102764\1526554
December 9, 2024
Mayor Matt Mahan
City of San Jose
200 E. Santa Clara St.
San Jose, Ca 95113
Re: Opposition to San Jose’s proposed “Multifamily Housing Incentive Program.” To Mayor Matt Mahan,
The Nor Cal Carpenters Union (“NCCU”) is writing to express its opposition to the City of San Jose’s proposed “Multifamily Housing Incentive Program.” While the NCCU supports efforts to stimulate housing production, this initiative ignores existing City policy by exempting a public subsidy from triggering labor standards including prevailing wage. In sum, this program would give to developers while depriving workers of longstanding protections and benefits.
For reasons further outlined in this letter, the City should pause introducing this program until a comprehensive analysis can be undertaken regarding the inclusion of labor standards in the “Multifamily Housing Incentive Program”.
Today, Californian construction workers and their families are already forced to contend with an economically precarious situation which this measure as currently proposed would only stand to exacerbate.
The City of San Jose’s proposed “Multifamily Housing Incentive Program” should legally trigger labor standards including prevailing wage
The City’s “Multifamily Housing Incentive Program” offers multifamily housing developers an in- lieu fee waiver and a significant reduction in principal construction taxes. Pursuant to generally applicable City laws (Chapter 14.10 of the San Jose Municipal Code), these incentives constitute public subsidies which trigger labor standards including a requirement that workers on the benefited projects receive prevailing wages.1
Despite this, the City is using a single third-party consultant’s assumption that prevailing wage renders projects “financially infeasible” to justify exempting the “Multifamily Housing Incentive Program” from Chapter 14.10 of the San Jose Municipal Code.2
1 Chapter 14.10 of the San José Municipal Code sets “Minimum Labor Standards for a Private Construction Project Accepting a City Subsidy. ” Chapter 14.10 defines a subsidy to include any “reduction, permanent suspension or exemption of any fee or tax” that applies to single or multiple projects. 2 sanjose.legistar.com/View.ashx?M=F&ID=13583575&GUID=F101D3D4-D65C-407D-9B6C-234BDE8EB26A
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FW: Item 8.2 Multifamily Housing Incentive Program and North San José Parks Fee Realignment From City Clerk <[email protected]>
Date Tue 12/10/2024 7:39 AM
To Agendadesk <[email protected]>
From: Anthony Montes <
Sent: Monday, December 9, 2024 6:59 PM
To: City Clerk <[email protected]>
Subject: Item 8.2 Mul family Housing Incen ve Program and North San José Parks Fee Realignment
You don't often get email from . Learn why this is important Dear San Jose City Council,
On behalf of the Silicon Valley Bicycle Coalition (SVBC), a nonprofit dedicated to creating healthier and more just communities by promoting safe and accessible bicycling, we are writing to oppose the implementation of the Multifamily Housing Incentive Program and North San José Parks Fee Realignment policy.
The proposed policy aims to stimulate multifamily housing development by temporarily reducing construction taxes by 50% and 25% in the upcoming years. Nevertheless, the staff report lacks concrete data or metrics to substantiate this approach. City staff are also uncertain about whether these incentives will effectively increase our housing supply.
The proposed policy comes at a significant cost to essential city services, particularly transportation infrastructure. They directly impact the Traffic Capital Improvement Program, which funds essential transportation infrastructure, staffing, and grant matching for the San Jose Department of Transportation (SJDOT). Waiving these taxes for two phases of the housing project could lead to a loss of approximately $7.3 million. Although the city plans to offset some of this loss with Community Development Block Grant funds, a substantial reduction of $4.6 million to the program is still projected.
The city should avoid jeopardizing critical traffic improvement funding to benefit developers who may only see a marginal increase in profit.
Moreover, the city’s proposal risks placing historically marginalized communities in danger by stalling vital street safety projects, Vision Zero priorities, and eliminating traffic fatalities. From 2012 to 2023, the city has averaged 50 traffic deaths per year and this policy takes resources and tools away from SJDOT to change the built environment and make our streets safer. In the past year, we have worked alongside the department to connect with community members as part of the King Road Complete Streets project. 12/10/24, 10:27 AM Mail - Agendadesk - Outlook
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We commend SJDOT's excellent work in engaging with the community on this project and hope to continue this type of intentional outreach and progress on street safety projects. We urge the council not to force our community to choose between housing and street safety.
Additionally, SVBC’s strategic plan prioritizes creating "People-Centered Communities." This means we support equitable land-use policies that bring jobs, housing, and essential services to the community, alongside promoting street safety and bike-friendly streetscapes. We’re deeply concerned about the proposed changes to the Inclusionary Housing Ordinance, including the lowered affordability threshold to 100% AMI and the 100% discount on IHO fees. Offering developers $0 in-lieu fees for projects with fewer than 15% affordable units undermines our affordable housing goals. This policy counterintuitively prioritizes market-rate development over affordable housing, diverting future funds and hindering our progress toward a more equitable city.
To that end, we strongly urge the City Council to reconsider this policy and carefully consider how to incentivize development without compromising vital street safety and sustainability projects.
Thank you for your consideration.
Best,
Anthony Montes | he/him/his
Associate Director of Advocacy and Development
Mobile: | LCI # 7,038
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FW: Letter in Support of the Multifamily Housing Incentive Program From City Clerk <[email protected]>
Date Tue 12/10/2024 7:40 AM
To Agendadesk <[email protected]>
From: Joe Kirchofer <
Sent: Monday, December 9, 2024 9:24 PM
To: Mahan, Ma <Ma [email protected]>; Kamei, Rosemary <[email protected]>; Jimenez, Sergio <[email protected]>; Cohen, David <[email protected]>; Davis, Dev <[email protected]>; Doan, Bien <[email protected]>; Candelas, Domingo <[email protected]>; Foley, Pam <[email protected]>; Batra, Arjun <[email protected]>; Or z, Peter <Peter.Or [email protected]>; Casey, George <[email protected]>
Cc:
Burton, Chris <[email protected]>; Tu, John <[email protected]>; A enza, Manuel <Alec.A [email protected]>; Erik Schoennauer <
Subject: Le er in Support of the Mul family Housing Incen ve Program
Some people who received this message don't often get email from . Learn why this is important Dear Mr Mayor, Councilmembers, and City Staff -
First of all, I apologize that I am not able to a end in person tomorrow. I am wri ng to express AvalonBay’s support of the Mul family Housing Incen ve Program, which is on your agenda Tuesday a ernoon, December 10th.
AvalonBay is the developer of the approved project at 700 Saratoga Ave, where we hope to build 302 new apartments to serve the community of West San Jose. This project was originally conceived in 2016, and was approved by City Council in spring of 2019. We prepared full construc on drawings and were prepared to pull building permits in the late spring of 2020, just as the breadth and extent of the COVID pandemic was star ng to become clear. At that me, we decided to put construc on of these new homes on hold.
In the intervening years, the economic condi ons that allowed this project to proceed in 2016 have changed drama cally. We have watched rents in San Jose stay mostly flat, while construc on costs have risen sharply and general infla on has increased opera ng costs for mul family buildings. In the current environment, most new housing development is simply not economically feasible, and 700 Saratoga is no excep on.
S ll, we are diligently seeking a path forward to revive this development proposal and bring new housing to the underu lized parking lots on this property. Anything that the City can do to reduce the cost of building new housing will make a difference, and the proposal in front of you today will significantly improve the feasibility of the 700 Saratoga Ave development. While this change alone will not allow us to start construc on right away, it 12/10/24, 10:28 AM Mail - Agendadesk - Outlook
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This message is from outside the City email system. Do not open links or attachments from untrusted sources. represents a step in the right direc on. And, if it is combined with a reduc on in construc on costs or an increase in market rents, we are op mis c that we can re-start ac ve development of the site in 2025.
Thank you for your considera on of this important measure, -Joe Kirchofer
SVP, AvalonBay Communi es
NOTICE: This message, including any a achments, is proprietary to AvalonBay Communi es, Inc., intended solely for the use of the individual or en ty to whom it is addressed and may contain informa on designated as internal use, confiden al, and/or a orney-client privileged work product doctrine informa on. If you are not the intended recipient, any disclosure, copying, distribu on, or use of the contents of this message are prohibited. If you have received this email in error, please destroy it and no fy the sender immediately.
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FW: Concerns Regarding the Proposed Multifamily Housing Incentive Program and Its Impact on Affordable Housing Development
From City Clerk <[email protected]>
Date Tue 12/10/2024 10:56 AM
To Agendadesk <[email protected]>
1 attachment (245 KB)
SVH Letter RE - Concerns Regarding the Proposed Multifamily Housing Incentive Program (MHIP).pdf;
From: Manuel Salazar <
Sent: Tuesday, December 10, 2024 10:16 AM
To: The Office of Mayor Ma Mahan <[email protected]>; District1 <[email protected]>; Kamei, Rosemary <[email protected]>; District2 <[email protected]>; Jimenez, Sergio <[email protected]>; District3 <[email protected]>; District4 <[email protected]>; Cohen, David <[email protected]>; District5 <[email protected]>; Or z, Peter <Peter.Or [email protected]>; District 6 <[email protected]>; Davis, Dev <[email protected]>; District7 <[email protected]>; Doan, Bien <[email protected]>; District8 <[email protected]>; Candelas, Domingo <[email protected]>; District9 <[email protected]>; Foley, Pam <[email protected]>; District 10 <[email protected]>; Batra, Arjun <[email protected]>; Rocha, Vincent <[email protected]>; City Clerk <[email protected]>
Cc: Regina Celes n Williams < Alison Cingolani
< Mathew Reed <
Subject: Concerns Regarding the Proposed Mul family Housing Incen ve Program and Its Impact on Affordable Housing Development
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Dear Mayor Mahan and Members of the San Jose City Council,
As affordable housing developers, we recognize the significant challenges posed by rising development costs, and we share a collec ve interest in advancing projects to address the urgent need for more housing in San Jose. We are, however, deeply concerned about the proposed Mul family Housing Incen ve Program (MHIP), which proposes to waive all In Lieu fees to incen vize units at 100% Area Median Income (AMI) rents. While we understand the program’s intent to support market rate development, we urge you to consider the poten al loss of scarce resources for affordable housing development in return for a small number of units with rents far above what is needed to truly address the affordability crisis in our region.
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The original intent of the Inclusionary Housing Ordinance (IHO) was to leverage market-rate development to generate affordable housing and funds for affordable housing that serves those at lower income levels. The funds generated by San Jose’s IHO fees have become increasingly important for funding 100% affordable housing projects, which leverage other state, federal, and commercial resources to address our housing needs where they are most acute. This is par cularly true as other sources of local funding, including Measure E and Measure A, are either being redirected to other uses or have been successfully invested. Between 2020 and 2023 the IHO collected nearly $52.5 million. Future IHO fee resources will be essen al to suppor ng our collec ve efforts to expand deeply affordable and permanent suppor ve housing resources in the city.
We urge the City Council to reconsider completely waiving IHO fees for these projects without requiring the inclusion of units affordable to the city’s low-income residents. We believe market development can be incen vized without abandoning public value. Affordable housing delivers significant community benefits, including stability for underserved residents and long-term economic impacts. Preserving local funding mechanisms like IHO fees is essen al to ensuring these homes con nue to serve the popula ons most in need.
Sincerely,
Regina Celes n Williams
Execu ve Director
Manuel Salazar
Housing Planning and Produc on Associate
SV@Home
Pronouns: He/Him
t.
Silicon Valley Is Home. Join our Houser Movement. Become a member! Website I Facebook I Twi er I LinkedIn
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Via Email
December 10th, 2024
San Jose City Council
200 E Santa Clara St
San Jose, CA 95113
RE: Concerns Regarding the Proposed Multifamily Housing Incentive Program and Its Impact on Affordable Housing Development
Dear Mayor Mahan and Members of the San Jose City Council, As affordable housing developers, we recognize the significant challenges posed by rising development costs, and we share a collective interest in advancing projects to address the urgent need for more housing in San Jose. We are, however, deeply concerned about the proposed Multifamily Housing Incentive Program (MHIP), which proposes to waive all In Lieu fees to incentivize units at 100% Area Median Income (AMI) rents. While we understand the program’s intent to support market rate development, we urge you to consider the potential loss of scarce resources for affordable housing development in return for a small number of units with rents far above what is needed to truly address the affordability crisis in our region.
The original intent of the Inclusionary Housing Ordinance (IHO) was to leverage market-rate development to generate affordable housing and funds for affordable housing that serves those at lower income levels. The funds generated by San Jose’s IHO fees have become increasingly important for funding 100% affordable housing projects, which leverage other state, federal, and commercial resources to address our housing needs where they are most acute. This is particularly true as other sources of local funding, including Measure E and Measure A, are either being redirected to other uses or have been successfully invested.
Between 2020 and 2023 the IHO collected nearly $52.5 million. Future IHO fee resources will be essential to supporting our collective efforts to expand deeply affordable and permanent supportive housing resources in the city.
We urge the City Council to reconsider completely waiving IHO fees for these projects without requiring the inclusion of units affordable to the city’s low-income residents. We believe market development can be incentivized without abandoning public value.
Affordable housing delivers significant community benefits, including stability for underserved residents and long-term economic impacts. Preserving local funding mechanisms like IHO fees is essential to ensuring these homes continue to serve the populations most in need.
Sincerely,
Regina Celestin Williams
Executive Director
Board of Directors
Shiloh Ballard, Chair
Aubrey Merriman, Vice Chair
LifeMoves
Andrea Osgood, Treasurer
Eden Housing
Nevada Merriman, Secretary
MidPen Housing Corporation
Bob Brownstein
Working Partnerships USA
Julie Mahowald
Housing Trust Silicon Valley
Candice Gonzalez
Sand Hill Property Company
Amie Fishman
Non-Profit Housing
Association of Northern CA
Maria Noel Fernandez
Working Partnerships USA
Randy Tsuda
Alta Housing
Steven Yang
Northern CA LIIF
Victor Vasquez
SOMOS Mayfair
Javier Gonzalez
Google
Pilar Lorenzana
Silicon Valley Community
Foundation
Poncho Guevara
Sacred Heart Community
Service
Chris Neale
The Core Companies
Staff
Regina Celestin Williams
Executive Director
w
ww.svathome.org •
Date: December 10th, 2024
RE: Concerns Regarding the Proposed Multifamily Housing Incentive Program and Its Impact on Affordable Housing Development
Welton Jordan,
Chief Real Estate Development Officer
Jennifer Hark Dietz,
Chief Executive Officer
Louis Chicoine,
Chief Executive Officer
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FW: RE: Agenda Item 8.2 Multifamily Housing Incentive Program and North San José Parks Fee From City Clerk <[email protected]>
Date Tue 12/10/2024 10:57 AM
To Agendadesk <[email protected]>
1 attachment (802 KB)
12-10-24 SV@Home Alternative to Proposed MHIP.pdf;
From: Alison Cingolani <
Sent: Tuesday, December 10, 2024 10:13 AM
To: City Clerk <[email protected]>
Subject: FW: RE: Agenda Item 8.2 Mul family Housing Incen ve Program and North San José Parks Fee
You don't often get email from Learn why this is important
Alison Cingolani
Director of Policy | SV@Home
|
Join our Houser Movement. Become a member!
Website Facebook LinkedIn Twi er
From: Alison Cingolani
Sent: Monday, December 9, 2024 7:51 PM
To: The Office of Mayor Ma Mahan <[email protected]>; District1 <[email protected]>; Kamei, Rosemary <[email protected]>; District2 <[email protected]>; Jimenez, Sergio <[email protected]>; [email protected]; District4 <[email protected]>; Cohen, David 12/10/24, 10:59 AM Mail - Agendadesk - Outlook
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This message is from outside the City email system. Do not open links or attachments from untrusted sources. <[email protected]>; District5 <[email protected]>; Or z, Peter <Peter .Or [email protected]>; District 6 <[email protected]>; [email protected]; District7 <[email protected]>; Doan, Bien <[email protected]>; District8 <[email protected]>; Candelas, Domingo <[email protected]>; District9 <[email protected]>; Foley, Pam <[email protected]>; District 10 <[email protected]>; Batra, Arjun <[email protected]>; Rocha, Vincent <[email protected]>
Cc: Solivan, Erik <[email protected]>; Ferguson, Jerad <[email protected]>; Mathew Reed < >; Regina Celes n Williams < >; Manuel Salazar
< >
Subject: RE: Agenda Item 8.2 Mul family Housing Incen ve Program and North San José Parks Fee
Hello Mayor Mahan, Vice Mayor Kamei, and Councilmembers Jimenez, Cohen, Or z, Davis, Doan, Candelas, Foley, and Batra,
Please find a ached SV@Home’s le er proposing alterna ves to the Mul family Housing Incen ve Program, under considera on at the December 10, 2024 mee ng of the City Council. We look forward to a robust discussion, and ac on that both provides incen ves for growth and preserves the public benefit of the City’s Inclusionary Housing Ordinance.
Warm regards,
Alison Cingolani
Director of Policy | SV@Home
|
Join our Houser Movement. Become a member!
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Via email
December 9, 2024
RE: Agenda Item 8.2 Multifamily Housing Incentive Program and North San José Parks Fee
Realignment
Dear Mayor Mahan, Vice Mayor Kamei, and Councilmembers Jimenez, Cohen, Ortiz, Davis, Doan, Candelas, Foley, and Batra,
As an organization dedicated to ensuring every resident of Santa Clara County has access to a safe, stable home they can afford, SV@Home has been actively engaged with city staff as they draft the Multifamily Housing Incentive Program (MHIP). This program was developed in response to Council’s direction to explore reducing costs of development within the City’s control and proposes to reduce certain fees and taxes.
The current staff proposal also would substantially reduce developers’ obligations under the Inclusionary Housing Ordinance (IHO) for nearly 20 developments with applications deemed complete by December 2022, comprising more than 7,500 housing units, some with entitlements potentially valid through 2029. We appreciate the detailed work staff is doing on this program, and we share an interest in lowering the costs to develop market rate and affordable residential pipeline projects. However, we continue to have concerns about core aspects of the proposed MHIP, which we believe unnecessarily sacrifice the significant public benefits achieved by the City’s Inclusionary Housing Ordinance (IHO).
We believe there are unique circumstances that justify a significant reduction of the public benefits associated with inclusionary housing to render development feasible.
As a result, we supported the City’s Downtown highrise exemption to facilitate the development of this more costly construction type in a critical growth geography. We understand the difficult development environment facing the South Bay today. We support incentives for targeted projects that are stuck in the pipeline or are early in the process but expect to be stuck. However, the IHO remains a critical tool for the City to meet its RHNA and affordable housing commitments, particularly for its most vulnerable residents. We believe that the City must continue to deliver substantial public benefits to its residents through the IHO. Below, we propose an alternative that would signal to the market that San Jose welcomes residential development, provide regulatory relief and simplified options for developers, AND preserve the value capture & public benefit of the City’s IHO.
Background
The City of San Jose has long been a leader in California in the use of an IHO, leveraging market-rate development to create affordable housing resources for lower income families and individuals. Assembly Bill 1505, known as the Palmer Fix, was created in Board of Directors
Shiloh Ballard, Chair
Aubrey Merriman, Vice Chair
LifeMoves
Andrea Osgood, Treasurer
Eden Housing
Nevada Merriman, Secretary
MidPen Housing Corporation
Bob Brownstein
Working Partnerships USA
Julie Mahowald
Housing Trust Silicon Valley
Candice Gonzalez
Sand Hill Property Company
Amie Fishman
Non-Profit Housing
Association of Northern CA
Maria Noel Fernandez
Working Partnerships USA
Randy Tsuda
Alta Housing
Steven Yang
Northern CA LIIF
Victor Vasquez
SOMOS Mayfair
Javier Gonzalez
Google
Pilar Lorenzana
Silicon Valley Community
Foundation
Poncho Guevara
Sacred Heart Community
Service
Chris Neale
The Core Companies
Staff
Regina Celestin Williams
Executive Director
December 9, 2024
Re: Agenda Item 8.2 Multifamily Housing Incentive Program and North San José Parks Fee Realignment
2 response to the 2015 California Supreme Court ruling in Building Industry Association v. City of San Jose. AB 1505 codifies the Court’s decision, upholding the constitutionality of local governments' ability to adopt inclusionary housing ordinances.
The City of San Jose’s IHO, adopted in 2010 and amended 2021, requires developers building for-sale or rental housing to provide deed-restricted units affordable to qualified buyers or renters at income levels specified in the ordinance. The base obligation of the IHO requires 15% of the inclusionary units to be provided on site, and city staff have also worked with developers to provide a broad menu of alternative means to comply with the IHO.
Key among these options is the payment of a fee in lieu of on-site development, which has proven to be an important source of City funding for subsidy of 100% affordable housing developments.
Analysis
As data on the performance of the IHO is not published by the City, SV@Home requested from the City raw data from 2020 to present in order to fully understand the potential costs and benefits of the proposed MHIP. Our analysis produced the key findings below, which reinforce our experience of the IHO.
The IHO is and has been an important source of both affordable units and city funds for 100% affordable development.
• Since 2020, the IHO has produced hundreds of affordable homes within market rate developments, advancing the City’s goal of mixed-income developments without public subsidy. • Since 2020, the IHO has produced more than $52 million in in-lieu fees, which the City uses toward meeting its commitment to subsidize deeply affordable housing, while leveraging billions of dollars in state and federal investment in our communities.
• In lieu fees are especially important now that Measure E, once the City’s primary source of funding for affordable housing, has been largely reprogrammed to support the construction and operation of interim shelters and other homelessness response programs. Other sources of subsidy are also declining (such as Commercial Linkage Fees), or have been nearly fully deployed (such as the County’s Measure A).
In-lieu fees are an important source of subsidy to “close the gap” in the financing stack of 100% affordable housing developments, leveraging about $3.50 in state, federal, and other resources for every dollar of City funding.
• City funding of affordable housing continues to deliver significant public benefits by delivering deeply affordable homes to serve the needs of our most vulnerable residents with most units for residents below 60% of area median income.
• The table below shows the eleven 100% affordable developments receiving City subsidy, 2021-2024. The City’s average award of $156,372 leveraged an additional $902,330 in State and Federal Funds for 1,272 affordable homes.
December 9, 2024
Re: Agenda Item 8.2 Multifamily Housing Incentive Program and North San José Parks Fee Realignment
3 100% Area Median Income (AMI) is not affordable housing. • According to the City’s most recent Cost of Residential Development study, current market rents are well below the published rent limits for 100% AMI units, even in the city’s most expensive market (West San Jose). The table below shows that the City’s rent limits for 100% AMI 1- and 2-bedroom units are hundreds of dollars above current market rents (which include both existing and new-construction units).
Note: Estimated 2024 rents calculated by applying a 2.2% multiplier to per-square foot market rents for West San Jose in the City’s Cost of Residential Development report (presented to Council in November, 2023). Our calculations are borne out by the Zillow Observed Rent Forecast, available at https://www.zillow.com/research/data/
December 9, 2024
Re: Agenda Item 8.2 Multifamily Housing Incentive Program and North San José Parks Fee Realignment
4 • While developers will likely rent these units at lower cost than the published rent limits, they would have no obligation to do so under the current proposal and could increase rents up to the higher 100% AMI rent maximums as the market recovers.
• The proposed MHIP creates a regulatory burden for developers and imposes the burden of regular income-qualification for residents, yet fails to deliver a public benefit of affordability.
We support thoughtful cost reduction to enable projects to move forward. This will have far-reaching impacts, and we should carefully analyze and understand the costs and benefits of the solutions we choose. We believe we should not sacrifice a community benefit of this magnitude for short-term gains- which may still not materialize given the challenging economic environment.
Recommendations
Instead, we recommend a phased approach for the MHIP, with the proposed incentive plan applying to the first 1,500 units in the eligible project list that also obtain a city building permit by December 31, 2025. This would allow any developments able to benefit from the proposed incentive structure to move forward quickly, achieving Council objectives.
After December 31, 2025, projects should have the following compliance options:
1. A reduction of the current Inclusionary Housing Ordinance in-lieu fee to $11.71 per square foot in “Strong Market Areas,” and $7.43 in “Moderate Market Areas.”
2. Or, the provision of 5% of units onsite at up to 50% of the Area Median Income.
This option both provides housing targeted to the needs of San Jose’s more vulnerable residents, and allows developers to take advantage of the cost reductions available under the State Density Bonus Law (20% density bonus, 1 concession, unlimited waivers provide regulatory relief and related cost reductions) at no cost to the City, and delivers the significant community benefit of more homes at deep affordability for our most vulnerable residents.
The chart below compares the potential outcomes of the City’s current IHO, the proposed MHIP, and SV@Home’s proposal. Although our proposal represents a dramatic reduction in inclusionary obligations for the projects under consideration for the MHIP, it preserves both in lieu funding and housing affordable to San Jose’s residents in greatest need.
An MHIP providing 2 IHO compliance options to developers allows them to choose the option that best meets the needs of their unique development. These options can create momentum for both market-rate and affordable
December 9, 2024
Re: Agenda Item 8.2 Multifamily Housing Incentive Program and North San José Parks Fee Realignment
5 development and support expanded affordable housing resources for our most vulnerable households by leveraging an important tool in the city’s affordable housing tool kit.
Sinc
erely,
Regina Celestin Williams
Executive Director
Silicon Valley @ Home is a nonprofit advocacy organization that supports housing and affordable housing development throughout Santa Clara County. SV@Home works with a broad coalition of strategic partners to address the urgent housing needs of the diverse residents across all our communities. We advocate for solutions including increasing production of homes at all income levels, especially affordable housing; preserving existing affordable housing; and protecting our community’s most vulnerable residents from displacement.
December 9, 2024
Re: Agenda Item 8.2 Multifamily Housing Incentive Program and North San José Parks Fee Realignment
w
ww.svathome.org •
Appendix
Table A: The chart below shows that throughout Santa Clara County, rent burdens are highest among households with the lowest incomes. Nearly 90% of households with extremely low incomes (ELI, or up to 30% of area median income) and 80% of households with very low incomes (VLI, or up to 50% of area median income) are cost burdened, paying more than 30% of their monthly income for housing. A large proportion of these (71% of ELI households and 34% of VLI households) pay more than half their income in housing costs each month, leaving little income to cover the cost of food, medical care, transportation, and other basic needs. Moderate income households, including those at 100% AMI, face comparably little cost burden.
December 9, 2024
Re: Agenda Item 8.2 Multifamily Housing Incentive Program and North San José Parks Fee Realignment
7 Table B: City of San Jose Affordable Housing Funding Commitment Housing Memos This table shows the final per-unit awards from the City of San Jose to 100% affordable housing developments, with links to the staff memo showing the final award. We note that the average per-unit award across all developments is $156,372, well below the City’s approved per-unit threshold.
Project Name
Total #
of
Units
Date and link
to City
Housing
Memo
Total City
Funding
Commitment
Per-Unit
City
Funding
Notes on City Funding
Hawthorn Senior Apts
118 and 124 N 15th St 103 4/17/2024 $15,150,000 $147,087 Approving a combined Construction-Permanent Loan commitment of up to $15,150,000 in Measure E Funds, or such other special funds as the City may designate, for the Hawthorn Senior Apartments development Santa Teresa
Multifamily
5885 Santa Teresa
Blvd
49 6/7/2024 $7,250,000 $147,959
Approving a Construction-Permanent Loan commitment of up to $7,250,000 in Measure E Funds, or such other special funds as the City may designate, for the Santa Teresa Multifamily affordable housing development
Lupina
797 Almaden 99 3/1/2023 $24,940,000 $251,919
Approving a total Construction-Permanent Loan commitment of up to $21,350,000 and a land acquisition loan or acquisition funding commitment of up to $3,590,000 in funds from Measure E for the 797 Almaden development 525 N Capitol
525 N Capitol Ave 160 3/13/2024 $26,500,000 $165,625
A total Construction-Permanent loan commitment of up to $20,000,000 with $14,920,000 in Measure E Funds and $5,080,000 in Inclusionary Fee Funds. A land acquisition loan or acquisition funding commitment of up to $6,500,000 in Inclusionary Fee Funds.
Kooser Apts
1371 Kooser Ave 191 3/13/2024 $29,251,066 $153,147
A total Construction-Permanent loan commitment of up to $19,551,066 with $5,912,450 in Low- and Moderate-Income Housing Asset Funds and $13,638,616 in Inclusionary Fee Funds; and (b) A land acquisition loan or acquisition funding commitment of up to $9,700,000 in Inclusionary Fee Funds.
Alum Rock
Multifamily
1860 Alum Rock
60 4/8/2023 $8,087,753 $134,796
Authorizing an increase of up to $587,753, from $7,500,000 to $8,087,753 using Measure E Funds, to the City Council approved construction-permanent loan commitment to Alum Rock, LP., a California limited partnership, to provide funds December 9, 2024
Re: Agenda Item 8.2 Multifamily Housing Incentive Program and North San José Parks Fee Realignment
8 to complete tenant improvements to the commercial space for the community- based non-profit Amigos de Guadalupe.
Parkmoor
1510-1540 Parkmoor
Ave
81 9/1/2023 $16,826,688 $207,737
Approving a total commitment of up to $16,826,688 from the Low and Moderate Income Housing Asset Fund and the Affordable Housing Impact Fee Fund for a ConstructionPermanent Loan to Allied Housing, Inc. or an affiliated development entity for the Parkmoor Community Apartments.
The Charles
551 Keyes 99 5/4/2023 $9,675,885 $97,736
The City Council approved a loan to the Borrower on June 21, 2022, for eligible development costs up to $9,405,000 during the construction period (the City Construction Loan) and up to $9,675,885 during the permanent period after construction and lease-up. The funding sources for the City Loan will consist of Measure E Real Property Transfer Tax Revenue plus other sources at the City’s discretion.
Tamien Station
1197 Lick Ave 135 5/4/2023 $17,250,000 $127,778
Adopt a resolution authorizing an increase of up to $500,000 from Measure E Funds to increase the City Council-approved construction-permanent loan commitment to Tamien Affordable, L.P., a California limited partnership, from $16,750,000 to $17,250,000 to provide funds for tenant improvements to the commercial space for a commercial childcare facility.
777 West San Carlos
777 West San Carlos
St
154 5/12/2023 $22,247,500 $144,464
The City agreed to lend the Borrower eligible development costs up to $21,420,500 during the construction period (City Construction Loan) and an additional $827,000 for a total of $22,247,500 during the permanent period (City Permanent Loan) after construction and lease-up (the City Permanent Loan and, with the City Construction Loan, collectively the City Loan). Of the total loan amount, up to $247,500 in Measure E funds are planned to provide tenant improvements for a childcare facility.
McEvoy Apartments
699 W San Carlos St 141 8/20/21 $20,000,000 $141,844
Approving a total commitment of up to $20,000,000 in Measure E funding reserved in the General Fund for a Construction-Permanent Loan to First Community Housing, or an affiliated entity, for the McEvoy Apartments, which is being developed to offer 222 rent-and income-restricted apartments for extremely low-income, very low-income, low-income at 80% of Area Median Income households. (McEvoy Apartments & Dupont Family Apartments) December 9, 2024
Re: Agenda Item 8.2 Multifamily Housing Incentive Program and North San José Parks Fee Realignment
9 Table C: State and Federal Awards to 100% Affordable Developments in San Jose The table below shows the value of state and federal Low Income Housing Tax Credits and tax exempt bond cap awards to 100% affordable developments in San Jose from 2021-2024. Although other state, federal, and county programs also provide funding for affordable housing in San Jose, the value of these awards alone represent significant outside investment leveraged by developments affordable to households at extremely low, very low, and low incomes.
December 9, 2024
Re: Agenda Item 8.2 Multifamily Housing Incentive Program and North San José Parks Fee Realignment
10 Table D: Potential Public Benefit of a sample of Pipeline Projects Under SV@Home’s Proposed Incentives The table below analyzes four developments, one in a high market (498 W. San Carlos) and three in moderate markets. At the reduced inclusionary obligation of 5% at 50% AMI (serving VLI households) or reduced in lieu fees of $11.71 in a high market and $7.43 in a moderate market, these four developments would produce up to 112 affordable homes, $13,335,773 in in lieu funds, or some combination of the two.
December 9, 2024
Re: Agenda Item 8.2 Multifamily Housing Incentive Program and North San José Parks Fee Realignment
11 Table E: Comparative Benefits of In-Lieu Fees
The table below shows the value, in number of units subsidized by the City, of the in lieu fees potentially generated by the sample of developments above. At the City’s current level of average per-unit award ($156,327), $13,335,773 would generate 85 homes affordable to households at 50% of AMI, leveraging more than $46.6 million in state and federal investment in San Jose.
December 9, 2024
Re: Agenda Item 8.2 Multifamily Housing Incentive Program and North San José Parks Fee Realignment
12 Table F: Full Comparative Analysis of Yield of Pipeline Projects Eligible for the MHIP Under Current Compliance Plans, Proposed MHIP, and SV@Home Proposal