Coming Soon: Affordable Housing Citywide?

City Hall Diary

No, I am not referring to the subprime mortgage crisis and the subsequent foreclosures but rather last week’s three-hour city council study session regarding inclusionary housing. Many comments were expressed on how inclusionary housing should be dispersed. What exactly is “inclusionary housing?” Is it for extremely low income (ELI), or for others? No one can argue that San Jose has not done a good job at building affordable housing, especially when you compare San Jose to other municipalities in the Bay Area.

San Jose has typically moved forward with infill development specifically within RDA areas. Most of the RDA areas are located downtown or in SNI areas. The San Jose Redevelopment Agency puts 20 percent of their funds (tax increment) aside for affordable housing which has built over 10,000 units.

The purpose of the study session was for city staff to clearly define inclusionary housing, how it has been done in other cities and the potential benefits and impacts of a citywide policy.  Many interest groups attended the session, including PACT, Catholic Charities, Home Builders Association, labor groups, the Chamber of Commerce, Sierra Club and others.

The overview was a good start with a variety of views expressed from staff, consultants and builders.  Ideas included taxing homeowners every time a home is sold with some type of transfer tax, adding taxes to developers and/or landowners as the cost of building in San Jose for a greater good. There were other ideas of allowing higher densities on housing developments to make it pencil out for developers or allow for preferential zoning when it comes to affordable housing.

There were many thoughtful speakers from the audience who shared personal stories regarding how they spend 50-70 percent of their income on rent alone. Even working full time as a senior cashier at Home Depot still meant sharing a room in a rental unit.

Teachers spoke who sacrifice income for service and are having difficulty with finding affordable housing. Then there were comments from double-income young people who wanted to buy their first home but felt that affordable housing drives up the cost of entry-level market housing.

The council voted unanimously to allow an additional six months of study and outreach on this topic.  Please take advantage of this opportunity to share your opinions and ideas regarding inclusionary housing.

Is there a moral responsibility for all cities to provide affordable housing?

Does San Jose have a larger responsibility then other cities since we have more land?

Should affordable housing be citywide or in certain areas?

Should we target affordable housing to certain groups? Seniors? Occupations like teaching and public safety?

Has San Jose done enough for affordable housing and now it’s time for other cities to step up to the plate?

38 Comments

  1. Pierluigi,

    Adding to the housing stock, especially inclusionary housing, is an admirable goal.  I do have one thought about the issue – will we first ensure that we have sufficient water for the new residents?  Or will we turn a blind eye to the water shortage and just hope it goes away?

  2. The only real solution to housing and income disparity is for San Jose to embrace Communism.  San Jose must become a leader in equality, brotherhood and peace.  Although, Communism has had a poor track record in Cuba, North Korea and the old Soviet Union, through American know-how and hard work we can make Communism work.  Let each San Josean have the same income, whether you are a teacher, lawyer, engineer, restaurant worker or bus driver.  Every person in San Jose should make no more or no less than 51,237 dollars per year.

  3. > “IS there a moral responsibility for all cities to provide affordable housing?”

    NO!

    There are plenty of reasons to consider affordable housing without inviting the Vatican and the Dalai Lama into this discussion. If we want to support the entry-level positions needed to make companies work, police, teachers, firefighters, etc. then they need options; it is an economics issue, not philosophical.

    Get into morality, and you get answers like George’s.

    I fall into that category of ‘two income young people’ that really relishes the idea of spending 34% of our incomes on a townhome just to see 500 ultra-dense Hormel apartments go in next door. I recommend usable and affordable public transportation between San Jose and Gilroy.

  4. If anyone is interested in affordable housing then they should look at East San Jose.  There are lots of good homes with large lots on tree-lined streets currently up for sale.

    This is a perfect location for singles and childless couples to get started in the housing market.  By being located at the intersection of 101 and 280, commutes are relatively painless.  It sure beats driving to Gilroy or the Central Valley for the same priced home.

    Help rebuild East San Jose and make society a better place.

  5. I know you have a loving heart Pier and you’ll vote to make affordable housing happen. Of that I have no doubt. 
    Yes, the City does have not only a moral obligation, but also a humane responsibility to build more affordable housing for low-income workers, the elderly, and disabled. They do jobs that don’t pay as well as they should and can’t afford these outrageous home prices. And the disabled, retired, or fixed income folks don’t have the income to qualify or afford these huge monthly payments. No one can afford the property taxes, etc., whether they have a good income or not. 
    The reason San Jose is so far behind other cities on affordable housing is because San Jose caters to Labor and Developers far too much. Developers have a nasty habit of getting low interest loans to build, and then they make it difficult to get into their supposed low-income units.
    The original rent control ordinance has been so deluted and destroyed that it is a joke. Homeowners who have lost their homes are now filling the rental market, and SOME, NOT ALL, greedy landlords, and property management companies are ready and waiting to gouge them nicely. Landlords are charging people for water, garbage, sewer, and an extra $50.00 a month, per pet, pet rent, on top of expensive rents, security deposits, and first and last month rents. Renters or I should say very few renters, no longer can claim or get Renter’s Credit on their taxes thanks to Wilson. And you guys wonder why no one can live here.

  6. PO:

    The truth about Inclusionary Zoning (IZ) is that it does not promote home ownership.  The truth is that you really don’t own your home.  The reason is that you have to restrict the sale price and sell to another low income family.  So even though you are in the home, it is deed restricted to be for low income forever.  So why bother upgrading the appliances, putting in wood floors, keeping the front and back yards nice if you are not going to see the fruit of your labors? 

    IZ is also intellectually unjustifiable…its pure take from someone else to give to the poor.  There have been numerous studies done and most other bay area cities have adopted it, like Mountain View, Palo Also, Sunnyvale, San Francisco, etc.  Those are some of the most unaffordable places to live so it has had no real impact.  In fact, Sunnyvale has had an IZ ordinance for aprox. 30 years.  Theirs was had a ton of fraud.

    San Jose State did a study that found all kinds of problems with IZ. 

    The weak thing would be to adopt IZ because everyone else does it.  The smart thing would be to not adopt it because of all the problems.

  7. Pierluigi:

    I would recomend that the county government take over all housing departments and projects.  All cities within the county should contribute to these programs on an equal basis.  The City of San Jose could effectively “write a check” to the county government each year and reassign housing dept employees.  Consider: why are the housing depts for every city?…put it all under one umbrella…there would be more money to spend on programs rather than bureacrats.

    Pete Campbell

  8. A usage tax (fee?) should be levied on CH politicians and staff for each utterance of the word ‘tax’.  Unless of course ‘tax’ is immediately followed by the word ‘cut’, as in ‘tax cut’.

    tax cut;  noun;  the act of reducing taxation

    I know this is a complete stretch, but has San Jose ever considered actually competing with other municipalities to attract business?

    You know, by doing things like reducing the costs of doing business in San Jose?

    I think it’s been shown once or twice that reducing taxes actually *increases* tax revenues.

  9. Inclusionary housing or zoning will add $$$ thousands to US’s highest housing prices so that many 2 income households can not afford to buy condo or house in San Jose giving our most productive people bad choices – rent, move out of area or state for jobs and housing,  or long car commute to work

    Our children and grandchildren will not be living in San Jose because most will not be able to get jobs paying enough to afford homes while businesses will move more jobs to other cities, states and counties

  10. What came first, the government getting into the low-income housing business or the decline in real wages experienced by low-wage earners? If we are going to justify providing housing and health care for a particular class of workers in the name of compassion, then shouldn’t our first step be to inquire at what starvation-level their employers plan to set wages? That way we can better prepare for exactly how much money the government is going to forcibly remove from the wallets of one class of people, stupid taxpayers, so that it can provide a basic standard of living for another class of people, unskilled workers, in order that a third class of people, business owners, can be free from the effect that supply and demand have on hourly wages.

    This is nuts! The socialist virus has so infected our culture that we’ve been rendered blind to its crippling impact. Wages are low because there are workers, many of them here illegally, willing to exchange their labor for a low wage. Remove that undermining element from the picture and employers will be forced to adapt or forced out of business. If busboys and dishwashers and production workers made a better wage then you just might see the return of the kid next door, the undergraduate, and the moonlighter to those labor markets. And if some businesses go under, so be it. Why should we worry about losing a business whose bottom line was built around government-subsidized workers?

    That cheap labor that’s here is competing for low-rent housing and driving up rents. Get rid of them and see what happens when property owners have to start competing to fill their buildings. Allow the market to work and the people in those apartments will be paying less rent and making better wages. And haven’t those always been the first steps towards saving for a future home?

  11. I believe San Jose in it`s housing boom has left out two groups; (1) housing for students coming out of college with student loans looking for jobs in the high tec industry (2) housing for those in the lower paying jobs.

      With the new jobs coming downtown for those students, graduating from college, housing is needed for them, close to work or near the light rail. Gas prices going to $4dollars this summer. In addition student loan obligations and other living cost make it difficult for these young professionals to work and live in San Jose.

      Families working in the less skilled, lower paying jobs like in the foodservice and hospitality industry and other industries are finding it difficult housing close to work. These people rely on ground transportation in buses, light rail, walking or taking bikes to work. The hotels and restaurants in our newly developed downtown need these workers.When you talk to the employeers you will get a sense of this need.

      Double income young people complain about apartments with only one parking space allowed. This forces them to look for street parking (Cahil Station).

      Most of the Jobs for these two groups are here in San Jose, Sunnyvale,Mt. View, Palo Alto and all of our freeways ( 101,85,280, 87) are grid locked. With the current housing boom, these four freeways are going to get worse as housing fills out.

      Other Santa Clara County Cities can help out by building housing too for these two groups.

      The other serious problem is VTA seems to be out of touch when it comes to our transportation needs. We need to supply affordable transportation “soon” to move these people to there jobs along the same routes these four freeways cover here in San Jose and Santa Clara County. All we here from the VTA Exec.`s is plans to build BART to the east bay cities when the jobs are right here.

      Our Children grow up here, go on to college and can`t afford to return and live here. The City Council and City Planners need to focus on this problem.

  12. Socialist Virus Infects America?

    Socialism is a system in which the state owns the means of production (capital) and operates it for the benefit of the whole society. This is different from capitalism, a system in which capitalists own the capital and operate it to enrich themselves.

    Nearly all enterprises in the United States of America are privately-owned. Capitalists use their accumulation of wealth to pressure the government into operating most publicly owned capital, such as our dams an our forests, in such a way that they benefit the capitalists from the burden borne by ordinary Americans. Others that are not subject to such intense pressure from capitalists, such as municipal utilities, provide better service at lower costs to ordinary people because there is no profit motive.

    No politician or prominent citizen is calling for the socialization of any capital property. No workers are attempting to syndicalize their workplaces with the intent of turning them over to the state. Where is the virus?

    To answer your original question, what came first was the owners of capital paying laborers starvation wages. Then came the organization of labor and then, after years of attempting to destroy the movement, came government regulation of first workplace conditions and then the economy. Government leaving entrepreneurship in the hands of the capitalists while heavily regulating markets, the monetary system, banking, and supporting organized labor resulted in the greatest prosperity the world has ever known. The destruction of this system in the 1980’s saw the looting of America and its people.

    So yeah, making developers reserve 15% of units for people of moderate incomes (80% to 120% of the median household income in the valley) is a good idea. The argument that it makes the rest of the units less affordable is not empty. The difference between $800,000 and $840,000 is meaningless. It is better to have 15% of new units be affordable than 0%. And, the capitalist still accumulates wealth.

    “Everyone is a Keynesian.” -Richard M. Nixon

  13. Left out of all of this is that inclusionary zoning doesn’t work. 

    As a county, we have about 200,000 more jobs than we have employed residents.  That means there are about 130,000 more families than available homes.

    You can designate 5%, 10%, or 99% as affordable.  It doesn’t matter.  If there are not enough homes, then there are not enough homes. 

    At the end of the day, 130,000 families will not be able to afford a home.  The problem is exactly the same size as it would be without IZ.

  14. $$$$$$$

    That was a swell definition of socialism. Having you explain how the government’s taking “capital” from the group I referred to as stupid taxpayers in order to give it (read “benefit”) low-wage earners is not a form of socialism is comforting. If I recall correctly, our nation spends over five-hundred billion tax-dollars a year providing benefits to people based on nothing more than income thresholds. But now that I’ve been educated that this is not a form of socialism, I need to find a new name for it. I’m considering “magic money,” since it magically disappears from one person’s pocket and magically appears in another’s.

    I feel much better. You have a real gift. Were you a physician, I’m sure you’d comfort a patient bleeding from an open artery by providing him with a precise definition of exsanguination and the assurance that, due to the absence of a required condition (death), exsanguination is clearly nothing to worry about.

  15. Greg

    Got lost in your numbers and how they relate to each other, please explain   Where are your numbers from?

    County has 200.000 more jobs than employed residents –    Got that, so people from other counties commute to Santa Clara County mostly by car since VTA and public transit from other counties does not go quickly or easily between where people live and work  

    1 – Why does county not have sufficient housing for jobs?
    2-  Most people, businesses and city governments do not want to restrict jobs so what is solution to housing / jobs imbalance?  Sound like better public transit to / from county and inside county is part of solution to move people from other counties to jobs except VTA is grossly inefficient and other counties won’t cooperate?
    3-  How does having 200,000 more jobs equal 130,000 more families than available homes?  Is there jobs to resident / homes number or what ? 

    4-  You talk about people from outside county but inclusionary zoning is for people living in county unless you mean with more affordable housing out of county people will move to county from another counties and since someone has to pay housing prices will go up for market rate housing making more people unable to afford market rate housing and needing more affordable housing

    5 – Most county cites restrict hosuing especially low income and affordable so how can San Jose afford to provide county affordable housing when has budget deficit and poor streets and limited services now Wouldn’t San Jose’s budget deficit, streets and limited services get worst while other cities do better?

    6-  Why doesn’t inclusionary zoning work overall or for 1 poor city in rich region?

  16. 1- The county doesn’t have sufficient housing for jobs because the smaller cities have not allowed it.  They have used zoning to encourage multi story office parks while discouraging multi story housing.  That gives you a lot of jobs and not many homes. 

    2-  Better transit sounds great, but it isn’t realisitic.  I don’t know of any wealthy area in the nation that has our densities and over 10% transit usage. 

    3- Many, but not all, homes have more than one worker.  Most studies around here assume about 1.5 or 1.6 workers per home.  That works out to 130K homes for 200K workers.

    4- The net in-commute is my measure of the housing shortage.  It’s a structural imbalance between the number of cubicles and the number of beds.  And prices have to rise until 200,000 people give up on living here.  That’s what keeps housing unaffordable.

    5- I’m advocating market rate housing, which pays much higher taxes.  I also think that stricter housing requirement should be enforced on the smaller cities.

    6- All the cities are in the same market, and that market lacks adequate housing.  The housing shortage created by the smaller cities will still drive prices up on every non-subsidized home.  As before, those prices have to rise until 200,000 people leave.

  17. #8 Jeff

    I missed your counter balance viewpoint on the SJ HAC after you moved to WA.  My term ending in January 2007 and I chose not to volunteer for a 2nd term so I could spend more time with family.

    Heres a factual correction though:

    One City that does Inclusionary Ownership Housing right is Santa Clara. 

    In 2006, it revamped its Inclusionary Policies for its Below Market Purchase housing program to make it more market and buyer friendly.  It has been so successful since implementation that the program was just presented to the CA Chapter of the American Planning Association statewide conference held here in SJ in October. 

    On the panel to recommend the Santa Clara program and its market approach to city planners statewide were Charles Mckeag, VP of Development for Citation Homes, and Jonel Jackson, Regional Build Manager for First Horizon Home Loans.  Both of these panelist are affiliated with the Northern CA Homebuilders Association.  Also on the panel, was Ed Moncrief, CEO of Neighborhood Housing Services Silicon Valley, a local non-profit housing adocate & lender assisting First Time Home Buyers, many of whom have been the hard working folks written about in some of the postings.

    A copy of the October presentation can be found on the City of Santa Clara website under the Housing and Community Services Division website of its Planning & Inspection Department.

  18. Erwin:

    Thanks for the information on the Mission City.  I’ve not had the benefit of reading it yet so I’ll reserve judgment until I do so.  Glad to hear you are still at the HAC and bringing your solid experience to the forefront. 

    I do, however, still believe that IZ is indefensible as a just policy and favor open markets.  I cannot think of any industry or product that has benefited from government manipulation whether its gas, IZ or rent control. 

    I think Greg Perry does a much better justification than I am able to do for open markets. 

    Jeff Dennison

  19. Only designated individuals may officially speak for the Santa Clara County Association of REALTORS®, otherwise known as “THE local Realtor Association”. The individual who posted the response under the title “your local Realtor Association” does not carry the authority to speak on behalf of the Santa Clara County Association of REALTORS®, which is the only local REALTOR® association for San Jose. The comments made by this individual, who has refused to reveal their identity, are those of that particular individual and DO NOT reflect the position of the Santa Clara County Association of REALTORS®.

    Furthermore, his advocacy for a certain demographic of the population is inappropriate. Affordable housing is a need for all, whether they are single, a couple, a family, senior citizens, etc. As a REALTOR®, it is also inappropriate to be advocating for one region over another. It is the duty of a REALTOR® to best serve their client’s needs not their own.

  20. Why are we wasting our time on IZ. We need to starting building infrastructure on the hills to support our population when the valley completely floods over from rising ocean levels as a result of global warming. All the added housing on the hills might also help the affordable housing crisis…..Food for thought….

  21. I think we need to have 100% inclusionary zoning.  No one should have to pay for a roof over there heads.  In fact I don’t thins inclusionary zoning doesn’t goes far enough. Housing for all.

  22. #22-

    Local groups lobbied me when Mountain View was allocating their housing funds.

    The apartment association thought we should subsidize rents.  Realtors thought we should subsidize home sales.  (Though I think it was SILVAR®, not SCCAR®)  Construction nonprofits thought we should subsidize nonprofit home construction.

    It’s not surprising.  You get a sense of who the real beneficiaries are.

  23. Global warming is bs.  But I do agree with ManBearPig’s comment about more homes on the hills.  More housing equals more affordable housing.

  24. What is in a name ??

      “BART to San Jose”  or” BART from San Jose to the East Bay”

        “BART to San Jose” implies that the east bay cities of Alameda County are building a rail system to the San Jose Market.

        BART to the East Bay from San Jose implies that San Jose is building a rail system to the east bay.

        The truth of the matter is in both cases San Jose and Santa Clara County tax payers are building a rail to the east bay for mostly the benefit of the east bay cities.

        “Housing” IZ or any other type of new housing is going to bring our city to a hault real soon if we don`t solve our traffic flow problems in San Jose first.

        Pierluigi I have a question for both you and Norman Kline, “What do you really believe is the best use of our transit dollars”?
        Build a excellent rapid system in all of Santa Clara County that will benefit all local residents. Or, build and pay for a system that will benefit the East Bay Cities at no cost to Alameda County taxpayers?

        The way it looks like our leaders are recomending us is,” we (San Jose and Santa Clara County cities) should build and pay for 100% of the cost of this system. Why ?

        I`d like to hear your opinions !

  25. We do not have tax money for both transit systems so taxpayers who will pay for transit need to have choice to pick best public transit system that will benefit Santa Clara County residents and businesses  

    Hint – It is not BART to East Bay or another North First Street trolley line where most people chose to drive rather than take slooow billion dollar trolley transit

    We need high speed dedicated track light rail like on Highway 87 all over county – 30 minutes or less across entire county from any place

  26. The good thing about public transportation is you don’t need a car to take it. The bad thing is it costs money, it should be free for all before is should be called “public”, I’m sure they don’t charge people in China…

  27. Transit Choice for a better name ?
      Ok, I agree with you to a point, but,“from any place”.

      My question,” should San Jose and Santa Clara County taxpayers pay billions for a system that benefits Alameda County?

      If the taxpayers were told the truth about the benefits to Alameda County vs. Santa Clara County, do you believe they would vote for a slow system, “BART” that would benefit Alameda County?

      The Merc is grossly understating the cost for this System and there numbers are very inconsistant when you go online and read publications from the Merc and the Chronicle over the past 8 years. The numbers $$ haven`t been brought up to date.

        The changes to the system since 2000, that have been added to the system since 2000, and have raised the cost have not been disclosed either.

        “High Speed dedicated track”, the plan only calls for “one’’ rail track to bring thre rail to San Jose. To have a high speed track you need three tracks, one north, one south, each stopping at each and every station, and an express track dedicated for high speed, just like Caltrain has. Again this has not been disclosed. Why not??? Can you imagine how much an underground tunnel would cost to San Jose, wide enough to handle “three tracks”.

      If San Jose and Santa Clara County taxpayers are going to pay for it, “then it`s from San Jose to the East Bay”, no sense.

  28. #31
      I`m for rapid transit, please understand me.
      I believe we need a high speed light rail along the 237 corridor from Milpitas to Sunnyvale. There is room.

      I believe we need a high speed light rail on Hwy 85 from Santa Teresa to Shoreline business park in Mountian View.There is room.

      I believe we should have a High Speed light rail along hwy 87 too from hwy 85 to downtown San Jose and onto north San Jose.

        The real problem is none of these choices have been given to the citizens of San Jose and santa clara County.

      Special interest groups don`t want to see us vote on one of four choices. They want to continue urban spral up the East Bay. They have their reasons.

  29. #27

    Coincidentally, we were discussing this very subject with our ace non-Realtors and non-climatologists, BearPigMan, PigBearMan, and ManPigBear, and none agree with ManBearPig. 

    While Global Warming is occuring, and will get worse before it gets better, we feel that buying homes in the hills for lake front property is not a good idea.

  30. #21 Santa Clara County Association of REALTORS®

    It is the duty of a REALTOR® to best serve their client’s needs not their own.

    Did any of your Realtors sell homes, and pocket nice commission checks, to individuals who the Realtor knew would not be able to make the payments? 

    Or was that all the work of unscrupulous Realtors who do not belong to “THE local Realtor Association”?

  31. Pierluigi are you out there ??

      I think some of us that have a lot of respect for you wish you would join in with us on this discussion.

        Come on in the water is fine.