HOUSING DEPARTMENT
MULTIFAMILY HOUSING INCENTIVE
PROGRAM RESIDENTIAL TAX AND FEE
WAIVER FOR 3896 STEVENS CREEK BLVD
September 15, 2026 Item 8.1
Ci
ty Council
Erik L. Soliván
Housing Director
Banu San
Deputy Director
Multifamily Housing Incentive Program (MHIP)
Approved December 10, 2024 | Amended May 13, 2025 and January 27, 2026 Slide 2
MHIP closes the financial feasibility gap for high-density rental housing* through construction tax reductions and IHO fee waiver.
Program Summary
IHO fee waiver: In-lieu fee reduced to $0 for developments with >5% of units on-site at <110% of Area Median Income Construction tax reduction: Building and Structure (B&S) and Commercial-Residential-Mobile Home-Park (CRMP) Construction Taxes reduced on a phased schedule as eligible units are built out Eligibility: Projects must be listed on Eligible Projects list *The Cost of Residential Development Study released in December 2025 reported that higher-density rental housing is generally not financially viable due to elevated construction costs, high interest rates, and insufficient rents to cover development costs. 3896 Stevens Creek Blvd – Phase 1
Project Phase Building
Building Area
(Square Feet) Residential Units
Retail Space
(Square Feet)
Phase 1* 2 469,763 311 6,033
Phase 2 1 441,614 264 7,594
Total 911,377 575 13,627
*Only Project Phase 1 is currently considered for the current incentive request. Project Phase 2 is scheduled to start construction approximately 12 months after Project Phase 1.
Slide 3
3896 Stevens Creek Blvd
Developed by Holland Partner
Group
Eight-story residential building
containing five levels of
residential space over three
levels of parking & retail space
311 market rate housing units
16 moderate-income housing
units at 50% AMI
Slide 4
Proposed Tax and Fee Waiver
Inclusionary Housing In-Lieu Fee $5,478,664
50% Reduction of CRMP and B&S Construction Taxes on
the residential portion of the building $1,455,954
Maximum Total Fee
Waiver and Reduction
Up to $6,934,618
($22,298 per unit)
Slide 5
MHIP Production Progress
Development Developer Market-Rate Affordable Total
905 North Capitol Avenue Hanover Co. 328 17 345
498 West San Carlos Street Urban Catalyst 264 14 278
358 Hatton Street Federal Realty 245 13 258
0 Seely Building A Hanover Co. 377 20 397
Martha Gardens* Maracor/Pacific West 2 164 166
El Paseo de Saratoga Sand Hill Property 733 39 772
0 Seely Avenue Building B Hanover Co. 353 19 372
0 Seely Affordable Building* Hanover Co. 1 135 136
210 Baypointe Parkway SummerHill Apartments 277 15 292
3896 Stevens Creek Blvd** Holland Partner Group 295 16 311 Total Units 2,875
(86%)
452
(14%)
3,327
(100%)
* These units will not count toward the IHO MHIP allocation, as the project is 100% affordable. ** Development discussed in this presentation.
Slide 6
MHIP Phase I: Approaching Full Capacity
A Program Working
as Intended.
Strong developer acceptance:
MHIP is closing the feasibility
gap amid elevated construction
and financing costs.
Ahead of schedule: At the current
pace (273 unit allocations
remaining), Phase I capacity may
be reached before the scheduled
February 28, 2027 stepdown.
What happens next: Once the
cap is reached, B&S relief falls to
25% and CRMP relief ends.
92%
of Phase I capacity used
3,6003,327 units
8,600+
MHIP eligible units in the pipeline*
Benefit Phase I Phase II
IHO reduced requirement Active Continues
B&S construction tax reduction 50% Drops to 25%
CRMP construction tax reductions 50% Ends
Slide 7
*Pipeline includes approximately 2,300 to 2,600 affordable housing units.