(d)2: City Council Focus Area Status
Report: Building More Housing
Community and Economic Development Committee
June 15, 2026
Erik Soliván, Director, Housing Department
Jerad Ferguson, Principal Planner, Planning, Building and Code Enforcement Department Focus Area Background
Agenda
1 2
3 Execution as Learning – Focus Area Portfolio Update
Next Steps
2 3
Focus
Areas (5)
Core Services (74)
Budget Programs (259)
Complex long-term
initiatives requiring
significant staff
capacity and crossdepartment
coordination
Services that the
City routinely
delivers and
Departments largely
manage
independently
Focus Areas
An Opportunity to Evolve
We are cultivating an organizational mindset
of learning and continuous improvement that
will drive results for our community
While data support storytelling, numbers alone do not show progress and require context setting
Learning in public builds trust and accountability
Retrospection contributes to learning and understanding Progress requires humility, iteration, and commitment 4 Focus Areas
Philosophy and Principles
Building More Housing
Focus Area
5 Q3 Portfolio Retrospective
1. Land Use, Policy, and Regulation. Land use and housing policies are complex with many stakeholders and quality of life goals.
Problem Goals Metrics
Meet resident’s housing needs across income levels by making San José a great place to build housing.
Long-Term
Goal Indicators
2. Development Services Process. There is an opportunity to streamline and improve analysis and communication
of our development services process.
Problem Goals Metrics
3. Linking Land and Capital. There is an opportunity to align Problem land use and housing policies with market feasibility. Goals Metrics Building More Housing Focus Area
6 0
400
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FY24
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FY24
Q3
FY24
Q4
FY24
Q1
FY25
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Q3
FY25
Q4
FY25
Q1
FY26
Q2
FY26
Q3
FY26
Market Rate Affordable ADU
Performance Dashboard
Building More Housing Focus Area
Long-Term Goal.
7 Meet residents’ housing needs across income levels by making San José a great place to build housing.
Indicators
Housing Units Entitled Building Permit Issued
Quarterly RHNA Target: 1,944
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1200
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2400
2800
Q1
FY24
Q2
FY24
Q3
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Q4
FY24
Q1
FY25
Q2
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Q3
FY25
Q4
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Q1
FY26
Q2
FY26
Q3
FY26
Market Rate Affordable
0 400
800
1200
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2000
Q1
FY24
Q2
FY24
Q3
FY24
Q4
FY24
Q1
FY25
Q2
FY25
Q3
FY25
Q4
FY25
Q1
FY26
Q2
FY26
Q3
FY26
Market Rate Affordable ADU
Certificates of Occupancy Issued
Since Council approved the multifamily housing incentive program in December 2024, 2,216 units have moved from entitlement to construction, however, there are still not enough units being built. 8 Goal 1.1 General Plan 4-Year Review.
Goal 1.2 Downtown Ministerial.
Problem 1. Land Use, Policy, and Regulation.
Problem 2. Development Services Process.
Problem 3. Linking Land and Capital.
Goal 3.1 Cost of Development Study Session.
Goal 3.2 Financial Feasibility.
Goal 3.3 Financing Programs.
Goal 3.4 Alternative Financing Programs.
Meet resident’s housing needs across income levels by making San José a great place to build housing.
Long-Term
Goal
Goal 2.1 Performance Management.
Goal 2.2 CEQA Standard Conditions.
Goal 2.3 CEQA Streamlining.
Goal 2.4 Development Fee Estimator.
Blue: Complete
Green: On Track
Yellow: Needs Attention
Red: Off Track
Gray: Not Started
Building More Housing Focus Area
Performance Dashboard
9 Complete task force process for General Plan 4-Year Review by June 2026. Goal 1.1
• General Plan Task Force Process will conclude with a
conceptual framework of General Plan changes heard at
Planning Commission on June 24 and at City Council on
August 18
• Successfully held four Open Housing outreach events in addition to community stakeholder meetings in coordination with the City Manager’s Office of Racial and Social Equity • Staff also attended neighborhood meetings in Council
Districts
Problem 1. Land Use, Policy, and Regulation.
Building More Housing Focus Area
Performance Dashboard
10 Develop Downtown Ministerial permit process and include analysis in October Community and Economic Development Citywide Planning Activities Status Report. Goal 1.2 • Work added to implement SB 79 and necessary capacity to keep the General Plan Four-Year Review on track contributed to the goal moving to red
• Development of the downtown ministerial permit process is included as a FY 2026-2027 Building More Housing Focus Area Work Plan goal with targeted completion by December 2026, including scope for a 90-day guaranteed approval for ministerial projects and inclusion of multi-family housing outside of the downtown area
Problem 1. Land Use, Policy, and Regulation.
Building More Housing Focus Area
Performance Dashboard
11 Analyze options to report on development services timeliness across the pipeline and report findings to the CED Committee in December 2025. Goal 2.1 • CED heard the item on December 15, 2025, including an analysis of permit timelines for affordable and market-rate housing projects.
• Affordable housing projects met targets through closer coordination, while market-rate and other development
timelines lengthened.
• PBCE and ITD are developing standardized permitting
performance metrics and reporting.
• Council interest in permitting improvements led to an April 20, 2026, Study Session, with Development Services
optimization work ongoing.
Problem 2. Development Services Process.
Building More Housing Focus Area
Performance Dashboard
12 Bring standard conditions of approval and CEQA process guidelines to City Council by Q3 FY 2025-2026. Goal 2.2
• Environmental Review Handbook and Environmental Standard Permit Conditions were approved at the May 19, 2026, City Council meeting.
Problem 2. Development Services Process.
Building More Housing Focus Area
Performance Dashboard
Conduct initial analysis of projects affected by state CEQA streamlining statues by June 2026. Goal 2.3
• Three projects approved under AB 130, two under SB 131, and seven AB 130 projects are under review.
• Staff report faster project processing, though tribal consultation remains a barrier. • New laws are reducing fee revenue and shifting more CEQA analysis to the City at the plan and policy level.
• Staff are evaluating staffing restructures, historic resource impacts, and community engagement implications.
13 Complete development fee estimator work by adding multi-family new construction by December 2025. Goal 2.4
• Multifamily construction was added to the fee
estimator tool, completing the goal.
• The tool now supports residential, ADU, multifamily,
and commercial/industrial new construction
projects.
• Staff continue evaluating tool performance and
future expansion to additions, alterations, and
tenant improvement projects.
Problem 2. Development Services Process.
Building More Housing Focus Area
Performance Dashboard
14 Cost of Residential Development City Council Study Session on affordable and market-rate development data analysis in December 2025. Goal 3.1 • A December 8, 2025, Study Session analyzed housing feasibility gaps and established a basis for fee and waiver reduction relief strategies. • External factors including construction costs remain the primary barrier to housing feasibility in San José.
• Mid-rise and tower projects continue to face significant feasibility challenges, while office conversions remain limited.
• Fee reductions and waivers could improve project economics and inform future Council housing discussions.
Problem 3. Linking Land and Capital.
Building More Housing Focus Area
Performance Dashboard
15 Review a portfolio of entitled housing projects with various requirements that present financial feasibility challenges in today’s market. Present analysis to CED Committee in February 2026.
Goal 3.2
Problem 3. Linking Land and Capital.
Building More Housing Focus Area
Performance Dashboard
• Item was presented to the CED Committee on February 23, 2026. • Initial analysis found that roughly two-thirds of entitled housing units are financially infeasible, with many projects stalled for 3+ years after approval.
• Staff is working on a more comprehensive data analysis, in partnership with developers, to overlay current entitlements, financing tools, AMI levels to identify opportunities to catalyze projects into construction • Most near-term housing construction is expected from projects using Multifamily Housing and Downtown Residential Incentive Programs. 16 Provide data analysis on the effectiveness of the market-rate incentive and affordable financing housing programs and bring resulting program adjustments to City Council in Q3 FY 2025-2026.
Goal 3.3
• Analysis found the Multifamily Housing Incentive Program restarted the market-rate housing pipeline, with 2,216 units under construction, including 267 deed-restricted affordable units at up to 110% AMI.
• On January 27, 2026, Council expanded the program and launched a Downtown Conversion Program for office-to-residential adaptive reuse.
• Conversion feasibility varies significantly by building type, with older buildings generally more suitable for reuse.
• Through May 22, 2026, Council approved two Downtown Residential Incentive Program projects: Bank of Italy (109 units, under construction) and Gateway Tower (220 units, construction anticipated Summer 2026).
Problem 3. Linking Land and Capital.
Building More Housing Focus Area
Performance Dashboard
Bank of Italy
17 Provide alternative financing programs to preserve housing at all income levels. Goal 3.4
• This work focuses on preserving
housing in distressed residential
properties through public-private
partnerships, including opportunities
to expand both moderate and lowincome housing.
• To date, the program has preserved
650 units across three residential
buildings.
• One project was approved by Council
on February 24, 2026, with two
additional projects anticipated in Q1
FY 2026-2027.
Problem 3. Linking Land and Capital.
Building More Housing Focus Area
Performance Dashboard
The Fay, 10 Reed Street
What’s Next?
Focus Areas and the
FY 2026-2027 Budget
Process
18 What’s Next?
Focus Areas and the FY 2026-2027 Budget Process
Embedding Focus Area discussion into the Budget Process to ensure co-creation of strategies aimed to meet our Long-Term Goals 19 Now
• Manager’s Budget Addendum. The Administration published an MBA that establishes a recommended path for FY 2026-2027 Focus Area work plans based on City Council direction in the Mayor’s March Budget Message.
• June Budget Message. Through adoption of the June Budget Message, the City Council will formally adopt the Focus Area work plans for FY 2026-2027.
Next
• Fall 2026. The Administration will bring a FY 2025-2026 Focus Area Annual Report to City Council providing final progress and lessons learned from the past fiscal year work plan.
Later
• December 2026. Each respective Committee will receive a status update on progress and lessons learned through execution of the current fiscal year work plan. (d)2: City Council Focus Area Status
Report: Building More Housing
Community and Economic Development Committee
June 15, 2026
Erik Soliván, Director, Housing Department
Jerad Ferguson, Principal Planner, Planning, Building and Code Enforcement Department