NVF:CPA:JMD
12/6/2024
T-48566 / 2163329_3 1
Council Agenda: 12/10/2024
Item No.: 8.2(a)(1)
DRAFT – Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
REVISED – per Supplemental Memorandum to Council dated 12-9-2024 RESOLUTION NO. ______________
A RESOLUTION OF THE COUNCIL OF THE CITY OF
SAN JOSE AUTHORIZING THE ESTABLISHMENT OF A
TEMPORARY MULTIFAMILY HOUSING INCENTIVE
PROGRAM FOR SPECIFIED ELIGIBLE MULTIFAMILY
RESIDENTIAL PROJECTS
WHEREAS, on June 18, 2024, the City Council extended and modified the Downtown Residential High-Rise Incentive Program that applies exclusively to residential high -rise located in the Downtown Planned Growth Area defined in the City’s Envision San José 2040 General Plan to reduce the City’s two primary construction taxes and deferral of payment of these taxes to final inspection and reducing the Inclusionary Housing Ordinance in-lieu fees to $0 subject to certain conditions being met; and WHEREAS, in addition to extending and modifying the Downtown Residential High-Rise Incentive Program, the City Council directed staff to study additional strategies for promoting citywide housing construction aimed at Growth Areas defined the Envision San José 2040 General Plan with an emphasis on those projects with project applications that were deemed complete by the Planning Department by the end of June 2022; and WHEREAS, the City received an allocation 62,200 units from the Association of Bay Area Governments and adopted by the California Department of Housing and Community Development for its 6th Cycle Housing Element covering the period of January 31, 2023 to January 31, 2031; and
WHEREAS, San José has experienced modest production of affordable housing in the last several years and continues to underperform in housing production, particularly in the last calendar year for multifamily housing market rate housing; and NVF:CPA:JMD
12/6/2024
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Council Agenda: 12/10/2024
Item No.: 8.2(a)(1)
DRAFT – Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
REVISED – per Supplemental Memorandum to Council dated 12-9-2024 WHEREAS, on October 26, 2023, the City Council held a study session and received the latest report on the Cost of Residential Development (“Report”), which concluded that current economic conditions remain a significant barrier to the construction of new market rates and affordable housing within Downtown and citywide; and WHEREAS, following the Report, Century Ur ban, the City ’s Consultant , provided a n updated high-level feasibility analysis, noting that there has been no material improvement in key drivers of economic feasibility since publishing the Report and therefore no indication or evidence that the challeng ing residential development economics observed in the 2023 analysis have improved; and WHEREAS, Chapter 14.10 of the San José Municipal Code sets “Minimum Labor Standards for a Private Construction Project Accepting a City Subsidy”, defining a subsidy to include any “reduction, permanent suspension or exemption of any fee or tax” that applies to single or multiple projects; and
WHEREAS, construction projects receiving a City subsidy are required to pay all workers employed on the construction prevailing wage rates, and are subject to other provisions such as requiring apprenticeships and local hire, among others; and WHEREAS, there are exemptions to the definition of a subsidy that include the reduction of a fee or tax that is applied uniformly across all private construction projects within a specific subcategory of use, e.g., high -rise residential, when City Council determines, based on specified criteria, that construction of the projects is not financially feasible; and WHEREAS, the City recognizes the importance of supporting Residential Development to complement job growth, catalyze transit usage, and foster vibrant retail environments; and
NVF:CPA:JMD
12/6/2024
T-48566 / 2163329_3 3
Council Agenda: 12/10/2024
Item No.: 8.2(a)(1)
DRAFT – Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
REVISED – per Supplemental Memorandum to Council dated 12-9-2024 WHEREAS, based on the results of the analysis in the Report and the updated analysis regarding the lack of financial feasibility, Council desires to establish the Multifamily Housing Incentive Program applicable to specified multifamily residential developments listed under Attachment A, attached hereto; and
WHEREAS, based on the Report and subsequent analysis conducted by the Consultant, the City has determined that the fee reduction permitted under the Multifamily Housing Incentive Program is not a subsidy; and
WHEREAS, Attachment A to this Resolution contains the list of projects eligible for the proposed Multifamily Housing Incentive Program that includes a total of 34 35 projects with up to 10,0399,633 units with 7, 530 357 market-rate and 2, 509 276 affordable meeting specified requirements as described further in the Memorandum; and WHEREAS, the list of eligible projects in Attachment A (“Projects”) are generally located in a Planned Growth Area, e.g., Urban Village, defined in the Envision San José 2040 General Plan , have a density exceeding 50 dwelling units per acre equivalent to the minimum density in the Envision San José 2040 General Plan Transit Residential land use designation, and submitted a project application that was deemed complete by the Department of Planning, Building, and Code Enforcement by the end of December 2022; and
WHEREAS, the Multifamily Housing Incentive Program established herein and further defined in the Resolution and Ordinance approved concurrently herewith generally provides a waiver of the Inclusionary Housing Ordinance (IHO) in lieu fees for Projects providing at least 5% of units at an affordable housing cost or affordable rent available to households earning no more than 100% Area Median Income (AMI) that are approved by the Housing Director consistent with the Program requirements including amending the Project’s Inclusionary Housing Compliance Plan , and also provides a 50% reduction in NVF:CPA:JMD
12/6/2024
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Council Agenda: 12/10/2024
Item No.: 8.2(a)(1)
DRAFT – Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
REVISED – per Supplemental Memorandum to Council dated 12-9-2024 the Building and Structure Construction Tax and Commercial, Residential and Mobile Home Park Construction Tax for the first 1,500 units meeting specified deadlines and 25% reduction thereafter for the remaining units in such Projects; and WHEREAS, the Multifamily Housing Incentive Program is establis hed based on the findings of the Memorandum, the Report, and the documents linked to the Memorandum;
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF SAN JOSE THAT:
A. The above recitals are true and correct.
B. The City Council finds that the fee reduction permitted under the Multifamily Housing Incentive Program is not a subsidy under Chapter 14.10.
C. The City Council hereby establishes the Multifamily Housing Incentive Program applicable to specified multifamily residential projects included in Attachment A attached hereto.
D. The application of the Multifamily Housing Incentive Program is further defined and described in the Resolution and Ordinance approved concurrently herewith, as may be amended or superseded.
NVF:CPA:JMD
12/6/2024
T-48566 / 2163329_3 5
Council Agenda: 12/10/2024
Item No.: 8.2(a)(1)
DRAFT – Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
REVISED – per Supplemental Memorandum to Council dated 12-9-2024 ADOPTED this _____ day of ___________, 2024, by the following vote:
AYES:
NOES:
ABSENT:
DISQUALIFIED:
MATT MAHAN
Mayor
ATTEST:
TONI J. TABER, MMC
City Clerk
NVF:CPA:JMD
12/6/2024
T-48566 / 2163329_3 A-1
Council Agenda: 12/10/2024
Item No.: 8.2(a)(1)
DRAFT – Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
REVISED – per Supplemental Memorandum to Council dated 12-9-2024
ATTACHMENT A
LIST OF ELIGIBLE MULTIFAMILY HOUSING PROJECTS
Market-Rate Projects
Project Address Developer Last
Entitlement
Expiration
Units
1 498 West San Carlos Urban Catalyst 12/14/2028 278272
2 4300-4360 Stevens Creek Fortbay/Perry Hariri 8/30/2028 407 3 14200 Union Weingarten Investors 11/2/2028 305
4 1312 El Paseo de Saratoga/1177
Saratoga Sand Hill Property 11/29/2029 772*
5 205 Dupont Miramar Capital/Perry Hariri 5/4/2028 689
6 700 Saratoga Avalon Bay Communities 3/17/2027 247
7 905 North Capitol Hanover 6/29/2028 345350
8 1298 Tripp; 1325/1347
E. Julian ROYGBIV 11/29/2029 913
9 70 N. 27th HC Investment LLC 5/31/2029 198
10 1530 W. San Carlos Urban Villas LLC 6/28/2029 237
11 1520 W. San Carlos Vivji Mani 7/12/2029 256
12 1050 Saint Elizabeth Evershine XVII LP 4/19/2029 206 13 West San Carlos and Sunol Republic Urban 5/4/2028 263 14 1065 S. Winchester A&Z Development 10/25/2028 70
15 1073 S. Winchester A&Z Development 8/25/2027 61
16 605 Blossom Hill Republic Urban 8/9/2028 239
17 1197 Lick/Tamien Station Republic Urban 12/9/2026 434 18 681 E. Trimble Hannover Company 8/14/2028 1318114
6 19 210 Baypointe Summerhill Homes 10/22/2028 292
*Revised number of project units pending City Council approval. Total 75307357 Affordable Projects
Project Address Developer Last
Entitlement
Expiration
Units
1 802 S. First Maracor/Pacific West 10/12/2028 166
2 124 N. 15th 2080 Almaden Affirmed Housing GroupSanta
Clara Housing Authority
9/2/202710/6/
2029
10380
3 1371 Kooser Affirmed Housing Group 8/24/2028 191190
4 525 N. Capitol Community Development
Partners 9/1/2028 160
5 771-797 Almaden Resources for Community
Development 1/28/2028 99
6 675 E. Santa Clara St. Housing Authority/Eden/Core 4/20/2028 559178 NVF:CPA:JMD
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T-48566 / 2163329_3 A-2
Council Agenda: 12/10/2024
Item No.: 8.2(a)(1)
DRAFT – Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
REVISED – per Supplemental Memorandum to Council dated 12-9-2024 7 1135 E. Santa Clara605 Blossom
Hill Green Republic Blossom Hill LLC 8/9/2028 89
8 70 Kentucky Place Charities Housing 11/9/2029 55
9 501 Almaden Satellite Housing 9/1/2028 53
10 1135 E. Santa Clara Allied Housing 10/9/2026 91
11 2315 Canoas Garden Sand Hill Property Co 1/10/2028 237 12 995 E. Santa Clara First Community Housing 9/23/2028 74 13 2920/2928 Alum Rock Charities Housing 9/1/2028 83
14 934-948 E. Santa Clara Milestone Housing Group 8/8/2029 103 15 71 Vista Montana Charities Housing 3/21/2029 446
16 178 E. Trimble Pacific Companies 8/14/2028 172
Total 25092276