NVF:CPA:JMD
12/6/2024
T-48566 / 2163328_2 1
Council Agenda: 12/10/2024
Item No.: 8.2(a)(2)
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 A REDUCTION IN THE
INCLUSIONARY HOUSING ORDINANCE IN LIEU FEES TO
$0 FOR SPECIFIED ELIGIBLE MULTIFAMILY PROJECTS
THAT INCLUDE AT LEAST 5% OF UNITS ON THE
DEVELOPMENT SITE MADE AVAILABLE AT AN
AFFORDABLE RENT TO HOUSEHOLDS EARNING NO
MORE THAN 100% OF AREA MEDIAN INCOME ,
PURSUANT TO THE TEMPORARY MULTIFAMILY
HOUSING INCENTIVE PROGRAM
WHEREAS, the Inclusionary Housing Ordinance, Chapter 5.08 of Title 5 of the San José Municipal Code (IHO) requires residential development projects (“Projects”), as defined therein, to provide for a period of ninety-nine (99) years 15% of the housing units on-site offered to income qualified buyers or renters at an Affordable Housing Cost or Affordable Rent as defined under Health and Safety Code sections 50052.5 and 50053; and WHEREAS, the IHO additionally requires the execution and recording of a deed - restricted Inclusionary Housi ng Agreement memorializing a Project’s inclusionary housing obligations and regular monitoring to ensure compliance during the affordability term; and
WHEREAS, Section 5.08.520 of the IHO provides that a Residential Development can meet its inclusionary h ousing requirement by the payment of an in lieu fee calculated based on the rentable square footage that must be received before certificate of occupancy for the first market rate unit; and
WHEREAS, Subsection I. of 5.08.520 of the Inclusionary Housing Ordinance, Chapter
5.08 of Title 5 of the San José Municipal Code, authorizes the City to adopt a resolution reducing the in lieu fees; and
NVF:CPA:JMD
12/6/2024
T-48566 / 2163328_2 2
Council Agenda: 12/10/2024
Item No.: 8.2(a)(2)
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 Urban, the City’s consultant, provided a current high-level feasibility analysis, noting there has been no material improvement in key drivers of economic feasibility since publishing the Report and therefore no indication or evidence that the challenging 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
NVF:CPA:JMD
12/6/2024
T-48566 / 2163328_2 3
Council Agenda: 12/10/2024
Item No.: 8.2(a)(2)
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, the City recognizes the importance of supporting multifamily residential development to complement job growth, catalyze transit usage, and foster vibrant reta il environments; and
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 to allow specified eligible multifamily residential projects listed under Attachment A, attached hereto, to meet its inclusionary housing obligation by the payment of $0 in lieu fee if the eligible project provides at least 5% onsite residential units made available at an affordable rent to households earning no more than 100% of Area Median Income and otherwise meets the requirements of the IHO; and
WHEREAS, the Multifamily Housing Incentive Program excludes projects otherwise eligible under the Program that have approvals under Title 20 of the San José Municipal Code (“Zoning Code”), unless the Project obtains an amendment pursuant to the provisions of the Multifamily Housing Incentive Program, Zoning Code, Inclusionary Housing Ordinance, and other applicable laws and guidelines; and WHEREAS, eligible Projects may be amended and remain eligible under the Program if the complete the following: 1) submit a complete application(s) to the City to amend the Project approvals by December 31, 2025; 2) maintains a density of at least 50 density units per acre; 2) subsequently obtain a building permit eighteen (18) months after planning approval of the amended project; and 4) pass a first building inspection six (6) months after building permit issuance; and
WHEREAS, the Housing Director may approve an amendment to an existing Inclusionary Housing Ordinance Compliance Plan for projects listed in Attachment A consistent with the requirements of the Multifamily Housing Incentive Program; and NVF:CPA:JMD
12/6/2024
T-48566 / 2163328_2 4
Council Agenda: 12/10/2024
Item No.: 8.2(a)(2)
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, the reductions of the in lieu fee are made 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 hereby authorizes a reduction of the Inclusionary Housing Ordinance in lieu fee to $0 to specified eligible multifamily residential projects under the Multifamily Housing Incentive Program listed under Attachment A to meet their inclusionary housing requirement if the eligible project provides at least 5% onsite residential units made available at an affordable rent to households earning no more than 100% of Area Median Income, and otherwise meets the requirements of the Inclusionary Housing Ordinance.
C. The Housing Director may approve an amendment to an existing Inclusionary Housing Ordinance Compliance Plan for projects listed in Attachment A consistent with the requirements of the Multifamily Housing Incentive Program.
D. The reduction of the Inclusionary Housing Ordinance in lieu fee to $0 is excluded for Projects otherwise eligible under the Multifamily Housing Incentive Program that have existing approvals under Title 20 of the San José Municipal Code (“Zoning Code”), unless the Project obtains an amendment consistent with B. and C. above pursuant to the provisions of the Multifamily Housing Incentive Program, Zoning Code, Inclusionary Housing Ordinance, and other applicable laws and guidelines, and satisfies all the following:
1. The Project maintains a density of at least 50 density units per acre; NVF:CPA:JMD
12/6/2024
T-48566 / 2163328_2 5
Council Agenda: 12/10/2024
Item No.: 8.2(a)(2)
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.
2. The complete application(s) to amend the Project is submitted to the City by December 31, 2025;
3. The Project obtains a building permit eighteen (18) months after planning approval of the amended Project; and
4. The Project passes its first building inspection six (6) months after building permit issuance.
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 / 2163328_2 A-1
Council Agenda: 12/10/2024
Item No.: 8.2(a)(2)
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 13181146
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. 15th2080 Almaden Santa Clara Housing
AuthorityAffirmed Housing Group
9/2/202710/6/
2029
10380
3 1371 Kooser Affirmed Housing Group 8/24/2028 191
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
12/6/2024
T-48566 / 2163328_2 A-2
Council Agenda: 12/10/2024
Item No.: 8.2(a)(2)
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