Stay The Course: Jobs Before More Housing

Last week, the City Council voted to direct planning staff to explore how San Jose could build more housing in North San Jose (possibly even exceeding the cap which would go against the incremental plan laid about by the North San Jose vision). The vision for North San Jose has included some housing next to jobs so we could allow the opportunity for people to live close to their work while allowing for intensification of commercial and industrial that would allow San Jose to acquire more jobs which equal more revenues to pay for our core city services.

I blogged on the North San Jose plan back on April 30, 2007:
http://www.sanjoseinside.com/sji/blog/entries/taller_buildings_equal_bigger_parks_in_north_san_jose/

North San Jose is the Golden Goose of our Redevelopment Agency (RDA).  The tax increment financing that comes out of this area funds our Downtown projects, a community center in Edenvale, road paving for SNI areas and gang intervention programs, among others. When property is developed in this area and the assessed value rises, the RDA receives that extra money to provide for those items I listed above.

The North San Jose plan is mostly industrial land conversion. I have nervously voted yes to convert land there because there is a plan in place that limits the number of housing units by waiting for equal amounts of commercial development which equals job growth.  Its even more important to wait now that the economy has gone sour and job growth is retracting. Also, because the housing market is at it worst condition in the last 50 years, the 7,000 plus housing units we have approved may wait since they cannot get financing. (Yet, another reason to not mandate inclusionary affordable housing on Dec 9th when the housing industry is in a depression).

So here is the dilemma, in my opinion, there are others developers beyond the cap who would like to build housing now because they have financing. They want the council to allow for additional land to be converted from industrial to housing before the jobs come.

This is wrong.

San Jose always builds housing far and above any other Bay Area city. These decisions lead us be continually broke; and in my opinion have played a part in our current budget deficit. We need to be patient and wait for the job growth to happen. If we convert industrial land then San Jose’s greatest asset, tax generating land, is lost forever.  This is why I voted no on this item.  Instead, I would rather direct planning staff to find ways to increase revenue for the city.

Now remember my Golden Goose reference above?  When we develop land in an RDA zone, that added tax increment money goes to RDA to fund all those nice projects the community wants. Even if residential development is done in North San Jose it increases the value of the land and therefore money to RDA.  However, for example,  if we decide to allow 100% affordable housing projects that are done through a non-profit they pay no property tax. Therefore RDA receives nothing therefore less projects that residents want citywide. Plus affordable housing does not pay park fees or provide land for parks which is an important part of creating a livable community in North San Jose.

So we need to watch what we as a council approve because it has ramifications to financial well being for all of San Jose.

32 Comments

  1. You are so right.  There is a real estate rule: REAL ESTATE FOLLOWS EMPLOYMENT.
    For example, if a large factory were built in the Nevada desert and hired workers, soon
    housing would be built. 
    But if a large housing development were built in the Nevada desert,with no factory close very few people would buy them.

  2. Pierlugi,

    Please stay the course on this issue.  There is no excuse whatsoever for San Jose to dig itself even deeper into financial ruin. 

    For far too long, our fair city has been the affordable housing solution for Sunnyvale, Mountain View, Santa Clara and other communities.  Let them finally share in the costs of this undertaking.

  3. Pier,
    I agree that we need jobs first. But I have a question for you, with rents so high that few can afford them, where do you think low income working class people should live then? I asked you this once before and never received an answer.

  4. Kathleen,

    I don’t how Pier will answer but, from my quarter, I’d suggest Alameda County, particularly Hayward, San Leandro, Oakland and Fremont.  San Jose’s budget shortfall simply doesn’t allow us to intentionally worsen the problem.

  5. Pierluigi,

    Thanks for bringing light to this topic. I support your stance. We need a balance of jobs and housing and San Jose has always needed more jobs.

    Number 3

    Kathlen,

    There are 50 states and thousands of cities where anyone can live in this country. I do not expect each city to build affordable or market rate housing to meet a demand that is exponential. Nor should San Jose. People seem to have lived in high priced cities like New York, London and Tokyo of all income levels for centuries.  There will never be enough housing to satisfy everyone.

  6. Kathleen,
      Berryessa! More housing in Berryessa! Then more jobs in Warm Springs/Union City.Then more cuts in San Jose core city services like police and fire department,and Emergency Medical Services.

  7. Shouldn’t our future enhanced Diridon lure more jobs to the downtown core? Let’s hold off on that sprawly mess of the north and get the jobs to the transit centers. Then we don’t necessarily need the housing near the jobs because we’ll have better connections between them.

  8. I know that San Jose has provided more affordable housing than any other city, and I agree that that is not fair. (When I speak of affordable housing, I want to be clear that I mean RENTALS, not buying a home.) San Jose needs to start pressuring surrounding cities to help bear the load. 

    Kirkland said,
    “People seem to have lived in high priced cities like New York, London and Tokyo of all income levels for centuries.”

    Yes that is true, but you failed to mention that New York and other cities have rent controlled apartments and housing, and that is how many of these folks are able to live there. They also have much better public transit than we do.

    With all due respect, I think you guys are being naive about this. If I understand you, you are of the opinion that low-income working class folks should move an hour or more away from their jobs and families to commute here. Hum… Some of them don’t own a car. Public transit takes hours, and stops running after certain hours. How are these folks going to get home?

    Secondly you are forgetting about the elderly and disabled. Are you saying they should be taken a way from their family, friends, and a place where they grew up, and be shipped out to one of the other cities, or 50 States because it is cheaper to live there? Come on guys, you can trouble shoot better than that.

  9. Pierluigi,

    Why spend all that time making a plan and not following it? I could see if the plan was a decade old possibly but not a plan that was just completed. This was not in the mewspaper last week so thank you for sharing these topics again and again.

  10. 8 Kathy

    So how much is enough? I see apartments all over the place in my neighborhood much of it new. How much more should we provide?  People have free will to move wherever they want and it is not the responsibility of one city to build all the housing. Let other cities carry the weight by building housing as well.

    More importantly then this is stick with the plan and the jobs.

  11. #10- Please re-read my post. I already addressed some of what you are saying.

    You say you see lots of apartments, much of them new, do you know the amount of rent they are charging for them? Let me give you a clue, one bedrooms are going for $1,100.00 to $1,500 a month. Add on first and last months rent, plus a deposit equal to the rent, or sometimes more. (You can check Craig’s List to verify.) The rent is more in some cases if you add another person or a pet. Now do the math. If you earn minimum wage, or even $10.00 an hour, how are you going to afford that rent?

    Secondly, who is going to wash your car, bag your groceries, serve you tacos or fries if these low paying jobs don’t pay enough for these workers to live here? The situation is way more complex than affordable housing or no affordable housing. You can’t be an elitist and say only well off people can live in San Jose. And you can’t expect the City to keep giving tax breaks, and low cost loans to developers without them providing a portion of their RENTAL units to affordable housing.

  12. #8 Kathleen,

      We have a glut of housing in Santa Clara County.Bueatiful new Condo`s in Campbell,low down priced at #300, same in San Jose.
      Build jobs in San Jose. When the time is right, build housing in Union City,Warm Springs.Let the people in the Fremont area have a taste of what it`s like to pay for “core city services” without jobs.
      San Jose has more affordable housing than all other Santa Clara Counties combined.We need jobs and sales tax revenue to pay for core city services.

  13. #11

    Kathy,

    Yes Kathy I am an “elitist” renter who lives at a nice clean apartment complex on Winchester.I pay $1500 for a 2bdrm apt in a nice clean modern complex.

    Since you choose to call me “elitist” let me label you “confusing”. You admit that San Jose has built the most affordable housing yet you still want more.

    All those people quoting you, “to wash your car, bag your groceries, serve you tacos”
    Those people who do this work in every city and not just San Jose. So they should have a chance to live in every city not just San Jose.

    So again the question is how much is enough?
    Would you be happy with new apartments for 1,000 more people? 5,000 more people? 10,000 more people?

    Please share with us a number and why that many or that few please. It is easy to just sit and say more…but how much more? What financial consequence does more mean?

  14. “The vision for North San Jose has included some housing next to jobs so we could allow the opportunity for people to live close to their work”

    I appreciate the hedged wordsmithing of this statement since it seems to represents a more realistic view of housing development in North San Jose. Too often developers and City leaders have attempted to over-sell the concept of co-locating jobs and housing in North San Jose.

    People generally don’t choose a place to live based on their employer’s location like they did a generation ago. Jobs today are transient. If you’re in a technology job, you might be working in San Jose today and another city next year or a couple years down the road. People with children choose housing based on schools. Younger folks choose dynamic urban locations. The idea that you can balance housing and jobs in a limited geographic area seems like a stretch.

    It would be interesting to have some real numbers given the existing density of jobs and housing in the North First Street / Tasman area. How many of the folks living in that area today actually work in that zone? My personal experience in working with several North First area companies is that a very small percentage of people live and work within a couple miles of their jobs even though there are significant opportunities to do so.

    I think you can walk into any Silicon Valley tech company today and find the same result. People come from all directions, near and far, to their Silicon Valley tech jobs. More housing in North San Jose may present an “opportunity” for people to live close to their work but I suspect it will not meaningfully change the existing pattern.

    I suggest that there would be greater long term benefit if the City emphasized industrial and commercial zone intensification and left the housing element as a much lower priority for North San Jose.  By maintaining and intensifying industrial and commercial zones, clearer high volume commute patterns would emerge and public transit would have much higher utility. I also question what will happen when the next Cisco or Google comes along. Will there be enough land left in North San Jose for further large scale industrial development if the pace of industrial zoning converting to housing continues? It kind of left me with a sinking feeling to see all of those former JDSU buildings that used to employ hundreds of people coming down recently for housing.

  15. #13- Long Term Debt,
    I’ve seen rents for two bedrooms going for as high as $1,800.00- $2,000.00 a month. Congratulations on finding an apartment for that rent. May be you can post the name of your complex so that others can look into renting there.

    You said, “You admit that San Jose has built the most affordable housing yet you still want more.” No actually I did not say that. What I asked was, where are elderly, disabled, and low income hard working people supposed to live with rents as high as they are? I also maintain that cities other than San Jose need to be a part of the housing solution by creating affordable housing rentals like San Jose has.  And finally, I said that we don’t need more housing until we actually have jobs to offer people.  You might want to read my posts again.

    As to my calling people elitist for wanting to ship the elderly, the disabled, the newly unemployed folks, and low income workers out of the City or State because the cost to live here has risen so high, I plead guilty. Sadly those types of elitist attitudes of the less fortunate does not in any way address, nor solve the housing issue facing San Jose, but rather reflects a very inhumane way of viewing the problem.

    http://encarta.msn.com/dictionary_1861607960/elitism.html
    e·lit·ism [ i l tìzzəm, ay l tìzzəm ]
    Noun
    Definition: 
    1. Belief in concept of superiority: the belief that some people or things are inherently superior to others and deserve preeminence, preferential treatment, or higher rewards because of their superiority
    2. Belief in control by small group: the belief that government or control should be in the hands of a small group of privileged, wealthy, or intelligent people, or the active promotion of such a system
    3. Control by small group: government or control by a small, specially qualified, or privileged group.

    By the way, my name is Kathleen, not Kathy.

    #14- YYY,
    A lot of what you say is true, but I honestly think that people would rather live near their place of employment, rather than commute.

  16. #14 YYY

    The issue with the housing in North San Jose is the jobs in that area, as in other high-tech areas, are going to be mostly for H1-Bs.  Since H1-Bs are temporary workers they will not mind living near their job.

    However, American workers would, mostly, rather live in other locations per the reasons you described.  Thus they are more unreliable as workers since they can be stuck in commutes, or would like to spend evenings and weekends with their families.  Hence, CEOs would rather not hire American workers.

    This housing in North San Jose is just one more example of the greed exhibited by CEOs who do not want American workers.  They would rather give away the country to foreign temporary workers as long as the CEOs get their extravagant pay checks.

    The fact that the San Jose City Council is in bed with these CEOs to give away American jobs is outrageous.

  17. North San Jose is least dense area of all San Jose with many hundreds acres of poorly utilized park like campuses of old 1-2 story office buildings surrounded by open land and ground level parking lots

    We can easily add 10’s thousands of new jobs and hundreds of new medium and large companies if all new building are 10-12 story high rises with multistory parking garages like Google’s and other new tech offices

  18. YYY-

    How on earth can you claim that intensifying office space construction leads to high public transit use?  Especially along the long distance corridors?

    Palo Alto, Menlo Park, Milpitas, and Santa Clara all have very large amounts of office space.  If your theory were true, each of these cities would have an excellent long distance public transit system to serve their employer centers. 

    None of them do.  Look at the parking lots in those cities.  The long distance commuters drive, too.  And each one drives 50 miles each way instead of just 10.

    Building tons of office space and little housing will just create tons of long distance commuters, clogging the freeways until we look like LA. 

    The smaller cities already have done a lot to create a brown could over the whole valley.  If San Jose were to follow their lead, it would be twice as bad.

  19. If you have a pet, and complain about the additional cost of the pet added to your rent, you should give it away.  It is your financial choice to keep pet which affect your living conditions.

    Factor in the cost if the pet must take meds for diabetes or PTSD or another ailment. 

    Is this really a good decision to have a pet when when you haven’t factored in the financial impact?

  20. Question Pierluigi,
        I agree,more housing at this time means less money for “Core City Services”especially Police,Paramedics,Fire Fighters,Parks and libraries.
        Those that ask for more inclusionary housing for those in need of lower cost housing,forget that those same people value core city services.In times of emergency these people need Emergency Medical Response from our Fire Fighters/Paramedics.Need police in the neighborhoods to keep order, move out those dealing drugs to their children or recruiting the young to join their gangs while both parents are at work.These same people need parks and recreation facilities to keep their quality of life better in the neighborhoods. Libraries are needed with computer labs to help educate their children.The eldery and schools need quick response times from our Fire fighters/Paramedics when there is an emergency or a serious accident on our roadways.
        My question from you is how is the “Mayors Heart Safe City Program” coming along,is it being funded. I know the Mayor had the HSC program to be funded in the 2007 budget,what happened in 2008? Where is it in the 2009 budget? This program would reduce our response times.

  21. #21- Richard-
    Putting a roof over someone’s head should come before all else.

    So Pierluig, where do you think low income people shoiuld live?

  22. People of low income or any income should live wherever they wish in the state of California. Not sure why San Jose should continue to carry all the burden.

    Housing activists on this blog that preach more housing and more affordable housing in San Jose are doing all the other cities with jobs a favor.

    One person on this blog asked how many more apartments would be enough? However it appears there is no number to satisfy housing activists just more and more.

  23. People of low income can’t live wherever they wish in the state of California.  Prices are too high.

    That’s like telling a starving man he can eat anything he wants, but not offering any food.

    I can tell you how many apartments would be enough.  Santa Clara County needs about 150,000 additional homes/apartments to meet current needs. 

    And no, I do not believe they should all be in San Jose.  But I do believe that San Jose can do more, both with housing creation and with pressing the smaller cities to build enough homes to match their jobs.  San Jose has enough clout to get stricter requirements at ABAG and in state law, especially if they cooperate with Alameda County and the Central Valley.

  24. Christian,
      I don`t want to sound harsh but do you realy believe those who are pushing for inckusionary housing care for low income people.Look at the list of people in support of inclusionary housing, the names are the same people that pushed for BART.Is it an accident the inclusionary housing proposed zoning just has to be along the BART route.Don`t you think itmight have to do a little bit about having housing along the BART route so they can comply and recieve their federal portion of funding?
        Just how do you think these people are going to get from BART to their jobs around most of the county? The BART plan is to circle the bay, not service Santa Clara County.Light rail and buses bring them closer to their jobs.
        BART, well, just follow the money Christian.

  25. Greg,
        OK but why not build the inclusionary housing in southern Alameda County and bring the jobs to San Jose.San Jose is running out of money to cover core city services, and this is the problem when you have a housing inbalance.

        San Jose has been the leader in housing in the county.Let San Jose catch up with jobs. Just look at the empty hi-tech buildings in San Jose`s golden triangle. With the present economic condition, I don`t see those empty buildings filling up.If anything the inventory of empty buildings will probably increase in the future.

  26. Richard,
    You can cry about the need for jobs and “core services” all you want, but until the City of San Jose cuts the red tape, the amount of business fees and taxes to business, and starts making us a much more business friendly city, the jobs WILL NOT come. Why do you think other cities attract so many businesses? It is because they have an easier process and their policies are more business friendly to work with.

    Secondly, the former Mayor and Council made some really bad budget, and business decisions that we are still paying for, and will continue to pay for in the coming decades. People can’t be expected to live in the streets, under bridges, and in cars until the housing solution is resolved. Rent control is one answer, as well as the City of San Jose leaning on bordering cities to build low income, disabled, and senior housing. This is not an issue that is just going to go a way.

    Do you realize how many hard working people have been laid off, lost their homes, or BOTH in the past few months Richard? THOUSANDS in just San Jose alone. To expect them to move out of state, or to another city because you don’t want to provide for them is just plain heartless. My hope for you Richard, and Pier, and anyone else who doesn’t see this as serious, is that you NEVER have to experience that kind of hardship because clearly you aren’t in a position, or know someone who is, otherwise you wouldn’t be so compassionless toward others

  27. As I read everyones thoughts, I wonder when we are really going to discuss the true issues.

    We must stand up to the unions and say enough is enough. We must stop special interest. They are costing us way to much, which leads to less services and low quality support from the city.

    If the city and the unions want to be a business, then open the opportunities for ALL, not just the select few.

    How can we continue to have the union ask for more money, bigger pensions when we the tax payers are paying more for less?

    Once we do this we can balance a budget and truly manage the city to be as great as we would like.

    Dreaming BIG grin

  28. A while ago Kathleen asked Pier where he thought low income people should live if the city slows housing construction while speeding office space growth.

    I know it’s an awkward question, but it’s one that you sign up for when you run for city council.  I’d still like to hear his answer.

  29. A while ago Kathleen asked Pier where he thought low income people should live…

    Monte Sereno, Saratoga, Palo Alto, Los Altos Hills, Los Altos, Mountain View, Hillsborough, etc., anyplace other than San Jose.

    We currently have to many low income areas in this city, and all the problems that are associated with low income areas.  If anything, we need more high income residences, and all the benefits that come from high income homeowners.