Attachment — San Jose City Council, December 8, 2025

December 1, 2025

PRESENTED TO

THE CITY OF
SAN JOSÉ

COST OF RESIDENTIAL

DEVELOPMENT STUDY

TABLE OF CONTENTS
PART I.

INTRODUCTION AND SUMMARY OF FINDINGS .................... 1

RESIDENTIAL BUILDING TY
POLOGIES ........................................7

HOUSING DEV
ELOPMENT FINANCIAL ANALYSIS ...............11

ADDITIONAL MARKET CONSIDERA
TIONS ..............................23
APP
ENDIX ..................................................................................................... 29 PAR
T II.

EXECUTIVE SUMMARY ............................................................................ 3

METHODOLOGY AND AP
PROACH .................................................4

TRENDS IN TO
TAL DEVELOPMENT COSTS ...............................8
AFFORD

ABLE HOUSING DEVELOPMENTS
COSTS BY HOUSING TYPE ....................................................................9

SHARE OF DEV

ELOPMENT COSTS FUNDED
BY CITY SUBSIDIES AND OTHER SOURCES ...........................20

KEY DRIVERS OF AFFORDABLE
HOUSING DEVELOPMENT COSTS ................................................24 APPENDIX ..................................................................................................... 27 PART I.

COST OF DEVELOPMENT STUDY

DRAFT REPORT
Prepared for: Prepared by:

City of San José Economic & Planning Systems, Inc.

December 1, 2025
EPS #251053

Table of Contents 1. Introduction and Summary of Findings 1 Study Overview and Analytical Framework ........................................................................................................ 1 Key Findings ........................................................................................................................................................ 4 2. Residential Building Typologies 7 Townhome ......................................................................................................................................................... 8 Stacked Flats ....................................................................................................................................................... 9 Podium ............................................................................................................................................................... 9 Wrap ................................................................................................................................................................. 10 Tower ............................................................................................................................................................... 10 3. Housing Development Financial Analysis 11 Overview of Methodology ................................................................................................................................ 11 Development Costs .......................................................................................................................................... 12 Market Value Analysis ...................................................................................................................................... 17 Results and Sensitivity Analysis ........................................................................................................................ 18 4. Additional Market Considerations 23 Office to Residential Conversion ...................................................................................................................... 23 Regional Market Comparisons ......................................................................................................................... 26 Appendix 29

List of Tables Table 1. Results by Building type and Location (Hypothetical 2-Acre Site) ........................................................... 5 Table 2. Overview of Residential Building Type and Development Program Studied .......................................... 8 Table 3. Hard Costs by Building type .................................................................................................................. 13 Table 4. Summary of San José Pro-Formas ......................................................................................................... 13 Table 5. City Development Impact Fees by District ............................................................................................ 15 Table 6. Total Construction Taxes and Development Impact Fees ..................................................................... 16 Table 7. Other Soft Cost Assumptions ................................................................................................................ 17 Table 8. Average Rents and Sale Prices by MLS Zone ......................................................................................... 18 Table 9. Results by Building type and Location (Hypothetical 2-Acre Site) ......................................................... 19 Table 10. Development Impact Fee per Unit Comparison .................................................................................... 28 List of Figures Figure 1. San José Multiple Listing Service Zones Used in Study ............................................................................ 3 Figure 2. Townhome Results by Price Point – West San José (No Fee Waivers) .................................................. 20 Figure 3. Podium Results by Rental Rate – Central San José (No Fee Waivers) ................................................... 21 Figure 4. Podium Results by Total Development Costs – Central San José (No Fee Waivers) ............................. 22 Figure 5. Good vs Challenging Candidates ........................................................................................................... 24 Figure 6. Citywide Sale Price and Rent Comparison ............................................................................................. 27

Economic & Planning Systems, Inc. 1 Introduction and Summary of Findings

1. Introduction and Summary of Findings The San Jose City Council has demonstrated a long-standing interest in advancing both market and affordable housing development. To this end, the City Council directed staff to convene a Study Session on factors affecting housing cost and feasibility, building on previous studies on this topic going back to 2017. At the same time, the City Council recognizes that its policies, including the imposition of development impact fees, directly affect the economics of housing development. As such, the City Council has the discretion to temporarily waive these fees, or implement other policies, to encourage desired housing production. This Report provides information on the cost and financial feasibility of developing market rate housing in San José. It has been prepared by Economic & Planning Systems (EPS) as a part of a broader study effort commissioned by the San Jose City Council to evaluate the cost of both market rate and affordable housing production. EPS is serving as a sub-consultant to CSG Advisors, the author of an accompanying study on the development cost of affordable housing in San Jose. The primary purpose of this study on market rate housing is two-fold: 1. To inform City Council and the public on the economic feasibility of developing various types of housing given the current market environment in San José. 2. To inform City Council decisions related to extending impact fee waivers for certain housing projects, as allowed under Section 14.10.310 in the San José Municipal Code (MC). This Report documents the methodology, data sources, assumptions, and key findings from the EPS study of San Jose’s current market rate housing market. The information is provided as background to a City Council Study Session on December 8th, 2025. Study Overview and Analytical Framework This study evaluates the key market and financial factors affecting housing development economics in San Jose. In particular, the research has focused development costs as well as achievable market rents and sale prices throughout the city. This research reflects 2024 - 25 market conditions and, as described and referenced throughout, draws on a broad range of information and data sources (e.g. CoStar, Redfin, Marshall + Swift, and data from local projects).

COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 2 Introduction and Summary of Findings Because costs of residential development can vary across several factors, this research effort considered differences in development feasibility across the following key parameters: • Housing Building Types. EPS has considered five (5) residential building types as defined in Chapter 2 and referenced in the Report as (1) townhomes, (2) stacked flats, (3) podium, (4) wrap, and (5) tower. Townhomes and stacked flats building types are assumed to be for-sale, while podium, wrap, and tower building types are assumed to be for-rent. Each building type is assumed to be built on a 2-acre lot to provide a standardized comparison of results. The analysis includes separate estimates for the various components of development cost for each building type, including building construction (aka “hard costs”), indirect or “soft costs” (e.g., design, financing, marketing, etc.) and city permits and fees. While the EPS study also considers office to residential conversions, we do not provide specific estimates on their financial feasibility due to a wide variation in potential outcomes, as described further in Chapter 4. • Project Location. EPS has provided separate results for five (5) geographic areas within the City of San José to illustrate how differences in housing rents, sale prices, and City fees affect development feasibility (these factors can vary by location). These separate areas, referenced as West, Central, Downtown, North, and South / East, were also selected to be consistent with previous Cost of Development studies. The West, Central, North and South / East correspond to four Multiple Listing Service (MLS) zones that are used to determine the Parks and Recreation Department’s Parkland in-Lieu fee (see Figure 1). The study also identifies a Downtown zone, which is a subsection of the Central MLS zone, and reports separate results for the Tower building type (the primary building type of interest in this location).

COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 3 Introduction and Summary of Findings Figure 1. San José Multiple Listing Service Zones Used in Study It is important to note that the findings from this study are based on planning-level estimates of housing development economics. The feasibility of individual housing projects can differ from the results shown here due to a variety of factors, including site conditions, developer capabilities, access to capital, and return expectations, as well as the cost of labor, materials, and financing at the time of construction, among other factors. As a result, the estimates provided herein are designed to reflect typical conditions and serve as a general indicator of housing development feasibility under current market conditions. 09: Downtown/ Central 15: West 07B: North 03: South and East

COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 4 Introduction and Summary of Findings Key Findings • While several lower density housing building types are likely to be financially feasible to develop in San Jose given current market conditions, most higher density building types are not. For-sale townhomes and stacked flats appear financially feasible under current market conditions, driven by high achievable sale prices and lower construction costs for these types of structures. For example, these building types feature integrated, wood-framed parking garages which are much less expensive to construct per parking space than the concrete structures used in other building types. However, higher density building types, typically four stories or higher and requiring parking structures, are generally not financially viable. These higher density housing configurations involve more expensive building processes and materials and are usually delivered as a rental product rather than for purchase by homebuyers. • Fee waivers, as authorized under MC Section 14.10.310, as well as other relatively modest improvements in development economics, may “tip the scales” and make some higher density housing projects feasible, even under current market conditions. A combination of modest increase in rents and/or decline in development costs (e.g., from a fee waiver) can make the so-called “wrap” and / or “podium” multi-family project feasible (e.g., 5 to 15 percent change), as will relatively small improvements in market conditions. Residential towers, with higher development costs resulting from their fully steel-framed structures, will require a more substantial change in rents and / or development costs to achieve feasibility. The positive residual land values estimated for townhomes and stacked flats mean that developers of these buildings are unlikely to need fee waivers as an incentive to pursue housing production. Table 1 illustrates the current financial feasibility for all the housing building types evaluated in this analysis with and without fee waivers.

COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 5 Introduction and Summary of Findings Table 1. Results by Building type and Location (Hypothetical 2-Acre Site) • While there may be opportunities to convert under-performing office buildings to residential uses in San Jose, it is difficult to make broad conclusions about the feasibility of such projects, or the need for fee waivers, due to the wide variation in circumstances affecting individual properties. EPS research on regional and national trends in office-to-residential conversions suggests that only a narrow subset of buildings can feasibly support the cost of this type of adaptive reuse. In particular, the core factors influencing the feasibility of office to residential conversion include: (1) a building’s physical attributes, (2) local and property specific market and financial conditions, and (3) the regulatory framework effecting adaptive reuse (including fees). While San Jose’s office market exhibits relatively high vacancy rates, most of the larger and modern buildings do not appear well suited for conversion from a real estate investment perspective. But there may be promising opportunities for a limited supply of well-suited buildings – for example, pre-1960 or small post-1960 mid-rises with narrow plates, operable windows, and higher ceilings – particularly in cases where property owner motivation is combined with favorable policy support. !"#$%"&'(F*+,'-.L0*F12"-P4& RS*T !"#'S8"+*FP"$ !"#A%CDEF"*#A%CDEF+I#A%CDEF+I#A%CDE!+"#A%CDE -.ED LI"0N2I0"""LP0F*P0"""4L*0*++0"""R4LS0NPP0"""R !"#TUV%DUV%#WUV.;!"# !"# !"# !"#4LFS!0+2!0"""R<.%D;=[ LI0I*F0"""LI0*N+0"""4LFF0P+N0"""R4LN0FNF0"""R4LFS!0+2!0"""R?U;D] LF"0"PF0"""LF+0!2"0"""4LF20S"N0"""R4LFI0*I"0"""R !"#AUBD]#=%C#a=EDL20IN20"""LI0*NP0"""4LIF0F*"0"""R4LFP0!+F0"""R !"# -.ED LI20ISF0"""LF*0*+I0"""L!0P2P0"""L+02!+0""" !"#TUV%DUV%#WUV.;!"# !"# !"# !"#4LF"20F2*0"""R<.%D;=[ L*0*N"0"""LFF0!PF0"""LFF"0"""LI0+NP0"""4LF"20F2*0"""R?U;D] LFS0+IS0"""LII0PNI0"""4L+0*N!0"""R4L20""20"""R !"#AUBD]#=%C#a=EDL+0*2F0"""L+0SS!0"""4LF!0P2I0"""R4LFI0F*!0"""R !"# !A%&'(F*+,&-(.A,L0&0(%A(L&*.&-%(N2333
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COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 6 Introduction and Summary of Findings • The San Jose’s housing market is economically competitive relative to neighboring jurisdictions for both tenants seeking more affordable housing and developers seeking lower development impact fees. For the most part, market rents and sale prices in San Jose fall below those in Santa Clara, Sunnyvale, Cupertino, and Mountain View (only exception being the average sale price for stacked flats is slightly above Santa Clara). At the same time, the development impact fees charged to new housing development in San Jose area also well below those charged by these nearby jurisdictions. For example, the average impact fee for a market rate multi-family unit is about $22,400 per unit in San Jose, compared to $26,000 in Mountain View, $61,400 in Cupertino, $66,700 in Sunnyvale, and $52,300 in Santa Clara.

Economic & Planning Systems, Inc. 7 Residential Building Typologies

2. Residential Building Typologies This Chapter describes the unique development attributes for five (5) residential building types that are common in San Jose and likely to represent opportunities for high density infill housing production going forward. EPS also considered office to residential conversions but given the unique nature of this project type it is evaluated separately in Chapter 4. As described below, because the building types examined in this study have different structural components and configurations, both construction costs and per unit market values can vary significantly. In addition, some are typically developed as rental products while others are offered for purchase by homebuyers. These differences can materially affect the financial feasibility of developing each building type. Table 2 summarizes the hypothetical development program EPS has utilized to evaluate and compare the development feasibility of each residential building type. As shown, the building typologies range in density from townhomes to high-rise tower apartments. To facilitate and “apples-to-apples” comparison from a real estate investment perspective, the analysis assumes each building type is developed on a two-acre site. Though site-specific conditions and regulations will affect the development economics for any given project (e.g., entitlement costs, site preparation, etc.), for the purposes of this general and comparative analysis, EPS assumes that development costs for a given building types are the same regardless of the site in question (e.g., a wood frame apartment building costs the same to construct on a per square foot basis at all sites). The subsequent section provides further information on each of the residential building types evaluated in this study.

COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 8 Residential Building Typologies Table 2. Overview of Residential Building Type and Development Program Studied Townhome Townhomes are attached or semi-detached dwelling units of two to three stories that are usually developed as for-sale products but occasionally as rental. Townhomes typically incorporate tuck-under garages and provide a single-family lifestyle. They are often characterized by shallow front yards and stoops, rear vehicular access, and in some cases small rear yards or courts between the garages and main dwelling. This analysis assumes an average density of 20 units per acre parking ratio of 2 spaces per unit. !"#$%&D(&F* +F,*-F."/(0$1"2P4R0(#SF2&T. 8%0D +F,"%
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Example of a townhome project: Haven at Berryessa Crossing, San José (2017)

COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 9 Residential Building Typologies Stacked Flats Stacked flats are multifamily buildings where units are stacked vertically, often walk-up or served by a single stairwell or elevator. These are typically lower-rise, wood-frame structures that offer a more cost-efficient alternative to podium construction (see below) and delivered as mid-density units on smaller or mid-sized parcels. As with townhomes, parking for stacked flats is typically not located within a dedicated podium but is instead accommodated in tuck-under garages, surface lots, drive aisles, or setback areas elsewhere on the site. This analysis assumes an average density of 53 units per acre parking ratio of 2 spaces per unit. Podium Podium projects typically place apartments stacked over one or more levels of structured parking. These projects may fit in relatively smaller lots defined in part by the depth of a typical parking bay. Development costs are typically higher than townhomes and stacked flats because the parking and residential portions are mixed into one structure with consequent code-required life safety requirements. Residential podium buildings are typically in between 4 stories to a max allowable 8 stories. Typical densities range from 80-150 units per acre but can get upwards of 200 for smaller sites in dense urban areas. The practical maximum is typically based on a combination of State building code and construction economics. This analysis assumes an average density of 86 units per acre parking ratio of 1 space per unit.

Example of a stacked -flat project: Onyx, San José (2017) Example of a podium project: 808 West, San José (2016)

COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 10 Residential Building Typologies Wrap Wrap projects consist of stacked apartments constructed around a central parking garage. These projects typically require larger lots because the residential and parking aspects are separate structures. The cost of constructing the residential portion is the same as a podium as they have similar structures, but the parking structure is slightly less expensive to construct than podium parking. These buildings are typically between 4 and 7 stories. This analysis assumes an average density of 86 units per acre parking ratio of 1 space per unit. Tower Towers are the tallest and most dense form of residential development. These buildings are typically found in densely populated urban areas and maximize number of units on smaller lots by building upwards. Development costs are typically the highest for residential towers because they require steel and concrete materials throughout to allow for construction above 8 stories. Construction costs can also be driven upwards do accommodate subterranean parking garages. These are typically a minimum of 12 stories, and the tallest residential tower in San José is Miro at 28 stories. This analysis assumes an average density of 235 units per acre parking ratio of 0.8 space per unit.

Example of a wrap project: Eleanor, Milpitas (2021)
Example of a tower project: Miro, San José (2021)

Economic & Planning Systems, Inc. 11 Housing Development Financial Analysis

3. Housing Development Financial Analysis This chapter evaluates the financial feasibility of developing the housing building types described in Chapter 2 given the current market context in San Jose. The analysis identifies if, and under what circumstances, developers are likely to view the hypothetical projects as attractive from a real estate investment perspective. In this context, it is important to recognize the degree of economic uncertainty currently affecting real estate investment more generally and housing development, in particular. Among other factors, rising interest rates and construction costs, as well as concerns about a potential economic slowdown, have weakened the climate for housing investment. Accordingly, this Chapter discusses how improved market conditions might affect development prospects in San Jose and provides sensitivity testing of key financial variables. Overview of Methodology As part of this study, EPS created a set of cash-flow models to simulate the financial performance of each of the building type and site scenarios described in Chapter 2. The pro-forma financial models incorporate data on current rent and sale prices as well as construction costs using both market research and vendor-based data. Additionally, the pro-forma models account for existing City fees. To test financial feasibility, EPS solved for the residual land value (RLV) likely to be achieved under each scenario. The RLV is a financial metric commonly used in the real estate industry to represent the economic value of a project from an investors perspective. RLV is calculated by estimating the finished market value of a project and deducting all costs needed for financing, design, and construction, but excluding the purchase of the land itself. Development cost includes “hard costs” such as labor and materials, as well as “soft costs” such as building permits and fees, planning, architecture and engineering, and financing. The detailed pro-forma models used in this analysis are provided in Appendix A. Additional description of key development cost and revenue assumptions is provided below. Again, it is important to note that actual outcomes for a specific project can differ significantly depending on design considerations, unique site attributes, evolving market trends, project execution, and other factors.

COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 12 Housing Development Financial Analysis Development Costs The cost of developing a market rate unit is a key variable in the RLV calculations – projects that are more expensive to build on a per unit basis are likely to be less financially feasible than lower cost projects, all else equal. The EPS assumptions and data sources used to estimate project costs value are summarized below for both project “hard” and “soft” costs respectively. Hard Costs Hard cost assumptions are based on other recent Bay Area work, comparative cost factors from published sources (Marshall and Swift), and other San José pro-formas provided by City staff. EPS considers three categories of hard costs: site development, vertical construction costs, and parking construction costs as described below and summarized in Table 3. • Site development is assumed to be the same across all building types in this analysis and includes standard grading and demolition while excluding unique circumstances such as environmental mitigation. • Vertical construction costs vary across building types, with townhome and stacked flats being the least expensive to construct and tower being the most expensive. Townhomes and stacked flats offer the lowest per square foot vertical construction costs because of their low and simple wood framed structures. Podium and wrap products, while also wood framed, have higher vertical construction costs per square foot because they are taller structures, have smaller unit sizes, and include amenity / lobby spaces. Towers demand the highest cost per square foot because of their steel frames. • Similarly, parking construction costs per space vary based on the complexity of their structures. Townhomes and stacked flats offer integrated “tuck-under” parking garages with simple wood frames. The more dense podium, wrap, and tower building types require many more parking spaces, with larger concrete parking structures that are more costly to construct.

COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 13 Housing Development Financial Analysis Table 3. Hard Costs by Building type
A comparison of EPS pro-forma hard costs and developer-provided San José pro-formas is summarized in Table 4. As shown, EPS pro-forma hard cost estimates are closely in line with those provided by local developers. Differences in costs may arise from factors such as unit sizes, quality of interior finishes, and level of amenities provided. For example, Sample pro-forma 1 has lower per unit hard costs and higher per square foot costs because it offers smaller unit sizes. Table 4. Summary of San José Pro-Formas

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COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 14 Housing Development Financial Analysis Soft Costs Soft costs estimates are separated into local city development impact fees that vary across locations within the city, and other soft costs that are estimated as a percentage of hard costs or total development costs. Development impact fees are published by the City of San José and are summarized on a per unit of per square foot basis in Table 5. These development impact fees include inclusionary housing in-lieu, parkland in-lieu, and school mitigation fees. Also included are city Construction Taxes, as they are also eligible for waiver under Municipal Code Section 14.10.310. Below is a description of each fee / tax: • Inclusionary Housing in-Lieu: This analysis assumes that projects will fully utilize the inclusionary housing in-lieu fee and include no inclusionary housing units. There is a strong and moderate level of fee, depending on location. For this analysis, West, Downtown, and Central are in areas with “strong” levels of fees, while North and South / East are moderate. • Parkland in-Lieu: The parkland in-lieu fee is location based and depends on the MLS zone that the project is located in (Figure 1). It further assumes a 20 percent reduction for townhome and multifamily (stacked flat, podium, and wrap) building types, and a 25 percent reduction for towers for providing on-site open space amenities (e.g. balconies, rooftop amenities, etc.). • School Mitigation: School mitigation fees are gathered from the individual school districts in each location of the city. While the school district boundaries may not overlap exactly with the MLS zone boundaries used in this analysis, the best fitting school district was selected for each of the locations. • Construction Taxes: There are four city construction taxes. Building & Structure Construction Tax and Commercial, Residential, Mobile Park Construction Tax are assessed as a percentage of building valuation. Building valuation is calculated based on the International Code Council’s square foot construction costs available in the City of San José Building and Structure Permits Fee Schedule.1 City Construction Tax and Residential Construction Tax are assessed on a per unit basis. Table 5 presents Construction Taxes by building type, which are the same across each district. 1 City of San José Building and Structure Permits Fee Schedule

COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 15 Housing Development Financial Analysis Table 5. City Development Impact Fees by District
These impact fees calculated as a project total are shown in Table 6, along with their percentage of total development costs. On a per-unit basis, townhomes have the highest development impact fees because they have the largest square feet per unit. Impact fees as a percentage of total development costs varies between 7 and 14 percent given differences in their application by within the city. !"#$%CDEC)* +"#E!),*E),*-.),"%/"*E%0N2)%E34)5E3-0*S-T0#E !"#A%CD("FG+ID"-.DL%MN(%"2IP4LGI5L2ISTUI92UW;<ZUZ[;<ZUZ[;<ZUZ[;?[U][;?[U][ADC2GD#2 !"#ABCDEE")*"HA,DE*"HA,DE J.,A/0N",2,""H BFGCAF"aID"-.DL%[
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COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 16 Housing Development Financial Analysis Table 6. Total Construction Taxes and Development Impact Fees Aside from City development impact fees, this analysis makes assumptions around several other soft costs that are calculated as a percentage of hard costs or total development costs. These other soft cost assumptions are estimated based on other recent pro-formas and input from developers, as summarized in Table 7. While EPS uses the same assumption for all product types for soft costs as a percentage of hard costs, it is likely that some categories may experience economies of scale (e.g., architecture and engineering services may be lower for high density projects). !"#$
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COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 17 Housing Development Financial Analysis Table 7. Other Soft Cost Assumptions
Market Value Analysis The finished market value of a residential project is a key variable in the RLV calculation – projects that can achieve higher market values on a per unit basis are likely to be more financially feasible, all else equal. Table 8 compares the market value assumptions used in this analysis for each MLS zone as well as the San José citywide average, according to the City of San José Department of Housing Q2 2025 San José Housing Market Update. The assumptions and data sources are further summarized below for both for-sale and rental building types respectively. For Sale Townhome and Stacked Flat building types are assumed to be for sale in this analysis. Sale prices vary across MLS zone in the city, and estimates are based on data publicly available from Redfin. Each zone’s estimated sale price per square foot is the zone’s average sale price plus 10 percent. This is because the data is composed of several resale homes, and this analysis focuses on newly constructed buildings, which generally sell at about a 10 percent premium. The citywide average combines townhome and condo sales into one average, so the true townhome average is likely higher than presented, and the true condo average is likely lower. This is consistent with EPS price estimates. !"#A%C"'A%C(AF*"+, -"./0"1F
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COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 18 Housing Development Financial Analysis For Rent Podium, Wrap, and Tower building types are assumed to be for rent in this analysis. Rents are estimated based on data acquired from CoStar and represent the average rent of buildings built in the last 10 years in each location in the city. Podium and Wrap are assumed to have the same rent. For Tower rents, data was collected on buildings 12 stories or taller. Rent estimates are similarly compared to the San José citywide average according to the City of San José Department of Housing Q2 2025 San José Housing Market Update. In this case, the citywide average combines all multifamily (podium, wrap, and tower) rents together. Still, the reported citywide average falls within the range of EPS estimates across zone and building type. Table 8. Average Rents and Sale Prices by MLS Zone Results and Sensitivity Analysis As described above, RLV is calculated as the difference between project costs (excluding land) and project value. The RLV can be compared against the typical cost of acquiring vacant or developable land to obtain a general sense of whether certain residential building types are likely to be viable investment opportunities in the current market. !"#A%CD E"FA
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COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 19 Housing Development Financial Analysis Table 9 summarizes the results of the RLV by location and building type. As shown, Townhome and Stacked Flat building types are feasible under current market conditions while for rent Podium, Wrap, and Tower building types are not. Generally, Stacked Flats generate the highest residual land value because of their low hard costs and relatively high market value. Only in West San José where townhomes have especially high sale prices are Townhomes more profitable than Stacked Flats. On the rental side, Wrap buildings, while still negative, generate slightly more RLV than podiums because while they achieve the same market value, the Wrap’s structured parking garage is slightly less expensive to construct. Table 9. Results by Building Type and Location (Hypothetical 2-Acre Site) Because market conditions are constantly evolving, shifts in rents, pricing, development costs, and other factors can improve the feasibility of various building typologies over time and by location. To demonstrate these dynamics, EPS has conducted a series of sensitivity tests on market values and costs. These variables can serve as a proxy for, or include, other market factors such as interest and capitalization rates, labor agreements, fees and taxes, among other factors. !"#$%"&'(F*+,'-.L0*F12"-P4& RS*T !"#'S8"+*FP"$ !"#A%CDEF"*#A%CDEF+I#A%CDEF+I#A%CDE!+"#A%CDE -.ED LI"0N2I0"""LP0F*P0"""4L*0*++0"""R4LS0NPP0"""R !"#TUV%DUV%#WUV.;!"# !"# !"# !"#4LFS!0+2!0"""R<.%D;=[ LI0I*F0"""LI0*N+0"""4LFF0P+N0"""R4LN0FNF0"""R4LFS!0+2!0"""R?U;D] LF"0"PF0"""LF+0!2"0"""4LF20S"N0"""R4LFI0*I"0"""R !"#AUBD]#=%C#a=EDL20IN20"""LI0*NP0"""4LIF0F*"0"""R4LFP0!+F0"""R !"# -.ED LI20ISF0"""LF*0*+I0"""L!0P2P0"""L+02!+0""" !"#TUV%DUV%#WUV.;!"# !"# !"# !"#4LF"20F2*0"""R<.%D;=[ L*0*N"0"""LFF0!PF0"""LFF"0"""LI0+NP0"""4LF"20F2*0"""R?U;D] LFS0+IS0"""LII0PNI0"""4L+0*N!0"""R4L20""20"""R !"#AUBD]#=%C#a=EDL+0*2F0"""L+0SS!0"""4LF!0P2I0"""R4LFI0F*!0"""R !"# !A%&'(F*+,&-(.A,L0&0(%A(L&*.&-%(N2333
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COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 20 Housing Development Financial Analysis Figure 2 illustrates the RLV of a Townhome project in West San José across a range of sale price points and shows that as prices go up, so does RLV. Sale price points in the green area have positive RLV while those in the red area have negative RLV. In this scenario, the current market price of $1,100 per square foot is associated with approximately $525k RLV per unit. Given this significantly positive RLV, it would take a large drop in prices (to about $670 per square foot) to become infeasible. Stacked Flats have similar results; the current market price of $760 per square foot is associated with approximately $80k RLV per unit, and prices would have to drop to about $670 per square foot to become infeasible. Figure 2. Townhome Results by Price Point – West San José (No Fee Waivers) On the rental side, where projects are not currently feasible, feasibility would require an upward shift in rent. Figure 3 illustrates RLV of a Podium project in Central San José, where the current market rent of $3.89 per square foot is associated with approximately -$70k RLV per unit. Podium rents would have to increase about 10 percent, or $4.30 per square foot, to achieve feasibility. With the same rent and slightly lower development costs, Wrap buildings would have to increase to about $4.10 per square foot to achieve feasibility. Towers, though they have higher rents at $4.30 per square foot, also have much higher development costs and therefore have much lower RLV at approximately -$285k per unit. These would have to raise approximately 30 to 35 percent to $5.70 per square foot to achieve feasibility.

COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 21 Housing Development Financial Analysis Figure 3. Podium Results by Rental Rate – Central San José (No Fee Waivers) Similarly, feasibility can be changed by shifts in development costs. Figure 4 illustrates the RLV of a Podium project in Central San José across a range of total development costs. Only decreases in total development costs are shown because RLV is already negative and increases in total development costs would only make RLV more negative. As seen, a decrease of approximately 12 percent in total development costs could lead to feasibility in this scenario. This parallels roughly the same percentage increase in sale price that would be needed to achieve feasibility. Having slightly lower total costs, Wrap buildings would require an approximately 10 percent decrease in total development costs to reach feasibility. Towers, again having much higher costs, would require total development costs to decrease by approximately 30 to 35 percent to achieve feasibility.

COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 22 Housing Development Financial Analysis Figure 4. Podium Results by Total Development Costs – Central San José (No Fee Waivers)

Economic & Planning Systems, Inc. 23 Additional Market Considerations

4. Additional Market Considerations This Chapter discusses additional considerations relevant to the performance of San Jose’s housing market. These include the potential for of office to residential conversions to increase the San Jose’s housing supply as well as the performance of the City’s housing market relative to nearby jurisdictions. Office to Residential Conversion Like many downtowns, San Jose’s office market has struggled in the post-pandemic era due to increased remote work trends, evolving location preferences of commercial tenants, decline in several professional service-related sectors, among other factors. This trend has sparked interest in office-to-residential conversions as a potential strategy to boost housing supply and revitalize commercial districts. It has also raised the question of whether such projects might benefit from various policy incentives, including fee waivers. As part of the Cost of Development study, EPS reviewed regional and national trends in office-to-residential conversions to identify lessons that might be applicable to San Jose, particularly downtown. While EPS did not conduct a detailed review of San Jose’s office inventory, our research found that in general only a narrow subset of buildings can feasibly support the level of investment needed to convert to housing. In particular, the core factors influencing the feasibility of office to residential conversion include: (1) a building’s physical attributes, (2) local and property specific market and financial conditions, and (3) the regulatory framework that can help close remaining financial gaps. Each element is described separately below. Physical Determinants of Feasibility The physical attributes of a building largely determine whether conversion is possible before financial feasibility is even tested. Floorplate depth is the single most decisive variable: buildings with 40- to 60-foot plates allow most units to have window exposure and natural light, while deeper center-core plates produce large interior zones that cannot be converted into habitable space without costly carve-outs. Ceiling height is also critical; pre-war and mid-century structures with 11- to 14-foot floors provide room for mechanical, electrical, and plumbing systems, acoustic assemblies, and ducting required for residential standards. Equally important are structural regularity and façade type. A consistent column grid enables efficient unit stacking and vertical plumbing alignment, whereas irregular framing complicates layouts and increases design costs. Punched or operable windows across multiple façades allow natural ventilation and compliance with light-and-air standards at reasonable cost.

COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 24 Additional Market Considerations By contrast, curtain-wall glass façades common in post-1980s office towers are expensive to modify and typically lack operable openings. The building’s street interface and ground-floor configuration also influence marketability: structures that support active, transparent retail or amenity edges command higher residential rents and accelerate lease-up. Error! Not a valid bookmark self-reference. illustrates how these factors distinguish strong candidates such as the Bank of Italy Building from more challenging examples like the Sobrato Tower. Figure 5. Good vs Challenging Candidates Market and Financial Considerations Local and project specific market and financial circumstances also play a critical role in the feasibility of a conversion project. In San José and peer Bay Area markets, persistent office vacancy has depressed net operating income, and thus the market value, of many office buildings. Bur asset pricing for many of these buildings has not yet fallen enough to meet the residual land values supported by new residential development. This disconnect means that owners remain anchored to office-era valuations while residential investors must contend with a high cost of conversion (in most cases) and financing challenges. Because adaptive reuse projects require selective demolition, systems replacement, and extensive tenant improvements, the cost differential between conversion and ground-up development is often narrower than expected.

Good CandidateBank of Italy Building12 S 1stSt
Bad CandidateSobrato Tower488 Almaden Blvd

COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 25 Additional Market Considerations The capital market further constrains feasibility. Lenders and equity partners view office conversions as atypical, with few comparable transactions to benchmark. Unknown structural conditions, seismic upgrades, and irregular floorplates introduce contingency costs and risk premiums that elevate required returns. Even well-located projects face elevated underwriting hurdles, especially when net rentable area shrinks after inserting residential cores, light wells, or required amenities. In short, the current capital environment rewards projects with low acquisition basis and simple geometry while penalizing complex towers requiring heavy intervention. Within San José, these national dynamics are amplified by the city’s block-by-block variation in street activation, transit access, and adjacent land uses. While Class A vacancy exceeds historical norms, transaction pricing has been slow to adjust, and institutional owners often prefer to hold rather than sell below value. Consequently, only a small number of older or mid-rise buildings have both the physical characteristics and price basis to warrant exploration. Regulatory Levers and Policy Implications Although most determinants of feasibility are inherent to the building and market context, local policy can meaningfully “move the needle” for projects that fall near the margin. The most effective levers tend to reduce upfront cost or time rather than alter building form. Cities can temporarily reduce or defer impact and linkage fees, allow school and utility fees to be paid at certificate of occupancy, and / or provide parking ratio flexibility to reflect reduced demand for many residential uses. Additional flexibility in open space, private balcony, and amenity requirements can also allow conversions to proceed within existing envelopes without triggering costly structural changes. Zoning adjustments can further close the gap. Allowing residential uses by right in office districts, expanding density or height allowances where floor area already exists, and streamlining design review can all shorten entitlement timelines and improve project certainty. Process predictability is equally important; establishing a ministerial or expedited review track for qualifying conversions can substantially reduce holding costs and increase lender confidence. At the same time, many fundamental constraints, particularly those tied to seismic performance, life safety, accessibility, and energy code compliance, are governed by state building codes and cannot be modified locally. Municipal programs should therefore focus on offsetting these immovable costs through fee relief, permit coordination, and predevelopment assistance rather than attempting to waive core safety requirements. Coordinated partnerships between city staff, code officials, and developers will be critical to identify candidate buildings that are both physically convertible and aligned with broader housing and downtown revitalization goals.

COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 26 Additional Market Considerations Key Takeaways Feasibility begins with form: geometry and daylight access determine whether a conversion is technically achievable. Among buildings that meet these thresholds, market and capital conditions remain the principal barriers to execution. Policy can help, but it cannot overcome poor fundamentals. Only a small subset of structures, typically pre-1960 or small post-1960 mid-rises with narrow plates, operable windows, and higher ceilings, offer realistic potential for adaptation. These buildings represent limited but promising opportunities where thoughtful policy support can align private feasibility with public objectives for downtown revitalization. Given the high degree of variation in potential outcomes, generalized “rule-of-thumb” estimates related to typical conversion costs per square foot are hard to come by. That said, additional research and data on the composition of San Jose’s office stock, including metrics like year built, building dimensions, parking ratios, debt, and other salient factors, would likely facilitate “ball-park” estimates of the potential for these types of projects to increase the City’s long-term housing supply. Regional Market Comparisons This section provides data on how San José housing market compares to neighboring jurisdictions from the perspective of both consumers and developers. Specifically, in compares San Jose to its neighbors in terms of market value and development impact fee rates. While other cities may not directly affect a project’s market valuation or costs, they can influence consumer demand and developer investment decisions. Market Value Comparisons San José sale prices and rents are compared to those in the neighboring cities of Santa Clara, Sunnyvale, Cupertino, and Mountain View in Figure 6. As seen, San José sale prices and rents are generally lower in comparison. While this makes San José more competitive to the potential buyer or renter, projects will be more challenged for feasibility if they are unable to attain sufficiently high rents to cover their development costs.

COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 27 Additional Market Considerations Figure 6. Citywide Sale Price and Rent Comparison
Development Impact Fee Comparison In the broader context of development impact fees, it is important to consider how a city’s fees compare to its neighboring cities, as they will influence developer decisions on where to build. EPS has collected the development impact fees from the cities of Santa Clara, Sunnyvale, Cupertino, and Mountain View for both townhome and multifamily projects. Each city collects different categories of fees, but this analysis compares the total burden per unit. This analysis further does not consider inclusionary housing in-lieu fees or water meter fees as these can vary significantly with each individual project. Additionally, this analysis does not consider Countywide fees (all selected cities are in Santa Clara County) or area plan fees. Table 10 summarizes development impact fees per unit for the selected cities. These estimates assume a standard 1,500 square foot townhome prototype and a 900 square foot multifamily prototype. San José has the lowest development impact fees of the cities compared, as it only includes a parks fee which is lower than all cities other than Mountain View. In school mitigation fees, San José Unified School District is lower than only Santa Clara Unified School District.2 Still, San José offers the lowest total fee burden among the cities compared, making it a more attractive location for developers. 2 There are several other school districts with different mitigation fees in the City of San José. For presentation purposes, only San José Unified School District was chosen for this comparison. A selection of other San José school district fees can be seen in Table 4. !"#$%$$$
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COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 28 Additional Market Considerations Table 10. Development Impact Fee per Unit Comparison

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cDd[klaBMm9%[51aBM%5P1"#n[EPM%51=[51SB59M[h99%["1m[;"49#[i949#[h99%]

Economic & Planning Systems, Inc. 29 Appendix
Appendix

COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 30 Appendix
Appendix Table 1: Full Cash Flow Model – West San José Townhome

!"#ABCD(CF* +##,-D(CF*.L.0NA(FB 2F(NP
!"#ABCDEAFGA H
!#IE"A- .
4BFRBN-
LAM-"#NBOPM"#-B4AEBCDEAR HS
TI#FUBVIW-"MGBPM"#- ;S
C<G=B>A#B!?=B@#=B4AEBPM"# AB;Ca
>A#B!?=B@#= CaB.A.
bEI--B!?=B@#= cHBadH
@UIIEBCEAFBeF#"I A
fFEg"MGB@IEhF# iM#AG=BbFEFGA
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4BFS"A(.TNP,"
jFEgA#BeF#AB!FUABkFUWA lABASS 4AEB>!@ lm;BA;;Bmmc
!FUABnI-# A=Co 4AEBLP pldmHBAcS
8"(.V,CP:C*R.TNP," lm.BAaHB;dc
;,DDFB(N<P".!"="PFD-"*(.TNP," >?@eA#WEMBIMBnI-#BOPMUA<AEAqBBArUDWqA-BUFMqR A?BCaB>Cbc> 4BFS"A(.dF#(
dF*#(B,A(CF*.dF#(#
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4NBeC*R.!CB"A(.dF#(# lABAS.B;;S
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!DvIIUBih4FD#B@AA- l;=HS 4AEBb!@ l.SmBA;C
n"#NBnIM-#EWD#"IMBTFrA-
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@"MFMD"MG ao IxBnIM-#EWD#"IMBnI-# lABmSHBHac
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!"#$%C5"S#C'")#) .T14041T48
^#vAEBfEI`AD#BnI-#-
uW"UqAEB@AA ;o IxBCUUBnI-#- lABH;cB.AH
LA<AUI4hAM#BnIM#"MGAMDN Co IxBCUUBnI-#- lABCCdBA;S
2F(NP.4BFS"A(.dF#(# AbbCagaCK?i
j"#C:,NP.kN*:.TNP," AKcCa?KCcBi
etkB4AEBPM"# lCH.BaSA
etkB4AEBtFMqB!?=B@#= lASB;cmBSH.

COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 31 Appendix
Appendix Table 2: Full Cash Flow Model – West San José Stacked Flats

!"#ABCD(CF* +##,-D(CF*.L.0NA(FB 2F(NP
!"#ABCDEAFGA H
!#IE"A- .
4BFRBN-
LAM-"#NBOPM"#-B4AEBCDEAR ST
UI#FVBWI;-"MGBPM"#- <=>
C?G@BAA#B!B@BC#@B4AEBPM"# <a<<b
AA#B!B@BC#@ <<baSTT
cEI--B!B@BC#@ <Tda.S=
CVIIEBCEAFBeF#"I H
fFEg"MGBCIEhF# iM#AG@BcFEFGA
fFEg"MGBeF#"I H
UI#FVBfFEg"MGB!4FDA- H<H
4BFS"A(.TNP,"
jFEgA#BeF#AB!FVABkFV;A lm>= 4AEBA!C ld=a=b.ad.T
!FVABnI-# <@So 4AEBLP pl<aTS<aHm.
8"(.V,CP:C*R.TNP," lbbamTTa>>b
;,DDFB(N<P".!"="PFD-"*(.TNP," >?@eA#;EMBIMBnI-#BOPMVA?AEAqaBArVD;qA-BVFMqR ABBC>?aCB>b 4BFS"A(.cF#(
cF*#(B,A(CF*.cF#(#
!"#ABsIEg l<= 4AEBtFMqB!B@BC#@ lbm<aH==
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!DvIIVBih4FD#BCAA- l.@H= 4AEBc!C lSbSa>dH
n"#NBnIM-#E;D#"IMBUFrA-
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etkB4AEBPM"# lmma=S>
etkB4AEBtFMqB!B@BC#@ l.a=bTadmT

COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 32 Appendix
Appendix Table 3: Full Cash Flow Model – Central San José Podium

!"#A%CDECFG +##I-DECFG.L.0NAEF% OFENP
!"#ABCDEAFGA H
!#IE"A- .
4%FR%N-
LAM-"#NBOPM"#-B4AEBCDEAR ST
UI#FVBWI;-"MGBPM"#- <.H
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?A#B!@>BA#> <aabCBS
cEI--B!@>BA#> <SHbdTB
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fFEg"MGBAIEhF# fIi";h
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nI--A-B#IBoFDFMDN .>CCp qlaCTb.BB
r#kAEBeA=AM;A-BOfFEg"MGbB-#IEFGAbB4A#-bBI#kAEBh"-D>R Hp l<mdbTTd 8%F##.V"#C:"GECNP.V";"GI" <=>?=@>?A@
r4AEF#"MGBst4AM-A- l<CbCCC 4AEBLP ql<b.HCbCCC
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4N%lCGR.!C%"AE.KF#E# l.b<SBbTCC
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mFnE.KF#E#
fFEgByh4FD#BAAA- l<SbCSC 4AEBLP lmb<CBb.TC
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enoB4AEBPM"# qlTBbCTT
enoB4AEBnFMiB!@>BA#> qlabBmBbTa.

COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 33 Appendix
Appendix Table 4: Full Cash Flow Model – Central San José Wrap

!"#A%CDECFG +##I-DECFG.L.0NAEF% OFENP
!"#ABCDEAFGA H
!#IE"A- .
4%FR%N-
LAM-"#NBOPM"#-B4AEBCDEAR ST
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@A#B!A?BB#? <..baCS
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nI--A-B#IBoFDFMDN =?aap ql.aTb=CC
r#kAEBeA>AM;A-BOfFEg"MGbB-#IEFGAbB4A#-bBI#kAEBh"-D?R Hp l<mdbTTd 8%F##.V"#C:"GECNP.V";"GI" <=>?=@>?A@
r4AEF#"MGBst4AM-A- l<abaaa 4AEBLP ql<b=Habaaa
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!DkIIVByh4FD#BBAA- ld?=C 4AEBc!B lS=dbaH.

Z"#NBZIM-#E;D#"IMBUFtA-
v;"Vi"MGB]B!#E;D#;EA <?.dp IxBv;"Vi"MGBoFV;F#"IM ldm<b.Tm ZIhhAED"FVBeA-"iAM#"FVbBjI^"VABWIhABfFEgBZIM-#E;D#"IMH?dHp IxBv;"Vi"MGBoFV;F#"IM lT=Sb<=a ZIM-#E;D#"IM l=. 4AEBPM"# l<HbCaa
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fAEh"#-BFMiBBAA- <p IxBZIM-#E;D#"IMBZI-# l=.mbmdC
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enoB4AEBPM"# ql.mbdm.
enoB4AEBnFMiB!A?BB#? qldb.C.bdH.

COST OF DEVELOPMENT STUDY
Economic & Planning Systems, Inc. 34 Appendix
Appendix Table 5: Full Cash Flow Model – Downtown San José Tower

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PART II.

Presented to: City of San José
Affordable Housing Development Cost Study

41 Perimeter Center East, Suite 615 Atlanta, GA 30346
2 | Page
TABLE OF CONTENTS 1. Executive Summary ............................................................................................. 3 2. Methodology and Approach ................................................................................. 4 3. Trends in Total Development Costs ....................................................................... 8 4. ABordable Housing Developments Costs by Housing Type ..................................... 9 5. Share of Development Costs Funded by City Subsidies and Other Sources .......... 20 6. Key Drivers of ABordable Housing Development Costs ........................................ 24 7. Appendix I. Projects Evaluated During the 2025 Study .......................................... 27 41 Perimeter Center East, Suite 615 Atlanta, GA 30346
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Execu&ve Summary This 2025 Aﬀordable Housing Development Cost Study for the City of San José provides an updated analysis of aﬀordable housing development costs, drawing from a signiﬁcantly expanded dataset of 194 projects comprising over 22,000 housing units across California. The report idenNﬁes stabilizaNon in construcNon costs following the sharp increases observed during the pandemic years, while also highlighNng conNnued challenges driven by ﬁnancing costs, deeper aﬀordability requirements, and regulatory complexity. Key ﬁndings include convergence of San José’s cost levels with regional peers average costs relaNve to 2023 and improved cost eﬃciency in larger projects. Despite this moderaNon, total development costs remain elevated due to high land and ﬁnancing costs as well as deep aﬀordability and service-enriched housing types. Introduc&on The City of San José (the “City”) engaged CSG Advisors to prepare an update to the prior Aﬀordable Housing Development Cost Study (“2025 Study”) to evaluate the current cost of developing aﬀordable housing within the City. As San José conNnues to experience persistent demand for aﬀordable housing amid rising development costs, this update provides an in-depth assessment of evolving cost structures, key cost drivers, and opportuniNes for improved eﬃciency in project delivery. The analysis draws upon data from California Tax Credit AllocaNon Commi[ee (CTCAC) applicaNons for projects iniNated between 2023 and 2025, reﬂecNng the most current and comprehensive dataset available for aﬀordable housing developments statewide. ConstrucNon costs in San José and the broader Bay Area have conNnued to climb since the onset of the COVID-19 pandemic in 2020, though recent indicators suggest a gradual moderaNon in escalaNon rates. Between 2018 and 2022, costs rose sharply due to labor shortages, supply chain disrupNons, and sustained increases in material prices. The most signiﬁcant spike occurred in 2021, when average construcNon costs surged by roughly 15 percent.

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Figure 1 illustrates year-over-year construcNon cost increases from 2019 through 2025, highlighNng the volaNlity and sustained escalaNon that conNnue to shape housing development feasibility. Acer a signiﬁcant 8% rise in 2019, cost growth brieﬂy cooled to 3% in 2020 before climbing again to 5% in 2021. The most dramaNc spike occurred in 2022, when construcNon costs surged by 15%—a reﬂecNon of acute supply-chain disrupNons, labor shortages, and inﬂaNonary pressures that deﬁned the post-pandemic building environment. Although increases moderated in subsequent years, rising by 6% in 2023 and 3% in 2024, costs conNnue to inch upward into 2025 with an addiNonal 2% increase. While the recent trend suggests stabilizaNon rather than conNnued acceleraNon, the cumulaNve eﬀect of several years of steep growth has elevated baseline construcNon pricing far above pre-pandemic levels, contribuNng to persistent feasibility challenges for both market-rate and aﬀordable projects. This report examines the factors inﬂuencing aﬀordable housing construcNon costs in San José and evaluates changes in cost pa[erns since the prior study. The analysis is based on detailed CTCAC applicaNon data, which include comprehensive development budgets, funding structures, and operaNng assumpNons for projects expected to begin construcNon within 180 days of award. These data were compared with market-rate development benchmarks to idenNfy structural diﬀerences in cost composiNon, ﬁnancing, and project economics between aﬀordable and market-rate housing, providing an evidence-based foundaNon for future policy and investment decisions. Methodology and Approach Data Sources and Scope of Analysis The 2025 Aﬀordable Housing Development Cost Study draws on publicly available data from the California Tax Credit AllocaNon Commi[ee (CTCAC) and the California Debt Limit AllocaNon Commi[ee (CDLAC). CTCAC accepts applicaNons for federal and state Low-Income Housing Tax Credits (LIHTCs) two to three Nmes per year, and CDLAC publishes awarded projects within roughly 90 days of each round. This study begins with the March 2023 applicaNon cycle; the ﬁrst full round following compleNon of the 2023 Cost Study and includes all new-construcNon aﬀordable housing projects that received tax-credit awards through the end of 2025. Each CTCAC applicaNon provides detailed development budgets, funding sources, and operaNng assumpNons for projects expected to commence construcNon within 180 days of award, creaNng a consistent basis for analyzing current cost trends. 41 Perimeter Center East, Suite 615 Atlanta, GA 30346
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Dataset Composition and Project Characteristics The dataset includes 194 aﬀordable housing projects totaling 22,574 units statewide, of which 19 projects (3,287 units) are located within the City of San José. Compared to the 2023 Study’s 8 projects (987 units), this represents a more than threefold increase in project coverage, improving the reliability of cost comparisons and trend analysis. Figure 2. San José Projects - 2025 Study Has a Larger Sample Size and Slightly Broader Housing Mix As shown in Figure 2 above, the composiNon of San José projects has shiced notably since 2023: • Large Family housing accounts for 12 projects (36 percent of units), up from 4 projects (43 percent) in 2023. • Non-Targeted projects, qualifying through geographic rather than populaNon set asides, is sNll consistent at 1 project (56 percent of units) in the 2025 study, compared with 1 project (27 percent) previously. • Special Needs housing now represents 5 projects (1 percent), up from 3 projects (30 percent) in the prior study. • Senior housing accounts for only 1 project (6 percent) in the current study, compared to none in the previous study. • No Single-Room Occupancy (SRO) projects received tax-credit allocaNons during this period. • The average building height of San José projects declined from six stories in 2023 to ﬁve stories in 2025.

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Figure 3. San José Applica5ons Skew Toward Non-Targeted & Large Family Regional Distribution and Comparative Context To place the San José projects within a broader context, the study classiﬁes projects into Bay Area and Non-Bay Area groups for comparison of housing-type distribuNon and relaNve producNon scale. As summarized in Figure 3 above, the Bay Area porNon of the dataset includes 70 projects totaling 7,835 units, while the non-Bay Area regions account for 110 projects and 12,523 units. Because the 2023 tax credit applicaNons applied only to the Bay Area, these were excluded to ensure both the Bay Area and Non-Bay Area comparisons reﬂect the same 2024–2025 Nme period. Across the Bay Area, Large Family housing dominates the pipeline, 47 projects (60 percent of units), with smaller but signiﬁcant shares of Special Needs (8 percent) and non-targeted (27 percent) projects. Outside the Bay Area, Special Needs, Large Family, and Non-Targeted developments remain the most prevalent, comprising 23 percent, 35 percent, and 36 percent of total units, respecNvely. This geographic breakdown reﬂects San José’s current porqolio, which is heavily weighted toward Non-Targeted and Large Family projects. This aligns with the regional producNon pa[ern but remains disNnct in its building scale and typology. Comparative Framework and Analytical Approach Given San José’s disNnct project proﬁle, which is characterized by mid-rise, high-density developments with smaller unit sizes and complex ﬁnancing structures, this analysis compares cost outcomes with similar projects across major California urban counNes, including Santa Clara, Los Angeles, Alameda, and San Francisco. These jurisdicNons were also evaluated in the 2023 Study to maintain consistency in methodology and benchmarking.

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A total of 194 aﬀordable housing projects received tax credit allocaNons during the study period statewide, excluding those within the City of San José. Of these, 43 projects were in the comparison jurisdicNons, and 21 mid-rise developments deﬁned as buildings between four and nine stories, were idenNﬁed as typologically comparable to San José’s porqolio. These “Other City Projects” form the benchmark group for evaluaNng diﬀerences in total development cost (TDC), unit size, and building program characterisNcs. As illustrated in Figure 4 below, San José’s aﬀordable housing stock is overwhelmingly mid-rise in character, with 16 of 19 projects (approximately 84 percent) falling within the four-to-nine-story range. Only one San José project is classiﬁed as low-rise (three stories or fewer), and two projects qualify as high-rise (ten or more stories). This marks a notable shic from prior study periods most notably the 2023 Study, when the City’s porqolio included a broader range of building heights, including more high-rise Type I construcNon. Figure 4. Mid-Rise Buildings Dominate Across Regions, Especially Outside the Bay Area The average building height for San José projects is approximately ﬁve stories, a modest reducNon from the six-story average reported in 2023. These building types achieve economies of scale while avoiding the elevated costs associated with concrete or steel high-rise construcNon. By comparison, Bay Area jurisdicNons outside San José exhibit a more diverse range of building typologies: 17 low-rise, 46 mid-rise, and 7 high-rise projects. Non-Bay Area jurisdicNons are more heavily weighted toward low- and mid-rise construcNon, with 22 low-rise, 85 mid-rise, and only 3 high-rise developments. This distribuNon highlights that while San José’s project scale is consistent with other urban centers, its porqolio remains concentrated in the mid-rise category, with limited parNcipaNon in low-rise suburban prototypes or very tall high-rise developments. The uniformity of San José’s project typology suggests a development pa[ern that balances cost containment with land-use eﬃciency. By emphasizing mid-rise forms, San José is achieving

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densiNes suﬃcient to meet housing-producNon goals while miNgaNng the premium costs associated with high-rise construcNon. This shic also reﬂects both market realiNes and policy intent: developers conNnue to target building types that can compete eﬀecNvely for tax-credit allocaNons while remaining feasible within current cost and ﬁnancing constraints. The dominance of mid-rise construcNon in San José’s aﬀordable housing porqolio has important cost implicaNons. While mid-rise buildings are generally more economical than high-rise developments, they sNll incur signiﬁcant per-unit costs due to structural complexity, parking integraNon, and podium construcNon requirements. These costs are further elevated by prevailing wage obligaNons and higher labor and material prices in the Bay Area, compared to non-Bay Area developments. Conversely, the shic away from high-rise construcNon has tempered cost escalaNon by avoiding the addiNonal expense of concrete framing, deep foundaNons, and high-rise building systems. As a result, San José’s 2025 projects demonstrate improved cost alignment with other large urban markets, even as total development costs remain above statewide averages. The following secNon examines these trends in detail, comparing total development costs by housing type and region. See Appendix I for further details on all of the projects evaluated during the 2025 development cost study. Trends in Total Development Costs Total development costs for San José aﬀordable housing projects have conNnued to evolve since the last study period, reﬂecNng both cyclical and structural forces shaping the housing development market. Following the rapid escalaNon in 2021–2022 driven by material shortages, supply-chain disrupNons, and inﬂaNonary pressures, costs in 2023 and 2024 moderated but remained elevated relaNve to historical norms. While construcNon acNvity slowed slightly amid higher interest rates, rising ﬁnancing and labor expenses prevented a full reversion to pre-pandemic levels. The 2025 dataset indicates that costs have begun trending upward again, suggesNng a return to moderate escalaNon as market stabilizaNon gives way to renewed demand and persistent inﬂaNon in key construcNon inputs. 41 Perimeter Center East, Suite 615 Atlanta, GA 30346
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Figure 5. Narrow Data Constrains Year Over Year Conclusions About Development Costs As illustrated in Figure 5 above, total development costs for San José projects averaged approximately $763,889 per unit in 2025, represenNng a 15 percent increase over 2024 levels. This follows two years of relaNve stability, with modest year-over-year changes of 4 percent in 2024 and –16 percent in 2023 acer the prior study’s peak. While the 2023 Study found that projects applying for tax credits in San José that year averaged $938,700 per unit, that informaNon was drawn from a small sample size of 2 projects and was not representaNve of a full year of data. The broader trend since 2019 indicates that per-unit costs have risen from a range of $602,000-$673,000 in 2019-2021 to $634,000 to $764,000 in 2023-2025. The year-over-year cost ﬂuctuaNons reﬂect a conﬂuence of factors, including changes in building typology, project mix, and ﬁnancing condiNons. The sharp increase from 2021 to 2022 was primarily driven by projects incorporaNng larger family units and higher service components, while the 2023 decline corresponded with a greater share of smaller, mid-rise developments achieving cost eﬃciencies. When evaluated on a per-square-foot basis, however, the escalaNon trend is more measured. Between 2023 and 2025, total development costs per square foot increased by an esNmated 4 to 5 percent annually, consistent with long-term regional construcNon cost indices. This suggests that while project-level total costs have risen, much of the increase is a[ributable to changes in project composiNon, parNcularly the growing prevalence of larger family-oriented projects, rather than broad-based cost inﬂaNon. Aﬀordable Housing Developments Costs by Housing Type As illustrated in Figure 6 below, the 2025 analysis ﬁnds that total development costs for San José projects average approximately $675,744 per unit, which is consistent with Bay Area averages. The focus on mid-rise development in the City as well as conNnued use of streamlined funding and permisng processes have helped stabilize costs even amid elevated construcNon and ﬁnancing condiNons.

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Among the San José project types, Special Needs housing exhibits the highest total development costs, averaging approximately $857,022 per unit, followed by Large Family projects at roughly $745,840 per unit. Senior housing averages $804,837 per unit, while non-targeted projects, which are typically general occupancy or mixed-populaNon developments, average approximately $612,051 per unit. No single-room occupancy (SRO) projects were included in the San José dataset for this study period. Figure 6. San José Development Costs Are Higher Than Other City Averages Across Most Housing Types Development costs among San José projects are consistent with the Bay Area overall. Across the Bay Area, average total development costs reach $770,214 per unit, while projects in non–Bay Area regions average $540,076 per unit. The higher relaNve costs for San José’s Special Needs and Senior projects reﬂect the complex design, service coordinaNon, and programmaNc space requirements typical of these developments. Both housing types frequently include case management oﬃces, community faciliNes, and supporNve service areas that expand gross

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building area and reduce overall eﬃciency raNos. However, the narrowing gap between San José and its peer jurisdicNons parNcularly for Large Family and Non-Targeted projects indicates measurable progress toward cost convergence and eﬃciency gains. Unit Size and Development Efficiency As shown in Figure 7 below, developer costs per net square foot are highly correlated with average unit sizes, with smaller average unit sizes associated with higher development costs per square foot. This trend is expected, as ﬁxed components of a unit — kitchens, bathrooms, mechanical systems, and circulation — do not scale down proportionally when the overall square footage shrinks. In practice, this means that projects composed largely of studios and one-bedroom units carry higher per-square-foot costs even when total per-unit costs remain in line with regional norms. Average unit sizes for San José projects are squarely in range with those of other Bay Area jurisdictions. The same holds true for total development costs per net square foot. San José’s costs—at roughly $1,050 per net square foot—sit comfortably within the Bay Area cluster, which ranges from the high $900s to the low $1,400s depending on county. In other words, San José neither over-performs nor under-performs its peers: its unit sizes are similar, and its per-square-foot costs track the same regional pattern, with higher costs in counties with smaller average unit sizes and lower costs where units tend to be larger. Figure 7. Cost per Net Square Foot and Average Unit Size

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Figure 8. Average Unit Sizes by Housing Type Show Varia5on Across Regions San José’s average unit sizes are generally comparable to other jurisdictions, but in several housing types they are meaningfully larger. Special Needs and Non-Targeted units in particular are substantially larger for San José than those built elsewhere in the Bay Area — by 17 to 26 percent — reﬂecting the inclusion of service space, accessibility features, and program-driven design requirements. Senior units in San José are also larger than those in the Bay Area as a whole. Large Family units are roughly in line with regional norms. Taken together, the data shows that while San José’s overall average unit size falls near regional averages, certain program types produce larger units, which contributes to higher total development costs. Affordability Levels and Cost Implications As illustrated in Figure 9 below, the depth of aBordability remains one of the most signiﬁcant cost drivers. Approximately 17 percent of all units in San José’s aBordable housing projects are located within Extremely Low-Income (ELI) buildings, where at least half of all units serve households earning 30 percent or less of AMI. These developments are consistently more expensive to build because they require additional service space, higher operating reserves, and deeper subsidy layering to support the much lower rents. In San José, ELI buildings average roughly $918,000 per unit — nearly 36 percent higher than the average cost across all aBordable projects in the City. This same pattern appears statewide: ELI buildings in the Bay Area and non–Bay Area regions are substantially more expensive than mixed-income projects. This consistent statewide trend highlights that deeper aﬀordability levels can be a signiﬁcant factor in total development costs for aﬀordable units.

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Figure 9. San José’s ELI Developments Exhibit the Highest Average Per-Unit Costs Among All Regions The Components of Development Costs Developing affordable housing requires the coordination of multiple funding sources and the management of diverse cost elements. Total development costs (TDC) can be grouped into three principal components: • Land or property acquisition costs, • Direct or “hard” construction costs, and • Indirect “soft” costs such as design, permitting, professional services, and impact fees. Each component plays a distinct role in shaping the overall feasibility of affordable housing projects, and together they reflect the challenges of delivering high-quality, deeply affordable housing within the Bay Area’s cost environment. Site Acquisition Costs by Housing Type Land acquisition continues to represent a relatively small but influential component of overall development costs. As illustrated in Figure 10, average site acquisition costs for San José projects total approximately $32,500 per unit, roughly 22 percent lower than the Bay Area average of $49,000 per unit and comparable to the non-Bay Area average of $37,300 per unit. The lower average reflects San José’s successful use of publicly owned or contributed land and the City’s ability to structure deals through ground leases or discounted site transfers that reduce or eliminate direct acquisition costs for many affordable housing developments.

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When disaggregated by housing type, the differences become more pronounced. Large Family projects in San José average approximately $35,800 per unit, about 17 percent lower than comparable Bay Area and Non-Bay Area projects. Special Needs projects report significantly higher land costs, averaging $69,400 per unit, or roughly 27 percent higher than Bay Area peers, reflecting the scarcity of suitably zoned and service-proximate sites for supportive housing. Non-Targeted projects average $27,400 per unit, approximately 11 percent below regional counterparts, while Senior housing averages $51,000 per unit, in line with both Bay Area and non-Bay Area averages. No Single-Room Occupancy (SRO) projects were included in the San José dataset for this study period. Figure 10. Average Acquisition Costs in San José Are Below Bay Area Averages and Comparable to Non-Bay Area Projects Direct Construction Costs by Housing Type Direct or “hard” construction costs which encompass site preparation, structural framing, parking facilities, and building systems remain the single largest component of total development costs. As shown in Figure 11 below, these costs account for approximately 68 percent of total development costs for San José projects, consistent with both the 2023 Study and regional averages. For comparison, Other City projects report construction costs equal to 66 percent of total development costs, indicating minimal variation in proportional cost structure despite differences in location and project scale.

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Figure 11. San José Projects Have Higher Hard Costs Per Unit Than Other Regions Across housing types, San José’s construction costs are generally higher than those of comparable projects in other urban jurisdictions, except for non-targeted developments, which tend to employ smaller footprints and less complex construction systems. Non-Targeted housing projects exhibit the most significant variance, with San José averaging roughly 50 percent higher construction costs than the Bay Area & Non-Bay Area. When normalized on a per-square-foot basis, however, this differential narrow to approximately 34 percent, suggesting that the higher per-unit costs stem primarily from larger unit sizes, integrated service areas, and enhanced building amenities rather than inflated base pricing. Although only a subset of CTCAC applications explicitly identify prevailing wage costs, qualitative feedback from developers and general contractors consistently highlights compliance with state and federal wage standards as a major cost driver. Furthermore, as construction activity across the Bay Area has rebounded in 2024–2025, competition for skilled labor has intensified, reinforcing upward pressure on bids even as material prices stabilize. Indirect Soft Costs Indirect or “soft” costs, which include design, professional services, permitting, financing, reserves, and developer fees, continue to represent a substantial share of total development expenses for affordable housing projects in San José. As illustrated in Figure 12, San José projects average approximately $192,000 in soft costs per unit, a level generally consistent with regional

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norms and reflective of the City’s complex regulatory environment and layered financing structure. Figure 12. Average Soft Costs in San José Are Below Bay Area Averages and Comparable to Non-Bay Area Projects Among individual categories, architectural and engineering fees average $17,200 per unit, lower than the Bay Area’s $24,400 average but higher than the $15,900 seen in non–Bay Area regions—an indication of the efficiencies gained through standardized mid-rise design typologies in San José. Permitting and third-party consultant costs average $37,000 per unit, below the Bay Area average of $47,500 but slightly higher than the $35,700 observed in other California markets, suggesting that while San José’s permitting reforms have improved timelines, entitlement and review costs remain a significant expense. Financing costs average $65,700 per unit, notably below the Bay Area’s $75,700 average, due to improved coordination of local, state, and federal funding sources; however, persistently high interest rates continue to exert upward pressure on total borrowing costs. Other soft-cost categories remain relatively stable. Soft cost contingencies average $5,200 per unit, while reserves total $5,800 per unit, both slightly below Bay Area averages. Developer fees, averaging $59,600 per unit, are nearly identical to non–Bay Area levels and below the Bay Area’s $71,700. Collectively, these categories account for approximately 25 to 30 percent of total development costs, underscoring the continued impact of soft costs on overall project feasibility. Impact Fees Impact fees continue to play a significant role in shaping the overall cost profile of affordable housing development across California’s major metropolitan areas. These fees, typically levied to fund public infrastructure such as parks, transportation, and schools, vary widely by

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jurisdiction and can represent a considerable portion of total soft costs. As shown in Figure 13, San José projects report average impact fees of approximately $19,386 per unit, consistent with prior studies and below the Bay Area and statewide averages for comparable urban markets. Figure 13. San José Impact Fees Are Below Most Peer Cities but Higher Than Los Angeles For comparison, affordable projects in Los Angeles average only $7,716 per unit in reported impact fees, largely due to the city’s larger project sizes, which distribute similar total fee burdens across more units. Based on submitted tax credit applications, San José and Los Angeles each collected roughly $63 million in total fees for projects awarded during the study period. However, Los Angeles delivered approximately twice as many total units, effectively halving its per-unit cost relative to San José. This highlights how project scale and density significantly influence the apparent fee burden when measured on a per-unit basis. Across other jurisdictions, Santa Clara County (outside San José) averages $22,700 per unit, while Sacramento and San Diego report $24,006 and $19,331 per unit, respectively. The Bay Area average for all other cities stands at $23,941 per unit. These figures confirm that while San José’s affordable housing fee levels remain relatively consistent on a per-unit basis, the City still contributes to the overall fee burden for affordable housing developments. While San José’s per-unit fee burden compares favorably to its peers, the City’s total fee volume remains substantial. As construction and financing costs continue to rise, impact fee relief remains a key mechanism for maintaining affordability and development feasibility. Streamlined fee structures, predictable schedules, and additional credits for deeply affordable or service-enriched housing could further enhance project viability while preserving the City’s ability to fund essential infrastructure improvements.

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Financing Costs Financing costs continue to represent a growing share of overall affordable housing development expenses, reflecting both higher interest rate environments and the increasingly complex capital stacks required to fund projects. These costs include capitalized construction interest, origination and bond issuance fees, tax credit syndication costs, and legal expenses associated with financing multiple funding sources. Figure 14. SOFR Rates Held Steady for Much of 2025, Ending with a Modest Drop in October As illustrated in Figure 14, the Secured Overnight Financing Rate (SOFR)—a key benchmark for construction and permanent loan pricing—has shown modest stabilization throughout 2025 following a period of volatility and sustained rate increases over the past two years. After reaching nearly 4.6 percent at the close of 2024, SOFR declined gradually to approximately 4.2 percent by October 2025, marking the first year of slight downward pressure on borrowing costs since the Federal Reserve began its rate hikes in March 2022. While this decline has eased some cost escalation pressures, borrowing remains substantially more expensive than in the pre-2022 period. Figure 15. Comparison of Financing Costs per Unit: 2023 vs. 2025 Studies

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Figure 15 compares financing costs per unit for San José Projects and Other City Projects in the 2023 and 2025 studies. As shown, San José’s projected financing costs average $65,734 per unit, which is comparable to the average for Other City Projects of $64,958 per unit. While the recent moderation in SOFR suggests gradual relief, total borrowing costs remain high relative to long-term norms. Construction loan interest rates for affordable housing projects typically remain in the 7.5 to 8.0 percent range due to elevated risk premiums and tighter credit standards among private lenders. The persistence of higher rates, combined with the extended timelines and layered capital structures characteristic of affordable housing finance, continues to drive financing costs upward as a proportion of total project budgets. Financing costs now account for roughly 9 percent of total development costs for both San José and Other City Projects. The disparity between San José and peer jurisdictions primarily reflects differences in project size and complexity—San José developments frequently layer six or more funding sources, including tax credit equity, city subsidies, and project-based vouchers, each with unique compliance and closing requirements. This complexity, coupled with rising interest rates and prolonged construction timelines, underscores the central role financing costs play in shaping the total cost of affordable housing delivery across the region. Tax Credit Pricing Investor equity generated through the Low-Income Housing Tax Credit (LIHTC) program continues to serve as the primary source of capital for affordable housing development, but recent data indicate a modest decline in pricing for both federal and state tax credits. These shifts, though moderate, have direct implications for project feasibility and the overall amount of local subsidy required to close financing gaps. Figure 16. Tax Credit Pricing Slightly Lower in 2025 Across All Regions As shown in Figure 16, federal tax credit pricing for San José Projects averaged $0.88 per credit dollar in 2025, a slight decrease from $0.90 reported in the 2023 Study. Other City Projects reported a similar trend, averaging $0.87 in 2025 compared to $0.89 in 2023. While this decline of approximately two cents per credit may appear minor, it can represent hundreds of thousands

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of dollars in reduced equity for a single project, particularly for larger developments exceeding 100 units. State tax credit pricing has followed a similar trajectory. San José Projects averaged $0.83 per credit dollar in 2025, down from $0.86 in 2023. For comparison, Other City Projects averaged $0.85 in 2025, reflecting a slightly stronger investor appetite in other regions. The narrowing spread between jurisdictions suggests that local factors such as project pipeline stability, developer experience, and geographic CRA (Community Reinvestment Act) investment patterns continue to influence investor demand more than regional macroeconomic conditions alone. Overall, both federal and state credit markets show signs of stabilization following the volatility of 2020–2022, when rapid shifts in investor sentiment and interest rates affected pricing. However, credit values remain below pre-pandemic levels, reducing the total equity available to projects. This underscores the continued importance of local and state subsidy participation, particularly gap financing tools, to sustain affordable housing production at current cost levels. Share of Development Costs Funded by City Subsidies and Other Sources Affordable housing development continues to require a complex layering of public and private funding sources to bridge the gap between total development costs and limited permanent debt capacity. Unlike market-rate developments—which typically depend on developer equity and conventional loans—affordable projects combine numerous funding sources, including Low-Income Housing Tax Credits (LIHTC), state and local subsidies, tax-exempt bond financing, and project-based rental assistance. In 2025, San José projects relied on an average of six distinct funding sources per development, with some utilizing as many as eight. Each additional source adds administrative and transactional complexity, often leading to longer predevelopment timelines, extended financial closings, and increased soft costs such as legal and consultant fees. Market participants consistently note that the need to align multiple funding programs remains one of the largest contributors to cost escalation, particularly in high-cost markets like the Bay Area where construction costs can fluctuate rapidly. Local Subsidy Participation and Scale Local subsidy participation continues to play an essential role in making deeply affordable and special-needs projects feasible. As illustrated in Figure 17, City of San José contributions vary by housing type but remain a critical source of gap financing across all project categories. Across all San José projects in the 2025 dataset, the average City subsidy is $28,605 per unit, representing a 31 percent higher per-unit contribution than the combined Bay Area and non–Bay Area averages. This support reflects the City’s proactive role in leveraging limited local 41 Perimeter Center East, Suite 615 Atlanta, GA 30346
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resources to sustain affordable housing delivery despite rising development costs and constrained federal funding. Subsidy levels vary significantly by housing type. Special Needs projects received the highest per-unit City funding, averaging $147,959, or more than six times the average subsidy in other jurisdictions ($31,513 in the Bay Area and $11,075 in non–Bay Area regions). This reflects the higher operating and service requirements typical of supportive housing developments. Large Family projects averaged $50,355 per unit, exceeding both the Bay Area average of $41,369 and the non–Bay Area average of $18,387, while non-targeted projects averaged $14,340 per unit, slightly above peer averages. In contrast, no City funds were allocated to Senior or SRO projects during the current study period for San José. This absence likely reflects both limited available local resources and the lack of new senior or SRO projects receiving allocations during the 2025 cycle. Figure 17. San José’s Special Needs Projects Receive Significantly Higher City Subsidies Than Other Regions Composition of Project Funding Sources Affordable housing in San José continues to rely on a complex mix of public and private funding sources to bridge the gap between high development costs and limited debt capacity. Unlike market-rate projects, typically financed with 70–80 percent private debt and 20–30 percent

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equity, affordable projects require multiple funding layers, each with distinct regulatory and timing requirements that add administrative cost and delay. As shown in Figure 18, tax credit equity remains the largest funding source, averaging $300,974 per unit across all San José projects, or roughly 44 percent of total development costs. Among housing types, Special Needs projects receive the most tax credit equity ($564,480 per unit), followed by Large Family projects ($351,719) and non-targeted projects ($269,577). Permanent debt represents about 27 percent of total costs, averaging $181,742 per unit, with the highest levels in Large Family projects and the lowest in Special Needs projects due to lower rental revenues. County and State funds provide an average of $88,794 per unit (about 13 percent of costs), supporting deeper affordability levels and special needs housing. City of San José subsidies average $28,605 per unit, accounting for roughly 4 percent of total project funding, with particularly high contributions to Special Needs ($147,959) and Large Family ($50,355) projects. Additional sources such as deferred developer fees and smaller grants, average $83,089 per unit. The 2025 funding profile highlights San José’s continued use of a balanced, multi-source capital structure. City participation remains a critical catalyst, leveraging external resources and ensuring the financial feasibility of deeply affordable projects despite elevated construction and financing costs. Figure 18. In San José, Tax Credit Equity Dominates Total Funding Sources, with City and State Contributions Varying by Housing Type

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The funding composition for Other City Projects closely parallels that of San José developments but reflects a slightly greater reliance on private and credit-based financing. As shown in Figure 19, public funded tax credit equity remains the dominant funding source, averaging $336,057 per unit in public subsidy, supplemented by permanent debt averaging $176,198 per unit, which represents a lower leverage ratio than observed in San José projects. County and State funds contribute approximately $116,330 per unit, providing critical gap financing but at lower levels than those supporting San José’s deeper affordability projects. Local city funding averages $22,971 per unit, a modest share compared to San José’s higher per-unit contributions, indicating a broader but less intensive municipal participation model. Other funding sources, such as deferred developer fees and smaller subsidy programs, account for an additional $87,818 per unit, aligning with San José’s averages. Overall, while the structure of Other City Projects’ capital stacks remains similar, these developments depend more heavily on tax credit equity and debt financing, whereas San José projects rely more on layered public subsidies to achieve deeper affordability targets. Figure 19. Tax Credit Equity Dominates Funding in Other Cities, With Permanent Debt Second Overall

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Key Drivers of Aﬀordable Housing Development Costs The primary cost drivers identified in the 2023 Study remain highly relevant in 2025. Prevailing Wage Requirements Prevailing wage mandates, which are tied to the use of public funds, continue to be a significant contributor to higher development costs for affordable housing projects nationwide. Required under most federal, state, or local funding programs, prevailing wage rates typically increase total labor costs by 10 to 20 percent compared to non-prevailing wage projects. Developers and contractors also cite increased administrative costs related to payroll certification and compliance tracking. While the Low-Income Housing Tax Credit (LIHTC) program itself does not require prevailing wage, most affordable projects include at least one funding source that does—making this requirement effectively unavoidable for the majority of developments. Building Efficiency and Program Requirements Affordable housing projects generally have lower efficiency ratios than market-rate developments due to the inclusion of non-revenue spaces such as community rooms, offices for service providers, and shared amenity areas. Efficiency ratios for affordable projects typically range from 70 to 75 percent, compared with 75 to 80 percent for market-rate projects. This gap is especially pronounced in permanent supportive housing, where on-site case management and resident services necessitate larger common areas. These spaces are critical to tenant well-being but increase total development costs on a per-unit and per-square-foot basis. Higher Density and Construction Typology Most San José projects in 2025 continue to utilize mid-rise podium construction ranging from five to seven stories. While this approach maximizes land efficiency and aligns with the City’s density goals, it introduces higher structural, design, and entitlement costs. Taller buildings require more complex systems and must meet stricter code and fire-safety standards. Extended permitting and multiple funding application rounds also contribute to longer predevelopment periods, increasing holding costs for developers who must continue servicing debt and paying property taxes while awaiting approvals or allocations. Complexity and Coordination of Funding Sources San José’s affordable housing developments now rely on an average of six funding sources per project, with some utilizing as many as eight. Each source carries distinct underwriting, legal, and compliance requirements that elevate soft costs and extend closing timelines. In contrast, market-rate projects typically rely on just two private equity and conventional debt allowing for faster execution. Limited funding application rounds create additional constraints for affordable housing developments and any missed funding cycles can result in costly development delays. 41 Perimeter Center East, Suite 615 Atlanta, GA 30346
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Greater coordination among City, County, and State funding programs, including aligned calendars and shared application criteria, could reduce both cost and time burdens. Design, Parking, and Environmental Standards Local requirements for enhanced design, materials, and open space, while improving aesthetics and community integration, can also contribute to elevated costs. Local Development Fees Impact and development fees remain a meaningful cost factor. Based on submitted tax credit applications, San José projects report average impact fees of $19,400 per unit, despite partial reductions to the City’s Park Impact In-Lieu Fee and exemption from the Affordable Housing Impact Fee. While affordable units receive a 50 percent credit toward park fees, aggregate impact fees when combined with utility and regional charges continue to weigh heavily on overall project feasibility. Additional targeted reductions or temporary fee waivers could further ease financial barriers for projects delivering deeper affordability. Deeper Affordability and Unit Characteristics Approximately 17 percent of all San José units are located in Extremely Low-Income (ELI) buildings, compared to 16 percent among other jurisdictions. ELI projects typically require additional service spaces, larger reserves, and capitalized operating subsidies to maintain long-term viability. Moreover, San José’s Special Needs projects average 658 square feet per unit, which is larger than the 564-square-foot average in peer cities. The combination of deeper affordability targets, larger units, and integrated support services substantially increases both hard and soft costs. Conclusion The 2025 Affordable Housing Development Cost Study provides the clearest picture to date of San José’s development cost landscape, supported by a significantly expanded dataset of 194 projects statewide, including 19 in the City. The broader sample allows for more reliable comparisons than the 2023 study and indicates that San José’s affordable housing costs are now broadly aligned with those of other Bay Area jurisdictions. Across the dataset, total development costs in San José fall within the same range as regional peers and are influenced by similar factors: mid-rise construction typologies, elevated Bay Area labor and material prices, and persistently high interest rates. On a per–square-foot basis, San José’s costs track closely with counties such as Alameda, San Francisco, and Los Angeles. Unit sizes also fall within regional norms, though Special Needs and Non-Targeted units in San José 41 Perimeter Center East, Suite 615 Atlanta, GA 30346
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tend to be larger than those built elsewhere, contributing to higher per-unit totals for those specific housing types. Across all projects, the composition of development costs remains consistent with statewide patterns: hard costs represent roughly two-thirds of total development costs, soft costs account for 25–30 percent, and land costs remain a relatively small share due to the prevalence of contributed or discounted sites. Impact fees, financing costs, and tax-credit pricing also closely mirror the trends observed in other major urban markets. Taken together, the findings indicate that San José’s development cost profile is shaped primarily by project type, building scale, and depth of affordability rather than deviations in construction pricing or soft-cost structures. The City’s overall cost levels remain within the expected range for Bay Area mid-rise affordable housing development during the 2023–2025 period. 41 Perimeter Center East, Suite 615 Atlanta, GA 30346
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Appendix I. Projects Evaluated During the 2025 Study Project Name Developer City CountyHousing TypeStoriesTotal UnitsTotal GSFSubsidized UnitsApplication YearAlvarado Park Santa Clara County Housing AuthoritySan JoseSanta ClaraSeniors 5 9098,52789 2023Stevens Creek PromenadePacific West Communities, Inc. San JoseSanta ClaraLarge Family6 173166,610171 2023View at Julian JEMCOR Development Partners, LLCSan JoseSanta ClaraNon-Targeted8 300252,013296 2023Meridian Family ApartmentsROEM Development CorporationSan JoseSanta ClaraLarge Family5 233301,815231 2023Martha Gardens ApartmentsPacific West Communities, Inc. San JoseSanta ClaraNon-Targeted6 166145,848164 2023Monterey Road ApartmentsPacific West Communities, Inc. San JoseSanta ClaraNon-Targeted5 240132,880237 20232880 Alum Rock Avenue ApartmentsPacific West Communities, Inc. San JoseSanta ClaraNon-Targeted6 164143,055162 2023Villa Del Sol Pacific West Communities, Inc. San JoseSanta ClaraNon-Targeted6 194164,595192 2023Julian Street StudiosCorporation for Better Housing San JoseSanta ClaraNon-Targeted7 305143,895301 2024525 N Capitol Community Development PartnersSan JoseSanta ClaraNon-Targeted5 160143,250158 2024Kooser ApartmentsAffirmed Housing Group San JoseSanta ClaraLarge Family7 191198,716189 2024Dry Creek CrossingCRP Affordable Housing and Community Development LLCSan JoseSanta ClaraLarge Family6 6489,30863 2023Hawthorn Senior Santa Clara County Housing AuthoritySan JoseSanta ClaraSeniors 4 10392,710101 2024A. Parkmoor Community ApartmentsAllied Housing, Inc. San JoseSanta ClaraLarge Family5 8197,24579 2023Santa Teresa MultifamilySanta Teresa, L.P. San JoseSanta ClaraSpecial Needs3 4936,99748 2025Berryessa Family ApartmentsGreen Valley Corporation San JoseSanta ClaraLarge Family6 260283,803257 2025Lupina Resources for Community DevelopmentSan JoseSanta ClaraNon-Targeted6 9986,16298 2025Gateway Tower Core Affordable Housing, LLC San JoseSanta ClaraNon-Targeted15 220256,679218 2025Berryessa TOD Affirmed Housing Group, Inc. San JoseSanta ClaraLarge Family10 195211,819193 2025 Appendix A: San Jose Projects
Project Name Developer City CountyHousing TypeStoriesTotal UnitsTotal GSFSubsidized UnitsApplication YearMonterey Family ApartmentsROEM Development CorporationGilroy Santa ClaraLarge Family3 9486,56893 2024Distel Circle EAH Inc. Los Altos Santa ClaraLarge Family5 90115,87088 2024Montecito MultifamilyCharities Housing Development Corporation of SantaMountain ViewSanta ClaraLarge Family5 8594,20284 2023Mitchell Park Place Eden Housing, Inc. Palo Alto Santa ClaraSpecial Needs4 5037,09349 202380 Saratoga Avenue ApartmentsPacific West Communities, Inc. Santa ClaraSanta ClaraLarge Family6 200234,638198 20231178 Sonora Court MidPen Housing Corporation Sunnyvale Santa ClaraLarge Family7 176219,430174 2023Pacific Avenue Senior HomesSatellite Affordable Housing AssociatesLivermore AlamedaSeniors 4 7966,85478 2024Regional Street ApartmentsEden Housing, Inc. Dublin AlamedaSeniors 5 11384,669112 2024BUSD Workforce HousingSatellite Affordable Housing AssociatesBerkeley AlamedaLarge Family6 110123,76797 2024Legacy Court Eden Housing Inc. & Community Housing Development Richmond Contra CostaLarge Family2 4345,39042 2024Civic Crossing (699 Ygnacio Valley Road)Resources for Community DevelopmentWalnut CreekContra CostaLarge Family5 9377,31092 2024Walnut Apartments Pacific West Communities, Inc. Danville Contra CostaLarge Family3 4439,46943 20243300 Mission StreetDreamkeeper Venture LLC San FranciscoSan FranciscoSRO 6 3521,55834 2024Golden Gate Avenue Phase 1 LIHTCMidPen Housing Corporation San FranciscoSan FranciscoLarge Family8 5561,79354 2024Sutter Street Martin McNerney Development, Inc.San FranciscoSan FranciscoNon-Targeted14 10291,005101 2024Casa Adelante 1515 South Van NessChinatown Community Development CenterSan FranciscoSan FranciscoLarge Family9 168191,719167 2024850 Turk Street MidPen Housing Corporation San FranciscoSan FranciscoLarge Family8 9298,71991 2024Balboa Reservoir - Building EBRIDGE Housing Corporation San FranciscoSan FranciscoLarge Family7 128135,349127 2024Sunnydale HOPE SF Block 9Related Irvine Development CompanySan FranciscoSan FranciscoLarge Family5 95112,22494 2024Sunnydale HOPE SF Block 7 Mercy Housing California San FranciscoSan FranciscoLarge Family5 89137,17788 2024300 De Haro MRK Partners Inc. San FranciscoSan FranciscoNon-Targeted11 425195,921421 2024160 Freelon Related Irvine Development CompanySan FranciscoSan FranciscoLarge Family9 8566,73584 2024Oak Gardens MidPen Housing Corporation Menlo Park San MateoSpecial Needs3 6252,22660 2024Cherry Street CommonsEden Housing, Inc. San Carlos San MateoLarge Family5 3340,61732 2024Hill Street Linc Housing Corporation Belmont San MateoLarge Family5 3755,86336 2024Midway Village Phase 2MidPen Housing Corporation Daly City San MateoLarge Family4 113185,781111 2024Vera Avenue ApartmentsCorporation for Better Housing Redwood CitySan MateoNon-Targeted7 178104,950176 2024View at San Bruno JEMCOR Development Partners, LLCSan Bruno San MateoLarge Family10 341426,017337 2024Broadway MeadowsPacific West Communities, Inc. Millbrae San MateoLarge Family7 9790,72096 2024North Fair Oaks ApartmentsAffirmed Housing Group, Inc. Redwood CitySan MateoSpecial Needs6 8677,52385 2024831 Water Street Novin Development Corp. Santa Cruz Santa CruzSpecial Needs6 140115,648135 2024Downtown Library Mixed Use ProjectFor the Future Housing, Inc. Santa Cruz Santa CruzLarge Family8 124127,038123 2024Westside Village CRP Affordable Housing & Community Development LLCSanta Cruz Santa CruzLarge Family3 3838,99037 20244575 Scotts Valley ApartmentsCRP Affordable Housing & Community Development LLCScotts ValleySanta CruzLarge Family3 100103,95999 2024Summer Oaks MidPen Housing Corporation Sonoma SonomaLarge Family3 7266,78871 2024Casa Roseland MidPen Housing Corporation Santa Rosa SonomaLarge Family5 7589,25674 2024Windsor Park Linc Housing Corporation Windsor SonomaLarge Family3 3337,95032 2024Dry Creek CommonsBurbank Housing Development CorporationHealdsburg SonomaLarge Family4 5861,47057 2024Saggio Hills Phase I Freebird Development Company, LLC / Jamboree HousiHealdsburg SonomaLarge Family3 4859,88247 2024Meridian at Corona StationDanco Communities Petaluma SonomaLarge Family4 131124,525130 2024Rovina Lane ApartmentsPacific West Communities, Inc. Petaluma SonomaLarge Family3 3239,92631 2024 Appendix A: Other City Projects
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Project Name Developer City CountyHousing TypeStoriesTotal UnitsTotal GSFSubsidized UnitsApplication YearAlmond Gardens ApartmentsHarbor Park, LLC Suisun City SolanoNon-Targeted3 9778,13196 2024Beech Hill ApartmentsPacific Housing, Inc. Orangevale SacramentoLarge Family4 2935,84528 2024Central Sacramento Studios IIDano Communities SacramentoSacramentoSpecial Needs5 5238,18551 2024Terracina at WildhawkUSA Multi-Family Development, Inc.SacramentoSacramentoLarge Family6 145117,665144 2024The Pardes 2 CRP Affordable Housing and Community Development LElk Grove SacramentoLarge Family4 140188,560139 202469th Street ApartmentsCRP Affordable Housing and Community Development LSacramentoSacramentoLarge Family6 130128,628129 2024Monarch Mutual Housing California SacramentoSacramentoNon-Targeted5 241193,785239 2024Sakura Mutual Housing California SacramentoSacramentoNon-Targeted5 13489,822133 2024Harrington Grove ApartmentsWest Development Ventures, LLCFolsom SacramentoLarge Family3 5245,02851 2024The Rigby Abbey Road Inc. Los AngelesLos AngelesSpecial Needs4 6483,17062 2024HHH New HampshireBRIDGE Housing Corporation Los AngelesLos AngelesSpecial Needs6 9536,73593 2024Alma Wakeland Housing and Development CorporationLos AngelesLos AngelesSpecial Needs4 4735,80746 2024Willowbrook 3 Linc Housing Corporation Compton Los AngelesSpecial Needs3 5149,15650 202418722 Sherman WayLA Family Housing Corporation Los AngelesLos AngelesSpecial Needs4 6439,02763 2024Jordan Downs Phase S5The Michaels Development CompanyLos AngelesLos AngelesLarge Family4 5883,64757 2024300 Alamitos Mercy Housing 112, LP Long BeachLos AngelesSeniors 5 8261,96381 2024The Garvey Coalition for Responsible Community DevelopmentCompton Los AngelesSpecial Needs2 7561,26974 2024Grace Villas Women Organizing Resources, Knowledge and ServicesLos AngelesLos AngelesSpecial Needs6 4881,42247 2024Harmony Senior ApartmentsDomus Development, LLC Los AngelesLos AngelesSeniors 4 8459,65283 2024The 101 Jamboree Housing Corporation Long BeachLos AngelesSpecial Needs5 5257,03051 2024Prisma Artist Lofts National Community Renaissance of CaliforniaCity of PomonaLos AngelesLarge Family4 7597,00774 202420th Street ApartmentsVenice Community Housing CorporationSanta MonicaLos AngelesSpecial Needs7 7882,62276 2024121 Mathews HVN Development, LLC Los AngelesLos AngelesNon-Targeted4 4022,57139 20246018 Brynhurst HVN Development, LLC Los AngelesLos AngelesNon-Targeted4 5031,89849 2024Peak Plaza ApartmentsHollywood Community Housing CorporationLos AngelesLos AngelesLarge Family7 10492,437102 2024Bana at Palmdale Milare Housing Investments, Inc Palmdale Los AngelesNon-Targeted5 4879,75147 2024Rosa's Place Daylight Community DevelopmentLos AngelesLos AngelesSpecial Needs7 9890,13797 2024Holt & Main Meta Development LLC Pomona Los AngelesLarge Family6 160219,551158 2024Jubilo Village Community Corporation of Santa MonicaCulver City Los AngelesLarge Family6 95135,39293 2024The Walk ResidencesPrimestor Development, Inc. Norwalk Los AngelesNon-Targeted6 5663,46055 2024Maison's Village - Phase IIRavello Holdings, Inc. Palmdale Los AngelesNon-Targeted0 191182,138189 2024Residency at Sky Village Hollywood - Phase IABS Properties Inc. Los AngelesLos AngelesSpecial Needs7 237191,972235 2024Residency at Sky Village Hollywood - Phase II#N/A Los AngelesLos AngelesSpecial Needs18 245191,972242 2024910 Wetherly Drive West Hollywood Community Housing CorporationWest HollywoodLos AngelesNon-Targeted7 8778,42586 2024Toyon Gardens Brilliant Corners UnincorporatedLos AngelesSpecial Needs6 7862,90077 2024Rose Hill Courts Phase IIRelated Irvine Development Company of CaliforniaLos AngelesLos AngelesLarge Family3 9693,22995 20244345 Matilija HVN Development, LLC Los AngelesLos AngelesNon-Targeted5 7544,54274 20243981 Meier HVN Development, LLC Los AngelesLos AngelesNon-Targeted4 7546,50874 20243412 Victoria HVN Development, LLC Los AngelesLos AngelesNon-Targeted4 5833,09657 20245625 Case HVN Development, LLC Los AngelesLos AngelesNon-Targeted4 7041,77869 20245749 Brynhurst HVN Development, LLC Los AngelesLos AngelesNon-Targeted4 5340,62452 20248911 Ramsgate HVN Development, LLC Los AngelesLos AngelesNon-Targeted4 7746,50276 2024U.S.VETS-WLAVA Building 300U.S.VETS Housing Corporation Los AngelesLos AngelesSpecial Needs2 4440,13443 2024Maison's Sierra - Phase 2Ravello Holdings, Inc. Lancaster Los AngelesNon-Targeted0 171132,233169 2024Alveare Parkview Related Irvine Development Company, LLCLos AngelesLos AngelesLarge Family8 105129,811104 20241250 West Jeff Community Builders Group Los AngelesLos AngelesLarge Family7 122107,414121 2024Oaks on Balboa Las Palmas Housing and Development CorporationLos AngelesLos AngelesSpecial Needs2 11776,483116 2024Twin Park Landing Pacific West Communities, Inc. Los AngelesLos AngelesNon-Targeted6 275190,726272 2024Veteran Commons Abode Communities Downey Los AngelesNon-Targeted3 10097,42199 2024Victory Blvd Linc Housing Corporation Los AngelesLos AngelesLarge Family5 194230,645192 2024Century + Restorative Care Village Phase ICentury Affordable Development, Inc.Los AngelesLos AngelesSpecial Needs6 146152,708145 2024Weingart Tower 1B Weingart Center Association Los AngelesLos AngelesSpecial Needs11 10453,511103 2024Locke Lofts Pacific West Communities, Inc. Los AngelesLos AngelesSpecial Needs6 14868,937146 2024Casa de la Luz Hollywood Community Housing CorporationLos AngelesLos AngelesNon-Targeted5 95106,45593 2024Cudahy Seniors National Community Renaissance of CaliforniaCudahy Los AngelesSpecial Needs5 140165,707138 2024Terrasini Chelsea Investment CorporationSan Diego San DiegoSeniors 5 9564,65594 2024Alvarado Senior VillageSan Diego Community Housing CorporationFallbrook San DiegoSeniors 3 5443,47553 2024Fox Point Farms Chelsea Investment CorporationEncinitas San DiegoLarge Family0 4049,02039 2024Rose Creek Village National Community Renaissance of CaliforniaSan Diego San DiegoSRO 5 6036,39659 2024Quince Street SeniorsSan Diego Interfaith Housing FoundationEscondido San DiegoSeniors 4 145187,450142 2024Chula Vista Seniors San Diego Interfaith Housing FoundationChula Vista San DiegoSeniors 3 5837,78057 2024El Camino Real Affordable ApartmentsMirka Investments, LLC Oceanside San DiegoLarge Family4 111104,940110 2024St. Luke's AffordableRise Urban Partners LLC San Diego San DiegoNon-Targeted8 7851,71577 2024Kindred BRIDGE Housing Corporation San Diego San DiegoSpecial Needs8 126144,179125 2024La Costa Family ApartmentsMirka Investments, LLC Carlsbad San DiegoLarge Family3 1918,27419 2024North City AffordableCarmel Enterprise, LLC San Marcos San DiegoLarge Family4 224322,015222 2024The Trails at Carmel Mountain RanchChelsea Investment CorporationSan Diego San DiegoLarge Family5 125176,399124 2024Monarch Hillside Affordable ApartmentsMonarch Group & Klein Financial CorpSan Diego San DiegoNon-Targeted5 5146,74750 2024The Grant at Mission Trails CRP Affordable Housing & Community Development LLCSan Diego San DiegoLarge Family7 4853,95247 2024Wakeland RiverwalkWakeland Housing and Development CorporationSan Diego San DiegoLarge Family5 190215,305188 2024712 Seagaze Elsey Holdings LLC Oceanside San DiegoNon-Targeted8 179155,387177 2024 Appendix A: Other City Projects
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Project Name Developer City CountyHousing TypeStoriesTotal UnitsTotal GSFSubsidized UnitsApplication YearAlvarado Creek ApartmentsPacific West Communities, Inc. San Diego San DiegoLarge Family6 227230,285225 2024Avanzando San Ysidro ( Site 1: Cypress)Hitzke Development CorporationSan Diego San DiegoLarge Family3 103133,913101 2024St. Paul Terrace St. Paul Terrace, LP Berkeley AlamedaLarge Family7 5063,38949 2025Foothill Family ApartmentsOakland Housing Initiatives, Inc.Oakland AlamedaLarge Family3 6567,31264 202534th & San Pablo Family HousingEast Bay Asian Local Development CorporationOakland AlamedaSpecial Needs6 6055,69059 2025Lazuli Landing MidPen Housing Corporation Union City AlamedaLarge Family4 81125,80580 20251523 Harrison StreetoWOW LLC Oakland AlamedaNon-Targeted11 279179,500275 2025The Eliza Mercy Housing California Oakland AlamedaSeniors 8 9747,72496 2025TBV Villas at RenaissanceSandidge Urban Group, Inc. Richmond Contra CostaLarge Family5 105136,000104 2025El Cerrito Plaza - Parcel A SouthRelated Irvine Development Company, LLCEl Cerrito Contra CostaLarge Family6 7072,99169 2025967 Mission 967 Mission, LP San FranciscoSan FranciscoSeniors 9 9547,42494 2025Balboa Reservoir - Building ABRIDGE Housing Corporation San FranciscoSan FranciscoLarge Family6 159192,080158 20252970 16th Street Mission Housing Development CorporationSan FranciscoSan FranciscoSpecial Needs9 13670,839136 2025960 Howard Street oWOW LLC San FranciscoSan FranciscoNon-Targeted15 202123,050200 2025Cypress Point MidPen Housing Corporation Moss BeachSan MateoLarge Family3 7120,71770 2025Sheridan ApartmentsAlliant Communities Menlo Park San MateoLarge Family3 8887,72487 2025The Magnolias Eden Housing, Inc. Morgan Hill Santa ClaraSpecial Needs5 6675,15065 2025El Camino Real MultifamilyCharities Housing Development CorporationPalo Alto Santa ClaraLarge Family5 130243,585128 2025Mountain View Lot 12Related Irvine Development Company, LLCMountain ViewSanta ClaraLarge Family5 120161,833119 2025Beverly Gardens CRP Affordable Housing and Community Development LScotts ValleySanta CruzLarge Family3 2549,74224 2025525 Water Street Zen Development LLC Santa Cruz Santa CruzLarge Family5 9088,10989 202541st & Soquel ApartmentsPacific West Communities, Inc. Soquel Santa CruzLarge Family6 256290,820253 2025136 River Apartments136 River Partners, LLC Santa Cruz Santa CruzLarge Family6 5054,15749 2025Pinnacle Pass ApartmentsCRP Affordable Housing and Community Development LScotts ValleySanta CruzLarge Family3 4044,63539 2025Banana Belt ApartmentsCRP Affordable Housing & Community Development LLCSanta Cruz Santa CruzLarge Family6 83102,84582 2025Donner Field Senior ApartmentsEden Housing, Inc. SacramentoSacramentoSeniors 3 6744,52966 2025Coral Blossom ApartmentsExcelerate Housing Group LLC Elk Grove SacramentoSpecial Needs3 8180,17980 2025La Trinidad ApartmentsDomus Development, LLC Los AngelesLos AngelesSpecial Needs5 6654,80965 2025Armory Arts CollectiveLinc Housing Corporation Long BeachLos AngelesSeniors 5 6462,77063 2025Safe Harbor II Holos Inc. Wilmington Los AngelesSpecial Needs4 4032,42339 202510953 Whipple HVN Development, LLC Los AngelesLos AngelesNon-Targeted5 9153,68590 20255403 Inglewood HVN Development, LLC Los AngelesLos AngelesNon-Targeted5 4625,59245 20259030-9038 ReadingHVN Development, LLC Los AngelesLos AngelesNon-Targeted5 7743,55376 202511218-11222 CalifaHVN Development, LLC Los AngelesLos AngelesNon-Targeted5 7646,09875 2025537 Kenmore 537 N Kenmore LP Los AngelesLos AngelesNon-Targeted5 6536,40864 2025VA Building 408 TSA Housing, Inc. Los AngelesLos AngelesSpecial Needs4 10186,776100 2025U.S.VETS-WLAVA Building 256U.S.VETS Housing Corporation Los AngelesLos AngelesSpecial Needs3 4136,80840 2025West LA VA- Building 409Century Affordable Development, Inc. (CADI)Los AngelesLos AngelesSpecial Needs4 11785,221115 2025Palmdale Family HousingAffirmed Housing Group, Inc. Palmdale Los AngelesLarge Family3 264291,361260 2025Community Hub at Inglewood First UMCBMB Housing LLC Inglewood Los AngelesNon-Targeted3 6028,50159 2025Linden Apartments AMCAL Multi-Housing, Inc. Long BeachLos AngelesLarge Family4 100115,17599 20256033 De Soto Meta Development, LLC Los AngelesLos AngelesNon-Targeted7 207244,694205 2025Zenith on 25th Lincoln Avenue Capital LLC Palmdale Los AngelesLarge Family3 272306,137269 2025Crenshaw Court Arden Development, Inc. Los AngelesLos AngelesLarge Family7 7051,48969 2025638 S Berendo 638 Berendo Partners, LLC Los AngelesLos AngelesNon-Targeted8 16391,295161 2025Creekside CommonsCRP Affordable Housing ad Community Development LLSanta ClaritaLos AngelesLarge Family4 128129,788127 2025Sky Castle Arden Development, Inc. Los AngelesLos AngelesNon-Targeted2 241148,208239 2025Prisma Affirmed Housing Group, Inc. Los AngelesLos AngelesSpecial Needs6 9847,46796 2025La Estancia AMCAL Multi-Housing Inc. Los AngelesLos AngelesNon-Targeted6 190122,383188 202521010 Vanowen Meta Development, LLC Los AngelesLos AngelesNon-Targeted6 395349,900391 2025Francis Avenue ApartmentsMRK Partners, Inc. Los AngelesLos AngelesNon-Targeted8 232133,303230 2025Sherman ApartmentsMeta Development, LLC Los AngelesLos AngelesNon-Targeted8 244197,860242 2025Warner Center II Meta Development, LLC Los AngelesLos AngelesLarge Family8 128167,047127 2025Serra Mesa ApartmentsCommunity HousingWorks San Diego San DiegoSpecial Needs5 6034,92459 2025Coast Villas National Community Renaissance of CaliforniaOceanside San DiegoSpecial Needs4 5641,49955 2025Navajo Family ApartmentsCommunity HousingWorks San Diego San DiegoLarge Family4 4542,64144 2025Aero Drive Affordable ApartmentsMirka Investments, LLC San Diego San DiegoLarge Family6 190202,869188 2025Brookview Senior VillasNational Community Renaissance of CaliforniaFallbrook San DiegoSpecial Needs3 6147,72460 2025SDSU Mission ValleyChelsea Investment CorporationSan Diego San DiegoLarge Family5 126119,001125 2025Mirka Tower 1 Mirka Investments, LLC San Diego San DiegoLarge Family21 318313,098315 2025Mira Mesa Chelsea Investment CorporationSan Diego San DiegoLarge Family7 90139,03989 2025Hillcrest Hall CRP Affordable Housing and Community Development LSan Diego San DiegoLarge Family8 9875,35897 2025Market Two MRK Partners, Inc. San Diego San DiegoNon-Targeted6 272132,844269 2025 Appendix A: Other City Projects

San Jose City CouncilDecember 8, 2025

San Jose City Council
December 8, 2025