose to build under the base zoning or under the overlay, usually allowing for greater density. This approach has been found to violate housing element law by the California Court of Appeal.

In New Commune DTLA LLC v. City of Redondo Beach (2025) 115 Cal.App.5th 111), the Court held that the use of a zoning overlay for housing element rezonings does not comply with the mimum density provisions of housing element law. (See Gov. Code, § 65583.2, subd. (h)(2).) In order to comply with minimum density, housing element rezonings must require that all new development include the minimum residential density mandated by state law.

Allowing uses permitted under the base zoning, such as underlying, non-residential uses, or lower density residential development, violates the minimum residential density requirement imposed by state housing law.
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The overlays proposed for the Foothill College and St. Nicholas sites were introduced by the Council on October 16, 2025. These overlays allowed the uses of the underlying Residential-Agricultural district (except for what is explicitly forbidden by code section 10-1.1608). Additionally, they expressly allowed the establishment of public and private schools.

Because the overlays allow for non-residential uses, they did not satisfy the minimum density requirements of state law. (See Gov. Code, § 65583.2, subd. (h)(2)). As the Court explained in New Commune, “the goal of the Housing Element Law . . . was not merely to require the identification of sites that could theoretically accommodate housing needs, but to encourage development to meet housing needs.” The Town’s proposed overlays therefore violate the binding precedent established by New Commune.

CalHDF notes that the proposed zoning has been adjusted to attempt to comply with New Commune:

The Floating Multi-Family Overlay covers the entire Foothill College campus. It seems highly improbable that Foothill College would have agreed to submit a tentative letter of interest had it known that all future development on its campus would be subject to a 50% residential requirement.

Additionally, the proposed zoning may otherwise violate the minimum density standards in state law because the proposed zoning excludes areas with steep slopes. (See page 202 of the Housing Element and the October 16, 2025 proposed rezoning.) The Town should be aware that the gross density of the sites must still meet or exceed 20 units/acre after the steep slopes have been excluded. (Gov. Code, § 65583.2, subd. (h)(2). 7 of 12

This is a Bad Faith Housing Element Amendment
Today, the Town has zero deed-restricted affordable housing units. The Town also has only 16 units of multifamily housing out of 3,180 units total, the vast majority of which are large single family homes built on minimum one-acre lots. With an average home value of $5.7 million, the Town is one of the most expensive and exclusionary jurisdictions in the state.

The Town’s Housing Element commits to rezoning the 15-acre Twin Oaks Court site to multifamily housing at a density of 30 units per acre. Subsequent to adoption of the Housing Element, a developer proposed a 593-unit, mixed-income, multifamily development on the site, which would create the Town’s first ever deed-restricted affordable units. This development would make major steps towards meeting the Town’s RHNA obligations and would reverse decades of exclusionary zoning in the Town.

However, it seems as though the Town has no intention of actually meeting its obligations under state Housing Element law. As soon as the development was proposed, the Town began the process of amending its Housing Element in order to cut back the Twin Oaks Court site as much as possible in order to stop the development.

The amended Housing Element would remove more than 2/3rds of the site and change the proposed zoning from 30 units/acre to 24 units/acre, while also excluding areas with steep slopes from density calculations. Removing more than 10 acres of the site, reducing the density from 30 units/acre to 24 units/acre, and excluding steep slopes (resulting in a buildable area of 3.8 acres) would change the total zoned capacity of the site from 450 units to 91 units (the produce of 24 units/acre and 3.8 acres), or actually less than the 92 units planned for the site.

Furthermore, the Town removed the vacant portion of the site, and the 4.5 acres of the site that remain include at least two single-family homes in addition to other structures. Given that these homes would have to be redeveloped (and the Town’s extremely high home prices), the Town is making development as unattractive as possible.

Given the timelines necessary for housing development, the fact that we are already two and a half years into the planning period, and its terrible history on affordable and/or multifamily housing, it is grossly inappropriate for the Town to carve back its most important low-income site.

Government Code Section 65583, subdivision (a)(3) requires that the Housing Element include (emphasis added) “An inventory of land suitable and available for residential development, including vacant sites and sites having realistic and demonstrated potential for redevelopment during the planning period to meet the locality’s housing need for a designated income level, and an analysis of the relationship of zoning and public facilities 8 of 12

and services to these sites, and an analysis of the relationship of the sites identified in the land inventory to the jurisdiction’s duty to affirmatively further fair housing.” The Town’s original housing element included additional capacity in the low-income site inventory to account for the fact that two of the three sites did not have demonstrated potential for development during the planning period. The Twin Oaks site, at its full size and proposed density, represented the only realistic possibility of low income housing development in the housing element. The Town’s actions will directly thwart the ability of the Twin Oaks Court site to redevelop during the planning period, and will result in a noncompliant housing element.

The Town should not amend its Housing Element in order to prevent a mixed-income, multifamily development that would fulfill so much of the Town’s RHNA and provide the first deed-restricted affordable housing in the Town’s history.

Amending the Housing Element Would Violate Fair Housing Law Local governments have an obligation under California to refrain from any actions that would discriminate against protected classes, or against the “intended occupancy of any residential development by persons or families of very low, low, moderate, or middle income.” (Gov. Code, § 65008, subs. (a)(3), (b)(1)(C), and (b)(2)(B).) In addition, both local governments and California state agencies are tasked with affirmatively further fair housing (AFFH), requiring “meaningful actions, in addition to combating discrimination, that overcome patterns of segregation and foster inclusive communities free from barriers that restrict access to opportunity based on protected characteristics.” (Gov. Code, § 8899.50, subd. (a)(1).) The obligation to AFFH works in conjunction with, and independently of, local government’s housing element obligations. Local governments are required to include a plan to AFFH as part of a compliant housing element, and are required to carry out this plan and other policies consistent with their obligation to affirmatively further fair housing. (Id., § 65583, subd. (a)(3), (b)(1).) By any measure, the actions of Los Altos Hills since the adoption of their current housing element, and these amendments to that housing element, fail to meet its fair housing obligations.

The Current Los Altos Hills Housing Element
Los Altos Hills’s current housing element was certified by HCD in late May of 2023, just in time to give the Town a full three years to complete the required rezonings of low income sites. The housing element contained a detailed discussion of the Town’s plan to AFFH. This discussion outlines how the Town was founded in 1956, eight years after the Supreme Court outlawed explicit racial covenants in its Shelley v. Kraemer decision, in order to preserve the “rural character” of the area. (2023 Housing Element, page 83, 122.) Many properties in the area contained racial covenants, and many still do today despite these restrictions being unenforceable. (pg. 122.) At the time of incorporation, the Town “required a 1-acre minimum 9 of 12

lot size and barred the construction of multifamily housing.” Not coincidentally, the Town maintains a sizable white majority today. The Town identifies the dominance of expensive large-lot single family homes, and community opposition to housing as key barriers to fair housing. The main program to break down these barriers is Program A-1, requiring the rezoning of three identified sites to promote the development of multifamily affordable housing.

Amending its Housing Element to carve back the Twin Oaks Court site would establish a clear pattern of discrimination against multifamily and affordable housing, and it would also fail to affirmatively further fair housing. The change would be clearly contrary to the Town’s adopted plan to AFFH. Removing more than 10 acres of the site, and reducing the density from 30 to 24 acres, would dramatically reduce the ability of the site to produce housing affordable to lower-income households.

The City Council’s February 20, 2025 public meeting regarding the Twin Oaks proposal and potential Housing Element amendments revealed that the explicit purpose of this change is to prevent the development of a mixed-income housing development on the Twin Oaks site.

Vice Mayor Bhateja and Council Member Mok stated that the Town was going to amend the Housing Element regarding the Twin Oaks site: “The goal is to limit development to approximately 92 units while addressing key concerns such as wildfire safety, traffic congestion, and preserving the town’s character.” Their presentation concluded by stating that “the focus remains on responsible development that aligns with state requirements while preserving the town’s unique character.” While maintaining more limited capacity on the site allows the Town to put forth a facade of maintaining compliance with the law, there is no proposed housing development at such lower density, and the Town has done nothing to demonstrate such a proposal is viable.

In addition to the proposed changes to the Twin Oaks site, the Town has already denied two affordable housing developments since the adoption of the previous plan. Both were builder’s remedy projects proposed during the period when the Town was out of compliance with its housing element, and both were denied on technicalities manufactured by the Town. If the Town is allowed to thwart the proposed Twin Oaks development, it would result in the denial of three consecutive developments that would have brought the Town its first ever deed restricted affordable housing.

While the Council leaves unsaid what it means by “preserving the Town’s character,” we can infer that they are referring to the exact character identified in their AFFH plan as a barrier to fair housing. Approving the proposed reduction in density on the Twin Oaks site would aid in a clear effort to prevent the development of lower-income housing in one of the wealthiest municipalities in the state. This effort is wildly inconsistent with the Town’s and the State’s obligation to take "meaningful actions . . . to overcome patterns of segregation 10 of 12

and foster inclusive communities free from barriers that restrict access to opportunity based on protected characteristics.” (Gov. Code, § 8899.50, subd. (a)(1).) Relying Heavily on ADUs Violates Fair Housing Law
Aside from the Twin Oaks site, the remainder of the Town’s low income site inventory relies heavily on ADUs. The Town is therefore planning on using ADUs to account for 105 units of its total lower-income RHNA of 197 units. In fact, during the February 20, 2025 public hearing, a number of members of the public testified that the Town should rely even more heavily on ADUs rather than allow the Twin Oaks development to proceed.

However, this ADU-heavy strategy is highly problematic from a fair housing perspective. The federal Fair Housing Act does not apply to ADUs, and state fair housing law is unclear on the issue. Additionally, the Town’s recent survey of ADUs found that less than half of ADUs in the Town were used as dwelling units - the majority were used as guest houses, as office spaces, or as other extra space for the primary dwelling unit. Furthermore, the survey in Los Altos Hills showed that 44% of the occupied ADUs were inhabited by family members. Both of these factors mean that historically excluded groups, such as Black or Latino-headed households, will have much greater challenges living in a Los Altos Hills ADU, as only half of the ADUs are available for residential use and only about half of the remaining ADUs are available for non-family members.

Furthermore, ADUs are significantly smaller than other types of housing. While this makes them naturally more affordable, it also reduces housing opportunities for families with children. As discussed supra, state law obligates the Town’s Housing Element to affirmatively further fair housing. Protected categories include familial status, as mandated by Gov. Code 65583, subd. (c)(5):

Promote and affirmatively further fair housing opportunities and promote housing throughout the community or communities for all persons regardless of race, religion, sex, marital status, ancestry, national origin, color, familial status, or disability, and other characteristics protected by the California Fair Employment and Housing Act (Part 2.8 (commencing with Section 12900) of Division 3 of Title 2), Section 65008, and any other state and federal fair housing and planning law.

Los Altos Hills’s overreliance on ADUs fails to promote housing throughout the community for families with children, which is a familial status.

If the Town is allowed to amend its Housing Element to hamstring the site with the best potential to be developed into multifamily, mixed-income housing, then the primary lower-income units developed in the Town will be ADUs, with the result there were may not be any zero deed restricted affordable housing developed in the Town. And 3/4ths of the 11 of 12

ADUs developed will either not be used as housing or will only be available to relatives of existing town residents. This will be a fair housing disaster. ⧫ ⧫ ⧫
The Town’s proposed amendment to its Housing Element is a transparent effort to thwart the first genuine mixed-income housing proposal (and first deed-restricted affordable units) in the Town’s history. This amendment would violate the Town’s duty to affirmatively further fair housing. By over-relying on ADUs and actively sabotaging mixed-income development, the Town is acting to continue to exclude marginalized racial and ethnic groups from the community. The Town’s history of building exclusively large, expensive single-family homes on one-acre lots compounds these concerns. The Town should abandon this amendment and implement its current Housing Element, as the law requires.

CalHDF is a 501(c)(3) non-profit corporation whose mission includes advocating for increased access to housing for Californians at all income levels, including low-income households. You may learn more about CalHDF at www.calhdf.org.

Sincerely,
Dylan Casey
CalHDF Executive Director
James M. Lloyd
CalHDF Director of Planning and Investigations
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October 16, 2025
Town of Los Altos Hills
26379 Fremont Road
Los Altos Hills, CA 94022
By email: [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected] Cc: [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]
Re: Proposed Zoning Map and Text Amendments
Dear Los Altos Hills City Council and Staff,
The California Housing Defense Fund (“CalHDF”) submits this correspondence as comment regarding agenda item 7A for the October 16, 2025 Council meeting, proposed amendments to the Town of Los Altos Hills (“Town”) General Plan, zoning map, and zoning code.

The proposed rezoning does not fulfill the Town’s obligations under Housing Element law.

The proposal also violates a recently decided binding Court of Appeal decision and state fair housing law.

It is clear that the Town, having seen its proposed housing element amendment disapproved by the California Department of Housing and Community Development (“HCD”) (see attached disapproval letter), is attempting to disregard that disapproval by implementing a rezoning the accomplishes the same goal as the failed housing element amendment - the carving back of the Twin Oaks Site in order to thwart the first affordable housing in the Town’s history.

This is disappointing, but hardly surprising, given the Town’s history of exclusionary land use policies.
2201 Broadway, PH1, Oakland, CA 94612
www.calhdf.org

Inadequate Rezoning
The Housing Element Law (Gov. Code, §§ 65580 et seq.) establishes a clear process for the evaluation, planning, and enactment of the Town’s housing policy. That process has a two-part structure. In the first part, the Town must adopt a housing element on a specified timeline and that meets certain requirements. In the second part, the Town must implement the programs promised in its housing element. Crucially, the second step relies on the first step: what, precisely, the Town must do in the second step has already been established by the housing element. (See Gov. Code, § 65583, subd. (c).) The second step is not a freestanding exercise in policymaking or policy analysis. (See id.) The policymaking and policy analysis are conducted in the first step, and the Housing Element Law leaves essentially no room to alter the results at the second step. 1 The Town has completed the first step. It adopted a housing element in January 2023, adhering to the substantive and procedural rules in the Housing Element Law. The California Department of Housing and Community Development (“HCD”) also certified the Town’s adopted housing element as legally compliant, pursuant to its statutory authority. (See, e.g., Gov. Code, § 65585.) That housing element made numerous detailed commitments. These commitments include promises to rezone three sites to accommodate housing for lower income households. (See Gov. Code, §§ 65583 [establishing standards for required rezonings]; 65583.1 [same]; 65583.2 [same].) The scope and density of the rezoning program in the housing element was informed by the likelihood of development in each individual site. The plan that was certified by HCD required a larger and denser rezoning, precisely because the individual sites were not likely to be developed, and to offset the many constraints on housing development that would confront any development proposal on each site. When the Town attempted to amend its plan to reduce the scale of the proposed upzoning, this amendment was rejected by HCD because there was insufficient evidence that the sites were likely to develop at the proposed density.

The Town is now at the second step of the process: implementing the commitments in its housing element. This includes the aforementioned rezoning and associated policy analyses. The Town’s proposed rezoning, however, seeks to accomplish the same scaled-back rezoning that HCD has already rejected as failing to comply with housing element law, and fails to fulfill crucial aspects of its housing element commitments. These are commitments that the Town, as explained above, cannot renege on without going through a full amendment process for its housing element.

Twin Oaks Site
1 If the Town wishes to alter the policy analysis or programs promised by its housing element, it has an avenue to do that: it may amend its housing element according to the procedures set forth in Government Code section 65585. But the process remains a two-step process: the Town must first amend its housing element, and only then can it proceed to the second step of implementing the promised housing element programs.
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For the Twin Oaks Site, the Town’s proposed rezoning fails to implement the rezoning that it committed to in its Housing Element.

The Twin Oaks site, composed of APNs 18202017, 18202018, 18202019, 18202020, 18202021, 18202022, 18202007, is discussed on pages 192-194 of the Housing Element. The Housing Element commits to rezoning it to 20-30 units per acre.

Appendix A of the Housing Element, the Housing Element site inventory, assigns a certain number of units by income to each of these parcels. The relevant section of the table is reproduced below:

As can be seen, the site inventory assigns specific numbers of housing units, including low-income units, to each parcel contained in the Twin Oaks site [APN 182 02 016 is not part of the Twin Oaks Site].

However, the proposed rezoning only rezones parcels 18202020, 18202021, and 18202022.

Furthermore, rather than rezone these parcels for a density of 20 to 30 units an acre, as committed to on page 193 of the Housing Element, the rezoning only allows a density of 20 to 24 units per acre. As discussed infra, the rezoning has an effectively much lower density, given that it implements numerous additional constraints, which reduce the area of the site that may be developed and also reduce the density generated by the zoning by excluding large portions of the parcels from density calculations.

By failing to rezone parcels in the site inventory, and rezoning parcels and densities less than what the Town committed to in its Housing Element, this rezoning fails to meet the requirements of the Housing Element Law. (See Gov. Code, § 65583, subd. (c)(1).) 3 of 11

Creating a Floating Zone Is Not a Rezoning
The Town is proposing to amend its zoning text to establish a floating zone, which would cover the campus of Foothill College: the “Floating Multi-Family Overlay.” Housing Element pages 186-188 provide the Town’s commitments for the Foothill College site (APNs 17541014, 17541015, and 17541016):
“The Foothill College site consists of a portion of three parcels located along El Monte Road with a gross area of approximately 124 acres. As a part of the Town’s planned Multi-family Infill Overlay Zone to allow and facilitate multi-family residential to meet the RHNA, the adopted overlay would allow a projected density of 30 du/ac. The Town would allow Foothill College to develop approximately 14.5 cumulative acres on the campus as that is the amount of acreage that can realistically be developed without the displacement or removal of any existing use on the campus (through redevelopment or building retrofitting) … Surface parking areas are among the most likely areas to accommodate infill housing. Two parking lots, approximately 9.5 and

4.5 acres in area are located at the northern and southwestern portions of the campus property. Both sites are accessed by the loop road through the campus. The parking lots are easily developed since they already have road access and utilities, a lack of habitat or environmental constraints.”
The Town therefore committed to rezoning 14.5 acres of the College’s campus at 30 units per acre. However, rather than following through on that commitment, the Town is instead creating a mechanism for the future mapping of a new zoning district somewhere on the campus. Additionally, the future (unmapped) zoning district would only allow 24 units per acre, not the 30 units / acre committed to in the Housing Element, and it would also be subject to the various unanalyzed constraints discussed infra.

Proposed code section 10-1.1603 provides the process by which an actual zoning district might be mapped (emphasis added):

The FMFO zone is hereby established as a floating zone on all properties designated on the General Plan Land Use Diagram as FMFO. The precise location of one or more FMFO zoning districts shall be mapped at a later date. The FMFO zoning district(s) shall include a total of not less than 8.8 acres of contiguous buildable area as defined herein and shall meet all other applicable requirements of this Article 16. The FMFO district boundaries may be mapped and recorded after review and recommendation by the Planning Commission and adoption by resolution of the City Council:
a. At the discretion of the Town at any time;
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b. After selection by the property owner and confirmation by the Town Planning Director of compliance with MF zone requirements; or c. In conjunction with a proposed development application for multi-family development on the FMFO designated property.

Upon selection and demonstration of compliance, the Town shall adopt by resolution and subsequently publish the updated Zoning Map showing the boundaries of the MFO zoning district established by adoption of this Article 16.

Creating a mechanism for the creation of a future zoning district does not fulfill the requirements of Housing Element Law. Government Code section 65583, subd. (c)(1)(A)(i) reads, in pertinent part (emphasis added):

For the adoption of the sixth revision of the housing element, jurisdictions with an eight-year housing element planning period pursuant to Section 65588, including adoption of minimum density and development standards or, for a jurisdiction in the coastal zone, any necessary local coastal program amendments related to land use designations, changes in intensity ofland use, zoning ordinances, or zoning district maps … shall be completed no later than three years after either the date the housing element is adopted pursuant to subdivision (f) of Section 65585 … The Town must “complete” the zoning changes necessary to implement its Housing Element by January 30, 2026. The Town’s proposed mechanism leaves a host of required zoning changes that must be completed in the future. This means that the Town will not have rezoned the Foothill College site and will thereby miss its January 30, 2026, rezoning deadline.

Overlay Problems
The town is proposing to map an overlay on the St. Nicholas School site (APNs 33621003, 33621004) to allow housing development there. The Town’s commitments related to the St.

Nicholas School site are located on pages 188-191 of the Housing Element:

The property contains ample room to accommodate new residential units by developing the vacant, approximately 5-acreportion [sic] on the north side of the site above El Monte Road.The northern five-acre portion of the St. Nicholas school property is vacant and independent of the school facilities and operations to the south. The 5-acre site is located between El Monte Road and the campus facilities … This identified portion of the property has a high potential to be developed as there are no existing structures, the site has been previously disturbed, there is availability of water, sewer and other utilities, and the area at the top of the hill is relatively flat. 5 of 11

The adopted overlay zone will allow for a density of 30 du/ac to incentivize and allow residential redevelopment. The maximum unit capacity for this site is 150 units, while the realistic capacity assumed for this site is 75 units.

The Town therefore committed to rezoning five acres of the site at 30 units per acre. The Town’s proposed Multifamily Overlay zone will only allow developments up to 24 units per acre, violating the commitment made in the Housing Element.

However, the Town is choosing to rezone the St. Nicholas site with an overlay. From proposed code section 10-1.1603:

For areas where the MF zone is applied as an Overlay (MFO) or Floating MFO, the MFO zone standards and permitted uses supersede the single-family residential uses and development standards of the underlying Residential-Agricultural (R-A) zone when in conflict. All public and private school uses shall be subject to the otherwise applicable standards of the underlying R-A zone.

Code section 10-1.1608 forbids certain uses in the Multifamily Overlay, such as single-family homes. However, schools are specifically allowed in the Multifamily Overlay and Floating Multifamily Overlay.

Proposed code section 10-1.1607 Conditional Uses (MFO):

The following uses may be established in the Multi-Family Overlay (MFO) and Floating Multi-Family Overlay (FMFO) zones subject to the approval of the Planning Commission, and the issuance of a conditional development permit therefor pursuant to the provisions of this Title per Section 10-1.1004:
(a) Public schools where designated on the General Plan Land Use Diagram. (b) Private schools where designated on the General Plan Land Use Diagram.

However, binding caselaw from the California Court of Appeal forbids the Town from using an overlay to accomplish its rezoning. In New Commune DTLA LLC v. City of Redondo Beach (Oct. 10, 2025, No. B336042) ___ Cal.App.5th ___), the Court held that an overlay cannot be used to satisfy the requirements of state law for rezonings for lower-income sites (See Gov.

Code, § 65583.2, subd. (h)(2)) if the zoning expressly permits development that does not include housing. Allowing underlying, non-residential uses would not satisfy the minimum residential density requirement imposed by state housing law.

Not only do the overlays allow the uses of the underlying Residential-Agricultural district (except for what is explicitly forbidden by code section 10-1.1608), they expressly allow the establishment of public and private schools.
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Given that the owner of the St. Nicholas School site is opposed to the development of housing on the site, the fact that school uses will continue to be allowed by zoning makes the development of housing on this site highly unlikely. From the attached CalMatters article on the Los Altos Hills housing element:

The Diocese of San José, owner of the [St. Nicholas School site], has “no intention of developing or selling” any part of the school, said spokesperson Cynthia Shaw. “Legal counsel clearly conveyed the Diocese’s opposition to the Town’s submission of the housing plan in 2022.”
New Commune DTLA LLC v. City of Redondo Beach clearly forbids the Town from using an overlay to accomplish its required rezoning.

New Constraints
Housing Element Law requires local governments to analyze governmental constraints on housing production. (Gov. Code, § 65583, subd. (a)(5).) The results of this analysis then inform the policies and programs in the housing element. (See id.; id. at subd. (c)(3); Californians for Homeownership, Inc. v. City of Beverly Hills (2023) Los Angeles County Superior Court, Case No. 23STCP00143, at p. 6, [finding planned rezonings for housing element site inventory must consider constraints identified by the housing element’s constraints analysis] [opinion attached to this letter].)
However, because the new constraints included in the Town’s rezoning proposal were not analyzed in the Town’s housing element, the Town cannot rely on the rezoning proposal to produce as many units as it is required to unless the Town analyzes the effects of the new constraints and offsets their impact on housing production. The Multifamily, Multifamily Overlay, and Floating Multifamily Overlay (MF/MFO/FMFO) impose the following, unanalyzed constraints (proposed code § 10-1.1611):
● MF/MFO/FMFO imposes a requirement that each development site shall contain a contiguous buildable area, exclusive of steep slopes greater than 25% with a minimum horizontal measurement of 25 feet, with a minimum dimension not less than 50 feet wide.
○ This was not analyzed in the Housing Element and this will make development of these sites challenging given the gradients involved. ● MF/MFO/FMFO has a minimum lot size of 3.5 acres and a maximum lot size of 10 acres.
○ This was not analyzed in the Housing Element and these standards prevent the entire Twin Oaks site from being developed and it also inhibits the development of individual parcels within the Twin Oaks site. ● MF/MFO/FMFO has minimum front, side, and rear setbacks of 60 feet. 7 of 11

○ The Housing Element only considered 40 foot front setbacks and 30 foot side and rear setbacks.
○ Increased setbacks diminish the amount of buildable area on a parcel. ● MF/MFO/FMFO establishes a maximum average of 750 square feet of gross floor area per dwelling unit.
○ The Housing Element instead held that every parcel was allowed at least a 2,500 square foot dwelling. See Fair Housing implications infra. ● MF/MFO/FMFO establishes a requirement for 40 square feet of private recreation space per dwelling.
○ This was not analyzed in the Housing Element and private recreation space is challenging for affordable housing given the expense of constructing and maintaining balconies.
● MF/MFO/FMFO establishes a requirement for 100 square feet of common recreation space per dwelling unit.
○ This was not analyzed in the Housing Element and, when coupled with the above maximum average gross floor area per dwelling unit, this imposes a dramatic constraint on housing development.
● MF/MFO/FMFO establishes a building-to-building separation requirement of 25-50 feet.
○ This was not analyzed in the Housing Element and this will impose another barrier to housing, particularly on mixed-use sites.

Proposed code section 10-1.1614 also prohibits or strictly limits development on/near ridgelines, hilltops, steep slopes, hillsides, and near riparian corridors. These constraints were not analyzed in the Housing Element and this will impose another barrier to housing, particularly on mixed-use sites.

Most alarming is the fact that the proposed zoning calculates density differently based on net buildable area, as opposed to gross density based on total parcel area.

Proposed code section 10-1.1609 provides the following definition of “Contiguous Buildable Area:”
The contiguous area of a parcel, lot or development site with a minimum dimension not less than 50 feet wide and excluding areas of steep slopes greater than 25% measured over a minimum horizontal distance of 25 feet. The contiguous area may include small individual areas of slopes greater than 25% where such small individual areas are less than 1,000 square feet in area and are surrounded by slopes less than 25% on all sides of said area.

Then, proposed code section 10-1.1611 defines density as “dwelling units per acre of contiguous buildable area.”
8 of 11

As discussed supra, the Town is only rezoning the three lower-income Housing Element sites (Twin Oaks, St. Nicholas School, Foothill College) at 24 units per acre, as opposed to the 30 units per acre that the Housing Element committed to. However, because the proposed MF/MFO/FMFO zoning calculates the density in a more restrictive manner, the proposed rezoning will actually grant a density well under 24 units per acre.

Based on all these various new constraints, it is entirely unclear whether the lower-income sites will be able to generate the number of units committed to by the Housing Element.

Fair Housing Implications
The proposed rezoning fails to meet the Town’s fair housing obligations.

First, carving back the Twin Oaks Court site in order to thwart a proposed mixed-income housing development would establish a clear pattern of discrimination against multifamily and affordable housing, and it would also fail to affirmatively further fair housing. The change would be clearly contrary to the Town’s adopted plan to affirmatively further fair housing. Removing more than 10 acres of the site, and reducing the density from 30 to 24 acres, would dramatically reduce the ability of the site to produce housing affordable to lower-income households.

Local governments have an obligation under California to refrain from any actions that would discriminate against protected classes, or against the “intended occupancy of any residential development by persons or families of very low, low, moderate, or middle income.” (Gov. Code, § 65008, subs. (a)(3), (b)(1)(C), and (b)(2)(B).) CalHDF addressed the fair housing implications of carving back the Twin Oaks Site more thoroughly in our September 12, 2025 letter to HCD (attached).

Second, the proposed multifamily development standards establish a maximum average gross floor area per dwelling unit standard of 750 square feet. Because this is maximum average square footage, the average maximum floor area per dwelling unit will be approximately 600 square feet, due to the need for circulation space and common areas.

Beyond this, the zoning establishes a requirement for 100 square feet of common recreation space per dwelling unit, some of which would likely be in the form of exercise rooms or other common spaces. This will require projects to be predominantly studios and one-bedroom apartments, resulting in disparate impact against families with children.

Local governments have an obligation under California to refrain from any actions that would discriminate against protected classes based on protected characteristics (Gov. Code, 9 of 11

§ 65008, subs. (a)(1)(A). One such protected characteristic is familial status. (Gov. Code, § 12955 subd. (a).)
By forcing the units in these developments to be, on average, predominantly studios and one-bedrooms, the Town will make it vastly more challenging to develop housing units that are large enough to accommodate families with children. It is not surprising that the Town is engaging in this practice, given that the addition of lower-income children to the local school district is often highly opposed by the residents of high-income communities across the state and country.

Both local governments and California state agencies are tasked with affirmatively further fair housing, requiring “meaningful actions, in addition to combating discrimination, that overcome patterns of segregation and foster inclusive communities free from barriers that restrict access to opportunity based on protected characteristics.” (Gov. Code, § 8899.50, subd. (a)(1).) The obligation to affirmatively further fair housing works in conjunction with, and independently of, local government’s housing element obligations. Local governments are required to include a plan to affirmatively further fair housing as part of a compliant housing element, and are required to carry out this plan and other policies consistent with their obligation to affirmatively further fair housing. (Id., § 65583, subd. (a)(3), (b)(1).) The Town’s proposed rezoning therefore fails to meet its obligations under state fair housing law and housing element law.
⧫ ⧫ ⧫
The Town’s proposed rezoning is a transparent effort to thwart the Twin Oaks project, which would be the first genuine mixed-income housing proposal (and first deed-restricted affordable units) in the Town’s history. This rezoning would violate both Housing Element Law and state fair housing law. By actively sabotaging mixed-income development, the Town is acting to continue to exclude marginalized racial and ethnic groups from the community.

The Town’s history of building exclusively large, expensive single-family homes on one-acre lots compounds these concerns. The Town should reject this proposed rezoning and instead implement its Housing Element in accordance with state law.

CalHDF is a 501(c)3 non-profit corporation whose mission includes advocating for increased access to housing for Californians at all income levels, including low-income households.

You may learn more about CalHDF at www.calhdf.org.
10 of 11

Sincerely,
Dylan Casey
CalHDF Executive Director
James M. Lloyd
CalHDF Director of Planning and Investigations
11 of 11

December 1, 2025

PRESENTED TO

THE CITY OF
SAN JOSÉ

COST OF RESIDENTIAL

DEVELOPMENT STUDY

TABLE OF CONTENTS
PART I.

INTRODUCTION AND SUMMARY OF FINDINGS....................1 RESIDENTIAL BUILDING TYPOLOGIES........................................7 HOUSING DEVELOPMENT FINANCIAL ANALYSIS ...............11 ADDITIONAL MARKET CONSIDERATIONS..............................23 APPENDIX..................................................................................................... 29 PART II.

EXECUTIVE SUMMARY............................................................................ 3 METHODOLOGY AND APPROACH.................................................4 TRENDS IN TOTAL DEVELOPMENT COSTS...............................8

AFFORDABLE HOUSING DEVELOPMENTS
COSTS BY HOUSING TYPE....................................................................9

SHARE OF DEVELOPMENT COSTS FUNDED
BY CITY SUBSIDIES AND OTHER SOURCES ...........................20

KEY DRIVERS OF AFFORDABLE
HOUSING DEVELOPMENT COSTS ................................................24 APPENDIX ..................................................................................................... 27

PART I.

COST OF DEVELOPMENT STUDY

DRAFT REPORT
Prepared for: Prepared by:

City of San José Economic & Planning Systems, Inc.

December 1, 2025
EPS #251053

Table of Contents

1. Introduction and Summary of Findings 1
Study Overview and Analytical Framework........................................................................................................ 1 Key Findings........................................................................................................................................................ 4

2. Residential Building Typologies 7
Townhome ......................................................................................................................................................... 8 Stacked Flats....................................................................................................................................................... 9 Podium ............................................................................................................................................................... 9 Wrap................................................................................................................................................................. 10 Tower ............................................................................................................................................................... 10

3. Housing Development Financial Analysis 11
Overview of Methodology................................................................................................................................ 11 Development Costs .......................................................................................................................................... 12 Market Value Analysis...................................................................................................................................... 17 Results and Sensitivity Analysis........................................................................................................................ 18

4. Additional Market Considerations 23
Office to Residential Conversion ...................................................................................................................... 23 Regional Market Comparisons ......................................................................................................................... 26 Appendix 29

List of Tables
Table 1. Results by Building type and Location (Hypothetical 2-Acre Site)...........................................................5 Table 2. Overview of Residential Building Type and Development Program Studied ..........................................8 Table 3. Hard Costs by Building type ..................................................................................................................13 Table 4. Summary of San José Pro-Formas.........................................................................................................13 Table 5. City Development Impact Fees by District ............................................................................................15 Table 6. Total Construction Taxes and Development Impact Fees.....................................................................16 Table 7. Other Soft Cost Assumptions ................................................................................................................17 Table 8. Average Rents and Sale Prices by MLS Zone .........................................................................................18 Table 9. Results by Building type and Location (Hypothetical 2-Acre Site).........................................................19 Table 10. Development Impact Fee per Unit Comparison....................................................................................28 List of Figures
Figure 1. San José Multiple Listing Service Zones Used in Study............................................................................3 Figure 2. Townhome Results by Price Point – West San José (No Fee Waivers)..................................................20 Figure 3. Podium Results by Rental Rate – Central San José (No Fee Waivers)...................................................21 Figure 4. Podium Results by Total Development Costs – Central San José (No Fee Waivers) .............................22 Figure 5. Good vs Challenging Candidates...........................................................................................................24 Figure 6. Citywide Sale Price and Rent Comparison.............................................................................................27

Economic & Planning Systems, Inc. 1 Introduction and Summary of Findings

1. Introduction and Summary of Findings
The San Jose City Council has demonstrated a long-standing interest in advancing both market and affordable housing development. To this end, the City Council directed staff to convene a Study Session on factors affecting housing cost and feasibility, building on previous studies on this topic going back to 2017. At the same time, the City Council recognizes that its policies, including the imposition of development impact fees, directly affect the economics of housing development. As such, the City Council has the discretion to temporarily waive these fees, or implement other policies, to encourage desired housing production.

This Report provides information on the cost and financial feasibility of developing market rate housing in San José. It has been prepared by Economic & Planning Systems (EPS) as a part of a broader study effort commissioned by the San Jose City Council to evaluate the cost of both market rate and affordable housing production. EPS is serving as a subconsultant to CSG Advisors, the author of an accompanying study on the development cost of affordable housing in San Jose. The primary purpose of this study on market rate housing is two-fold:

1. To inform City Council and the public on the economic feasibility of developing various types of housing given the current market environment in San José.

2. To inform City Council decisions related to extending impact fee waivers for certain housing projects, as allowed under Section 14.10.310 in the San José Municipal Code (MC).

This Report documents the methodology, data sources, assumptions, and key findings from the EPS study of San Jose’s current market rate housing market. The information is provided as background to a City Council Study Session on December 8th, 2025.

Study Overview and Analytical Framework
This study evaluates the key market and financial factors affecting housing development economics in San Jose. In particular, the research has focused development costs as well as achievable market rents and sale prices throughout the city. This research reflects 2024 - 25 market conditions and, as described and referenced throughout, draws on a broad range of information and data sources (e.g. CoStar, Redfin, Marshall + Swift, and data from local projects).

COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 2 Introduction and Summary of Findings Because costs of residential development can vary across several factors, this research effort considered differences in development feasibility across the following key parameters:
• Housing Building Types. EPS has considered five (5) residential building types as defined in Chapter 2 and referenced in the Report as (1) townhomes, (2) stacked flats, (3) podium, (4) wrap, and (5) tower. Townhomes and stacked flats building types are assumed to be for-sale, while podium, wrap, and tower building types are assumed to be for-rent. Each building type is assumed to be built on a 2-acre lot to provide a standardized comparison of results. The analysis includes separate estimates for the various components of development cost for each building type, including building construction (aka “hard costs”), indirect or “soft costs” (e.g., design, financing, marketing, etc.) and city permits and fees. While the EPS study also considers office to residential conversions, we do not provide specific estimates on their financial feasibility due to a wide variation in potential outcomes, as described further in Chapter 4.
• Project Location. EPS has provided separate results for five (5) geographic areas within the City of San José to illustrate how differences in housing rents, sale prices, and City fees affect development feasibility (these factors can vary by location).

These separate areas, referenced as West, Central, Downtown, North, and South / East, were also selected to be consistent with previous Cost of Development studies.

The West, Central, North and South / East correspond to four Multiple Listing Service (MLS) zones that are used to determine the Parks and Recreation Department’s Parkland in-Lieu fee (see Figure 1). The study also identifies a Downtown zone, which is a subsection of the Central MLS zone, and reports separate results for the Tower building type (the primary building type of interest in this location).

COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 3 Introduction and Summary of Findings Figure 1. San José Multiple Listing Service Zones Used in Study It is important to note that the findings from this study are based on planning-level estimates of housing development economics. The feasibility of individual housing projects can differ from the results shown here due to a variety of factors, including site conditions, developer capabilities, access to capital, and return expectations, as well as the cost of labor, materials, and financing at the time of construction, among other factors. As a result, the estimates provided herein are designed to reflect typical conditions and serve as a general indicator of housing development feasibility under current market conditions.
09: Downtown/ Central
15: West
07B: North
03: South and East

COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 4 Introduction and Summary of Findings Key Findings
• While several lower density housing building types are likely to be financially feasible to develop in San Jose given current market conditions, most higher density building types are not. For-sale townhomes and stacked flats appear financially feasible under current market conditions, driven by high achievable sale prices and lower construction costs for these types of structures. For example, these building types feature integrated, wood-framed parking garages which are much less expensive to construct per parking space than the concrete structures used in other building types. However, higher density building types, typically four stories or higher and requiring parking structures, are generally not financially viable. These higher density housing configurations involve more expensive building processes and materials and are usually delivered as a rental product rather than for purchase by homebuyers.
• Fee waivers, as authorized under MC Section 14.10.310, as well as other relatively modest improvements in development economics, may “tip the scales” and make some higher density housing projects feasible, even under current market conditions. A combination of modest increase in rents and/or decline in development costs (e.g., from a fee waiver) can make the so-called “wrap” and / or “podium” multi-family project feasible (e.g., 5 to 15 percent change), as will relatively small improvements in market conditions. Residential towers, with higher development costs resulting from their fully steel-framed structures, will require a more substantial change in rents and / or development costs to achieve feasibility.

The positive residual land values estimated for townhomes and stacked flats mean that developers of these buildings are unlikely to need fee waivers as an incentive to pursue housing production. Table 1 illustrates the current financial feasibility for all the housing building types evaluated in this analysis with and without fee waivers.

COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 5 Introduction and Summary of Findings Table 1. Results by Building type and Location (Hypothetical 2-Acre Site) • While there may be opportunities to convert under-performing office buildings to residential uses in San Jose, it is difficult to make broad conclusions about the feasibility of such projects, or the need for fee waivers, due to the wide variation in circumstances affecting individual properties. EPS research on regional and national trends in office-to-residential conversions suggests that only a narrow subset of buildings can feasibly support the cost of this type of adaptive reuse. In particular, the core factors influencing the feasibility of office to residential conversion include: (1) a building’s physical attributes, (2) local and property specific market and financial conditions, and (3) the regulatory framework effecting adaptive reuse (including fees). While San Jose’s office market exhibits relatively high vacancy rates, most of the larger and modern buildings do not appear well suited for conversion from a real estate investment perspective. But there may be promising opportunities for a limited supply of well-suited buildings – for example, pre-1960 or small post-1960 mid-rises with narrow plates, operable windows, and higher ceilings – particularly in cases where property owner motivation is combined with favorable policy support.
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COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 6 Introduction and Summary of Findings • The San Jose’s housing market is economically competitive relative to neighboring jurisdictions for both tenants seeking more affordable housing and developers seeking lower development impact fees. For the most part, market rents and sale prices in San Jose fall below those in Santa Clara, Sunnyvale, Cupertino, and Mountain View (only exception being the average sale price for stacked flats is slightly above Santa Clara). At the same time, the development impact fees charged to new housing development in San Jose area also well below those charged by these nearby jurisdictions. For example, the average impact fee for a market rate multifamily unit is about $22,400 per unit in San Jose, compared to $26,000 in Mountain View, $61,400 in Cupertino, $66,700 in Sunnyvale, and $52,300 in Santa Clara.

Economic & Planning Systems, Inc. 7 Residential Building Typologies

2. Residential Building Typologies
This Chapter describes the unique development attributes for five (5) residential building types that are common in San Jose and likely to represent opportunities for high density infill housing production going forward. EPS also considered office to residential conversions but given the unique nature of this project type it is evaluated separately in Chapter 4.

As described below, because the building types examined in this study have different structural components and configurations, both construction costs and per unit market values can vary significantly. In addition, some are typically developed as rental products while others are offered for purchase by homebuyers. These differences can materially affect the financial feasibility of developing each building type.

Table 2 summarizes the hypothetical development program EPS has utilized to evaluate and compare the development feasibility of each residential building type. As shown, the building typologies range in density from townhomes to high-rise tower apartments.

To facilitate and “apples-to-apples” comparison from a real estate investment perspective, the analysis assumes each building type is developed on a two-acre site.

Though site-specific conditions and regulations will affect the development economics for any given project (e.g., entitlement costs, site preparation, etc.), for the purposes of this general and comparative analysis, EPS assumes that development costs for a given building types are the same regardless of the site in question (e.g., a wood frame apartment building costs the same to construct on a per square foot basis at all sites).

The subsequent section provides further information on each of the residential building types evaluated in this study.

COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 8 Residential Building Typologies Table 2. Overview of Residential Building Type and Development Program Studied Townhome
Townhomes are attached or semidetached dwelling units of two to three stories that are usually developed as forsale products but occasionally as rental.

Townhomes typically incorporate tuckunder garages and provide a single-family lifestyle. They are often characterized by
shallow front yards and stoops, rear
vehicular access, and in some cases small
rear yards or courts between the garages
and main dwelling. This analysis assumes
an average density of 20 units per acre
parking ratio of 2 spaces per unit.
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Example of a townhome project: Haven at Berryessa
Crossing, San José (2017)

COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 9 Residential Building Typologies Stacked Flats
Stacked flats are multifamily buildings
where units are stacked vertically, often
walk-up or served by a single stairwell or
elevator. These are typically lower-rise,
wood-frame structures that offer a more
cost-efficient alternative to podium
construction (see below) and delivered as
mid-density units on smaller or mid-sized
parcels. As with townhomes, parking for
stacked flats is typically not located within a
dedicated podium but is instead
accommodated in tuck-under garages,
surface lots, drive aisles, or setback areas
elsewhere on the site.

This analysis assumes an average density of
53 units per acre parking ratio of 2 spaces
per unit.

Podium
Podium projects typically place
apartments stacked over one or more
levels of structured parking. These
projects may fit in relatively smaller lots
defined in part by the depth of a typical
parking bay. Development costs are
typically higher than townhomes and
stacked flats because the parking and
residential portions are mixed into one
structure with consequent code-required
life safety requirements.

Residential podium buildings are typically
in between 4 stories to a max allowable 8
stories. Typical densities range from 80-
150 units per acre but can get upwards of
200 for smaller sites in dense urban areas.

The practical maximum is typically based
on a combination of State building code
and construction economics. This analysis assumes an average density of 86 units per acre parking ratio of 1 space per unit.

Example of a stacked - flat project: Onyx, San José
(2017)
Example of a podium project: 808 West, San José (2016)

COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 10 Residential Building Typologies Wrap
Wrap projects consist of stacked
apartments constructed around a central
parking garage. These projects typically
require larger lots because the residential
and parking aspects are separate
structures. The cost of constructing the
residential portion is the same as a podium
as they have similar structures, but the
parking structure is slightly less expensive
to construct than podium parking. These
buildings are typically between 4 and 7
stories. This analysis assumes an average
density of 86 units per acre parking ratio of
1 space per unit.

Tower
Towers are the tallest and most dense
form of residential development. These
buildings are typically found in densely
populated urban areas and maximize
number of units on smaller lots by building
upwards. Development costs are typically
the highest for residential towers because
they require steel and concrete materials
throughout to allow for construction
above 8 stories. Construction costs can
also be driven upwards do accommodate
subterranean parking garages. These are
typically a minimum of 12 stories, and the
tallest residential tower in San José is Miro
at 28 stories. This analysis assumes an
average density of 235 units per acre
parking ratio of 0.8 space per unit.

Example of a wrap project: Eleanor, Milpitas (2021)
Example of a tower project: Miro, San José (2021)

Economic & Planning Systems, Inc. 11 Housing Development Financial Analysis

3. Housing Development Financial Analysis
This chapter evaluates the financial feasibility of developing the housing building types described in Chapter 2 given the current market context in San Jose. The analysis identifies if, and under what circumstances, developers are likely to view the hypothetical projects as attractive from a real estate investment perspective.

In this context, it is important to recognize the degree of economic uncertainty currently affecting real estate investment more generally and housing development, in particular.

Among other factors, rising interest rates and construction costs, as well as concerns about a potential economic slowdown, have weakened the climate for housing investment. Accordingly, this Chapter discusses how improved market conditions might affect development prospects in San Jose and provides sensitivity testing of key financial variables.

Overview of Methodology
As part of this study, EPS created a set of cash-flow models to simulate the financial performance of each of the building type and site scenarios described in Chapter 2. The pro-forma financial models incorporate data on current rent and sale prices as well as construction costs using both market research and vendor-based data. Additionally, the pro-forma models account for existing City fees.

To test financial feasibility, EPS solved for the residual land value (RLV) likely to be achieved under each scenario. The RLV is a financial metric commonly used in the real estate industry to represent the economic value of a project from an investors perspective. RLV is calculated by estimating the finished market value of a project and deducting all costs needed for financing, design, and construction, but excluding the purchase of the land itself.

Development cost includes “hard costs” such as labor and materials, as well as “soft costs” such as building permits and fees, planning, architecture and engineering, and financing.

The detailed pro-forma models used in this analysis are provided in Appendix A.

Additional description of key development cost and revenue assumptions is provided below. Again, it is important to note that actual outcomes for a specific project can differ significantly depending on design considerations, unique site attributes, evolving market trends, project execution, and other factors.

COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 12 Housing Development Financial Analysis Development Costs
The cost of developing a market rate unit is a key variable in the RLV calculations – projects that are more expensive to build on a per unit basis are likely to be less financially feasible than lower cost projects, all else equal. The EPS assumptions and data sources used to estimate project costs value are summarized below for both project “hard” and “soft” costs respectively.

Hard Costs
Hard cost assumptions are based on other recent Bay Area work, comparative cost factors from published sources (Marshall and Swift), and other San José pro-formas provided by City staff. EPS considers three categories of hard costs: site development, vertical construction costs, and parking construction costs as described below and summarized in Table 3.
• Site development is assumed to be the same across all building types in this analysis and includes standard grading and demolition while excluding unique circumstances such as environmental mitigation.
• Vertical construction costs vary across building types, with townhome and stacked flats being the least expensive to construct and tower being the most expensive. Townhomes and stacked flats offer the lowest per square foot vertical construction costs because of their low and simple wood framed structures. Podium and wrap products, while also wood framed, have higher vertical construction costs per square foot because they are taller structures, have smaller unit sizes, and include amenity / lobby spaces. Towers demand the highest cost per square foot because of their steel frames. • Similarly, parking construction costs per space vary based on the complexity of their structures. Townhomes and stacked flats offer integrated “tuck-under” parking garages with simple wood frames. The more dense podium, wrap, and tower building types require many more parking spaces, with larger concrete parking structures that are more costly to construct.

COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 13 Housing Development Financial Analysis Table 3. Hard Costs by Building type
A comparison of EPS pro-forma hard costs and developer-provided San José pro-formas is summarized in Table 4. As shown, EPS pro-forma hard cost estimates are closely in line with those provided by local developers. Differences in costs may arise from factors such as unit sizes, quality of interior finishes, and level of amenities provided. For example, Sample pro-forma 1 has lower per unit hard costs and higher per square foot costs because it offers smaller unit sizes.

Table 4. Summary of San José Pro-Formas
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COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 14 Housing Development Financial Analysis Soft Costs
Soft costs estimates are separated into local city development impact fees that vary across locations within the city, and other soft costs that are estimated as a percentage of hard costs or total development costs. Development impact fees are published by the City of San José and are summarized on a per unit of per square foot basis in Table 5.

These development impact fees include inclusionary housing in-lieu, parkland in-lieu, and school mitigation fees. Also included are city Construction Taxes, as they are also eligible for waiver under Municipal Code Section 14.10.310.

Below is a description of each fee / tax:
• Inclusionary Housing in-Lieu: This analysis assumes that projects will fully utilize the inclusionary housing in-lieu fee and include no inclusionary housing units. There is a strong and moderate level of fee, depending on location. For this analysis, West, Downtown, and Central are in areas with “strong” levels of fees, while North and South / East are moderate.
• Parkland in-Lieu: The parkland in-lieu fee is location based and depends on the MLS zone that the project is located in (Figure 1). It further assumes a 20 percent reduction for townhome and multifamily (stacked flat, podium, and wrap) building types, and a 25 percent reduction for towers for providing on-site open space amenities (e.g. balconies, rooftop amenities, etc.).
• School Mitigation: School mitigation fees are gathered from the individual school districts in each location of the city. While the school district boundaries may not overlap exactly with the MLS zone boundaries used in this analysis, the best fitting school district was selected for each of the locations. • Construction Taxes: There are four city construction taxes. Building & Structure Construction Tax and Commercial, Residential, Mobile Park Construction Tax are assessed as a percentage of building valuation. Building valuation is calculated based on the International Code Council’s square foot construction costs available in the City of San José Building and Structure Permits Fee Schedule.1 City Construction Tax and Residential Construction Tax are assessed on a per unit basis. Table 5 presents Construction Taxes by building type, which are the same across each district. 1 City of San José Building and Structure Permits Fee Schedule

COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 15 Housing Development Financial Analysis Table 5. City Development Impact Fees by District
These impact fees calculated as a project total are shown in Table 6, along with their percentage of total development costs. On a per-unit basis, townhomes have the highest development impact fees because they have the largest square feet per unit.

Impact fees as a percentage of total development costs varies between 7 and 14 percent given differences in their application by within the city. !"#$%CDEC)* +"#E
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COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 16 Housing Development Financial Analysis Table 6. Total Construction Taxes and Development Impact Fees Aside from City development impact fees, this analysis makes assumptions around several other soft costs that are calculated as a percentage of hard costs or total development costs. These other soft cost assumptions are estimated based on other recent pro-formas and input from developers, as summarized in Table 7. While EPS uses the same assumption for all product types for soft costs as a percentage of hard costs, it is likely that some categories may experience economies of scale (e.g., architecture and engineering services may be lower for high density projects). !"#$
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COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 17 Housing Development Financial Analysis Table 7. Other Soft Cost Assumptions
Market Value Analysis
The finished market value of a residential project is a key variable in the RLV calculation – projects that can achieve higher market values on a per unit basis are likely to be more financially feasible, all else equal. Table 8 compares the market value assumptions used in this analysis for each MLS zone as well as the San José citywide average, according to the City of San José Department of Housing Q2 2025 San José Housing Market Update.

The assumptions and data sources are further summarized below for both for-sale and rental building types respectively.

For Sale
Townhome and Stacked Flat building types are assumed to be for sale in this analysis.

Sale prices vary across MLS zone in the city, and estimates are based on data publicly available from Redfin. Each zone’s estimated sale price per square foot is the zone’s average sale price plus 10 percent. This is because the data is composed of several resale homes, and this analysis focuses on newly constructed buildings, which generally sell at about a 10 percent premium. The citywide average combines townhome and condo sales into one average, so the true townhome average is likely higher than presented, and the true condo average is likely lower. This is consistent with EPS price estimates.
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COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 18 Housing Development Financial Analysis For Rent
Podium, Wrap, and Tower building types are assumed to be for rent in this analysis.

Rents are estimated based on data acquired from CoStar and represent the average rent of buildings built in the last 10 years in each location in the city. Podium and Wrap are assumed to have the same rent. For Tower rents, data was collected on buildings 12 stories or taller. Rent estimates are similarly compared to the San José citywide average according to the City of San José Department of Housing Q2 2025 San José Housing Market Update. In this case, the citywide average combines all multifamily (podium, wrap, and tower) rents together. Still, the reported citywide average falls within the range of EPS estimates across zone and building type.

Table 8. Average Rents and Sale Prices by MLS Zone
Results and Sensitivity Analysis
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COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 19 Housing Development Financial Analysis Table 9 summarizes the results of the RLV by location and building type. As shown, Townhome and Stacked Flat building types are feasible under current market conditions while for rent Podium, Wrap, and Tower building types are not. Generally, Stacked Flats generate the highest residual land value because of their low hard costs and relatively high market value. Only in West San José where townhomes have especially high sale prices are Townhomes more profitable than Stacked Flats. On the rental side, Wrap buildings, while still negative, generate slightly more RLV than podiums because while they achieve the same market value, the Wrap’s structured parking garage is slightly less expensive to construct.

Table 9. Results by Building Type and Location (Hypothetical 2-Acre Site) Because market conditions are constantly evolving, shifts in rents, pricing, development costs, and other factors can improve the feasibility of various building typologies over time and by location. To demonstrate these dynamics, EPS has conducted a series of sensitivity tests on market values and costs. These variables can serve as a proxy for, or include, other market factors such as interest and capitalization rates, labor agreements, fees and taxes, among other factors.
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COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 20 Housing Development Financial Analysis Figure 2 illustrates the RLV of a Townhome project in West San José across a range of sale price points and shows that as prices go up, so does RLV. Sale price points in the green area have positive RLV while those in the red area have negative RLV. In this scenario, the current market price of $1,100 per square foot is associated with approximately $525k RLV per unit. Given this significantly positive RLV, it would take a large drop in prices (to about $670 per square foot) to become infeasible. Stacked Flats have similar results; the current market price of $760 per square foot is associated with approximately $80k RLV per unit, and prices would have to drop to about $670 per square foot to become infeasible.

Figure 2. Townhome Results by Price Point – West San José (No Fee Waivers) On the rental side, where projects are not currently feasible, feasibility would require an upward shift in rent. Figure 3 illustrates RLV of a Podium project in Central San José, where the current market rent of $3.89 per square foot is associated with approximately -$70k RLV per unit. Podium rents would have to increase about 10 percent, or $4.30 per square foot, to achieve feasibility. With the same rent and slightly lower development costs, Wrap buildings would have to increase to about $4.10 per square foot to achieve feasibility. Towers, though they have higher rents at $4.30 per square foot, also have much higher development costs and therefore have much lower RLV at approximately -$285k per unit. These would have to raise approximately 30 to 35 percent to $5.70 per square foot to achieve feasibility.

COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 21 Housing Development Financial Analysis Figure 3. Podium Results by Rental Rate – Central San José (No Fee Waivers) Similarly, feasibility can be changed by shifts in development costs. Figure 4 illustrates the RLV of a Podium project in Central San José across a range of total development costs. Only decreases in total development costs are shown because RLV is already negative and increases in total development costs would only make RLV more negative.

As seen, a decrease of approximately 12 percent in total development costs could lead to feasibility in this scenario. This parallels roughly the same percentage increase in sale price that would be needed to achieve feasibility. Having slightly lower total costs, Wrap buildings would require an approximately 10 percent decrease in total development costs to reach feasibility. Towers, again having much higher costs, would require total development costs to decrease by approximately 30 to 35 percent to achieve feasibility.

COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 22 Housing Development Financial Analysis Figure 4. Podium Results by Total Development Costs – Central San José (No Fee Waivers)

Economic & Planning Systems, Inc. 23 Additional Market Considerations

4. Additional Market Considerations
This Chapter discusses additional considerations relevant to the performance of San Jose’s housing market. These include the potential for of office to residential conversions to increase the San Jose’s housing supply as well as the performance of the City’s housing market relative to nearby jurisdictions.

Office to Residential Conversion
Like many downtowns, San Jose’s office market has struggled in the post-pandemic era due to increased remote work trends, evolving location preferences of commercial tenants, decline in several professional service-related sectors, among other factors.

This trend has sparked interest in office-to-residential conversions as a potential strategy to boost housing supply and revitalize commercial districts. It has also raised the question of whether such projects might benefit from various policy incentives, including fee waivers.

As part of the Cost of Development study, EPS reviewed regional and national trends in office-to-residential conversions to identify lessons that might be applicable to San Jose, particularly downtown. While EPS did not conduct a detailed review of San Jose’s office inventory, our research found that in general only a narrow subset of buildings can feasibly support the level of investment needed to convert to housing. In particular, the core factors influencing the feasibility of office to residential conversion include: (1) a building’s physical attributes, (2) local and property specific market and financial conditions, and (3) the regulatory framework that can help close remaining financial gaps. Each element is described separately below.

Physical Determinants of Feasibility
The physical attributes of a building largely determine whether conversion is possible before financial feasibility is even tested. Floorplate depth is the single most decisive variable: buildings with 40- to 60-foot plates allow most units to have window exposure and natural light, while deeper center-core plates produce large interior zones that cannot be converted into habitable space without costly carve-outs. Ceiling height is also critical; pre-war and mid-century structures with 11- to 14-foot floors provide room for mechanical, electrical, and plumbing systems, acoustic assemblies, and ducting required for residential standards.

Equally important are structural regularity and façade type. A consistent column grid enables efficient unit stacking and vertical plumbing alignment, whereas irregular framing complicates layouts and increases design costs. Punched or operable windows across multiple façades allow natural ventilation and compliance with light-and-air standards at reasonable cost.

COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 24 Additional Market Considerations By contrast, curtain-wall glass façades common in post-1980s office towers are expensive to modify and typically lack operable openings. The building’s street interface and ground-floor configuration also influence marketability: structures that support active, transparent retail or amenity edges command higher residential rents and accelerate lease-up. Error! Not a valid bookmark self-reference. illustrates how these factors distinguish strong candidates such as the Bank of Italy Building from more challenging examples like the Sobrato Tower.

Figure 5. Good vs Challenging Candidates
Market and Financial Considerations
Local and project specific market and financial circumstances also play a critical role in the feasibility of a conversion project. In San José and peer Bay Area markets, persistent office vacancy has depressed net operating income, and thus the market value, of many office buildings. Bur asset pricing for many of these buildings has not yet fallen enough to meet the residual land values supported by new residential development. This disconnect means that owners remain anchored to office-era valuations while residential investors must contend with a high cost of conversion (in most cases) and financing challenges. Because adaptive
reuse projects require selective demolition, systems replacement, and extensive tenant improvements, the cost differential between conversion and ground-up development is often narrower than expected.

Good Candidate
Bank of Italy Building
12 S 1st St
Bad Candidate
Sobrato Tower
488 Almaden Blvd

COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 25 Additional Market Considerations The capital market further constrains feasibility. Lenders and equity partners view office conversions as atypical, with few comparable transactions to benchmark. Unknown structural conditions, seismic upgrades, and irregular floorplates introduce contingency costs and risk premiums that elevate required returns. Even well-located projects face elevated underwriting hurdles, especially when net rentable area shrinks after inserting residential cores, light wells, or required amenities. In short, the current capital environment rewards projects with low acquisition basis and simple geometry while penalizing complex towers requiring heavy intervention.

Within San José, these national dynamics are amplified by the city’s block-by-block variation in street activation, transit access, and adjacent land uses. While Class A vacancy exceeds historical norms, transaction pricing has been slow to adjust, and institutional owners often prefer to hold rather than sell below value. Consequently, only a small number of older or mid-rise buildings have both the physical characteristics and price basis to warrant exploration.

Regulatory Levers and Policy Implications
Although most determinants of feasibility are inherent to the building and market context, local policy can meaningfully “move the needle” for projects that fall near the margin. The most effective levers tend to reduce upfront cost or time rather than alter building form. Cities can temporarily reduce or defer impact and linkage fees, allow school and utility fees to be paid at certificate of occupancy, and / or provide parking ratio flexibility to reflect reduced demand for many residential uses. Additional flexibility in open space, private balcony, and amenity requirements can also allow conversions to proceed within existing envelopes without triggering costly structural changes.

Zoning adjustments can further close the gap. Allowing residential uses by right in office districts, expanding density or height allowances where floor area already exists, and streamlining design review can all shorten entitlement timelines and improve project certainty. Process predictability is equally important; establishing a ministerial or expedited review track for qualifying conversions can substantially reduce holding costs and increase lender confidence.

At the same time, many fundamental constraints, particularly those tied to seismic performance, life safety, accessibility, and energy code compliance, are governed by state building codes and cannot be modified locally. Municipal programs should therefore focus on offsetting these immovable costs through fee relief, permit coordination, and predevelopment assistance rather than attempting to waive core safety requirements. Coordinated partnerships between city staff, code officials, and developers will be critical to identify candidate buildings that are both physically convertible and aligned with broader housing and downtown revitalization goals.

COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 26 Additional Market Considerations Key Takeaways
Feasibility begins with form: geometry and daylight access determine whether a conversion is technically achievable. Among buildings that meet these thresholds, market and capital conditions remain the principal barriers to execution. Policy can help, but it cannot overcome poor fundamentals. Only a small subset of structures, typically pre-1960 or small post-1960 mid-rises with narrow plates, operable windows, and higher ceilings, offer realistic potential for adaptation. These buildings represent limited but promising opportunities where thoughtful policy support can align private feasibility with public objectives for downtown revitalization.

Given the high degree of variation in potential outcomes, generalized “rule-of-thumb” estimates related to typical conversion costs per square foot are hard to come by. That said, additional research and data on the composition of San Jose’s office stock, including metrics like year built, building dimensions, parking ratios, debt, and other salient factors, would likely facilitate “ball-park” estimates of the potential for these types of projects to increase the City’s long-term housing supply.

Regional Market Comparisons
This section provides data on how San José housing market compares to neighboring jurisdictions from the perspective of both consumers and developers. Specifically, in compares San Jose to its neighbors in terms of market value and development impact fee rates. While other cities may not directly affect a project’s market valuation or costs, they can influence consumer demand and developer investment decisions.

Market Value Comparisons
San José sale prices and rents are compared to those in the neighboring cities of Santa Clara, Sunnyvale, Cupertino, and Mountain View in Figure 6. As seen, San José sale prices and rents are generally lower in comparison. While this makes San José more competitive to the potential buyer or renter, projects will be more challenged for feasibility if they are unable to attain sufficiently high rents to cover their development costs.

COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 27 Additional Market Considerations Figure 6. Citywide Sale Price and Rent Comparison
Development Impact Fee Comparison
In the broader context of development impact fees, it is important to consider how a city’s fees compare to its neighboring cities, as they will influence developer decisions on where to build. EPS has collected the development impact fees from the cities of Santa Clara, Sunnyvale, Cupertino, and Mountain View for both townhome and multifamily projects. Each city collects different categories of fees, but this analysis compares the total burden per unit. This analysis further does not consider inclusionary housing in-lieu fees or water meter fees as these can vary significantly with each individual project. Additionally, this analysis does not consider Countywide fees (all selected cities are in Santa Clara County) or area plan fees.

Table 10 summarizes development impact fees per unit for the selected cities. These estimates assume a standard 1,500 square foot townhome prototype and a 900 square foot multifamily prototype. San José has the lowest development impact fees of the cities compared, as it only includes a parks fee which is lower than all cities other than Mountain View. In school mitigation fees, San José Unified School District is lower than only Santa Clara Unified School District.
2 Still, San José offers the lowest total fee burden
among the cities compared, making it a more attractive location for developers. 2 There are several other school districts with different mitigation fees in the City of San José. For presentation purposes, only San José Unified School District was chosen for this comparison. A selection of other San José school district fees can be seen in Table 4. !"#$%$$$!#%F$'%$$$ !#%())%$$$ !#%**+%$$$ !#%*F'%$$$ !"#$%$$$ !)()%$$$ !",,%$$$ !#%#*(%$$$ !#%$$"%$$$ !,%"'$!F%+F* !F%+#, !F%##, !(%$'* !$
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COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 28 Additional Market Considerations Table 10. Development Impact Fee per Unit Comparison
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Economic & Planning Systems, Inc. 29 Appendix
Appendix

COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 30 Appendix
Appendix Table 1: Full Cash Flow Model – West San José Townhome !"#ABCD(CF* +##,-D(CF*.L.0NA(FB 2F(NP
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COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 31 Appendix
Appendix Table 2: Full Cash Flow Model – West San José Stacked Flats !"#ABCD(CF* +##,-D(CF*.L.0NA(FB 2F(NP
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COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 32 Appendix
Appendix Table 3: Full Cash Flow Model – Central San José Podium !"#A%CDECFG +##I-DECFG.L.0NAEF% OFENP
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COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 33 Appendix
Appendix Table 4: Full Cash Flow Model – Central San José Wrap !"#A%CDECFG +##I-DECFG.L.0NAEF% OFENP
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PART II.

Presented to: City of San José
Affordable Housing
Development Cost Study

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TABLE OF CONTENTS

1. Executive Summary ............................................................................................. 3

2. Methodology and Approach ................................................................................. 4

3. Trends in Total Development Costs....................................................................... 8

4. ABordable Housing Developments Costs by Housing Type..................................... 9

5. Share of Development Costs Funded by City Subsidies and Other Sources .......... 20

6. Key Drivers of ABordable Housing Development Costs ........................................ 24

7. Appendix I. Projects Evaluated During the 2025 Study.......................................... 27

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Execu&ve Summary
This 2025 Affordable Housing Development Cost Study for the City of San José provides an updated analysis of affordable housing development costs, drawing from a significantly expanded dataset of 194 projects comprising over 22,000 housing units across California. The report idenNfies stabilizaNon in construcNon costs following the sharp increases observed during the pandemic years, while also highlighNng conNnued challenges driven by financing costs, deeper affordability requirements, and regulatory complexity.

Key findings include convergence of San José’s cost levels with regional peers average costs relaNve to 2023 and improved cost efficiency in larger projects. Despite this moderaNon, total development costs remain elevated due to high land and financing costs as well as deep affordability and service-enriched housing types.

Introduc&on
The City of San José (the “City”) engaged CSG Advisors to prepare an update to the prior Affordable Housing Development Cost Study (“2025 Study”) to evaluate the current cost of developing affordable housing within the City. As San José conNnues to experience persistent demand for affordable housing amid rising development costs, this update provides an in-depth assessment of evolving cost structures, key cost drivers, and opportuniNes for improved efficiency in project delivery. The analysis draws upon data from California Tax Credit AllocaNon Commi[ee (CTCAC) applicaNons for projects iniNated between 2023 and 2025, reflecNng the most current and comprehensive dataset available for affordable housing developments statewide.

ConstrucNon costs in San José and the broader Bay Area have conNnued to climb since the onset of the COVID-19 pandemic in 2020, though recent indicators suggest a gradual moderaNon in escalaNon rates. Between 2018 and 2022, costs rose sharply due to labor shortages, supply chain disrupNons, and sustained increases in material prices. The most significant spike occurred in 2021, when average construcNon costs surged by roughly 15 percent.

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Figure 1 illustrates year-over-year construcNon cost increases from 2019 through 2025, highlighNng the volaNlity and sustained escalaNon that conNnue to shape housing development feasibility. Acer a significant 8% rise in 2019, cost growth briefly cooled to 3% in 2020 before climbing again to 5% in 2021. The most dramaNc spike occurred in 2022, when construcNon costs surged by 15%—a reflecNon of acute supply-chain disrupNons, labor shortages, and inflaNonary pressures that defined the post-pandemic building environment. Although increases moderated in subsequent years, rising by 6% in 2023 and 3% in 2024, costs conNnue to inch upward into 2025 with an addiNonal 2% increase. While the recent trend suggests stabilizaNon rather than conNnued acceleraNon, the cumulaNve effect of several years of steep growth has elevated baseline construcNon pricing far above pre-pandemic levels, contribuNng to persistent feasibility challenges for both market-rate and affordable projects.

This report examines the factors influencing affordable housing construcNon costs in San José and evaluates changes in cost pa[erns since the prior study. The analysis is based on detailed CTCAC applicaNon data, which include comprehensive development budgets, funding structures, and operaNng assumpNons for projects expected to begin construcNon within 180 days of award.

These data were compared with market-rate development benchmarks to idenNfy structural differences in cost composiNon, financing, and project economics between affordable and market-rate housing, providing an evidence-based foundaNon for future policy and investment decisions.

Methodology and Approach
Data Sources and Scope of Analysis
The 2025 Affordable Housing Development Cost Study draws on publicly available data from the California Tax Credit AllocaNon Commi[ee (CTCAC) and the California Debt Limit AllocaNon Commi[ee (CDLAC). CTCAC accepts applicaNons for federal and state Low-Income Housing Tax Credits (LIHTCs) two to three Nmes per year, and CDLAC publishes awarded projects within roughly 90 days of each round.

This study begins with the March 2023 applicaNon cycle; the first full round following compleNon of the 2023 Cost Study and includes all new-construcNon affordable housing projects that received tax-credit awards through the end of 2025. Each CTCAC applicaNon provides detailed development budgets, funding sources, and operaNng assumpNons for projects expected to commence construcNon within 180 days of award, creaNng a consistent basis for analyzing current cost trends.

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Dataset Composition and Project Characteristics
The dataset includes 194 affordable housing projects totaling 22,574 units statewide, of which 19 projects (3,287 units) are located within the City of San José. Compared to the 2023 Study’s 8 projects (987 units), this represents a more than threefold increase in project coverage, improving the reliability of cost comparisons and trend analysis.

Figure 2. San José Projects - 2025 Study Has a Larger Sample Size and Slightly Broader Housing Mix As shown in Figure 2 above, the composiNon of San José projects has shiced notably since 2023:
• Large Family housing accounts for 12 projects (36 percent of units), up from 4 projects (43 percent) in 2023.
• Non-Targeted projects, qualifying through geographic rather than populaNon set asides, is sNll consistent at 1 project (56 percent of units) in the 2025 study, compared with 1 project (27 percent) previously.
• Special Needs housing now represents 5 projects (1 percent), up from 3 projects (30 percent) in the prior study.
• Senior housing accounts for only 1 project (6 percent) in the current study, compared to none in the previous study.
• No Single-Room Occupancy (SRO) projects received tax-credit allocaNons during this period.
• The average building height of San José projects declined from six stories in 2023 to five stories in 2025.

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Figure 3. San José Applica5ons Skew Toward Non-Targeted & Large Family Regional Distribution and Comparative Context
To place the San José projects within a broader context, the study classifies projects into Bay Area and Non-Bay Area groups for comparison of housing-type distribuNon and relaNve producNon scale. As summarized in Figure 3 above, the Bay Area porNon of the dataset includes 70 projects totaling 7,835 units, while the non-Bay Area regions account for 110 projects and 12,523 units.

Because the 2023 tax credit applicaNons applied only to the Bay Area, these were excluded to ensure both the Bay Area and Non-Bay Area comparisons reflect the same 2024–2025 Nme period.

Across the Bay Area, Large Family housing dominates the pipeline, 47 projects (60 percent of units), with smaller but significant shares of Special Needs (8 percent) and non-targeted (27 percent) projects. Outside the Bay Area, Special Needs, Large Family, and Non-Targeted developments remain the most prevalent, comprising 23 percent, 35 percent, and 36 percent of total units, respecNvely.

This geographic breakdown reflects San José’s current porqolio, which is heavily weighted toward Non-Targeted and Large Family projects. This aligns with the regional producNon pa[ern but remains disNnct in its building scale and typology.

Comparative Framework and Analytical Approach
Given San José’s disNnct project profile, which is characterized by mid-rise, high-density developments with smaller unit sizes and complex financing structures, this analysis compares cost outcomes with similar projects across major California urban counNes, including Santa Clara, Los Angeles, Alameda, and San Francisco. These jurisdicNons were also evaluated in the 2023 Study to maintain consistency in methodology and benchmarking.

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A total of 194 affordable housing projects received tax credit allocaNons during the study period statewide, excluding those within the City of San José. Of these, 43 projects were in the comparison jurisdicNons, and 21 mid-rise developments defined as buildings between four and nine stories, were idenNfied as typologically comparable to San José’s porqolio. These “Other City Projects” form the benchmark group for evaluaNng differences in total development cost (TDC), unit size, and building program characterisNcs.

As illustrated in Figure 4 below, San José’s affordable housing stock is overwhelmingly mid-rise in character, with 16 of 19 projects (approximately 84 percent) falling within the four-to-nine-story range. Only one San José project is classified as low-rise (three stories or fewer), and two projects qualify as high-rise (ten or more stories). This marks a notable shic from prior study periods most notably the 2023 Study, when the City’s porqolio included a broader range of building heights, including more high-rise Type I construcNon.

Figure 4. Mid-Rise Buildings Dominate Across Regions, Especially Outside the Bay Area The average building height for San José projects is approximately five stories, a modest reducNon from the six-story average reported in 2023. These building types achieve economies of scale while avoiding the elevated costs associated with concrete or steel high-rise construcNon.

By comparison, Bay Area jurisdicNons outside San José exhibit a more diverse range of building typologies: 17 low-rise, 46 mid-rise, and 7 high-rise projects. Non-Bay Area jurisdicNons are more heavily weighted toward low- and mid-rise construcNon, with 22 low-rise, 85 mid-rise, and only 3 high-rise developments. This distribuNon highlights that while San José’s project scale is consistent with other urban centers, its porqolio remains concentrated in the mid-rise category, with limited parNcipaNon in low-rise suburban prototypes or very tall high-rise developments.

The uniformity of San José’s project typology suggests a development pa[ern that balances cost containment with land-use efficiency. By emphasizing mid-rise forms, San José is achieving

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densiNes sufficient to meet housing-producNon goals while miNgaNng the premium costs associated with high-rise construcNon. This shic also reflects both market realiNes and policy intent: developers conNnue to target building types that can compete effecNvely for tax-credit allocaNons while remaining feasible within current cost and financing constraints.

The dominance of mid-rise construcNon in San José’s affordable housing porqolio has important cost implicaNons. While mid-rise buildings are generally more economical than high-rise developments, they sNll incur significant per-unit costs due to structural complexity, parking integraNon, and podium construcNon requirements. These costs are further elevated by prevailing wage obligaNons and higher labor and material prices in the Bay Area, compared to non-Bay Area developments.

Conversely, the shic away from high-rise construcNon has tempered cost escalaNon by avoiding the addiNonal expense of concrete framing, deep foundaNons, and high-rise building systems. As a result, San José’s 2025 projects demonstrate improved cost alignment with other large urban markets, even as total development costs remain above statewide averages. The following secNon examines these trends in detail, comparing total development costs by housing type and region.

See Appendix I for further details on all of the projects evaluated during the 2025 development cost study.

Trends in Total Development Costs
Total development costs for San José affordable housing projects have conNnued to evolve since the last study period, reflecNng both cyclical and structural forces shaping the housing development market. Following the rapid escalaNon in 2021–2022 driven by material shortages, supply-chain disrupNons, and inflaNonary pressures, costs in 2023 and 2024 moderated but remained elevated relaNve to historical norms. While construcNon acNvity slowed slightly amid higher interest rates, rising financing and labor expenses prevented a full reversion to prepandemic levels. The 2025 dataset indicates that costs have begun trending upward again, suggesNng a return to moderate escalaNon as market stabilizaNon gives way to renewed demand and persistent inflaNon in key construcNon inputs.

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Figure 5. Narrow Data Constrains Year Over Year Conclusions About Development Costs As illustrated in Figure 5 above, total development costs for San José projects averaged approximately $763,889 per unit in 2025, represenNng a 15 percent increase over 2024 levels.

This follows two years of relaNve stability, with modest year-over-year changes of 4 percent in 2024 and –16 percent in 2023 acer the prior study’s peak. While the 2023 Study found that projects applying fortax credits in San José that year averaged $938,700 per unit, that informaNon was drawn from a small sample size of 2 projects and was not representaNve of a full year of data.

The broader trend since 2019 indicates that per-unit costs have risen from a range of $602,000- $673,000 in 2019-2021 to $634,000 to $764,000 in 2023-2025.

The year-over-year cost fluctuaNons reflect a confluence of factors, including changes in building typology, project mix, and financing condiNons. The sharp increase from 2021 to 2022 was primarily driven by projects incorporaNng larger family units and higher service components, while the 2023 decline corresponded with a greater share of smaller, mid-rise developments achieving cost efficiencies.

When evaluated on a per-square-foot basis, however, the escalaNon trend is more measured.

Between 2023 and 2025, total development costs per square foot increased by an esNmated 4 to 5 percent annually, consistent with long-term regional construcNon cost indices. This suggests that while project-level total costs have risen, much of the increase is a[ributable to changes in project composiNon, parNcularly the growing prevalence of larger family-oriented projects, rather than broad-based cost inflaNon.

Affordable Housing Developments Costs by Housing Type
As illustrated in Figure 6 below, the 2025 analysis finds that total development costs for San José projects average approximately $675,744 per unit, which is consistent with Bay Area averages.

The focus on mid-rise development in the City as well as conNnued use of streamlined funding and permisng processes have helped stabilize costs even amid elevated construcNon and financing condiNons.

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Among the San José project types, Special Needs housing exhibits the highest total development costs, averaging approximately $857,022 per unit, followed by Large Family projects at roughly $745,840 per unit. Senior housing averages $804,837 per unit, while non-targeted projects, which are typically general occupancy or mixed-populaNon developments, average approximately $612,051 per unit. No single-room occupancy (SRO) projects were included in the San José dataset for this study period.

Figure 6. San José Development Costs Are Higher Than Other City Averages Across Most Housing Types Development costs among San José projects are consistent with the Bay Area overall. Across the Bay Area, average total development costs reach $770,214 per unit, while projects in non–Bay Area regions average $540,076 per unit. The higher relaNve costs for San José’s Special Needs and Senior projects reflect the complex design, service coordinaNon, and programmaNc space requirements typical of these developments. Both housing types frequently include case management offices, community faciliNes, and supporNve service areas that expand gross

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building area and reduce overall efficiency raNos. However, the narrowing gap between San José and its peer jurisdicNons parNcularly for Large Family and Non-Targeted projects indicates measurable progress toward cost convergence and efficiency gains.

Unit Size and Development Efficiency
As shown in Figure 7 below, developer costs per net square foot are highly correlated with average unit sizes, with smaller average unit sizes associated with higher development costs per square foot. This trend is expected, as fixed components of a unit — kitchens, bathrooms, mechanical systems, and circulation — do not scale down proportionally when the overall square footage shrinks. In practice, this means that projects composed largely of studios and one-bedroom units carry higher per-square-foot costs even when total per-unit costs remain in line with regional norms.

Average unit sizes for San José projects are squarely in range with those of other Bay Area jurisdictions. The same holds true for total development costs per net square foot. San José’s costs—at roughly $1,050 per net square foot—sit comfortably within the Bay Area cluster, which ranges from the high $900s to the low $1,400s depending on county. In other words, San José neither over-performs nor under-performs its peers: its unit sizes are similar, and its per-square-foot costs track the same regional pattern, with higher costs in counties with smaller average unit sizes and lower costs where units tend to be larger.

Figure 7. Cost per Net Square Foot and Average Unit Size

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Figure 8. Average Unit Sizes by Housing Type Show Varia5on Across Regions San José’s average unit sizes are generally comparable to other jurisdictions, but in several housing types they are meaningfully larger. Special Needs and Non-Targeted units in particular are substantially larger for San José than those built elsewhere in the Bay Area — by 17 to 26 percent — reflecting the inclusion of service space, accessibility features, and program-driven design requirements. Senior units in San José are also larger than those in the Bay Area as a whole. Large Family units are roughly in line with regional norms. Taken together, the data shows that while San José’s overall average unit size falls near regional averages, certain program types produce larger units, which contributes to higher total development costs.

Affordability Levels and Cost Implications
As illustrated in Figure 9 below, the depth of aBordability remains one of the most significant cost drivers. Approximately 17 percent of all units in San José’s aBordable housing projects are located within Extremely Low-Income (ELI) buildings, where at least half of all units serve households earning 30 percent or less of AMI. These developments are consistently more expensive to build because they require additional service space, higher operating reserves, and deeper subsidy layering to support the much lower rents. In San José, ELI buildings average roughly $918,000 per unit — nearly 36 percent higher than the average cost across all aBordable projects in the City. This same pattern appears statewide: ELI buildings in the Bay Area and non–Bay Area regions are substantially more expensive than mixed-income projects. This consistent statewide trend highlights that deeper affordability levels can be a significant factor in total development costs for affordable units.

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Figure 9. San José’s ELI Developments Exhibit the Highest Average Per-Unit Costs Among All Regions The Components of Development Costs
Developing affordable housing requires the coordination of multiple funding sources and the management of diverse cost elements. Total development costs (TDC) can be grouped into three principal components:
• Land or property acquisition costs,
• Direct or “hard” construction costs, and
• Indirect “soft” costs such as design, permitting, professional services, and impact fees.

Each component plays a distinct role in shaping the overall feasibility of affordable housing projects, and together they reflect the challenges of delivering high-quality, deeply affordable housing within the Bay Area’s cost environment.

Site Acquisition Costs by Housing Type
Land acquisition continues to represent a relatively small but influential component of overall development costs. As illustrated in Figure 10, average site acquisition costs for San José projects total approximately $32,500 per unit, roughly 22 percent lower than the Bay Area average of $49,000 per unit and comparable to the non-Bay Area average of $37,300 per unit. The lower average reflects San José’s successful use of publicly owned or contributed land and the City’s ability to structure deals through ground leases or discounted site transfers that reduce or eliminate direct acquisition costs for many affordable housing developments.

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When disaggregated by housing type, the differences become more pronounced. Large Family projects in San José average approximately $35,800 per unit, about 17 percent lower than comparable Bay Area and Non-Bay Area projects. Special Needs projects report significantly higher land costs, averaging $69,400 per unit, or roughly 27 percent higher than Bay Area peers, reflecting the scarcity of suitably zoned and service-proximate sites for supportive housing. NonTargeted projects average $27,400 per unit, approximately 11 percent below regional counterparts, while Senior housing averages $51,000 per unit, in line with both Bay Area and non-Bay Area averages. No Single-Room Occupancy (SRO) projects were included in the San José dataset for this study period.

Figure 10. Average Acquisition Costs in San José Are Below Bay Area Averages and Comparable to Non-Bay Area Projects Direct Construction Costs by Housing Type
Direct or “hard” construction costs which encompass site preparation, structural framing, parking facilities, and building systems remain the single largest component of total development costs. As shown in Figure 11 below, these costs account for approximately 68 percent of total development costs for San José projects, consistent with both the 2023 Study and regional averages. For comparison, Other City projects report construction costs equal to 66 percent of total development costs, indicating minimal variation in proportional cost structure despite differences in location and project scale.

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Figure 11. San José Projects Have Higher Hard Costs Per Unit Than Other Regions Across housing types, San José’s construction costs are generally higher than those of comparable projects in other urban jurisdictions, except for non-targeted developments, which tend to employ smaller footprints and less complex construction systems. Non-Targeted housing projects exhibit the most significant variance, with San José averaging roughly 50 percent higher construction costs than the Bay Area & Non-Bay Area. When normalized on a per-square-foot basis, however, this differential narrow to approximately 34 percent, suggesting that the higher per-unit costs stem primarily from larger unit sizes, integrated service areas, and enhanced building amenities rather than inflated base pricing.

Although only a subset of CTCAC applications explicitly identify prevailing wage costs, qualitative feedback from developers and general contractors consistently highlights compliance with state and federal wage standards as a major cost driver. Furthermore, as construction activity across the Bay Area has rebounded in 2024–2025, competition for skilled labor has intensified, reinforcing upward pressure on bids even as material prices stabilize.

Indirect Soft Costs
Indirect or “soft” costs, which include design, professional services, permitting, financing, reserves, and developer fees, continue to represent a substantial share of total development expenses for affordable housing projects in San José. As illustrated in Figure 12, San José projects average approximately $192,000 in soft costs per unit, a level generally consistent with regional

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norms and reflective of the City’s complex regulatory environment and layered financing structure.

Figure 12. Average Soft Costs in San José Are Below Bay Area Averages and Comparable to Non-Bay Area Projects Among individual categories, architectural and engineering fees average $17,200 per unit, lower than the Bay Area’s $24,400 average but higher than the $15,900 seen in non–Bay Area regions—an indication of the efficiencies gained through standardized mid-rise design typologies in San José. Permitting and third-party consultant costs average $37,000 per unit, below the Bay Area average of $47,500 but slightly higher than the $35,700 observed in other California markets, suggesting that while San José’s permitting reforms have improved timelines, entitlement and review costs remain a significant expense. Financing costs average $65,700 per unit, notably below the Bay Area’s $75,700 average, due to improved coordination of local, state, and federal funding sources; however, persistently high interest rates continue to exert upward pressure on total borrowing costs.

Other soft-cost categories remain relatively stable. Soft cost contingencies average $5,200 per unit, while reserves total $5,800 per unit, both slightly below Bay Area averages. Developer fees, averaging $59,600 per unit, are nearly identical to non–Bay Area levels and below the Bay Area’s $71,700. Collectively, these categories account for approximately 25 to 30 percent of total development costs, underscoring the continued impact of soft costs on overall project feasibility.

Impact Fees
Impact fees continue to play a significant role in shaping the overall cost profile of affordable housing development across California’s major metropolitan areas. These fees, typically levied to fund public infrastructure such as parks, transportation, and schools, vary widely by

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jurisdiction and can represent a considerable portion of total soft costs. As shown in Figure 13, San José projects report average impact fees of approximately $19,386 per unit, consistent with prior studies and below the Bay Area and statewide averages for comparable urban markets.

Figure 13. San José Impact Fees Are Below Most Peer Cities but Higher Than Los Angeles For comparison, affordable projects in Los Angeles average only $7,716 per unit in reported impact fees, largely due to the city’s larger project sizes, which distribute similar total fee burdens across more units. Based on submitted tax credit applications, San José and Los Angeles each collected roughly $63 million in total fees for projects awarded during the study period. However, Los Angeles delivered approximately twice as many total units, effectively halving its per-unit cost relative to San José. This highlights how project scale and density significantly influence the apparent fee burden when measured on a per-unit basis.

Across other jurisdictions, Santa Clara County (outside San José) averages $22,700 per unit, while Sacramento and San Diego report $24,006 and $19,331 per unit, respectively. The Bay Area average for all other cities stands at $23,941 per unit. These figures confirm that while San José’s affordable housing fee levels remain relatively consistent on a per-unit basis, the City still contributes to the overall fee burden for affordable housing developments.

While San José’s per-unit fee burden compares favorably to its peers, the City’s total fee volume remains substantial. As construction and financing costs continue to rise, impact fee relief remains a key mechanism for maintaining affordability and development feasibility. Streamlined fee structures, predictable schedules, and additional credits for deeply affordable or serviceenriched housing could further enhance project viability while preserving the City’s ability to fund essential infrastructure improvements.

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Financing Costs
Financing costs continue to represent a growing share of overall affordable housing development expenses, reflecting both higher interest rate environments and the increasingly complex capital stacks required to fund projects. These costs include capitalized construction interest, origination and bond issuance fees, tax credit syndication costs, and legal expenses associated with financing multiple funding sources.

Figure 14. SOFR Rates Held Steady for Much of 2025, Ending with a Modest Drop in October As illustrated in Figure 14, the Secured Overnight Financing Rate (SOFR)—a key benchmark for construction and permanent loan pricing—has shown modest stabilization throughout 2025 following a period of volatility and sustained rate increases over the past two years. After reaching nearly 4.6 percent at the close of 2024, SOFR declined gradually to approximately 4.2 percent by October 2025, marking the first year of slight downward pressure on borrowing costs since the Federal Reserve began its rate hikes in March 2022. While this decline has eased some cost escalation pressures, borrowing remains substantially more expensive than in the pre-2022 period.

Figure 15. Comparison of Financing Costs per Unit: 2023 vs. 2025 Studies

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Figure 15 compares financing costs per unit for San José Projects and Other City Projects in the 2023 and 2025 studies. As shown, San José’s projected financing costs average $65,734 per unit, which is comparable to the average for Other City Projects of $64,958 per unit.

While the recent moderation in SOFR suggests gradual relief, total borrowing costs remain high relative to long-term norms. Construction loan interest rates for affordable housing projects typically remain in the 7.5 to 8.0 percent range due to elevated risk premiums and tighter credit standards among private lenders. The persistence of higher rates, combined with the extended timelines and layered capital structures characteristic of affordable housing finance, continues to drive financing costs upward as a proportion of total project budgets.

Financing costs now account for roughly 9 percent of total development costs for both San José and Other City Projects. The disparity between San José and peer jurisdictions primarily reflects differences in project size and complexity—San José developments frequently layer six or more funding sources, including tax credit equity, city subsidies, and project-based vouchers, each with unique compliance and closing requirements. This complexity, coupled with rising interest rates and prolonged construction timelines, underscores the central role financing costs play in shaping the total cost of affordable housing delivery across the region.

Tax Credit Pricing
Investor equity generated through the Low-Income Housing Tax Credit (LIHTC) program continues to serve as the primary source of capital for affordable housing development, but recent data indicate a modest decline in pricing for both federal and state tax credits. These shifts, though moderate, have direct implications for project feasibility and the overall amount of local subsidy required to close financing gaps.

Figure 16. Tax Credit Pricing Slightly Lower in 2025 Across All Regions As shown in Figure 16, federal tax credit pricing for San José Projects averaged $0.88 per credit dollar in 2025, a slight decrease from $0.90 reported in the 2023 Study. Other City Projects reported a similar trend, averaging $0.87 in 2025 compared to $0.89 in 2023. While this decline of approximately two cents per credit may appear minor, it can represent hundreds of thousands

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of dollars in reduced equity for a single project, particularly for larger developments exceeding 100 units.

State tax credit pricing has followed a similar trajectory. San José Projects averaged $0.83 per credit dollar in 2025, down from $0.86 in 2023. For comparison, Other City Projects averaged $0.85 in 2025, reflecting a slightly stronger investor appetite in other regions. The narrowing spread between jurisdictions suggests that local factors such as project pipeline stability, developer experience, and geographic CRA (Community Reinvestment Act) investment patterns continue to influence investor demand more than regional macroeconomic conditions alone.

Overall, both federal and state credit markets show signs of stabilization following the volatility of 2020–2022, when rapid shifts in investor sentiment and interest rates affected pricing.

However, credit values remain below pre-pandemic levels, reducing the total equity available to projects. This underscores the continued importance of local and state subsidy participation, particularly gap financing tools, to sustain affordable housing production at current cost levels.

Share of Development Costs Funded by City Subsidies and Other Sources Affordable housing development continues to require a complex layering of public and private funding sources to bridge the gap between total development costs and limited permanent debt capacity. Unlike market-rate developments—which typically depend on developer equity and conventional loans—affordable projects combine numerous funding sources, including LowIncome Housing Tax Credits (LIHTC), state and local subsidies, tax-exempt bond financing, and project-based rental assistance.

In 2025, San José projects relied on an average of six distinct funding sources per development, with some utilizing as many as eight. Each additional source adds administrative and transactional complexity, often leading to longer predevelopment timelines, extended financial closings, and increased soft costs such as legal and consultant fees. Market participants consistently note that the need to align multiple funding programs remains one of the largest contributors to cost escalation, particularly in high-cost markets like the Bay Area where construction costs can fluctuate rapidly.

Local Subsidy Participation and Scale
Local subsidy participation continues to play an essential role in making deeply affordable and special-needs projects feasible. As illustrated in Figure 17, City of San José contributions vary by housing type but remain a critical source of gap financing across all project categories.

Across all San José projects in the 2025 dataset, the average City subsidy is $28,605 per unit, representing a 31 percent higher per-unit contribution than the combined Bay Area and non– Bay Area averages. This support reflects the City’s proactive role in leveraging limited local

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resources to sustain affordable housing delivery despite rising development costs and constrained federal funding.

Subsidy levels vary significantly by housing type. Special Needs projects received the highest perunit City funding, averaging $147,959, or more than six times the average subsidy in other jurisdictions ($31,513 in the Bay Area and $11,075 in non–Bay Area regions). This reflects the higher operating and service requirements typical of supportive housing developments. Large Family projects averaged $50,355 per unit, exceeding both the Bay Area average of $41,369 and the non–Bay Area average of $18,387, while non-targeted projects averaged $14,340 per unit, slightly above peer averages.

In contrast, no City funds were allocated to Senior or SRO projects during the current study period for San José. This absence likely reflects both limited available local resources and the lack of new senior or SRO projects receiving allocations during the 2025 cycle.

Figure 17. San José’s Special Needs Projects Receive Significantly Higher City Subsidies Than Other Regions Composition of Project Funding Sources
Affordable housing in San José continues to rely on a complex mix of public and private funding sources to bridge the gap between high development costs and limited debt capacity. Unlike market-rate projects, typically financed with 70–80 percent private debt and 20–30 percent

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equity, affordable projects require multiple funding layers, each with distinct regulatory and timing requirements that add administrative cost and delay.

As shown in Figure 18, tax credit equity remains the largest funding source, averaging $300,974 per unit across all San José projects, or roughly 44 percent of total development costs. Among housing types, Special Needs projects receive the most tax credit equity ($564,480 per unit), followed by Large Family projects ($351,719) and non-targeted projects ($269,577).

Permanent debt represents about 27 percent of total costs, averaging $181,742 per unit, with the highest levels in Large Family projects and the lowest in Special Needs projects due to lower rental revenues. County and State funds provide an average of $88,794 per unit (about 13 percent of costs), supporting deeper affordability levels and special needs housing.

City of San José subsidies average $28,605 per unit, accounting for roughly 4 percent of total project funding, with particularly high contributions to Special Needs ($147,959) and Large Family ($50,355) projects. Additional sources such as deferred developer fees and smaller grants, average $83,089 per unit.

The 2025 funding profile highlights San José’s continued use of a balanced, multi-source capital structure. City participation remains a critical catalyst, leveraging external resources and ensuring the financial feasibility of deeply affordable projects despite elevated construction and financing costs.

Figure 18. In San José, Tax Credit Equity Dominates Total Funding Sources, with City and State Contributions Varying by Housing Type

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The funding composition for Other City Projects closely parallels that of San José developments but reflects a slightly greater reliance on private and credit-based financing. As shown in Figure 19, public funded tax credit equity remains the dominant funding source, averaging $336,057 per unit in public subsidy, supplemented by permanent debt averaging $176,198 per unit, which represents a lower leverage ratio than observed in San José projects. County and State funds contribute approximately $116,330 per unit, providing critical gap financing but at lower levels than those supporting San José’s deeper affordability projects. Local city funding averages $22,971 per unit, a modest share compared to San José’s higher per-unit contributions, indicating a broader but less intensive municipal participation model. Other funding sources, such as deferred developer fees and smaller subsidy programs, account for an additional $87,818 per unit, aligning with San José’s averages. Overall, while the structure of Other City Projects’ capital stacks remains similar, these developments depend more heavily on tax credit equity and debt financing, whereas San José projects rely more on layered public subsidies to achieve deeper affordability targets.

Figure 19. Tax Credit Equity Dominates Funding in Other Cities, With Permanent Debt Second Overall

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Key Drivers of Affordable Housing Development Costs
The primary cost drivers identified in the 2023 Study remain highly relevant in 2025.

Prevailing Wage Requirements
Prevailing wage mandates, which are tied to the use of public funds, continue to be a significant contributor to higher development costs for affordable housing projects nationwide. Required under most federal, state, or local funding programs, prevailing wage rates typically increase total labor costs by 10 to 20 percent compared to non-prevailing wage projects. Developers and contractors also cite increased administrative costs related to payroll certification and compliance tracking. While the Low-Income Housing Tax Credit (LIHTC) program itself does not require prevailing wage, most affordable projects include at least one funding source that does— making this requirement effectively unavoidable for the majority of developments.

Building Efficiency and Program Requirements
Affordable housing projects generally have lower efficiency ratios than market-rate developments due to the inclusion of non-revenue spaces such as community rooms, offices for service providers, and shared amenity areas. Efficiency ratios for affordable projects typically range from 70 to 75 percent, compared with 75 to 80 percent for market-rate projects. This gap is especially pronounced in permanent supportive housing, where on-site case management and resident services necessitate larger common areas. These spaces are critical to tenant well-being but increase total development costs on a per-unit and per-square-foot basis.

Higher Density and Construction Typology
Most San José projects in 2025 continue to utilize mid-rise podium construction ranging from five to seven stories. While this approach maximizes land efficiency and aligns with the City’s density goals, it introduces higher structural, design, and entitlement costs. Taller buildings require more complex systems and must meet stricter code and fire-safety standards. Extended permitting and multiple funding application rounds also contribute to longer predevelopment periods, increasing holding costs for developers who must continue servicing debt and paying property taxes while awaiting approvals or allocations.

Complexity and Coordination of Funding Sources
San José’s affordable housing developments now rely on an average of six funding sources per project, with some utilizing as many as eight. Each source carries distinct underwriting, legal, and compliance requirements that elevate soft costs and extend closing timelines. In contrast, market-rate projects typically rely on just two private equity and conventional debt allowing for faster execution. Limited funding application rounds create additional constraints for affordable housing developments and any missed funding cycles can result in costly development delays.

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Greater coordination among City, County, and State funding programs, including aligned calendars and shared application criteria, could reduce both cost and time burdens.

Design, Parking, and Environmental Standards
Local requirements for enhanced design, materials, and open space, while improving aesthetics and community integration, can also contribute to elevated costs.

Local Development Fees
Impact and development fees remain a meaningful cost factor. Based on submitted tax credit applications, San José projects report average impact fees of $19,400 per unit, despite partial reductions to the City’s Park Impact In-Lieu Fee and exemption from the Affordable Housing Impact Fee. While affordable units receive a 50 percent credit toward park fees, aggregate impact fees when combined with utility and regional charges continue to weigh heavily on overall project feasibility. Additional targeted reductions or temporary fee waivers could further ease financial barriers for projects delivering deeper affordability.

Deeper Affordability and Unit Characteristics
Approximately 17 percent of all San José units are located in Extremely Low-Income (ELI) buildings, compared to 16 percent among other jurisdictions. ELI projects typically require additional service spaces, larger reserves, and capitalized operating subsidies to maintain longterm viability. Moreover, San José’s Special Needs projects average 658 square feet per unit, which is larger than the 564-square-foot average in peer cities. The combination of deeper affordability targets, larger units, and integrated support services substantially increases both hard and soft costs.

Conclusion
The 2025 Affordable Housing Development Cost Study provides the clearest picture to date of San José’s development cost landscape, supported by a significantly expanded dataset of 194 projects statewide, including 19 in the City. The broader sample allows for more reliable comparisons than the 2023 study and indicates that San José’s affordable housing costs are now broadly aligned with those of other Bay Area jurisdictions.

Across the dataset, total development costs in San José fall within the same range as regional peers and are influenced by similar factors: mid-rise construction typologies, elevated Bay Area labor and material prices, and persistently high interest rates. On a per–square-foot basis, San José’s costs track closely with counties such as Alameda, San Francisco, and Los Angeles. Unit sizes also fall within regional norms, though Special Needs and Non-Targeted units in San José

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tend to be larger than those built elsewhere, contributing to higher per-unit totals for those specific housing types.

Across all projects, the composition of development costs remains consistent with statewide patterns: hard costs represent roughly two-thirds of total development costs, soft costs account for 25–30 percent, and land costs remain a relatively small share due to the prevalence of contributed or discounted sites. Impact fees, financing costs, and tax-credit pricing also closely mirror the trends observed in other major urban markets.

Taken together, the findings indicate that San José’s development cost profile is shaped primarily by project type, building scale, and depth of affordability rather than deviations in construction pricing or soft-cost structures. The City’s overall cost levels remain within the expected range for Bay Area mid-rise affordable housing development during the 2023–2025 period.

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Appendix I. Projects Evaluated During the 2025 Study
Project Name Developer City County Housing Type Stories Total Units Total GSF Subsidized Units
Application
Year
Alvarado Park Santa Clara County Housing Authority San Jose Santa Clara Seniors 5 90 98,527 89 2023 Stevens Creek Promenade Pacific West Communities, Inc. San Jose Santa Clara Large Family 6 173 166,610 171 2023 View at Julian JEMCOR Development Partners, LLC San Jose Santa Clara Non-Targeted 8 300 252,013 296 2023 Meridian Family Apartments ROEM Development Corporation San Jose Santa Clara Large Family 5 233 301,815 231 2023 Martha Gardens Apartments Pacific West Communities, Inc. San Jose Santa Clara Non-Targeted 6 166 145,848 164 2023 Monterey Road Apartments Pacific West Communities, Inc. San Jose Santa Clara Non-Targeted 5 240 132,880 237 2023 2880 Alum Rock Avenue Apartments Pacific West Communities, Inc. San Jose Santa Clara Non-Targeted 6 164 143,055 162 2023 Villa Del Sol Pacific West Communities, Inc. San Jose Santa Clara Non-Targeted 6 194 164,595 192 2023 Julian Street Studios Corporation for Better Housing San Jose Santa Clara Non-Targeted 7 305 143,895 301 2024 525 N Capitol Community Development Partners San Jose Santa Clara Non-Targeted 5 160 143,250 158 2024 Kooser Apartments Affirmed Housing Group San Jose Santa Clara Large Family 7 191 198,716 189 2024 Dry Creek Crossing CRP Affordable Housing and Community Development LLC San Jose Santa Clara Large Family 6 64 89,308 63 2023 Hawthorn Senior Santa Clara County Housing Authority San Jose Santa Clara Seniors 4 103 92,710 101 2024 A. Parkmoor Community Apartments Allied Housing, Inc. San Jose Santa Clara Large Family 5 81 97,245 79 2023 Santa Teresa Multifamily Santa Teresa, L.P. San Jose Santa Clara Special Needs 3 49 36,997 48 2025 Berryessa Family Apartments Green Valley Corporation San Jose Santa Clara Large Family 6 260 283,803 257 2025 Lupina Resources for Community Development San Jose Santa Clara Non-Targeted 6 99 86,162 98 2025 Gateway Tower Core Affordable Housing, LLC San Jose Santa Clara Non-Targeted 15 220 256,679 218 2025 Berryessa TOD Affirmed Housing Group, Inc. San Jose Santa Clara Large Family 10 195 211,819 193 2025 Appendix A: San Jose Projects
Project Name Developer City County Housing Type Stories Total Units Total GSF Subsidized Units
Application
Year
Monterey Family Apartments ROEM Development Corporation Gilroy Santa Clara Large Family 3 94 86,568 93 2024 Distel Circle EAH Inc. Los Altos Santa Clara Large Family 5 90 115,870 88 2024 Montecito Multifamily Charities Housing Development Corporation of Santa Mountain View Santa Clara Large Family 5 85 94,202 84 2023 Mitchell Park Place Eden Housing, Inc. Palo Alto Santa Clara Special Needs 4 50 37,093 49 2023 80 Saratoga Avenue Apartments Pacific West Communities, Inc. Santa Clara Santa Clara Large Family 6 200 234,638 198 2023 1178 Sonora Court MidPen Housing Corporation Sunnyvale Santa Clara Large Family 7 176 219,430 174 2023 Pacific Avenue Senior Homes Satellite Affordable Housing Associates Livermore Alameda Seniors 4 79 66,854 78 2024 Regional Street Apartments Eden Housing, Inc. Dublin Alameda Seniors 5 113 84,669 112 2024 BUSD Workforce Housing Satellite Affordable Housing Associates Berkeley Alameda Large Family 6 110 123,767 97 2024 Legacy Court Eden Housing Inc. & Community Housing Development Richmond Contra Costa Large Family 2 43 45,390 42 2024 Civic Crossing (699 Ygnacio Valley Road)Resources for Community Development Walnut Creek Contra Costa Large Family 5 93 77,310 92 2024 Walnut Apartments Pacific West Communities, Inc. Danville Contra Costa Large Family 3 44 39,469 43 2024 3300 Mission Street Dreamkeeper Venture LLC San Francisco San Francisco SRO 6 35 21,558 34 2024 Golden Gate Avenue Phase 1 LIHTC MidPen Housing Corporation San Francisco San Francisco Large Family 8 55 61,793 54 2024 Sutter Street Martin McNerney Development, Inc. San Francisco San Francisco Non-Targeted 14 102 91,005 101 2024 Casa Adelante 1515 South Van Ness Chinatown Community Development Center San Francisco San Francisco Large Family 9 168 191,719 167 2024 850 Turk Street MidPen Housing Corporation San Francisco San Francisco Large Family 8 92 98,719 91 2024 Balboa Reservoir - Building E BRIDGE Housing Corporation San Francisco San Francisco Large Family 7 128 135,349 127 2024 Sunnydale HOPE SF Block 9 Related Irvine Development Company San Francisco San Francisco Large Family 5 95 112,224 94 2024 Sunnydale HOPE SF Block 7 Mercy Housing California San Francisco San Francisco Large Family 5 89 137,177 88 2024 300 De Haro MRK Partners Inc. San Francisco San Francisco Non-Targeted 11 425 195,921 421 2024 160 Freelon Related Irvine Development Company San Francisco San Francisco Large Family 9 85 66,735 84 2024 Oak Gardens MidPen Housing Corporation Menlo Park San Mateo Special Needs 3 62 52,226 60 2024 Cherry Street Commons Eden Housing, Inc. San Carlos San Mateo Large Family 5 33 40,617 32 2024 Hill Street Linc Housing Corporation Belmont San Mateo Large Family 5 37 55,863 36 2024 Midway Village Phase 2 MidPen Housing Corporation Daly City San Mateo Large Family 4 113 185,781 111 2024 Vera Avenue Apartments Corporation for Better Housing Redwood City San Mateo Non-Targeted 7 178 104,950 176 2024 View at San Bruno JEMCOR Development Partners, LLC San Bruno San Mateo Large Family 10 341 426,017 337 2024 Broadway Meadows Pacific West Communities, Inc. Millbrae San Mateo Large Family 7 97 90,720 96 2024 North Fair Oaks Apartments Affirmed Housing Group, Inc. Redwood City San Mateo Special Needs 6 86 77,523 85 2024 831 Water Street Novin Development Corp. Santa Cruz Santa Cruz Special Needs 6 140 115,648 135 2024 Downtown Library Mixed Use Project For the Future Housing, Inc. Santa Cruz Santa Cruz Large Family 8 124 127,038 123 2024 Westside Village CRP Affordable Housing & Community Development LLC Santa Cruz Santa Cruz Large Family 3 38 38,990 37 2024 4575 Scotts Valley Apartments CRP Affordable Housing & Community Development LLC Scotts Valley Santa Cruz Large Family 3 100 103,959 99 2024 Summer Oaks MidPen Housing Corporation Sonoma Sonoma Large Family 3 72 66,788 71 2024 Casa Roseland MidPen Housing Corporation Santa Rosa Sonoma Large Family 5 75 89,256 74 2024 Windsor Park Linc Housing Corporation Windsor Sonoma Large Family 3 33 37,950 32 2024 Dry Creek Commons Burbank Housing Development Corporation Healdsburg Sonoma Large Family 4 58 61,470 57 2024 Saggio Hills Phase I Freebird Development Company, LLC / Jamboree Housi Healdsburg Sonoma Large Family 3 48 59,882 47 2024 Meridian at Corona Station Danco Communities Petaluma Sonoma Large Family 4 131 124,525 130 2024 Rovina Lane Apartments Pacific West Communities, Inc. Petaluma Sonoma Large Family 3 32 39,926 31 2024 Appendix A: Other City Projects

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Project Name Developer City County Housing Type Stories Total Units Total GSF Subsidized Units
Application
Year
Almond Gardens Apartments Harbor Park, LLC Suisun City Solano Non-Targeted 3 97 78,131 96 2024 Beech Hill Apartments Pacific Housing, Inc. Orangevale Sacramento Large Family 4 29 35,845 28 2024 Central Sacramento Studios II Dano Communities Sacramento Sacramento Special Needs 5 52 38,185 51 2024 Terracina at Wildhawk USA Multi-Family Development, Inc. Sacramento Sacramento Large Family 6 145 117,665 144 2024 The Pardes 2 CRP Affordable Housing and Community Development L Elk Grove Sacramento Large Family 4 140 188,560 139 2024 69th Street Apartments CRP Affordable Housing and Community Development L Sacramento Sacramento Large Family 6 130 128,628 129 2024 Monarch Mutual Housing California Sacramento Sacramento Non-Targeted 5 241 193,785 239 2024 Sakura Mutual Housing California Sacramento Sacramento Non-Targeted 5 134 89,822 133 2024 Harrington Grove Apartments West Development Ventures, LLC Folsom Sacramento Large Family 3 52 45,028 51 2024 The Rigby Abbey Road Inc. Los Angeles Los Angeles Special Needs 4 64 83,170 62 2024 HHH New Hampshire BRIDGE Housing Corporation Los Angeles Los Angeles Special Needs 6 95 36,735 93 2024 Alma Wakeland Housing and Development Corporation Los Angeles Los Angeles Special Needs 4 47 35,807 46 2024 Willowbrook 3 Linc Housing Corporation Compton Los Angeles Special Needs 3 51 49,156 50 2024 18722 Sherman Way LA Family Housing Corporation Los Angeles Los Angeles Special Needs 4 64 39,027 63 2024 Jordan Downs Phase S5 The Michaels Development Company Los Angeles Los Angeles Large Family 4 58 83,647 57 2024 300 Alamitos Mercy Housing 112, LP Long Beach Los Angeles Seniors 5 82 61,963 81 2024 The Garvey Coalition for Responsible Community Development Compton Los Angeles Special Needs 2 75 61,269 74 2024 Grace Villas Women Organizing Resources, Knowledge and Services Los Angeles Los Angeles Special Needs 6 48 81,422 47 2024 Harmony Senior Apartments Domus Development, LLC Los Angeles Los Angeles Seniors 4 84 59,652 83 2024 The 101 Jamboree Housing Corporation Long Beach Los Angeles Special Needs 5 52 57,030 51 2024 Prisma Artist Lofts National Community Renaissance of California City of Pomona Los Angeles Large Family 4 75 97,007 74 2024 20th Street Apartments Venice Community Housing Corporation Santa Monica Los Angeles Special Needs 7 78 82,622 76 2024 121 Mathews HVN Development, LLC Los Angeles Los Angeles Non-Targeted 4 40 22,571 39 2024 6018 Brynhurst HVN Development, LLC Los Angeles Los Angeles Non-Targeted 4 50 31,898 49 2024 Peak Plaza Apartments Hollywood Community Housing Corporation Los Angeles Los Angeles Large Family 7 104 92,437 102 2024 Bana at Palmdale Milare Housing Investments, Inc Palmdale Los Angeles Non-Targeted 5 48 79,751 47 2024 Rosa's Place Daylight Community Development Los Angeles Los Angeles Special Needs 7 98 90,137 97 2024 Holt & Main Meta Development LLC Pomona Los Angeles Large Family 6 160 219,551 158 2024 Jubilo Village Community Corporation of Santa Monica Culver City Los Angeles Large Family 6 95 135,392 93 2024 The Walk Residences Primestor Development, Inc. Norwalk Los Angeles Non-Targeted 6 56 63,460 55 2024 Maison's Village - Phase II Ravello Holdings, Inc. Palmdale Los Angeles Non-Targeted 0 191 182,138 189 2024 Residency at Sky Village Hollywood - Phase I ABSProperties Inc. Los Angeles Los Angeles Special Needs 7 237 191,972 235 2024 Residency at Sky Village Hollywood - Phase II #N/A Los Angeles Los Angeles Special Needs 18 245 191,972 242 2024 910 Wetherly Drive West Hollywood Community Housing Corporation West Hollywood Los Angeles Non-Targeted 7 87 78,425 86 2024 Toyon Gardens Brilliant Corners Unincorporated Los Angeles Special Needs 6 78 62,900 77 2024 Rose Hill Courts Phase II Related Irvine Development Company of California Los Angeles Los Angeles Large Family 3 96 93,229 95 2024 4345 Matilija HVN Development, LLC Los Angeles Los Angeles Non-Targeted 5 75 44,542 74 2024 3981 Meier HVN Development, LLC Los Angeles Los Angeles Non-Targeted 4 75 46,508 74 2024 3412 Victoria HVN Development, LLC Los Angeles Los Angeles Non-Targeted 4 58 33,096 57 2024 5625 Case HVN Development, LLC Los Angeles Los Angeles Non-Targeted 4 70 41,778 69 2024 5749 Brynhurst HVN Development, LLC Los Angeles Los Angeles Non-Targeted 4 53 40,624 52 2024 8911 Ramsgate HVN Development, LLC Los Angeles Los Angeles Non-Targeted 4 77 46,502 76 2024 U.S.VETS-WLAVA Building 300 U.S.VETS Housing Corporation Los Angeles Los Angeles Special Needs 2 44 40,134 43 2024 Maison's Sierra - Phase 2 Ravello Holdings, Inc. Lancaster Los Angeles Non-Targeted 0 171 132,233 169 2024 Alveare Parkview Related Irvine Development Company, LLC Los Angeles Los Angeles Large Family 8 105 129,811 104 2024 1250 West Jeff Community Builders Group Los Angeles Los Angeles Large Family 7 122 107,414 121 2024 Oaks on Balboa Las Palmas Housing and Development Corporation Los Angeles Los Angeles Special Needs 2 117 76,483 116 2024 Twin Park Landing Pacific West Communities, Inc. Los Angeles Los Angeles Non-Targeted 6 275 190,726 272 2024 Veteran Commons Abode Communities Downey Los Angeles Non-Targeted 3 100 97,421 99 2024 Victory Blvd Linc Housing Corporation Los Angeles Los Angeles Large Family 5 194 230,645 192 2024 Century + Restorative Care Village Phase I Century Affordable Development, Inc. Los Angeles Los Angeles Special Needs 6 146 152,708 145 2024 Weingart Tower 1B Weingart Center Association Los Angeles Los Angeles Special Needs 11 104 53,511 103 2024 Locke Lofts Pacific West Communities, Inc. Los Angeles Los Angeles Special Needs 6 148 68,937 146 2024 Casa de la Luz Hollywood Community Housing Corporation Los Angeles Los Angeles Non-Targeted 5 95 106,455 93 2024 Cudahy Seniors National Community Renaissance of California Cudahy Los Angeles Special Needs 5 140 165,707 138 2024 Terrasini Chelsea Investment Corporation San Diego San Diego Seniors 5 95 64,655 94 2024 Alvarado Senior Village San Diego Community Housing Corporation Fallbrook San Diego Seniors 3 54 43,475 53 2024 Fox Point Farms Chelsea Investment Corporation Encinitas San Diego Large Family 0 40 49,020 39 2024 Rose Creek Village National Community Renaissance of California San Diego San Diego SRO 5 60 36,396 59 2024 Quince Street Seniors San Diego Interfaith Housing Foundation Escondido San Diego Seniors 4 145 187,450 142 2024 Chula Vista Seniors San Diego Interfaith Housing Foundation Chula Vista San Diego Seniors 3 58 37,780 57 2024 El Camino Real Affordable Apartments Mirka Investments, LLC Oceanside San Diego Large Family 4 111 104,940 110 2024 St. Luke's Affordable Rise Urban Partners LLC San Diego San Diego Non-Targeted 8 78 51,715 77 2024 Kindred BRIDGE Housing Corporation San Diego San Diego Special Needs 8 126 144,179 125 2024 La Costa Family Apartments Mirka Investments, LLC Carlsbad San Diego Large Family 3 19 18,274 19 2024 North City Affordable Carmel Enterprise, LLC San Marcos San Diego Large Family 4 224 322,015 222 2024 The Trails at Carmel Mountain Ranch Chelsea Investment Corporation San Diego San Diego Large Family 5 125 176,399 124 2024 Monarch Hillside Affordable ApartmentsMonarch Group & Klein Financial Corp San Diego San Diego Non-Targeted 5 51 46,747 50 2024 The Grant at Mission Trails CRP Affordable Housing & Community Development LLC San Diego San Diego Large Family 7 48 53,952 47 2024 Wakeland Riverwalk Wakeland Housing and Development Corporation San Diego San Diego Large Family 5 190 215,305 188 2024 712 Seagaze Elsey Holdings LLC Oceanside San Diego Non-Targeted 8 179 155,387 177 2024 Appendix A: Other City Projects

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Project Name Developer City County Housing Type Stories Total Units Total GSF Subsidized Units
Application
Year
Alvarado Creek Apartments Pacific West Communities, Inc. San Diego San Diego Large Family 6 227 230,285 225 2024 Avanzando San Ysidro ( Site 1: Cypress)Hitzke Development Corporation San Diego San Diego Large Family 3 103 133,913 101 2024 St. Paul Terrace St. Paul Terrace, LP Berkeley Alameda Large Family 7 50 63,389 49 2025 Foothill Family Apartments Oakland Housing Initiatives, Inc. Oakland Alameda Large Family 3 65 67,312 64 2025 34th & San Pablo Family Housing East Bay Asian Local Development Corporation Oakland Alameda Special Needs 6 60 55,690 59 2025 Lazuli Landing MidPen Housing Corporation Union City Alameda Large Family 4 81 125,805 80 2025 1523 Harrison Street oWOW LLC Oakland Alameda Non-Targeted 11 279 179,500 275 2025 The Eliza Mercy Housing California Oakland Alameda Seniors 8 97 47,724 96 2025 TBV Villas at Renaissance Sandidge Urban Group, Inc. Richmond Contra Costa Large Family 5 105 136,000 104 2025 El Cerrito Plaza - Parcel A South Related Irvine Development Company, LLC El Cerrito Contra Costa Large Family 6 70 72,991 69 2025 967 Mission 967 Mission, LP San Francisco San Francisco Seniors 9 95 47,424 94 2025 Balboa Reservoir - Building A BRIDGE Housing Corporation San Francisco San Francisco Large Family 6 159 192,080 158 2025 2970 16th Street Mission Housing Development Corporation San Francisco San Francisco Special Needs 9 136 70,839 136 2025 960 Howard Street oWOW LLC San Francisco San Francisco Non-Targeted 15 202 123,050 200 2025 Cypress Point MidPen Housing Corporation Moss Beach San Mateo Large Family 3 71 20,717 70 2025 Sheridan Apartments Alliant Communities Menlo Park San Mateo Large Family 3 88 87,724 87 2025 The Magnolias Eden Housing, Inc. Morgan Hill Santa Clara Special Needs 5 66 75,150 65 2025 El Camino Real Multifamily Charities Housing Development Corporation Palo Alto Santa Clara Large Family 5 130 243,585 128 2025 Mountain View Lot 12 Related Irvine Development Company, LLC Mountain View Santa Clara Large Family 5 120 161,833 119 2025 Beverly Gardens CRP Affordable Housing and Community Development L Scotts Valley Santa Cruz Large Family 3 25 49,742 24 2025 525 Water Street Zen Development LLC Santa Cruz Santa Cruz Large Family 5 90 88,109 89 2025 41st & Soquel Apartments Pacific West Communities, Inc. Soquel Santa Cruz Large Family 6 256 290,820 253 2025 136 River Apartments 136 River Partners, LLC Santa Cruz Santa Cruz Large Family 6 50 54,157 49 2025 Pinnacle Pass Apartments CRP Affordable Housing and Community Development L Scotts Valley Santa Cruz Large Family 3 40 44,635 39 2025 Banana Belt Apartments CRP Affordable Housing & Community Development LLC Santa Cruz Santa Cruz Large Family 6 83 102,845 82 2025 Donner Field Senior Apartments Eden Housing, Inc. Sacramento Sacramento Seniors 3 67 44,529 66 2025 Coral Blossom Apartments Excelerate Housing Group LLC Elk Grove Sacramento Special Needs 3 81 80,179 80 2025 La Trinidad Apartments Domus Development, LLC Los Angeles Los Angeles Special Needs 5 66 54,809 65 2025 Armory Arts Collective Linc Housing Corporation Long Beach Los Angeles Seniors 5 64 62,770 63 2025 Safe Harbor II Holos Inc. Wilmington Los Angeles Special Needs 4 40 32,423 39 2025 10953 Whipple HVN Development, LLC Los Angeles Los Angeles Non-Targeted 5 91 53,685 90 2025 5403 Inglewood HVN Development, LLC Los Angeles Los Angeles Non-Targeted 5 46 25,592 45 2025 9030-9038 Reading HVN Development, LLC Los Angeles Los Angeles Non-Targeted 5 77 43,553 76 2025 11218-11222 Califa HVN Development, LLC Los Angeles Los Angeles Non-Targeted 5 76 46,098 75 2025 537 Kenmore 537 N Kenmore LP Los Angeles Los Angeles Non-Targeted 5 65 36,408 64 2025 VA Building 408 TSA Housing, Inc. Los Angeles Los Angeles Special Needs 4 101 86,776 100 2025 U.S.VETS-WLAVA Building 256 U.S.VETS Housing Corporation Los Angeles Los Angeles Special Needs 3 41 36,808 40 2025 West LA VA- Building 409 Century Affordable Development, Inc. (CADI) Los Angeles Los Angeles Special Needs 4 117 85,221 115 2025 Palmdale Family Housing Affirmed Housing Group, Inc. Palmdale Los Angeles Large Family 3 264 291,361 260 2025 Community Hub at Inglewood First UMCBMB Housing LLC Inglewood Los Angeles Non-Targeted 3 60 28,501 59 2025 Linden Apartments AMCAL Multi-Housing, Inc. Long Beach Los Angeles Large Family 4 100 115,175 99 2025 6033 De Soto Meta Development, LLC Los Angeles Los Angeles Non-Targeted 7 207 244,694 205 2025 Zenith on 25th Lincoln Avenue Capital LLC Palmdale Los Angeles Large Family 3 272 306,137 269 2025 Crenshaw Court Arden Development, Inc. Los Angeles Los Angeles Large Family 7 70 51,489 69 2025 638 S Berendo 638 Berendo Partners, LLC Los Angeles Los Angeles Non-Targeted 8 163 91,295 161 2025 Creekside Commons CRP Affordable Housing ad Community Development LL Santa Clarita Los Angeles Large Family 4 128 129,788 127 2025 Sky Castle Arden Development, Inc. Los Angeles Los Angeles Non-Targeted 2 241 148,208 239 2025 Prisma Affirmed Housing Group, Inc. Los Angeles Los Angeles Special Needs 6 98 47,467 96 2025 La Estancia AMCAL Multi-Housing Inc. Los Angeles Los Angeles Non-Targeted 6 190 122,383 188 2025 21010 Vanowen Meta Development, LLC Los Angeles Los Angeles Non-Targeted 6 395 349,900 391 2025 Francis Avenue Apartments MRK Partners, Inc. Los Angeles Los Angeles Non-Targeted 8 232 133,303 230 2025 Sherman Apartments Meta Development, LLC Los Angeles Los Angeles Non-Targeted 8 244 197,860 242 2025 Warner Center II Meta Development, LLC Los Angeles Los Angeles Large Family 8 128 167,047 127 2025 Serra Mesa Apartments Community HousingWorks San Diego San Diego Special Needs 5 60 34,924 59 2025 Coast Villas National Community Renaissance of California Oceanside San Diego Special Needs 4 56 41,499 55 2025 Navajo Family Apartments Community HousingWorks San Diego San Diego Large Family 4 45 42,641 44 2025 Aero Drive Affordable Apartments Mirka Investments, LLC San Diego San Diego Large Family 6 190 202,869 188 2025 Brookview Senior Villas National Community Renaissance of California Fallbrook San Diego Special Needs 3 61 47,724 60 2025 SDSU Mission Valley Chelsea Investment Corporation San Diego San Diego Large Family 5 126 119,001 125 2025 Mirka Tower 1 Mirka Investments, LLC San Diego San Diego Large Family 21 318 313,098 315 2025 Mira Mesa Chelsea Investment Corporation San Diego San Diego Large Family 7 90 139,039 89 2025 Hillcrest Hall CRP Affordable Housing and Community Development L San Diego San Diego Large Family 8 98 75,358 97 2025 Market Two MRK Partners, Inc. San Diego San Diego Non-Targeted 6 272 132,844 269 2025 Appendix A: Other City Projects

Presentation to the Board of Trustees
September 8, 2025
FOOTHILL – DE ANZA COMMUNITY COLLEGE DISTRICT

MOUNTAIN VIEW WHISMAN SCHOOL DISTRICT

Faculty/Staff Housing
• Diversity, Equity, Inclusion and Belonging
to support, Recruitment, Retention,
Community engagement, Wellness, and
Sustainability
• Financial viability
Faculty/Staff Housing
• Environmental sustainability
• Cost-effective housing
• Financial viability
https://sevensmv.com/gallery/ 2

3 De Anza Faculty/Staff Ranking
(5 – most preferred)
Near the De Anza College campus 3.76
Near the Foothill College campus 3.04
On the De Anza College campus 2.96
Near the Sunnyvale Center 2.87
On the Foothill College campus 2.22
Foothill Faculty/Staff Ranking
(5 – most preferred)
Near the Foothill College campus 3.79
On the Foothill College campus 3.22
Near the De Anza College campus 3.06
On the De Anza College campus 2.53
Near the Sunnyvale Center 2.39

• Planned for the employee housing site at Foothill College. • Los Altos Hills included 200 affordable housing units at Foothill College as part of their RHNA numbers but no funding commitment except for a guarantee that permits can be expedited. • Estimate cost for constructing 50 units is $ 1 million/unit not including site work, remediation, and demolition costs.
• Will take at least 3 years to construct (design, permitting, bidding, construction). • The rents will not be as affordable as it could be to ensure self-sustaining operations due to additional staffing required.

Description Estimate
Construction $ 50,000,000
Land $ 0
Sitework and Remediation TBD
Contingency $ 10,000,000
Furniture, Fixture, and Equipment $ 3,000,000
Miscellaneous Costs $ 1,500,000
Grand Total $ 64,500,000++
• $1M/unit based on early 2024 estimates before the LA fires and the tariffs.
• Sitework and remediation required to address seismic and flood zones. • Will require CEQA environmental impact report and take at least 3 years to complete (design, permitting, bidding, construction). • Potential change orders.
• DSA project review is not required. Local jurisdiction applies including zoning and land use entitlements.

Scholars Row at The Sevens
699 North Shoreline Blvd., Mountain View, CA 94043
Mission-driven and mission-aligned
partnership for workforce housing
operating on a co-tenancy partnership
with MVWSD owning 65% and
Foothill-De Anza owning 35% of
undesignated units benefited by the
amenities at the adjacent The Sevens
market rate housing project.

Scholars Row at The Sevens
Purchase Price • Total purchase price (land and building) is $54.5 million for 35% of the total units or 50 units.
• Includes 50 parking spaces (1 per unit).
• Access to all amenities at The Sevens.
• Initial Deposit of $544,500 (refundable until approval of due diligence, applied to purchase price)
• Second Deposit of $544,500 (after approval of due diligence, applied to purchase price)
Operations • 501(c)(3) corporation to manage and operate the property. • Foothill-De Anza is entitled to 1 seat with approval rights for any significant operational/management changes.

Rental Rates • Below Market Rates
Eligible Renters • Gross Total Household Income is below the 150% of Area Median Income
• Employees of the Foothill-De Anza Community College District • Foothill-De Anza can have its own prioritization rubric

FH Campus Scholars Row at
The Sevens
Construction $50,000,000 n/a
Site Work and Demo Work TBD n/a
Acquisition n/a $ 54,500,000
Contingency $10,000,000 $ 2,500,000
Furniture, Fixture, & Eqpmt. $ 3,000,000 $500,000
Miscellaneous $ 1,500,000 $ 1,500,000
Total $ 64,500,000 $59,000,000.00
ALL FIGURES ARE ESTIMATES ONLY.

Other Considerations include anticipated CEQA compliance, land use and zoning approvals, permitting requirements, electricity, water, sewage connections.

Contingency is about 20% of construction costs to account for escalation costs due to recent economic conditions.

Miscellaneous – legal, due diligence, and consultants.

Nearby Schools Restaurants and Coffee Shops Shopping

5 miles to Foothill College
14 minutes

6.9 miles to De Anza College
11 minutes
4 miles to Sunnyvale Center
12 minutes

Studio Unit
484 – 523 sq.ft.

One Bedroom Unit
665 – 847 sq.ft.

Two Bedroom Unit
956 – 1,006 sq.ft.

All units include appliances (dishwasher, refrigerator, and microwave). Furniture not included.

Year 2025 Household Size >>> 1 2 3 4 5 6 7 8
Santa Clara County Area
Median Income
Acutely Low $ 20,500 $ 23,450 $ 26,350 $ 29,300 $ 31,650 $ 34,000 $ 36,350 $ 38,700 Extremely Low $ 42,200 $ 48,200 $ 54,250 $ 60,250 $ 65,100 $ 69,900 $ 74,750 $ 79,550 Very Low Income $ 70,350 $ 80,400 $ 90,450 $ 100,450 $ 108,500 $ 116,550 $ 124,600 $ 132,600 Low Income $ 111,700 $ 127,650 $ 143,600 $ 159,550 $ 172,350 $ 185,100 $ 197,850 $ 210,650 Median Income $ 136,650 $ 156,150 $ 175,700 $ 195,200 $ 210,800 $ 226,450 $ 242,050 $ 257,650 Moderate Income $ 164,000 $ 187,400 $ 210,850 $ 234,250 $ 253,000 $ 271,750 $ 290,450 $ 309,200 Year 2025 Household Size >>> 1 2 3 4 5 6 7 8
150% Area Median Income Median Income $ 204,975 $ 234,225 $ 263,550 $ 292,800 $ 316,200 $ 339,675 $ 363,075 $ 386,475 • City of Mountain View approved the increase in eligibility from 120% AMI to 150% AMI in June 2025.
• These provisions for below market rate eligibility is part of the BMR Agreement between the City of Mountain View and Mountain View Whisman School District.
• Foothill-De Anza is working with the City of Mountain View to amend the BMR Agreement to ensure the District’s name and interest. • Eligible employees who will live in the property will have a three-year transition plan to move out should their gross total household income becomes higher than the 150% area median income.

DUE DILIGENCE
Review of construction documents and
suitability as affordable staff housing,
management and operational feasibility,
condition of title and certificate of occupancy
Review of ADA units and over-all accessibility

CLOSE OF ESCROW CONDITIONS
Amendment to the Below Market Rate (BMR)
Agreement by the City of Mountain View
Approval of the Co-Tenancy Agreement
Approval of the Maintenance and Operating
Agreement
Approval of Title Insurance Policy
Initial Deposit and Second Deposit Refundable if
Conditions not Satisfied

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Assessor's Parcel No.(s): 153-24-027
County: Santa Clara

PURCHASE AND SALE AGREEMENT
This Purchase and Sale Agreement (“Agreement”) is entered as of September ___, 2025, (“Effective Date”) by and between the Mountain View Whisman School District (“MVWSD” or “Seller”), and Foothill-De Anza Community College District (“FHDACCD” or “Buyer”). MVWSD and FHDACCD are California public entities located in the County of Santa Clara. Parties may be individually referred to herein as a “Party“ or collectively as “Parties.”

RECITALS
A. WHEREAS, MVWSD is the fee simple owner of the property, which includes a 144-unit residential apartment building, located at 699 North Shoreline Boulevard, in the City of Mountain View, California and County of Santa Clara, with the assessor parcel number (“APN") 153-24-027 and as more specifically described below and in Exhibit A, attached and made a part hereto ("Property").

B. WHEREAS, the Property is adjacent to and was developed as part of an integrated residential apartment complex with the Property and the adjacent parcel owned and developed by Mountain View Owner LLC consisting of 572 market-rate residential units, for a total of 716 residential units, subterranean parking structure (“Parking Garage”) and certain amenities (“Master Development”) and subject to that certain Agreement by and Among the City of Mountain View, Mountain View Owner, LLC, and Mountain View Wishman School District, Regarding the Provision of Affordable Rental Housing Units for A Residential Project Located at 777 West Middlefield Road (“Agreement for Affordable Rental Housing Units”) dated September 19, 2022 and recorded October 13, 2022 as Document No. 2536075 of Official Records and that certain Declaration of Covenants, Conditions and Restrictions and Establishment of Easements ad Cost Sharing Obligations for 777 West Middlefield (“CC&Rs”) dated November 28, 2022 and recorded December 6, 2022 as Document No. 25411919 of Official Records.

C. WHEREAS, MVWSD intends to sell to FHDACCD, and FHDACCD intends to purchase from MVWSD, an Ownership Interest (as further detailed and defined below) of an undivided thirty-five percent (35%) interest as tenants in common in the Property, including ownership of fifty (50) residential units and a proportionate share of the land, improvements, access to and use of a proportionate share of parking spaces in the Parking Garage, access to and use of all amenities, common areas and appurtenances of the Property, including easements or rights-of-way relating thereto, in the Master Development, of which the Property is a part thereof.

D. WHEREAS, MVWSD warrants it is authorized to sell the Ownership Interest, as defined herein, to FHDACCD.

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NOW THEREFORE, in consideration of the covenants and agreements hereinafter set forth MVWSD and FHDACCD agree as follows:

AGREEMENT

1. PROPERTY INTEREST TO BE PURCHASED

1.1 MVWSD agrees to sell and grant to FHDACCD the Ownership Interest in the Property and convey by a grant deed substantially in the form of Exhibit B, attached hereto (the “Grant Deed”).

1.2 Purchase Price: Buyer agrees to pay Fifty-Four Million Four Hundred Fifty Thousand Dollars ($54,450,000.00) (“Purchase Price”) for the Ownership Interest in the Property.

1.3 Deposits, Independent Consideration, and Payment of Purchase Price:

1.3.1 Initial Deposit. Buyer shall deposit Five Hundred Forty-Four Thousand Five Hundred Dollars ($544,500.00) into the escrow within one (1) business day of the Opening of Escrow (as defined below) (“Initial Deposit”). The Initial Deposit shall be deposited into an interest-bearing account.

1.3.2 Second Deposit. If Buyer, in its sole and absolute discretion, elects to proceed with the purchase of the Property, then Buyer shall deposit a second deposit in the sum of Five Hundred Forty-Four Thousand Five Hundred Dollars ($544,500.00) into the escrow within two (2) business days of the delivery of the “Approval Notice” as defined below (the “Second Deposit”). The Second Deposit shall be deposited into an interest-bearing account with the Initial Deposit and the Initial Deposit and the Second Deposit shall be referred to as the “Deposit.” If the sale of the Property is consummated, 100% of the Deposit, with interest, shall be credited against the Purchase Price.

1.3.3 Independent Contract Consideration. A portion of the Initial Deposit in the sum of $100.00 (the “Independent Contract Consideration”) has been bargained for and agreed to as consideration for Buyer’s exclusive right to purchase the Property and the right to inspect the Property during the Feasibility Period provided and defined herein, and for Seller’s execution and delivery of this Agreement. The Independent Contract Consideration is in addition to and independent of all other consideration provided in this Agreement, is non-refundable in all events (notwithstanding anything to the contrary herein), and shall be released to Seller upon Buyer’s deposit of the Initial Deposit into Escrow.

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1.3.4 The remaining portion of the Purchase Price in the amount of Fifty Three Million Three Hundred Sixty-One Thousand One Hundred Dollars ($53,361,100) shall be due and payable by Buyer to Seller at the Close of Escrow (as defined below), subject to the conditions set forth in this Agreement.

2. DEFINED TERMS

2.1 Close of Escrow. The term “Close of Escrow“ or “Closing“ shall mean the consummation of the purchase and sale of the Ownership Interest in the Property by the Parties by payment of the Purchase Price and the recordation of the Grant Deed substantially in the form of Exhibit B attached hereto, the Amendment to Agreement for Affordable Rental Housing Units, which shall be attached hereto as Exhibit C upon final approval of the City of Mountain View, and the Mountain View Whisman School District and Foothill-De Anza Community College District Co-Tenancy Agreement (“Co-Tenancy Agreement”) , which shall be agreed upon by the Parties and attached hereto as Exhibit D, attached hereto in accordance with the terms and provisions of this Agreement, including the “Closing” section herein.

2.2 Day. Unless otherwise indicated, “day” or “Day” shall mean a calendar day.

Opening of Escrow. Within two (2) business days of the Effective Date, Seller shall open an escrow to consummate the purchase of the Ownership Interest in the Property by Buyer with First American Title Company, Attention: Rhonda Watts, 222 De Anza Blvd., San Mateo, CA 94402 and 333 W. Santa Clara Street, Suite #220, San Jose, CA 95113, Phone: 650.356.1731, Cell: 650.822.4026 Email: [email protected] (“Escrow Holder”), and the Seller shall deposit with the Escrow Holder a duly fully executed copy of this Agreement (the “Opening of Escrow”), which shall constitute the joint escrow instructions.

2.3 Ownership Interest (“Ownership Interest”)

2.3.1 Buyer’s Ownership Interest in the Property shall be a thirty-five percent (35%) undivided tenant in common ownership interest. Buyer’s Ownership Interest shall include fifty (50) undesignated units (individually, an “FHDA Unit,” collectively, the “FHDA Units”), identified as to unit types and income levels and other amenities as follows:

2.3.1.1 Two (2) 80% AMI studio apartments,

2.3.1.2 Five (5) 150% AMI studio apartments,

2.3.1.3 Eight (8) 80% AMI one-bedroom apartments,

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2.3.1.4 Twenty-Two (22) 150% AMI one-bedroom apartments,

2.3.1.5 Three (3) 80% AMI two-bedroom apartments,

2.3.1.6 Ten (10) 150% AMI two-bedroom apartments,
Of the FHDA Units, FHDA will have access to 35% of the ADA accessible units.

The specific location of FHDA Units shall be assigned periodically by MWVSD to FHDA for FHDA’s exclusive use and occupancy pursuant to the Master Maintenance and Operations Agreement (“M&O Agreement”), which shall be entered into between the Parties by the Close of Escrow, and the Agreement for Affordable Rental Housing Units, as amended.

2.3.2 As part of Buyer’s Ownership Interest, Buyer shall own and have access to and use of fifty (50) parking spaces located in the Parking Garage (“FHDA Parking Spaces”), the general location of which is as shown in Exhibit A.

2.3.3 As part of Buyer’s Ownership Interest, Buyer shall have full access to and the use and enjoyment of all amenities that are part of the Master Development and appurtenant to the Property subject to: Section 2.3.4 below; the Agreement for Affordable Rental Housing Units, as amended; the CC&R’s; other matters of record that are identified encumbrances herein; and the M&O Agreement.

2.3.4 Seller’s and Buyer’s ownership interests in the Property shall be subject to the Agreement for Affordable Rental Housing Units, as amended, the Co-Tenancy Agreement, the M&O Agreement, CC&Rs and other matters of record, subject to Section 3.3.

2.4 Title Policy. The term “Title Policy“ shall mean the American Land Title Association (“ALTA”) owner's standard (or extended if applicable) coverage policy of title insurance to be issued by the Title Company upon the Close of Escrow pursuant to the terms of this Agreement.

3. DUE DILIGENCE; MARKETING; "AS-IS" PURCHASE; RELEASE OF SELLER.

3.1 Due Diligence. Close of Escrow shall be subject to Buyer’s determination of the suitability of the Property for Buyer’s intended use in Buyer’s sole and absolute discretion. Buyer shall have ten (10) days from the Opening of Escrow (the “Due Diligence Period”) to determine the suitability of the Property. Prior to 5:00 p.m. (local time) on the last day of the Due Diligence Period (the “Due Diligence

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Deadline”), Buyer shall either approve or disapprove the suitability of the Property. Buyer’s failure to deliver to Seller written notice approving the suitability of the Property (the “Notice of Due Diligence Approval” or “Notice to Proceed”) on or before the Due Diligence Deadline shall constitute Buyer’s disapproval, whereupon this Agreement and the Escrow shall automatically terminate, and Seller and Escrow Holder shall immediately return the Initial Deposit to Buyer, all without further instructions from Seller or Buyer, and neither Seller nor Buyer shall have any further rights or obligations under this Agreement.

3.2 Sellers Documents. Within two (2) business days of execution of this Agreement, Seller shall provide Buyer with copies of any of the following reports that Buyer has in its possession: proforma title policies, surveys, reports, environmental inspections, soil or geological reports, information concerning the most recent property taxes, land use entitlements for the Master Development, below market rate housing restrictions; zoning restrictions on the use of the Property, appurtenant easements, and other documents that Seller may have in its possession pertaining to the Property (“Diligence Materials”). Buyer shall review and inspect the Diligence Materials and shall provide the Seller a Notice to Proceed on or before the Due Diligence Deadline.

3.3 Title. Within two (2) business days after the Opening of Escrow, Seller shall cause the Title Company to issue a current preliminary title report with respect to the Property, accompanied by legible copies of all documents referred to in the report. Within two (2) business days after Buyer’s receipt of the preliminary title report, Buyer shall provide notice to Seller of any objections that Buyer has with respect to the exceptions to title listed in the preliminary title report. Seller shall have two (2) business days from the date of notice to (i) cure any exceptions to which Buyer objects, (ii) agree to cause such exception removed or eliminated prior to or at the Closing, to the reasonable satisfaction of Buyer, unless a longer period is mutually agreed by Parties, or (iii) decline to cure any Buyer title objections. If Buyer’s objection to any exception to title cannot be removed or eliminated to the reasonable satisfaction of Buyer, prior to the Due Diligence Deadline, Buyer may elect to cancel escrow and terminate this Agreement and thereafter, the Deposit shall be returned to Buyer. If Seller declines to cure any or all of Buyer’s title objections, then Buyer shall have the right to terminate this Agreement on or before the Due Diligence Deadline and the Deposit shall be returned to Buyer. If Buyer provides the Seller and Escrow Holder a Notice to Proceed as set forth in this Agreement and approves the condition of the Property on or before the Due Diligence Deadline, Buyer shall be deemed to have waived any prior title objections to which Seller declined to cure. Buyer shall not be required to object to deeds of trust, mortgages, mechanics’ liens, judgments or other monetary liens encumbering the Property,

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provided such monetary encumbrances were not created by or through any action or inaction of Seller, its agents or representatives (“Monetary Liens”) and to the Agreement for Affordable Rental Housing Units, as amended.

Notwithstanding the foregoing, neither (i) the Title Company’s standard printed exceptions; (ii) matters affecting title created by or with the consent of Buyer; nor (iii) liens to secure taxes and assessments not yet due and payable shall give rise to any objection to title by Buyer. Additionally, the Title Policy shall contain such endorsements, if any, as Buyer may negotiate with Title Company on or before the Due Diligence Deadline. Seller will provide the Title Company with a customary and reasonable owner’s affidavit permitting the Title Company to provide extended coverage to Buyer on the Property. Evidence of title to the Property shall be the issuance at the Close of Escrow by Title Company of a standard ALTA owner's coverage policy of title insurance, or extended ALTA owner’s coverage of title insurance at Buyer’s option and additional expense for said extended owner’s coverage) insuring title to the Property and containing such endorsements as Buyer shall request (if any), as the same shall be negotiated by Buyer with Title Company on or before the Due Diligence Deadline.

3.4 Marketing. From the Effective Date until Close of Escrow, Buyer may accept and process housing applications from qualified FHDA staff for FHDA Units and Seller, at no cost or expense to Seller, will cooperate as requested by Buyer to allow FHDA staff to take occupancy of FHDA Unit as soon as practical after Close of Escrow.

3.5 "AS-IS" PURCHASE. BUYER SPECIFICALLY ACKNOWLEDGES AND AGREES THAT

SELLER IS SELLING AND BUYER IS PURCHASING AN OWNERSHIP INTEREST IN THE PROPERTY ON AN "AS-IS WITH ALL FAULTS" BASIS. SELLER SHALL OFFER NO

CREDITS TO THE PURCHASE PRICE TO OFFSET ANY POTENTIAL MITIGATION OF

SOILS, UTILITIES, ENVIRONMENTAL, WETLANDS OR ANY OTHER CONDITION AFFECTING THE PROPERTY. EXCEPT FOR THE REPRESENTATIONS, WARRANTIES

AND COVENANTS OF SELLER IN THIS AGREEMENT, BUYER IS RELYING SOLELY ON

ITS INDEPENDENT INVESTIGATION AND NOT ON ANY REPRESENTATIONS OR

WARRANTIES OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, FROM SELLER

AS TO ANY MATTERS CONCERNING THE PROPERTY, ITS SUITABILITY FOR BUYER'S INTENDED USES OR ANY OF THE PROPERTY CONDITIONS. SELLER DOES NOT

GUARANTEE THE LEGAL, PHYSICAL, GEOLOGICAL, ENVIRONMENTAL OR OTHER

CONDITIONS OF THE PROPERTY, NOR DOES IT ASSUME ANY RESPONSIBILITY FOR

THE COMPLIANCE OF THE PROPERTY OR ITS USE WITH ANY STATUTE, ORDINANCE OR REGULATION. IT IS BUYER'S SOLE RESPONSIBILITY TO

DETERMINE ALL BUILDING, PLANNING, ZONING AND OTHER REGULATIONS RELATING TO THE PROPERTY AND THE USES TO WHICH IT MAY BE PUT.