TO: COMMUNITY AND
ECONOMIC DEVELOPMENT
FROM: Christopher Burton
SUBJECT: Citywide Planning Activities
Semi-Annual Status Report
DATE: March 10, 2025
Approved Date:
3/14/25
RECOMMENDATION
Accept the semi-annual status report on Citywide planning activities including Urban Village planning and aligning zoning with the General Plan.
BACKGROUND
The Citywide Planning team leads on the ongoing implementation of the Envision San José 2040 General Plan (General Plan), Area and Specific Plans, and Urban Villages.
This includes adoption and implementation of the Housing Element. In addition, Citywide Planning is responsible for the City's ordinances and policies that relate to land use and urban planning, such as the Zoning Ordinance, as well as the Sign Ordinance, Citywide Design Standards and Guidelines, and various City Council policies. The team is also responsible for monitoring and maintaining data relating to development in the City, forecasting development trends, and monitoring and responding to both pending and recently adopted state legislation. Much of the Citywide Planning team’s work is mandated by state law, such as the Housing Element. Other work on the team includes City Council’s priorities, such as ordinance changes related to the upcoming 2026 major sports events.
This update on Citywide Planning Activities is provided bi-annually to the Community and Economic Development Committee.
ANALYSIS
Tasks on the Citywide Planning team vary in duration and resource needs based on the nature of the specific task. The Planning, Building and Code Enforcement Customer COMMITTEE AGENDA: 3/24/25
ITEM: (d)4
COMMUNITY AND ECONOMIC DEVELOPMENT COMMITTEE
March 10, 2025
Subject: Citywide Planning Activities Semi-Annual Status Report
Service Charter (Charter) provides a comprehensive and transparent view of the Citywide Planning team’s current workload and ability to take on new tasks.
The Charter differentiates between work that is mandatory, i.e., something mandated by state law, or committed to through previous legally required actions, such as the Housing Element, versus work that is a priority for the City but is not mandated by any outside entity. The Charter provides a comprehensive evaluation of current and upcoming workload and capacity through at least adoption of the next 7th Cycle Housing Element, due in January 2031.
The Charter provides a framework for City Council to prioritize the discretionary work of the Citywide Planning team while considering the large volume of mandated work in the next seven years. As new work items are proposed or existing work items rise in importance, staff can be transparent about what project or projects would need to be postponed and what additional budget might be required to accommodate the work.
After accounting for overhead and administrative tasks, the entire citywide planning team has a total of 1,189 hours available for project work per month, which equates to 21,237 hours annually. Currently, over 100,000 hours are estimated to be required for the complete work plan through the adoption of the 7th cycle Housing Element in 2031.
Staff has identified a need to shift some priorities to advance key housing policies and take advantage of external funding opportunities, which are discussed further in this memorandum. City Council will consider these changes to Citywide Planning’s priorities and budget during the annual budget process. The Attachment includes the detailed work plan for Fiscal Year 2024-2025 and 2025-2026 with the associated hours for planned projects.
As shown in the Attachment, during the current fiscal year the Citywide team has an overall workload that exceeds its annual capacity of 21,237 hours. This has meant that certain projects have been paused and placed on hold until there is capacity to restart work. This will generally mean shifting work into future fiscal years, which limits the ability to plan new and future work items. Additionally, as detailed further below, staff will need to shift other currently active projects to “on hold” to align workload with overall capacity. Even with the suggested shifts in workload, the team will be over capacity, which is likely to result in delays in the completion of work items.
Citywide Planning Team Budget
As the Community and Economic Development Committee evaluates the Citywide Planning team’s upcoming priorities, it is helpful to understand the team’s funding sources and budget. Approximately two-thirds of the team is funded by the Citywide Planning Fee, which is an 11.97% surcharge on certain development permit, building plan check, and inspection fees. The remaining one third is funded mostly through General Fund dollars, with small amounts from other sources such as construction
COMMUNITY AND ECONOMIC DEVELOPMENT COMMITTEE
March 10, 2025
Subject: Citywide Planning Activities Semi-Annual Status Report
taxes and development permit fees. The Citywide Planning Fee is intended to fund both staff positions and non-personnel expenses for the Citywide Planning team, as well as historic preservation activities, and to create a “reserve” to fund periodic major updates to the General Plan.
Although staffing vacancies allowed for a reserve to be built over several years, as additional staff were added to the team and some major projects were funded by the fee (for example, the multi-year Senate Bill 1333 rezoning effort), the reserve began depleting. Barring a significant and immediate upswing in development activity, funding sources other than the Citywide Planning Fee must be identified to maintain staffing levels on the team in upcoming fiscal years. Further, funding other than the Citywide Planning Fee must be identified for the upcoming major items on the Citywide work plan, as there is not adequate reserve remaining to fund these items and maintain current staffing levels.
Citywide Seven-Year Horizon Work Plan
As discussed at the September 23, 2024, Community and Economic Development Committee meeting, there are four key priorities that will require extensive staff work through January 2031 that will diminish capacity for other work items and may require substantial consultant resources.
1 Given the size and scope of these items, some work
can be done concurrently, but some must be done sequentially.
These key priorities are explicitly mandated by state law, necessary to retain certification of the current Housing Element, or necessary to prepare for the next Housing Element.
Current/Near Term:
1. Implementation of the 6th Cycle Housing Element
2. General Plan Major Review (Four Year Review)
Future:
3. Open Space, Safety and Environmental Justice Elements (Tri-Element Update)
4. 7th Cycle Housing Element Update
1. Implementation of the 6th Cycle Housing Element
Since the last Citywide update in September 2024, staff has completed work to advance implementation of the 6th Cycle Housing Element. Staff completed the second phase of Housing Element item H-14: Emergency Shelters further modifying the zoning ordinance around the permitting of emergency shelters. Additionally, in December staff achieved a major milestone in completing the first phase of P-7: City Infill Housing 1“Citywide Planning Activities Semi-Annual Status Report,” dated 9/4/24, https://sanjose.legistar.com/View.ashx?M=F&ID=13310857&GUID=D2E61791-AA9B-43BF-A7D9- 465D544543D0
COMMUNITY AND ECONOMIC DEVELOPMENT COMMITTEE
March 10, 2025
Subject: Citywide Planning Activities Semi-Annual Status Report
Ministerial Approval Ordinance to streamline the approval of multifamily housing in growth areas. Staff also completed zoning ordinance modifications to complete P-14:
Housing in Business Corridors to allow mixed-use housing in several Neighborhood Business Districts.
Staff is continuing to work on several other items including P-11: Allow “SB 9” Type Housing on Additional Properties, P-42: Group Homes for Seven or More Persons, P36: Alum Rock East Urban Village Plan, P-10: Standardize and Streamline Permitting Fees, Applications (Development Fee Framework) and P-41: Review and Revise Planning Permit Conditions.
2 Staff has also started work on its update to Council Policy 6-30, the public outreach policy for land use and development proposals. This work will include focus groups representing a diverse mix of communities and individuals from San José to seek initial feedback that will result in further outreach in the middle of the calendar year.
Staff has initiated work on two major items P-40: Evaluate Urban Village Planning Process and P-35: Small Multifamily Housing. One strategy identified in the evaluation of the Urban Village planning process is to plan the remaining neighborhood villages through one planning effort or framework that would include community outreach but may not result in individual community plans for all remaining neighborhood villages.3 Based on staff analysis, General Plan changes are necessary to facilitate this work as there are current policies that may need to be modified around Urban Village planning.
Additionally, there is very limited housing capacity remaining in the neighborhood villages in the current General Plan. As discuss further below, these changes likely need to be made through a General Plan Four-Year Review given their significance.
Staff has started work on P-35: Small Multifamily Housing through the inclusion of a feasibility assessment of this type of housing in the next iteration of the Cost of Residential Development Report to understand what can be built in the current market.
However, to ultimately move this policy forward changes that must come through a General Plan Four-Year Review will be necessary.
2. General Plan Four-Year Review
In the previous report to the Community and Economic Development Committee, staff indicated work was underway to update the “Tri-Elements”—the Open Space, Safety and Environmental Justice Elements of the General Plan. These are important and 2 More detailed updates on these items can be found in the Report on the Housing Catalyst Work Plan from the February Community and Economic Development meeting:
https://sanjose.legistar.com/View.ashx?M=F&ID=13766827&GUID=BE7311BA-A139-40D1-9A83- C77969420C6C. 3 Further detail on the evaluation of the Urban Village planning process is discussed in the Housing Catalyst Work Plan report from February 2025:
https://sanjose.legistar.com/View.ashx?M=F&ID=13766827&GUID=BE7311BA-A139-40D1-9A83- C77969420C6C
COMMUNITY AND ECONOMIC DEVELOPMENT COMMITTEE
March 10, 2025
Subject: Citywide Planning Activities Semi-Annual Status Report
required elements that need to be updated, and staff believed that it had the time and capacity to complete these items before moving to the General Plan Four-Year Review.
However, through the work done in the last quarter in implementing the 6th Cycle Housing Element, and further evaluation of the timeline to prepare for the next 7th Cycle Housing Element, staff is shifting focus to initiate the next General Plan Four-Year Review in spring 2025. Given the requirements and penalties of both implementing the current Housing Element and potential penalties for producing a late updated 7th Cycle Housing Element, the work needs to take priority over the Tri-Element Update.
One of the lessons learned during adoption and certification of the 6th Cycle Housing Element is that earlier preparations will benefit the City. A key component of the 7th Cycle Housing Element will be identifying sites for housing production. Based on staff’s preliminary analysis, the 6th Cycle Housing Element sites inventory has taken up most of the residential capacity in the 2040 Envision San José General Plan. In order to prepare for the work of the 7th cycle, staff anticipates the need to conduct a General Plan Four-Year Review that will have a primary focus of adding residential capacity to the General Plan. Updating the residential capacity of the General Plan will require analysis of existing General Plan strategies and significant environmental review. This process will also function as the Four-Year Major Review described in General Plan Goal IP-2.
By addressing the residential capacity issue, the General Plan Four-Year Review will also facilitate work on the implementation of 6th Cycle Housing Element strategies including P-40: Evaluate Urban Village Planning Process and P-35: Small Multifamily Housing.
To provide staff capacity to conduct the General Plan Four-Year Review and ensure efficiencies across teams, staff is proposing to modify work plan items. The Tri-Element Update will be delayed for approximately one year to allow the General Plan team the ability to lead the Four-Year Review process. Given staff’s limited resources and higher priority items, staff is proposing to pause work on the Coyote Monterey Corridor Study.
Through the City’s budget process, staff plans to propose that the $300,000 allocated to the Coyote Monterey Corridor Study be reallocated to the General Plan Four-Review.
The Coyote Monterey Corridor Study would resume when funding is identified, and it is reprioritized by City Council in the future. The CEQA team estimates between 240 and 320 hours of their time will be needed for the Environmental Impact Report (EIR) required for the Coyote Monterey Corridor Study, depending on the time required for tribal consultations and to respond to comments during the public circulation period.
Pausing the Coyote Monterey Corridor Study would allow staff to reallocate that time to other critical work such as the General Plan Four-Year Review EIR and addressing the remaining environmental review audit recommendations. It would also allow staff on the ordinance team to immediately begin working on a critical state law compliance zoning update to address changes made by the state legislature in the last year to accessory dwelling units, density bonus, and ministerial permits.
COMMUNITY AND ECONOMIC DEVELOPMENT COMMITTEE
March 10, 2025
Subject: Citywide Planning Activities Semi-Annual Status Report
Lastly, staff is proposing to include the environmental review for the Saratoga Urban Village Plan into the General Plan Four-Year Review’s environmental review. Currently, the Saratoga Urban Village plan area does not have sufficient residential capacity to accommodate future growth. Addressing the larger issue of residential capacity within one environmental review document will provide efficiencies for both the Citywide and Environmental Review teams. While this proposal will slow down the work on the Saratoga Urban Village Plan by approximately a year and a half, it will give the Urban Village team capacity to work on the Transit Oriented Communities Policy, as described in the section below.
The scope of work for the General Plan Four-Year Review will be presented to the City Council for approval in spring 2025. Following approval, staff will begin policy analysis and conduct community outreach and enagement to provide input and final recommendations to the City Council. While this portion of the work will take several months, the overall timeline will largely be driven by the environmental review process.
This work plan item will require significant analysis and resources, including staff across various City departments and from other Planning teams such as Environmental Review. Costs for the environmental review alone are estimated to be $500,000, not including staff time. Adjusting the Saratoga Urban Village Plan work plan will allow staff to repurpose the approximately $300,000 currently set aside for that plan’s environmental review to the General Plan Four-Year Review. Funding for the TriElement Update will also be shifted to the Four-Year Review; however, an additional budget allocation will be needed to fully cover all staff costs.
Transit Oriented Communities Policy Compliance
The Metropolitan Transportation Commission (MTC)'s Transit-Oriented Communities (TOC) Policy aims to promote sustainable, equitable development near transit hubs.
The TOC Policy was adopted by the MTC in September 2022, and final administrative guidance for implementation was issued in November 2024. 4 The policy applies to all property within a half mile of rail stations, including VTA light rail stations. San José is home to 54 stations subject to the TOC Policy. The key requirements to comply with the policy are:
1. Minimum residential and commercial office densities for new development;
2. Affordable housing production, preservation and protection, and stabilizing businesses to prevent displacement;
3. Parking management; and
4. Transit station access and circulation.
4 MTC TOC Policy Administrative Guidance: https://mtc.ca.gov/digital-library/5023804-mtc-administrativeguidance-transit-oriented-communities-policy
COMMUNITY AND ECONOMIC DEVELOPMENT COMMITTEE
March 10, 2025
Subject: Citywide Planning Activities Semi-Annual Status Report
Compliance with the TOC Policy is required to receive discretionary funding from the MTC. The MTC has consistently set expectations that compliance will be required before the next round of One Bay Area Grant (OBAG Cycle 4) funding is made available in early 2026. This has the potential to affect significant sources of funding for San José planning and transportation projects. OBAG has provided more than $148 million to the City from 2012 to present for work such as pavement maintenance, Vision Zero/Safety and Complete Streets, Smart City projects, Urban Village plans, and more. More detailed information on the TOC policy and the City’s compliance status can be found in the November 1, 2024 memorandum to the Community and Economic Development Committee.
5 While high-level alignment exists between the TOC policy and San José’s policies related to denser development around transit stations, City staff are challenged by some of the specific requirements in the TOC Policy, the volume of the work associated with the number of stations in San José, and the complexity of the TOC Policy itself. San José has begun the process of determining existing compliance but lacks staff resources. Citywide Planning’s work plan currently assumes some hours for TOC compliance work, addressing compliance in a substantial way has not been included.
In fall 2024, the MTC released a grant application for a total of approximately $20 million for local jurisdictions to develop policies to support TOC compliance. Local jurisdictions are eligible for up to $1.2 million each to support land use policy changes to increase residential and commercial densities in station areas. Applications were due in November 2024. PBCE submitted an application for the maximum $1.2 million. The grant would fund a team of two Planners and one Supervising Planner who would focus on TOC compliance over two years.
Given the sheer volume of station areas in San José, and the challenges with policy compliance, the City does not expect this funding will support land use changes around all 54 stations. The compliance approach that may be funded by the grant is two-fold.
The first phase of work would be to fully assess existing compliance with the policy’s density and FAR requirements for at minimum 26 of the 54 station areas. The 26 stations are prioritized based on expected future transportation investments, identification of opportunity sites, and overlap with City growth areas, among other factors. The team would then evaluate potential policy updates such as targeted amendments to zoning and general plan designations; rezoning of property; creation of new overlay districts; minor or comprehensive updates to existing area, specific, or urban village plans; or new area plans for specific station areas or corridors. Through this analysis the City will select a preferred approach or approaches to increasing density that can be achieved in the requested two year timeline. The second phase of work will be to implement the selected approach(es). This will include community outreach and ideally will be coordinated with other related concurrent TOC policy work 5 https://sanjose.legistar.com/View.ashx?M=F&ID=13540700&GUID=73BBE9AD-0785-44E8-B522- 57D03F9F23E9
COMMUNITY AND ECONOMIC DEVELOPMENT COMMITTEE
March 10, 2025
Subject: Citywide Planning Activities Semi-Annual Status Report
on station area access and parking. As some of the station areas overlap with unplanned Urban Villages, staff anticipates one of the preferred approaches developed in phase 1 would be a streamlined and consolidated Urban Village Plan for either the Highway 87 or Capitol Expressway light rail stations.
On February 14, 2025, the MTC staff presented their recommendations to the MTC Planning Committee who voted to approve San José’s grant application for the full amount requested. The grant application will go to MTC’s Programming and Allocations Committee on March 12, 2025, and then to the full Commission for a final decision on March 26, 2025. After the final decision, MTC staff will reach out to awarded jurisdictions with next steps. Accepting the grant will require City Council approval, and the City will need to enter into a formal agreement with MTC. Based on conversations with MTC staff, they expect work funded by this grant would commence in late summer or early fall 2025.
Due to ongoing budget constraints with the Citywide Planning fund and current constraints with the General Fund, staff recommends that this grant fund existing planning positions on the Citywide Planning team. Should the City receive the grant, staff will recommend some shifts to Citywide Planning work priorities to take on this substantial and important body of work. This will be brought before City Council for consideration at a later date.
Work Plan Highlights
The Citywide Planning section is comprised of seven teams that are each responsible for a variety of work plan items. The team has made progress on several priorities since the last activities update. Significant accomplishments of the team include adoption of the Streamlined Ministerial Review ordinance, Council approval of the Pleasant Hills Guiding Principles, adoption of the Neighborhood Business District overlay to allow for residential uses, community workshops for the Saratoga Urban Village plan, completion of the Five Year Development Forecast, census-tract level analysis for the Environmental Justice element, and adoption of phase two updates to the Emergency Shelter ordinance.
At the Community and Economic Development Committee meeting on March 21, 2025, staff will provide a verbal update to the Committee regarding key Citywide projects and initiatives, including the Pleasant Hills Golf Course Guiding Principles, initiating work to revise the Outreach process detailed in Council Policy 6-30, updating and expanding SB 9, and work on the Saratoga and Eastside Alum Rock Urban Villages.
COORDINATION
This memorandum was coordinated with the City Attorney’s Office.
COMMUNITY AND ECONOMIC DEVELOPMENT COMMITTEE
March 10, 2025
Subject: Citywide Planning Activities Semi-Annual Status Report
/s/
Christopher Burton
Director, Planning Building and Code Enforcement
For questions, please contact Martina Davis, Division Manager, Planning Building and Code Enforcement, at martina.davis@sanJoséca.gov or (408) 535-7888.
ATTACHMENTS
Attachment: Citywide Work Plan, FY 24-25 and FY 25-26