San Jose City Council
November 15, 2022

Downtown Residential
High-Rise Program
City Council Meeting
November 15, 2022
Item 8.1
Jerad Ferguson, Housing Catalyst, Office of Economic Development and Cultural Affairs Nanci Klein, Director, Office of Economic Development and Cultural Affairs Jacky Morales-Ferrand, Director, Housing Department
Rachel VanderVeen, Deputy Director, Housing Department
Rosalynn Hughey, Deputy City Manager
2 Current Downtown High-Rise Residential Program
Inclusionary Housing Ordinance (IHO)
Reduction to $0 in-lieu if
completed by June 30, 2025
(see table)
Construction Taxes
(Commercial-Residential-Mobilehome Park
Construction Tax and
Building and Structure
Construction Tax)
50% reduction and deferral of
payment if completed by
June 30, 2025
Building Permit by IHO In-Lieu Fee
June 30, 2021 $0/SF
June 30, 2022 $0/SF
June 30, 2023 $0/SF
June 30, 2024 $13/SF
June 30, 2025 $23/SF
Certificate of Occupancy for 80% of dwelling units must be obtained on or by June 30, 2025
3 Feasibility Analysis
• Three high-rise scenarios analyzed in Cost of Development Report:
1) No tax and fee waiver
2) Current tax and fee waiver
3) Including 5% of units at 100% AMI (moderate income)
• All scenarios were found to be infeasible – no waiver scenario increases feasibility gap by $63,000 per unit
• Total unit costs increase by 7%
• Analysis shows hypothetical example of development – specific projects may have unique circumstances that would allow them to move forward in the current environment
4 Why Extend the Program?
Pipeline Projects
Developer Project Name Address Units
Acuity Realty The Carlysle 51 Notre Dame Ave 290
Scape Scape 600 South 1st Street 336
Urban Catalyst The Mark 459 South 4th St 222
Urban Catalyst Echo/Icon 147 E Santa Clara Street 415
Urban Community 420 South 2nd 420 South 2nd St 254
Urban Community 420 South 3rd 420 South 3rd St 152
Westbank Fountain Alley/Energy Hub 35 South 2nd St 194
Westbank Project Bo Town 409 S 2nd St 520
2,383
5 Staff Recommendation
Timeline Building
Permit by
Certificate of
Occupancy by
Inclusionary
Requirement
Geographic
Limitations
Construction
Taxes
Current June 30, 2023 June 30, 2025 $0 in-lieu fee
Downtown
Core /
Downtown
Planned
Growth Area
50% reduction
Phase 1 June 30, 2025 June 30, 2029 $0 in-lieu fee
Downtown
Planned
Growth Area
50% reduction
Phase 2 July 1, 2025 -
June 30, 2029 June 30, 2033
5% of units at
100% AMI
Downtown
Planned
Growth Area
50% reduction
Downtown Residential
High-Rise Program
City Council Meeting
November 15, 2022
Item 8.1
Jerad Ferguson, Housing Catalyst, Office of Economic Development and Cultural Affairs Nanci Klein, Director, Office of Economic Development and Cultural Affairs Jacky Morales-Ferrand, Director, Housing Department
Rachel VanderVeen, Deputy Director, Housing Department
Rosalynn Hughey, Deputy City Manager