TO: HONORABLE MAYOR FROM: Planning Commission
AND CITY COUNCIL
SUBJECT: SEE BELOW DATE: June 8, 2023
SUBJECT: GPT22-001 & ER21-032. CITY-INITIATED GENERAL PLAN TEXT AMENDMENT TO REVISE THE ENVISION SAN JOSÈ 2040 GENERAL
PLAN HOUSING ELEMENT FOR THE 2023-2031 REGIONAL HOUSING
NEED ALLOCATION (RHNA) CYCLE PROJECTION PERIOD
PURSUANT TO STATE LAW AND RELATED AMENDMENT TO
CHAPTER 7 OF THE GENERAL PLAN.
RECOMMENDATION
As recommended by the Planning Commission on May 24, 2023:
(a) Adopt a resolution certifying the City of San Jose 2023-2031 Housing Element Update Supplemental Environmental Impact Report and making certain findings concerning no significant impacts of the project, mitigation measures and project alternatives in accordance with CEQA.
(b) Adopt a resolution approving the General Plan Text Amendment to amend the Envision San José 2040 General Plan to include the 2023-2031 Housing Element, revise Chapter 7 of the General Plan, and repeal the 2014 2022 Housing Element.
SUMMARY AND OUTCOME
The 2023-2031 Housing Element was heard at the May 24, 2023, Planning Commission meeting (Attachment-Planning Commission Staff Report). The Planning Commission voted 8-2 to recommend that the City Council approve the staff’s recommendation. If the City Council approves the actions listed above as recommended by the Planning Commission, staff will submit the Housing Element to the state Department of Housing and Community Development (HCD) for certification.
Every eight years, every city, town, and county must update its Housing Element and have it certified by HCD. The Housing Element must be internally consistent with other parts of the General Plan and is critical to having a legally adequate General Plan. At its core, a Housing Element is an opportunity for a community conversation about how to address local housing challenges and find solutions. While the Housing Element addresses a range of housing issues COUNCIL AGENDA: 6/20/23
FILE: 23-938
ITEM: 10.2
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Subject: File Nos. GPT22-001 & ER21 -032 2023- 2031 San José Housing Element Pa ge 2
such as affordability, design, housing types, density, and location, it also establishes goals, policies, and programs to address existing and projected housing needs.
BACKGROUND
The Housing Element is part of San José's Envision 2040 General Plan, a community-based plan that serves as the blueprint for the City's growth. It identifies the City’s housing needs and opportunities and establishes goals and strategies to inform housing decisions. Maintaining a housing element that complies with HCD reporting requirements is important to the City's eligibility for state and regional funding for housing, transportation, and parks.
ANALYSIS
This Housing Element and associated appendices satisfy the requirements of state law (Government Code Section 65583(a)). The Housing Element is divided into the following chapters:
• Chapter 1-Introduction to the Housing Element—This chapter provides an overview of the Housing Element, state requirements, and a summary of the public outreach and community engagement process.
• Chapter 2-Summary of Housing Needs and Assessment of Fair Housing—This chapter provides an overview of the City’s population, household, and housing stock characteristics, and an analysis of these factors through a fair housing lens in order to identify housing needs of the variety of household types and special needs across the City.
• Chapter 3-Housing Goals, Objectives, Policies and Programs—This chapter contains the City’s housing goals and policies that provide direction to help the City meet its housing goals. The Housing Element includes five goals that create the framework for how the City will address housing needs. The objectives, policies, and implementation programs under each goal address how the City will meet housing needs across the City. • Chapter 4-Constraints on Housing—This chapter provides an analysis of the governmental and non-governmental constraints to housing production. • Chapter 5-Adequate Sites for Housing—This chapter includes the inventory of sites that are suitable for residential development during the planning period and an analysis of how the site’s inventory affirmatively furthers fair housing. • Chapter 6-Energy Conservation—This chapter includes an analysis of opportunities for residential energy conservation.
HONORABLE MAYOR AND CITY COUNCIL
June 8, 2023
Subject: File Nos. GPT22-001 & ER21 -032 2023- 2031 San José Housing Element Pa ge 3
EVALUATION AND FOLLOW-UP
Staff will provide an update to the City Council on the certification process of the Housing Element via an Information Memorandum, or through other appropriate means.
COORDINATION
This memorandum was coordinated with the City Attorney’s Office and the Department of Housing.
PUBLIC OUTREACH
The Planning Commission staff report was posted and available for public review on the Planning Commission Agenda website before the May 24, 2023, Planning Commission meeting.
Staff was available to answer questions. This memorandum will be posted on the City’s Council Agenda website for the June 20, 2023, City Council meeting.
Consistent with state law, the City developed and implemented a robust public participation strategy for the Sixth Cycle Housing Element Update process. The strategy involved using a variety of methods to involve the public and stakeholders, including community meetings, online surveys, focus groups, working groups, stakeholder meetings, tabling at community events, a podcast, and a documentary movie screening with a speaker panel event. These efforts also included public meetings of the City Council, Community and Economic Development Committee, Planning Commission, Housing and Community Development Commission, Neighborhoods Commission, and Neighborhood Services and Education Committee. A summary of community engagement efforts is included in Appendix H of the Housing Element.
COMMISSION RECOMMENDATION AND INPUT
The 2023-2031 Housing Element was heard by the Planning Commission on May 24, 2023. Staff provided a presentation with a summary of the document and answered questions from the Planning Commissioners.
Public Hearing
Seven members of the public spoke on the item. The comments included: a request to add language in support of a local hire and prevailing wage policy in the housing element; potential displacement of small businesses due to redevelopment of commercial sites; support for the housing element in general; lack of time to review the staff report presented to Planning Commission; a request for staff to begin allowing SB 9 type of housing on parcels with an R-2 Zoning (Duplex); and concern with the potential decrease in Measure E funds and the removal of
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the Community Opportunity to Purchase Program (COPA) as a Housing Element strategy. Staff also received eight letters from the public prior to the hearing. Comments included: concern with the removal of the COPA program; request to add more details in the programs and policies of Chapter 3; request to translate the Housing Element document into multiple languages; provide additional time prior to the Planning Commission to review the draft document; expand the governmental constraints analysis; and inadequacy of the site’s inventory and analysis.
Commission Discussion
Commissioners asked for clarification on the regional housing needs allocation and how often San José and other jurisdictions met those goals. There were clarifying questions on affordable housing financing, the City’s Inclusionary Housing Ordinance, and Builder’s Remedy. The Planning Commission also inquired about the impact a late submittal of the Housing Element would have on grant funding. Commissioners expressed support for programs and policies in Chapter 3 of the Housing Element, such as P-7 City Ministerial Infill Approval Ordinance, P-35 Small Multifamily Housing, and H-12 Neighborhood Outreach and Education on Homeless Housing and Other Housing Topics.
Commissioner Tordillos suggested adding a section to Chapter 4 Constraints on Housing that speaks to State-level reforms (such as CEQA reform) and funding needed to achieve our RHNA goals. Commissioners requested a matrix outlining the changes made to the Housing Element in response to the first comment letter received by HCD. Individual commissioners made the following recommendations on strategies to consider accelerating housing production:
• Re-use/convert commercial buildings for housing
• Provide more resources and staff to the Planning Division • Donate excess city land, such as streets, to affordable housing developers • Add a program to promote Social Housing (publicly backed housing that is affordable to individuals and families of different income levels)
• Reform building codes to allow single-stair case development • Provide by-right, ministerial approval for all affordable housing sites on the inventory
Commissioners expressed concern with the current state of residential construction and the likelihood that the City will not meet its RHNA goals. Commissioner Cantrell requested staff use an equity lens in their analysis to develop better outcomes and achieve the stated goals of the Housing Element. He was concerned with the City’s declining African American population and the lack of targeted programs and policies that would directly benefit them. Commissioner Tordillos felt that the pipeline project analysis (Chapter 5) could benefit from the additional study by product type (high-rise, mid-rise, etc.). He also raised the issue that it appears the capacity analysis assumed unrealistic density on certain sites in the inventory. Commissioners Cantrell, Tordillos, and Lardinois expressed concern with the amount of time they had to review the Housing Element as it posted seven days before the hearing. They preferred having additional time to review the document. Staff noted that the original document was posted on the project website since fall 2022, along with staff presentations, recorded webinars, and
HONORABLE MAYOR AND CITY COUNCIL
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Subject: File Nos. GPT22-001 & ER21 -032 2023- 2031 San José Housing Element Pa ge 5
information memorandums. Staff also presented at the Planning Commission retreat on November 4, 2022, and held a study session on the topic on November 16, 2023.
Commissioner Lardinois made a motion to continue the hearing one week to May 31, 2023, and re-open the public hearing. The motion was seconded by Commissioner Tordillos.
Commissioner Young made a substitute motion to accept staff’s recommendation. The motion was seconded by Commissioner Ornelas-Wise. The motion passed 8-2-0 (Lardinois and Tordillos opposed).
CEQA
The City of San José, as the lead agency for the Housing Element Update, prepared a Draft Supplemental Environmental Impact Report to the Envision San José 2040 General Plan Environmental Impact Report (Draft SEIR) which was circulated for public review from March 13, 2023, through April 27, 2023. A First Amendment to the Draft SEIR was prepared that provided responses to public comments submitted during the public review period and included revisions to the text of the Draft SEIR. The First Amendment together with the Draft SEIR constitutes the Final Environmental Impact Report (FEIR) for the proposed project.
Because the proposed project would facilitate the construction of new housing planned as part of the Envision San José 2040 General Plan, the proposed project would contribute to the significant unavoidable impacts identified in the Envision San José 2040 General Plan EIR, including those related to aesthetics, agricultural farmland and forestland, air quality, biological resources, greenhouse gas emissions, noise, population and housing/growth inducement, and transportation. The proposed project would not introduce any new significant impacts, nor would it substantially increase the severity of Impacts identified in the 2040 General Plan EIR.
Alternatives
The Draft SEIR analyzed two project alternatives, the No Project Alternative and the Reduced Density in High Vehicle Miles Traveled (VMT) Areas Alternative. These alternatives could lessen the significant effects of the project and achieve some of the project objectives, in accordance with CEQA Guidelines Section 15126.6.
The No Project Alternative would be identical to the proposed project in terms of the total amount of planned housing within the City, but no shift in 2040 General Plan residential capacity from North San José and the Rincon South Urban Village to other growth areas would occur.
However, since neither a housing sites inventory nor the programs necessary to implement the housing sites inventory would be adopted under this alternative, the Sixth Cycle RHNA requirements would not be met, and the City’s Housing Element would not comply with the requirements of the State law.
That housing development capacity would be removed from the total citywide development capacity, resulting in a net decrease of 680 units. By only reallocating development capacity to Growth Areas in mitigatable VMT areas or better, this alternative would result in a Citywide per
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capita VMT of 27,007,460 compared to 27,021,232 under the proposed project. Although this alternative would decrease VMT slightly more than the proposed project, both scenarios would represent a similar reduction of 0.02 compared to levels anticipated under the buildout of the 2040 General plan. Both the proposed project and this alternative would reduce the severity of the 2040 General Plan transportation impacts, but a significant unavoidable impact would remain in both cases.
The Reduced Density in High VMT Areas Alternative would be the environmentally superior alternative because it would achieve many objectives of the proposed project while slightly reducing VMT and associated air quality and greenhouse gas impacts. However, it would do so at the cost of reducing Citywide housing development capacity by 680 units. A reduction of 680 housing units would not meet the City’s RHNA goals and achieve compliance with State- mandated housing requirements.
Draft SEIR Public Review Comments
A total of six comment letters on the Draft SEIR were received including two from regional and local agencies and two from members of the public, and one from a Native American Tribe.
There was no request for tribal consultation pursuant to SB 18 (2004)16. City staff prepared responses in a First Amendment to the Draft SEIR addressing the following topics:
• Air quality and potential traffic congestion with the addition of housing • Potential adverse impacts to County facilities in Urban Villages receiving additional housing capacity
• Water conservation measures and natural groundwater recharge.
Draft SEIR Recirculation Unnecessary
Staff responded to the comments and questions in the First Amendment to the SEIR. None of the comments raised represent new significant information that would warrant recirculation of the Draft SEIR pursuant to CEQA Guidelines Section 15088.5(a). The recirculation of an EIR is required when significant new information is added to the EIR after public notice is given of the availability of the Draft EIR for public review but before certification. “Information” can include changes in the project or environmental setting as well as additional data or other information.
New information added to a Draft EIR is not “significant” unless the Draft EIR is changed in a way that deprives the public of a meaningful opportunity to comment on a substantial adverse environmental effect of the project or a feasible way to mitigate or avoid such an effect (CEQA Guidelines Section 15088.5).
The First Amendment was posted on the City’s website on May 12, 2023, and all commenters were notified via email of the document’s availability. The Draft Supplemental Environmental Impact Report (DSEIR) and First Amendment to the DSEIR are available for public review on the City’s website:
https://www.sanjoseca.gov/your-government/departments-offices/planning- building-codeenforcement/planning-division/environmental-planning/environmental- review/active-eirs/2023-2031housing-element-update-er21-032. T ogether, the DSEIR and the
HONORABLE MAYOR AND CITY COUNCIL
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Subject: File Nos. GPT22-001 & ER21 -032 2023- 2031 San José Housing Element Pa ge 7
First Amendment to the DSEIR constitute the Final SEIR that will be presented to Council for certification.
PUBLIC SUBSIDY REPORTING
This item does not include a public subsidy as defined in section 53083 or 53083.1 of the California Government Code or the City’s Open Government Resolution.
/s/
CHRISTOPHER BURTON
Secretary, Planning Commission
For questions, please contact Michael Brilliot, Deputy Director, at [email protected].
ATTACHMENT
Planning Commission Staff Report
PLANNING COMMISSION AGENDA: 05-24-23
ITEM: 8.a.
FROM: Christopher Burton TO: PLANNING COMMISSION
SUBJECT: GPT22-001 & ER21-032 DATE: May 24, 2023
______________
COUNCIL DISTRICT: CITYWIDE
Proposed General Plan text amendment City-initiated General Plan text amendment to revise the Envision San José 2040 General Plan Housing Element for the 2023-2031 Regional Housing Need Allocation (RHNA)
sixth cycle projection period pursuant to State law and related amendment to Chapter 7 of the General Plan.
Project Planner Ruth Cueto
CEQA Clearance Supplemental Environmental Impact Report to the Envision San José 2040 General Plan Final Program
Environmental Impact Report (FEIR), adopted through
Resolution No. 76041, and Supplemental EIR Resolution
No. 77617, adopted on December 15, 2015, and Addenda
thereto.
CEQA Planner Reema Mahamood
RECOMMENDATION
Staff recommends that the Planning Commission recommend to the City Council to:
1. Certify the Supplemental Environmental Impact Report to the Envision San José 2040 General Plan Final Program Environmental Impact Report (FEIR), adopted through Resolution No. 76041, and Supplemental EIR Resolution No. 77617, adopted on December 15, 2015, and Addenda thereto, in accordance with CEQA; and
2. Adopt a resolution approving the General Plan Text Amendment to amend the Envision San José 2040 General Plan to include the 2023-2031 Housing Element, revise Chapter 7 (“Housing Element”) of the General Plan, and repeal the 2014-2022 Housing Element.
PROJECT BACKGROUND
Since 1969, the State of California has required local governments to adequately plan to meet the housing needs of everyone in their respective communities by adopting a Housing Element as part of their General Plan.1 The General Plan serves as a local agency’s "blueprint" for how the city will grow and develop and includes eight required elements: land use, transportation, conservation, noise, open space, safety, environmental justice, and housing.
1 CA Government Code Title 7, Division 1, Chapter 3, Article 10.6 [65580 – 65589.11] regulates the use and requirements of housing elements in California
Attachment-Planning Commission Staff Report
File No. GPT22-001 &ER21-032
Every eight years, every city, town, and county must update their Housing Element and have it certified by the state Department of Housing and Community Development (HCD). The Housing Element must be internally consistent with other parts of the General Plan and is critical to having a legally adequate General Plan. At its core, a Housing Element is an opportunity for a community conversation about how to address local housing challenges and find solutions. While the Housing Element addresses a range of housing issues such as affordability, design, housing types, density, and location, it also establishes goals, policies, and programs to address existing and projected housing needs. State law does not require that jurisdictions build or finance new housing, but they must adequately plan for it.
State law requires the current update for jurisdictions in the Association of Bay Area Governments (ABAG) region to comply by January 31, 2023. Recent changes in state law have affected the timeline for preparing this cycle’s update. Specifically, Assembly Bill 215 (AB 215, 2021) requires local governments to make the first draft revision of their housing element update available for public comment for at least 30 days.
Further, if any comments are received, a local government must take at least ten additional business days to consider and incorporate public comments into the draft revision before submitting to HCD. HCD must review the draft and report its written findings to the planning agency within 90 days of receiving the first draft submittal for each housing element revision or within 60 days of its receipt for a subsequent draft amendment or adoption.
Process
Staff’s preparation of San José’s 2023-2031 Draft Housing Element occurred over the course of three years, including the first phase which focused on the Assessment of Fair Housing (AFH). It is based on extensive community input, gathered through discussions at public meetings, surveys, and other engagement methods. The project team reached out to and involved community groups, housing developers, advocates, and other stakeholders. Staff also held study sessions and workshops on the Draft Housing Element for the Planning Commission and the Housing and Community Development Commission. The City also considered and incorporated input received through several years of outreach and engagement on a range of housing and community development topics. This approach was intended to recognize, value, and act on the contributions of the many community members who have shared their needs and ideas with the City, particularly protected classes who experience disproportionate barriers to civic engagement. Staff also consulted HCD, and the Association of Bay Area Governments (ABAG) and Metropolitan Transportation Commission (MTC) for guidance on how to comply with state requirements while addressing local concerns and needs.
During the outreach process, stakeholders urged City staff to integrate public feedback from all recent housing-related outreach to help identify housing needs and potential strategies for the AFH and Housing Element. Accordingly, staff considered and incorporated7 input received through several years of outreach and engagement on a range of housing and community development topics. This approach was intended to recognize, value, and act on the contributions of the many community members who have shared their needs and ideas with the City, particularly protected classes who experience disproportionate barriers to civic engagement.
After months of staff analysis and multiple community engagement and outreach events with more than 4,100 participants2, the Draft 2023-2031 Housing Element was posted for public comment on July 15, 2022,
2 Participant number is duplicated, meaning stakeholders may have attended more than one meeting and been counted for each meeting.
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for 30 days.3 After incorporating changes to the document based on public feedback4 and further staff analysis, staff submitted the revised draft to HCD on September 16, 2022, initiating HCD’s 90-day review period. Although not required by state law, staff offered a second public comment period, which surpassed the state’s public comment period requirements, from September 16 to December 17, 2022.
Staff received HCD’s first review letter (Exhibit A) on December 15, 2022, and posted it to the City’s website. HCD’s review letter provided positive feedback on many of the approaches in the Draft Housing Element, but also specified additional needed changes and analyses. The review letter identified four sections (Review and Revision, Housing Needs, Resources and Constraints, Housing Programs, and Quantified Objectives) of the Draft 2023-2031 Housing Element that required changes and additional analysis to bring the City’s draft Housing Element into compliance. Some of the issues raised include providing specific metrics and timelines for certain programs and policies, clarifying the methodology used to determine residential capacity on the sites inventory, and clarifying required rezoning actions.
Since that time, staff worked diligently to respond to the comments in the letter and coordinated closely with HCD staff. Staff had several meetings with HCD staff to discuss the revisions that needed to be made to address the comments in the first review letter. The Housing Element Update presented to Planning Commission represents staff’s due diligence in preparing a substantially compliant document. Upon City Council’s approval of staff recommendation, the City will submit the revised Housing Element to HCD for a determination of substantial compliance and certification.
The following section summarizes the required components of Housing Element Updates per State law and new requirements included since the 5th Cycle Housing Element Update (2015-2023).
Required Components of a Housing Element
Pursuant to Government Code Section 65583, local governments are required to include the below items as components within their Housing Elements, and subsequent updates thereto. The existing required components are discussed below, followed by a discussion on the newly required components introduced as part of the Sixth Cycle.
1. Housing Needs Assessment. Examine demographic, employment and housing trends and conditions and identify existing and projected housing needs of the community, with attention paid to special housing needs (e.g., large families, persons with disabilities). This section includes a community’s Regional Housing Needs Allocation (RHNA) as determined by a community’s regional planning body in partnership with HCD.
2. Evaluation of Past Performance. Review the prior Housing Element to measure progress in implementing policies and programs.
3. Housing Sites Inventory. Identify locations of available sites for housing development or redevelopment to demonstrate there is enough land zoned for housing to meet future need at all income levels. New state law substantially changed the standards for designating adequate sites for this sixth cycle Housing Element, particularly for non-vacant sites.
3 Cal. Gov. Code 65585, https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220AB215 4 Public Letters and Web Comments Received During Public Review Period of Draft 2023 -2031 Housing Element https://www.sanjoseca.gov/home/showpublisheddocument/95097/638133744426730000 File No. GPT22-001 &ER21-032
4. Community Engagement. Implement a robust community engagement program that includes reaching out to individuals and families at all economic levels of the community plus historically underrepresented groups.
5. Constraints Analysis. Analyze and recommend remedies for existing and potential governmental and nongovernmental barriers to housing development.
6. Policies and Programs. Establish policies and programs to be carried out during the 2023-2031 planning period to fulfill the identified housing needs.
New Requirements for the Sixth Cycle Housing Element Update Pursuant to recent State legislation, the following items are now required as part of the Housing Element Update process:
• Affirmatively Furthering Fair Housing (AFFH). Assembly Bill 686 (AB 686, 2018) created new requirements for jurisdictions to affirmatively further fair housing. According to AB 686, affirmatively furthering fair housing means to take “meaningful actions, in addition to combating discrimination, which overcome patterns of segregation and foster inclusive communities free from barriers that restrict access to opportunity based on protected characteristics” and is Federally mandated by the 1968 Fair Housing Act. The four main goals are to:
o Address significant disparities in housing needs and in access to opportunity, and o Replace segregated living patterns with truly integrated and balanced living patterns, and o Transform racially and ethnically concentrated areas of poverty into areas of opportunity, and o Foster and maintain compliance with civil rights and fair housing laws. • Public Comment on Draft Revisions. Assembly Bill 215 (AB 215, 2021) requires local governments to make the first draft revision of their housing element update available for public comment for at least 30 days. Further, if any comments are received, a local government must take at least 10 additional business days to consider and incorporate public comments into the draft revision before submitting to HCD. HCD must review the draft and report its written findings to the planning agency within 90 days of receiving the first draft submittal for each housing element revision or within 60 days of its receipt for a subsequent draft amendment or adoption.
ANALYSIS
The following section summarizes the amendments to Chapter 7 of the General Plan and the contents of San José’s Sixth Cycle Housing Element for the 2023-2031 Planning Period.
General Plan, Chapter 7
Chapter 7 “Implementation” of the Envision San José 2040 General Plan includes policies to guide the use of the General Plan for the ongoing land use decision making process and development of related City policies. It includes an explanation of the Annual and Major General Plan review process, the Urban Village Planning process, and updates to the Housing Element. This section offers a brief description of the Sixth Cycle RHNA targets and goals. The proposed changes are found in Exhibit C and focus on updating references to the 2023-2031 Housing Element and the updated RHNA numbers for the Sixth Cycle Housing Element.
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Housing Needs Assessment
As part of the Housing Element Update process, the City is required to analyze the existing and projected housing needs of City including its fair share of RHNA requirements. The City’s analysis of housing needs is required to include an assessment of detailed demographic data including population, age, size, and ethnicity; household characteristics; overpayment trends; housing stock conditions; units in need of replacement or rehabilitation; and needs of special needs populations including the elderly, persons with disabilities, unhoused persons, extremely low-income households, and farmworkers. The Sixth Cycle Housing Element outlines the following housing needs of the City: an abundant and affordable supply of housing, sufficient housing for people experiencing homelessness, housing stability and opportunities to build wealth for all residents, racially and socially inclusive neighborhoods that overcome past and present discrimination. A full analysis of housing needs can be found in Chapter 2 of the Housing Element.
Regional Housing Needs Allocation (RHNA)
In January of 2022, HCD approved ABAG’s adopted Final RHNA Plan for the San Francisco Bay Area: 2023- 2031 (Plan) which establishes a total RHNA for the San Francisco Bay Area of 441,176 residential units for the Sixth Cycle housing element 2023-2031 planning period. ABAG’s Plan further distributes this RHNA across the Bay Area’s nine counties, and 101 jurisdictions based on demographic and population data received from the California Department of Finance (DOF). Local jurisdictions must then utilize their ascribed RHNA to update the housing elements of their general plans for the Sixth Cycle planning period, inclusive of identifying eligible sites to accommodate this RHNA. See the Sites Inventory Section below.
RHNA requirements are organized into four affordability categories, established according to the Area Median Income (AMI) of a geographic area. These categories include very low-income residential units, which are affordable to households earning less than 50% AMI; low-income residential units, which are affordable to households earning 51% to 80% AMI; moderate-income residential units, which are affordable to households earning 81% to 120% of AMI; and above moderate-income residential units which are affordable to households earning more than 120% AMI. San José’s RHNA is 62,200 units. The RHNA breakdown by household income category is shown in Table 1.5 Table 1: San José’s Regional Housing Needs Allocation (RHNA) Income Category Previous Housing Element
Cycle (2015-2023)
Sixth Cycle RHNA
(2023-2031)
Very Low (less than 50% of AMI) 9,233 15,088
Low (50-80% of AMI) 5,428 8,687
Moderate (80-120% of AMI) 6,188 10,711
Above Moderate (More than 120% of AMI) 14,231 27,714
Total RHNA 35,080 62,200
Source: Final RHNA Plan for the San Francisco Bay Area: 2023-2031
5 City of San José, Housing Income & Rent Limits Effective May 20, 2022, https://www.sanjoseca.gov/home/showpublisheddocument/86799/637901210146400000 File No. GPT22-001 &ER21-032
While RHNA is a planning goal, it also represents the need for housing in a jurisdiction based on a robust data-driven model at the regional level. To accomplish the affordable goals in Table 1 in this planning cycle, staff conservatively estimates6 that it would require $4.8 billion in City subsidies. The City’s subsidies would leverage another $19.0 billion7 in private and public sources loaned to and invested in housing developments.
RHNA Buffer
New “no net loss” provisions of Government Code Section 65863 require the City to ensure an adequate supply of land resources to be made available for housing development throughout the duration of the 2023-2031 planning period. This means if housing sites identified within the City’s Sixth Cycle housing element update are developed with non-residential uses, lower residential densities, or residential uses at affordability levels higher than anticipated by the Housing Element, the City’s Housing Element could be determined to be out of compliance. Accordingly, the City’s RHNA requirement is further buffered with 13,227 units or a 35% buffer to ensure compliance with “no net loss” provisions.
Constraints Analysis
In addition to analyzing the existing and projected housing needs of the City, the Housing Element Update must also identify and analyze potential and actual governmental and nongovernmental constraints to the maintenance, improvement, or development of housing for all income levels in the City. Chapter 4 of the Housing Element discusses constraints on housing. While there are many variables in the production of new housing units, construction costs in recent years have been the most significant constraint on the supply of housing in San José. A summary of constraints to the development and improvement of housing identified in Chapter 4 is included below, along with descriptions of local efforts to lessen these constraints as applicable.
Non-Governmental Constraints
Construction Costs: According to a local index,8 construction costs9 have increased by 17% in the region between the beginning of the pandemic in spring 2020 and early 2022. Since 2014, the total increase in construction costs has been 76%. High cost of construction remains the largest constraint on the production of new housing units at all income levels in San José.
For affordable housing, construction costs impact the size the of subsidy that must be provided by the city, county, or state. Projects then must also more frequently utilize additional funding sources than in previous years. This stacking of additional funding sources adds time and costs to affordable housing development and further constrains supply.
Availability of Financing: For affordable housing construction, the availability of financing has been constrained by level of subsidy available. In recent years, the competitiveness in obtaining funds has greatly increased especially for Low-Income Housing Tax-Credit (LIHTC) financing making it more challenging for projects to obtain sufficient funds to start construction. For market rate housing projects, financing had generally been available; however, rising interest rates, which began in 2022, in combination
6 This estimate assumes the following: the City would need to subsidize all the devel opment of extremely low-, very low-, and low-income units; no affordable homes are created by the private market through Inclusionary Housing requirements ; City subsidy is capped at $200,000 per unit for extremely low-, very low-, and low-income units; and, subsidies for moderate-income units are excluded.
7 Assumes City subsidy comprises 20% of total development costs. 8 Index from TBD Consultants.
9 Construction costs do not include the cost of land or other indirect costs such as permitting fees or prof essional services.
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with rising construction costs, have recently impacted the availability to finance these projects. These rising costs may continue to impact project financing and therefore dampen market rate housing production in the near term.
Resident Opposition: As with many jurisdictions throughout California, proposals for new housing development, both market rate and lower income developments, may often be opposed by residents who raise a variety of objections. These objections include the process for approval or concerns about the impacts of a project. This opposition can lead to longer review periods or result in material changes to a development proposal that impact costs or the number of units to be built. The resulting delays and added costs can be considered a constraint on housing in the City. To address this constraint, staff is proposing a City Ministerial Infill Housing Approval Ordinance (Chapter 3, Housing Goals and Policies, Program P-7). So long as they meet minimum requirements, projects processed under a ministerial review involve little or no discretion, are evaluated without any subjective judgment from planners, and do not require a public hearing.
Governmental Constraints
Fees and Exactions: The City collects impact fees, taxes, and exactions from new residential development to finance new public infrastructure, such as parks; to cover the cost of adding new capacity to existing public infrastructure such as wastewater; and to cover the cost of processing permits. Based on analysis done for the Housing Element and for the City’s Cost of Residential Development Reports, San José’s fees and taxes are in line with other jurisdictions in the area. Overall, the City’s fees and exactions do not represent an undue constraint on housing. However, since this is an area the City directly controls, there are some programs and policies identified related to fees and taxes (Chapter 3, Housing Goal and Policies, Program P- 10). This includes an existing program to reduce impact fees and construction taxes on residential high rise in downtown, an existing 50% reduction of park impact fees for affordable housing, and a suspension of construction taxes for affordable housing that staff will bringing forward in fall 2023. Additionally, the City intends to continue work on the Development Fee Framework which will provide transparency for developers and clarity to City decision makers on cost implications of housing development fees.
Urban Village Strategy: Urban Village planning requires significant staff resources and advanced planning.
Since the adoption of the General Plan in 2011, staff has planned 14 urban villages areas—an average of 1.2 every year. While housing development may proceed in unplanned urban villages through General Policies IP-5.10 and IP-5.12, these policies do not provide opportunities for residential and mixed-use residential development outside of 100% affordable developments and “Signature” projects. Essentially, unplanned urban villages are not yet primed to facilitate residential development. To address this constraint, staff is proposing the following programs: 1. evaluate the Urban Village strategy to help unlock opportunities for more housing; and 2. Identify funding for, and conduct program-level CEQA analysis as part of the process of developing or updating Urban Village plans to help speed developments' timelines. (Chapter 3, Housing Goals and Policies, Program P-40, P-37).
Housing Resources & Sites Inventory
For the Sixth Cycle housing element, the City is also required to identify resources available to the City for the preservation, rehabilitation, and production of housing throughout the community. This includes programmatic and financial resources, such as those offered locally or through State or Federal partners.
These resources also include sites, or “Opportunity Sites” as used throughout the document, within the City that were identified as eligible for accommodation of the City’s RHNA Requirements. Pursuant to Government Code Section 65583.2(a) the following sites are eligible for accommodation of the City RHNA:
vacant sites zoned for residential use; vacant sites zoned for nonresidential use that allow residential development; residentially zoned sites that are capable of being developed at a higher density; or sites File No. GPT22-001 &ER21-032
zoned for nonresidential use that can be redeveloped for residential use, and for which the Housing Element includes a program to rezone the site.
The City’s Housing Sites Inventory is summarized below in Table 2. Opportunity sites identified within the below Inventory Summary are included in Exhibit E, and can be viewed online at www.sanjoseca.gov/housingelementupdate.
Table 2: San José’s Housing Sites Inventory
Site Category LI (includes
ELI/VLI)
Moderate Above
Moderate
Total
Pipeline/Pending Projects 5,387 178 14,877 20,442
Projected ADUs 1,733 866 866 2,888
Opportunity Sites 20,663 10,545 20,874 52,082
Total 27,783 11,604 36,040 75,427
A total of 474 opportunity sites from across the City are included in the Sites Inventory. State law requires each jurisdiction to demonstrate that sufficient land is zoned to provide housing capacity that is adequate to meet the RHNA for each income level. To determine housing capacity, City staff and the consultant, Tolemi, who helped staff launch the SJ Housing Site Explorer—an interactive, web-based map and data site to help identify potential sites for new housing development—conducted a comprehensive inventory of all vacant and nonvacant developable land within the City limits that already allows for housing and is available to develop within the Housing Element planning period. In particular the City focused site identification in four main areas:
1. Urban Villages with adopted plans
2. Urban Villages without adopted plans
3. Downtown/Diridon Station Area
4. North San José
When identifying sites for the inventory, City staff filtered for parcels that had characteristics more conducive to development during the planning period. While the exact methods varied depending on location, they generally included filtering out properties that already had multifamily uses, were on the City’s Major Development Projects list, had Planning permits issued within the last four years, had new construction Building permits in the last eight years, and were smaller than 0.5 acre. Exceptions to this are sites in Downtown and the Diridon Station Area Plan (which only remove sites if they were smaller than the smallest site developed during the last planning period and added a new filter for historic buildings), North San José (where site identification is proceeding in conjunction with a separate zoning update – see paragraph below), and planned Urban Villages (where sites were limited only to those planned or intended for residential development).
There are 18 properties on the sites inventory in North San José that will be rezoned after the June 20, 2023, City Council hearing for the new Housing Element. These sites will require both a general plan and zoning overlay to allow for housing. This work must be completed by January 31, 2024 pursuant to Housing Element law (Gov Code 65583(c)(1)A). Information on this workplan is found in the November 15, 2022 City File No. GPT22-001 &ER21-032
Council staff report.10 This work to create overlay zones is also included in the new Housing Element as a program (Chapter 3, Housing Goals and Policies, Program P-3).
Policies and Programs
The new Housing Element includes a set of goals and strategies intended to promote the preservation, rehabilitation, and production of housing throughout the City. Goals are broad and comprehensive targets that describe the future outcomes the City desires. Strategies are a general way to describe actions the City will undertake during the planning period. They consist of policies, programs, and activities that the City would do either alone or in partnership with other organizations and the community. A summary of draft goals and strategies included within the City’s draft Housing Element Update is included below:
The Housing Element includes the following five goals and related strategies that create the framework for how the City of San José will address housing needs during the planning period.
Goal 1: An abundant and affordable housing stock. Strategies focus on both market-rate and affordable housing production.
Goal 2: Sufficient housing for people experiencing homelessness. Strategies include providing permanent and temporary housing for people experiencing homelessness, funding the delivery of services to people without homes and in service-enhanced housing, and helping to prevent people from becoming homeless. With its partners across the County, the City seeks to do this work with an equity lens, focusing its work and identifying priorities based on needs of and feedback from people with lived experience of homelessness.
Goal 3: Housing stability and opportunities to build wealth for all residents. Strategies focus on ensuring that all forms of tenure, including ones not common today, can provide households with stability and the foundation for a better life. These strategies address renter stability and access, fair housing, tenant protections, and wealth building.
Goal 4: Healthy, thriving neighborhoods with access to good jobs, schools, transportation, and other resources. Strategies focus on targeted neighborhood investments and access to higher-resource areas.
Goal 5: Racially and socially inclusive neighborhoods that overcome past and present discrimination.
Strategies focus on housing for special populations. They also include systems-oriented strategies such as equity-focused outreach, decision making bodies, and planning and advocacy structures. The systems- oriented strategies put more protected class residents, and their lived experiences, into the City’s decision-making process and program offerings. In the long-term, these changes should support improvements in neighborhoods’ inclusiveness and equity.
Evaluation of Past Progress
The City of San José’s Fifth Cycle Housing Element was adopted by City Council on January 27, 2015, and included a Regional Housing Needs Allocation (RHNA) of 35,080 total units of housing and an Implementation Work Plan that included over 80 planned programs, policies, and activities. The City exceeded Fifth Cycle goals for market-rate housing and met or exceeded almost all Work Plan items. While the City did not meet RNHA goals for affordable housing, the City has developed new local funding sources for affordable housing development which should aid in meeting future goals. In addition, the City met substantially all of its applicable work plan goals. A full analysis of the Fifth Cycle programs and policies work can be found in Appendix C of the 2023-2031 Housing Element.
10 https://sanjose.legistar.com/LegislationDetail.aspx?ID=5920049&GUID=C963AC4B -C3F0-45A3-AF88- 6501D081451C&Options=&Search=
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Community Engagement
Consistent with State Law, the City developed and implemented a robust public participation strategy for the Sixth Cycle Housing Element Update process. The objective was to involve all segments of the population and gather a wide range of feedback on key components of the documents with a focus on reaching underrepresented populations. The strategy involved using a variety of methods to involve the public and stakeholders, including community meetings, online surveys, focus groups, working groups, stakeholder meetings, tabling at community events, a podcast, and a documentary movie screening with speaker panel event.
These efforts also included public meetings of the City Council, Community and Economic Development Committee (CEDC), Planning Commission, Housing and Community Development Commission, Neighborhoods Commission, and Neighborhood Services and Education Committee (NSE) and are summarized within the Appendix H of the Housing Element Update and below.
The extensive outreach and engagement process began in 2019 with the AFH. The engagement activities conducted for the AFH and Housing Element Update are listed below, summarized in Chapter 2 of the Housing Element, and described in detail in the Appendix H of the Housing Element Update.
Community Meetings Date
1. San José Community Meeting at Hillview Library November 13 2019
2. San José Community Meeting at Southside Community Center November 16 2019
3. San José virtual Community Meeting September 2 2021
4. San José virtual Community Meeting December 13 2021
5. San José virtual Community Meeting May 25 2022
6. San José virtual Community Meeting June 1 2022
7. San José Community Meeting at Gardner Center June 4 2022
8. San José virtual Community Meeting July 27 2022
9. San José Community Meeting at Mexican Heritage Plaza August 8 2022 City Commission and Council Committee meetings on Housing Element/Assessment of Fair Housing
1. Housing and Community Development Commission January 27 2022
2. Neighborhoods Commission February 9 2022
3. Neighborhood Services and Education Committee February 10 2022
4. Community and Economic Development Committee February 28 2022
5. Housing and Community Development Commission Study Session October 13 2022
6. Planning Commission Study Session November 16 2022
7. Housing and Community Development Commission Study Session December 8 2022
8. Housing and Community Development Commission Study Session January 12 2023 Affirmatively Furthering Fair Housing (AFFH)
Assembly Bill 686 (AB 686, 2018) created new requirements for jurisdictions to affirmatively further fair housing as part of the Housing Element Update process. These requirements found in Government Code Section 8899.50 are intended to address racial inequalities seen today throughout the Bay Area that developed as a result of historical policies and practices enacted at federal, state, regional and local levels and across the public and private sectors. Although many of these explicit forms of historical discrimination have been outlawed, the results of these systems have left a lasting imprint on both the Bay Area region and the City. Racially explicit practices (e.g., racial covenants) which excluded persons of color from File No. GPT22-001 &ER21-032
predominately white neighborhoods have been replaced with race-neutral land use policies that continue to exclude these same groups. Furthermore, rapidly increasing housing costs have deepened racial and economic disparity and segregation, displacing many low-income individuals and people of color to the peripheries of the region or out of the Bay Area altogether.
Accordingly, the City must incorporate fair housing considerations into its Sixth Cycle Housing Element to increase housing opportunities in high resource neighborhoods and bring additional resources to traditionally under-resourced neighborhoods. The following section summarizes how the City’s Housing Element Update addresses the various components of the AFFH requirement.
Targeted Community Outreach
The City must demonstrate “meaningful, frequent, and ongoing community participation, consultation and coordination” as part of the Sixth Cycle Housing Element process. This is intended to ensure that input has been received from groups historically and presently most impacted by fair housing issues and that local knowledge is incorporated into Housing Elements. Accordingly, staff implemented the following targeted community outreach efforts:
• Staff offered Spanish and Vietnamese interpretation at the community meetings, translated the online surveys and the outreach materials advertising the meetings and surveys and ran Facebook ads. These efforts were particularly successful for the Fall 2021 online survey, which received 155 responses in Spanish and 150 in Vietnamese (305 of 640 total responses). • Staff scheduled the community meetings aimed at the general public in the evenings and offered alternative meeting times and methods to increase opportunities to provide input (such as a weekend event and virtual options to participate). Staff also offered refreshments and activities for children at the in-person meetings.
• Focus groups were a key method for reaching underrepresented populations. Staff hosted 21 focus groups of people from protected classes, such as unhoused people, LGBTQ+, veterans, survivors of gender violence, persons with disabilities, and people of Black/African ancestry. • Staff also partnered with several local organizations to encourage direct participation in the process among underrepresented populations and communities with protected characteristics, as well as to indirectly represent these populations through their relationship to these communities. By partnering with local organizations, connections and trust with underrepresented populations can be built. Staff met regularly with SV@Home and Law Foundation of Silicon Valley as the countywide equity collaborative partners and co-created a number of issue-based working groups, comprised of organizations representing a wide variety of stakeholders and protected classes, including persons with disabilities, unhoused residents, tenant advocates, and communities of color. Staff also met early in the outreach process with the Race Equity Action Leadership (REAL) Coalition, comprised of leaders in many local nonprofit organizations, service providers, and advocacy organizations. Additionally, staff sent email updates to a list of approximately 100 community leaders and prepared outreach materials that could be easily distributed.
Assessment of Fair Housing
The City must also describe and analyze the unique housing circumstances of the City. This analysis is referred to as an Assessment of Fair Housing (AFH) and analyzes circumstances within the City pertaining to Fair Housing issues including: San José’s history of segregation and its effect on opportunities and access for people of color, homelessness, fair housing violations, lack of accessibility for disabled persons and lack File No. GPT22-001 &ER21-032
of information and community engagement.
Fair Housing Outreach Capacity and Enforcement
The City’s AFH includes information regarding the City’s Fair Housing Outreach Capacity and Enforcement methods which includes its ability to provide fair housing outreach and enforcement. There is a continued need for fair housing rights and education and enforcement, especially in the City’s rental market. Despite the City’s and its partners’ ongoing efforts, there is still evidence of housing discrimination beyond what is reflected in official complaints, especially in terms of discrimination of people with disabilities (large numbers of inquiries reported despite a smaller percentage of complaints filed; multiple reports from community members during our community outreach process) and source of income discrimination (multiple reports during community engagement of applicants with Section 8 and other rental vouchers being turned away from rental opportunities). HUD maintains a record of all housing discrimination complaints filed in local jurisdictions. These grievances can be filed on the basis of race, color, national origin, sex, disability, religion, familial status, and retaliation. HCD also provides data for each County and census tracts, when available, through the Affirmatively Furthering Fair Housing Data and Mapping Resources. Data compiled by HUD’s Office of Fair Housing and Equal Opportunity (FHEO) and provided to the state database shows 13 cases for the County of Santa Clara from January 2006 to July 2020. Of these cases, seven were related to a disability bias, three were related to a racial bias, and three were related to familial status. HUD also tracks inquiries submitted in each jurisdiction. While these are not official cases, there is still value to identify concerns that residents have about possible discrimination. These inquiries may not have been pursued by the resident for any number of reasons. The dataset shows 225 inquiries in San José related to a disability bias.
The City contracts with local service provider Project Sentinel to conduct fair housing testing and investigation in addition to outreach and education. An example of fair housing testing would be to send multiple applicants of different races or ages but similar other characteristics to apply for the same apartment to test whether they would be treated differently on the basis of their race or age. Project Sentinel conducts fair housing educational workshops and trainings, including to housing providers, in addition to participating in community events, trade shows, and distributing fair housing brochures to San José residents and housing providers. The City also contracts with the Law Foundation of Silicon Valley to coordinate a consortium of fair housing service providers (Consortium). Through this contract, five programs provide services to support fair housing in San José. In addition to legal services and representation, the Consortium provides ongoing Fair Housing outreach and education services related to Fair Housing on behalf of the City. This work includes group trainings on housing discrimination and fair housing rights.
Segregation and Integration Patterns
The City’s AFH also analyzes segregation and integration patterns within the jurisdiction as well as regionally. Segregation and integration patterns are analyzed by evaluating the concentration (or lack thereof) of protected groups within the community, relative to their distribution across a larger geography.
As visually represented in the racial dot map below (Figure 1), the City has readily observable patterns of where people live by race.
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Figure 1: Racial Dot Map of San José
Source: U.S. HUD AFH Map
By standard measures of segregation11 and as shown in Figure 2, the City is one of the most segregated cities of the 100+ cities in the nine-county Bay Area.
11 AFH standard measures of segregation include the Dissimilarity Index (which compares the relative geographic distribution between two populations), the Isolation Index (which measures how likely a single population is likely to live near other populations), and the Theil’s H Index (which indicates how likely an individual is to live in a neighborhood that has the same demographic breakdown as the whole jurisdiction). Relative to the rest of the region, the City scores poorly on all of these measures.
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Figure 2: Segregation/Dissimilarity Indexes for 9-county Bay Area Note: a dissimilarity score of 0.4 or higher indicates that a population is segregated.
As discussed further in the City’s Assessment of Fair Housing (see Attachment B of the Housing Element), these patterns of segregation are rooted in racist policies and practices – implemented by both public (such as the City) and private entities (such as banks) – including redlining, discriminatory lending policies, urban renewal, and inequitable land use policies.
Racially and/or Ethnically Concentrated Areas of Poverty (R/ECAPS) The City’s AFH includes an analysis of Racially and or Ethnically Concentrated Areas of Poverty (R/ECAPS) based on the following criteria:
• HUD-identified R/ECAPs
• San José’s updated list of R/ECAP tracts, using HUD’s criteria but with 2019 5-year ACS, per the following:
o Population less than 50% non-Hispanic White,
o Poverty rate greater than 22.5%12;
• San José’s additional extremely low-income tracts, using 2019 5-year ACS per the following:
o Population less than 50% non-Hispanic White
o 40% of the tract households had an annual income less than $35,000 (the 2019 California Poverty line for a family of four, as determined by the Public Policy Institute of California13).
San José has six of eight of the County’s HUD-identified R/ECAPs. When expanded to include all three combined criteria above, there are 16 total R/ECAP tracts in San José with a total population of 78,493 (or
12 HUD defined poverty rate for R/ECAPs is the lower of 3x the MSA poverty rate OR a 40% poverty rate. Per the 2019 5-year ACS, the Santa Clara County poverty rate is 7.5%. Three times this rate is 22. 5%. 13 https://www.ppic.org/publication/poverty-in-california/ -- Because of the higher cost of living in California than for the nation as a whole, the Public Policy Institute of California calculates an alternative poverty threshold to the federal Poverty Line that is more aligned to California’s generally higher costs.
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approximately eight percent of the City’s total population). These tracts are generally in the center of the City, around Downtown, and slightly to the east and the south of Downtown.
Racially Concentrated Areas of Affluence (RCAA)
San José staff used the following criteria to identify Racially Concentrated Areas of Poverty and Affluence:
• Census tracts in which the population is greater than 67.3% non-Hispanic White plus Asian Indian and Chinese populations -OR- where the non-Hispanic White population is greater than 49.1% of the total tract population;14
• Census tracts in which the median income is above $112,852.5015 With these criteria and using the 2019 5-year ACS, there are 46 total RCAA tracts in San José with a total population of 260,394 (or approximately 25% of the City’s total population). These tracts are generally in identifiable clusters: in the Evergreen Hills, in west San José between Cupertino and Saratoga, in the Willow Glen neighborhood, in North San José, and in Almaden Hills.
Disparities in Access to Opportunity
The City’s AFH also evaluates disparities in access to opportunity within the City. These areas have substantial differences in access to education, transportation, economic and environmental outcomes. One measure of access to resources by neighborhood is the State of California’s Tax Credit Allocation Committee (TCAC)/HCD Opportunity Map, where census tracts are scored by a number of factors. These factors include test scores of schools in the neighborhood, exposure to pollution and other environmental risks, proximity to jobs, and median home values. Overlaying the R/ECAP and RCAA maps with the TCAC/HCD Opportunity Map shows that:
• All R/ECAPs (i.e., 100%) are in census tracts classified as “Low Resource” or “High Segregation and Poverty”, and
• Almost all RCAAs (i.e., 91%) are in census tracts classified as “High Resource” or “Highest Resource.” The remaining 9% of RCAAs are in “Medium Resource” areas.
In comparison, the City’s total population is split approximately one-third in High Resource tracts, one-third in Medium Resource tracts, and one-third in Low Resource tracts (see Figure 3).
14 This prong of the test incorporates both a locally-specific criterion (i.e., adding Asian Indian and Chinese Americans as racially advantaged groups) and HCD’s recommended criteria for RCAAs. 15 Per HCD recommended criteria, the RCAA tract income threshold is 150% of the California median household income.
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Figure 3: TCAC/HCD Opportunity Map Overlay
Across a wide variety of demographic, housing, and economic metrics, R/ECAP and RCAA areas are very different. As per the definitions of each area, the metrics for RCAAs are consistent with concentrated affluence and the metrics for R/ECAPs are consistent with concentrated poverty.
Disproportionate Housing Needs (for Low-Income Households and Protected Classes) The City’s AFH also evaluates disproportionate housing needs among low-income households and protected classes within the City. Disproportionate housing needs are evident when members of a protected group disproportionately experience a housing need in comparison to other groups or the total population. Through its Comprehensive Housing Affordability Strategy (CHAS) dataset, HUD tracks the severity of four “housing problems”: (1) cost burden, (2) overcrowding, (3) household lacks complete plumbing facilities, (4) household lacks complete kitchen facilities. Compared to Santa Clara County and the greater Bay Area region, problems relating to cost and overcrowding are manifest at greater frequency and severity in San José.
Housing Need (All Households) San José Santa Clara
County
9-County Bay
Area
Housing cost burden 38.6% 35.9% 36.9%
Severe housing cost burden 17.6% 16.1% 16.8%
Overcrowding 9.6% 8.2% 6.9%
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Severe overcrowding 3.5% 2.9% 2.7%
Lacks complete plumbing 0.2% 0.4% 0.6%
Lacks complete kitchen 0.8% 0.9% 1.3%
These housing problems disparately impact people of color and renters and are disproportionately concentrated in the areas of the City which have lower resources, greater risk of displacement, and more likely to be segregated by race and poverty.
Sites Inventory
State Law requires the City to evaluate whether Housing Sites are identified relative to the full scope of the assessment of fair housing (e.g., segregation and integration, racially and ethnically concentrated areas of poverty and affluence, access to opportunity, etc.). A summary of how Housing Sites were identified consistent with AFFH requirements is included below:
• Exacerbated Conditions: Approximately five percent of lower-income sites (includes extremely low-, very low- and low-income groups) are in R/ECAP areas. The vast majority are outside of either a R/ECAP or RCAA area. This low percentage is consistent with fair housing strategies to not concentrate affordable housing in areas that are experiencing racial, concentrated poverty.
• Isolation of the RHNA: Approximately 84% of San José’s lower-income sites are in Moderate/High/Highest Resources areas per State HCD maps. This indicates that the sites to accommodate low-income RHNA goals are not concentrated in any particular area of the City.
Furthermore, more than one-third of sites are in High/Highest Resources areas which have strong economic and educational outcomes. Locating affordable housing in these areas would result in more racial integration of neighborhoods and offer new economic opportunities to low-income people and families.
Table 4: Site Inventory Sites by TCAC Resource Level (total and percentage)
Low Resource
Moderate
Resource High Resource Highest Resource Total
Lower income 33 75 74 18 200
Moderate Income 144 52 14 0 210
Above Moderate
Income 5 38 6 0 49
Mixed Income 0 13 2 0 15
Table 3: Site Inventory Sites by RECAP/RCAA Status (total and percentage) In a R/ECAP In a San José
Defined RCAA
In neither a
R/ECAP nor RCAA
TOTAL
Lower Income 11
(5.5%)
6 (3%)
183
(91.5%) 200
Moderate Income 42
(28%)
0 (0%)
168
(72%) 210
Above Moderate Income 153
(0.7%)
0 (0.0%)
48 (99%) 49
Mixed Income
(Lower Income & Above Mod)
0 (0%)
0 (0%)
15 (100%) 15
Total
206
(7.9%)
6 (0.7%)
47,562
(91%) 474
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(Lower Income &
Above Mod)
Total 182 178 96 18 474
Goals, Policies, and Actions
Table 5 below summarizes a small sample of the policies and programs required by State Law to demonstrate the City’s commitment to affirmatively further fair housing as part of the Housing Element Update process. A full analysis can be found in Chapter 3 of the Housing Element.
Table 5: City’s Assessment of Fair Housing
Goal/Action Area Action Fair Housing Issue Contributing Factor Implementation with Housing Element
Policy Number
Housing Stability Increase the
number of lower-
income people in
high opportunity
areas
Segregation and
exclusion from
“High Resource”
areas
Patterns of segregation
established through redlining
and suburbanization
N-5, increase
affordable housing
production in higher-
resource areas
S-25, tenant-based
vouchers in higher-
resource areas
Abundant and
affordable housing
stock
Create goals and
incentives for
increased
affordable housing
production in
specified growth
and investment
areas
Exclusion from
growth areas
Past patterns of
investment/underinvestment
P-9, Diridon
affordable housing
production goal
P-3, North San José
Affordable Housing
Overlay Zone
Healthy, thriving
neighborhoods
with access to good
jobs, schools,
transportation, and
other resources
Better coordinate
citywide
investments and
service
programming to
target
neighborhoods and
communities that
historically have
not been the
beneficiary of
public and private
investments
Inequitable
patterns of
investment and
disinvestment
Patterns of infrastructure
investment have historically
been to the benefit of
suburban expansion and not
towards improving quality of
life in neighborhoods that
were redlined
N-1, outreach and
equity-based
framework for
investment
N-7, funding for
infrastructure to
create complete,
high-quality living
environments
Housing stability &
abundant and
affordable housing
stock
Anti-displacement
programs and
policies
Racially disparate
impacts of
displacement
Displacement
disproportionately impacts
communities of color
R-7, extend
affordable housing
restrictions
R-2, establish a
Preservation NOFA
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Goal/Action Area Action Fair Housing Issue Contributing Factor Implementation with Housing Element
Policy Number
S-10, study on rent
increases and rent
burden in affordable
housing
S-20, anti-
displacement tenant
preferences
CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA)
The City of San José, as the lead agency for the Housing Element Update, prepared a Draft Supplemental Environmental Impact Report to the Envision San José 2040 General Plan Environmental Impact Report (Draft SEIR) which was circulated for public review from March 13, 2023, through April 27, 2023. A First Amendment to the Draft SEIR was prepared that provided responses to public comments submitted during the public review period and included revisions to the text of the Draft SEIR. The First Amendment together with the Draft SEIR constitute the Final Environmental Impact Report (FEIR) for the proposed project.
Because the proposed project would facilitate construction of new housing planned as part of the Envision San José 2040 General Plan, the proposed project would contribute to the significant unavoidable impacts identified in the Envision San José 2040 General Plan EIR, including those related to aesthetics, agricultural farmland and forestland, air quality, biological resources, greenhouse gas emissions, noise, population and housing/growth inducement, and transportation. The proposed project would not introduce any new significant impacts, nor would it substantially increase the severity of impacts identified in the 2040 General Plan EIR.
Alternatives
The Draft SEIR analyzed two project alternatives, the No Project Alternative and the Reduced Density in High VMT Areas Alternative. These alternatives could lessen the significant effects of the project and achieve some of the project objectives, in accordance with CEQA Guidelines Section 15126.6.
The No Project Alternative would be identical to the proposed project in terms of the total amount of planned housing within the City, but no shift in 2040 General Plan residential capacity from North San José and the Rincon South Urban Village to other growth areas would occur. However, since neither a housing sites inventory nor the programs necessary to implement the housing sites inventory would be adopted under this alternative, the Sixth Cycle RHNA requirements would not be met and the City’s Housing Element would not comply with the requirements of State law.
The Reduced Density in High VMT Areas Alternative would eliminate the addition of housing development capacity to immitigable VMT areas planned as part of the proposed project. That housing development capacity would be removed from the total citywide development capacity, resulting in a net decrease of 680 units. By only reallocating development capacity to Growth Areas in mitigatable VMT areas or better, this alternative would result in a Citywide per capita VMT of 27,007,460 compared to 27,021,232 under the proposed project. Although this alternative would decrease VMT slightly more than the proposed project, both scenarios would represent a similar reduction of –0.02 compared to levels anticipated under buildout of the 2040 General plan. Both the proposed project and this alternative would reduce the severity of 2040 General Plan transportation impacts, but a significant unavoidable impact would remain in both cases.
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The Reduced Density in High VMT Areas Alternative would be the environmentally superior alternative because it would achieve many objectives of the proposed project while slightly reducing VMT and associated air quality and greenhouse gas impacts. However, it would do so at the cost of reducing Citywide housing development capacity by 680 units. A reduction of 680 housing units would not meet the City’s RHNA goals and achieve compliance with State-mandated housing requirements.
Draft SEIR Public Review Comments
A total of six comment letters on the Draft SEIR were received including two from regional and local agencies and two from members of the public, and one from a Native American Tribe. There was no request for tribal consultation pursuant to SB 18 (2004)16. City staff prepared responses in a First Amendment to the Draft SEIR addressing the following topics:
Air quality and potential traffic congestion with addition of housing • Potential adverse impacts to County facilities in Urban Villages receiving additional housing capacity • Water conservation measures and natural ground water recharge Draft SEIR Recirculation Unnecessary
Staff responded to the comments and questions in the First Amendment to the SEIR. None of the comments raised represent new significant information that would warrant recirculation of the Draft SEIR pursuant to CEQA Guidelines Section 15088.5(a). The recirculation of an EIR is required when significant new information is added to the EIR after public notice is given of the availability of the Draft EIR for public review but before certification. “Information” can include changes in the project or environmental setting as well as additional data or other information. New information added to a Draft EIR is not “significant” unless the Draft EIR is changed in a way that deprives the public of meaningful opportunity to comment on a substantial adverse environmental effect of the project or a feasible way to mitigate or avoid such an effect (CEQA Guidelines Section 15088.5).
The First Amendment was posted on the City’s website on May 12, 2023 and all commenters were notified via email of the document’s availability. The Draft Supplemental Environmental Impact Report (DSEIR) and First Amendment to the DSEIR are available for public review on the City’s website:
https://www.sanjoseca.gov/your-government/departments-offices/planning-building-code- enforcement/planning-division/environmental-planning/environmental-review/active-eirs/2023-2031- housing-element-update-er21-032 Together, the DSEIR and the First Amendment to the DSEIR constitute the Final SEIR that will be presented to Council for certification.
PUBLIC OUTREACH
As noted above, the City engaged in extensive outreach as identified in Appendix H of the Housing Element.
Staff followed Council Policy 6-30: Public Outreach Policy, in that notices for the public hearings were posted on the City’s website, published in the San José Post-Record, and emailed to a list of interested groups and individuals. This staff report and attachments were posted on the City’s website. Staff has been available to respond to questions from the public.
16 Cal. Gov. Code Section 65352.3.
File No. GPT22-001 &ER21-032
Project Manager: Ruth Cueto
Approved by: /s/ Michael Brilliot, Deputy Director for Christopher Burton, Planning Director
ATTACHMENTS:
Exhibit A: HCD Review Letter
Exhibit B: 2023-2031 Housing Element
Exhibit C: Housing Element Adoption Resolution
Exhibit D: CEQA Resolution
Exhibit E: Sites Inventory (web-based map)
GPT22-001 & ER21-032
Links to Attachment A - E
Click on the title to view document
Exhibit A: HCD Review Letter
Exhibit B: 2023-2031 Housing Element
Exhibit C: Housing Element Adoption Resolution
Exhibit D: CEQA Resolution
Exhibit E: Sites Inventory (web-based map)
Correspondence After 5/17/2023