San Jose has spent approximately $1 billion on affordable housing, which has produced tens of thousands of units being built within our city limits. The city has always done more than its fair share in this area. In fact, San Jose has carried the region—to its own economic detriment—by shouldering most of the affordable housing needs, resulting in fewer jobs.
This is important, because San Jose should not repeat past mistakes when it comes to future affordable housing decisions. City residents would be better served if we focused instead on commercial development and higher density market rate housing—both of which contribute to San Jose’s revenue, as neither are typically exempted from paying taxes and fees.
In my view, the goal of most past and current members of the City Council has been “quantity instead of quality” in regards to affordable housing projects. The combination of special interest pressure and support pushed many elected officials to do whatever they could to provide the lion’s share of affordable housing for the entire region. Unfortunately, this mindset has led to the city sacrificing more than $100 million in foregone tax and fee revenue. I believe voters would not approve of these developments if they knew the revenue trade-offs and understood the methodology that is currently in place to determine that who actually occupies these housing units.
One would hope that, at a bare minimum, all this affordable housing would actually benefit San Jose residents. But this is only partially true, due to the fact that San Joseans are not given preferential treatment in terms of access to available units.
An illustrative example concerns affordable housing for seniors. When a new senior affordable housing complex opens, residents from any region may apply for the highly coveted units. Let’s assume that one candidate is a person who has lived in San Jose all their life and has contributed to San Jose in some meaningful way over the past several decades. The other candidate is a person who recently moved to San Jose from out of the area, perhaps even from out of the state or country. Both these individuals qualify for the unit in terms of their income level and age. Who should get the affordable housing unit? It would seem only fair that the long-time San Jose resident would ultimately get the spot, but this is not always the case. The answer, quite literally, is “luck of the draw,” as the result is determined via a random lottery.
While this method does level the playing field and give all applicants an equal chance, I feel the system is imperfect if it fails to take into account that the city of San Jose and its current residents sacrifice tax and fee revenue to subsidize new affordable housing. Each time residents support more affordable housing projects they are forgoing the kind of revenue-generation that can lead to the funding of police officer salaries, more paved roads and new parks.
Charity starts at home, and we should find a way to allocate the majority of new affordable housing units to “native” or at least current San Jose residents. This would be a small but significant step in the right direction. In politics, as in life, we are often confronted with tradeoffs: How can we best meet the needs of our citizenry and provide the services that residents rightfully demand while simultaneously working within budgetary confines? The answer is we must prioritize projects that generate revenue.
While there is no denying the fact that the need for affordable housing is great and compassion should affect policy decisions in this area, the best solution should always be governed by the realization that there are limits to what we can do as one city.
Pierluigi Oliverio is a councilmember for San Jose District 6.
Completely agree with everything you said Pierluigi!
The model of funding low income units that are owned and administered by nonprofits is flawed. If we want to add low income housing units, we should subsidize rents.
It’s the difference between fixed and variable costs. Once a nonprofit owns a property, it creates a perpetual drain on city resources without contributing tax revenues. On the other hand when times are lean we can reduce or eliminate rent subsidies.
Pierre if you care so much about the residents of San Jose especially the Elderly , Then why is Public Safety such a non priority for this incompetant Council ??
As a person who has been involved in the affordable housing industry for several years, I beg to differ with the statements made which imply that affordable housing residents do not contribute to San Jose’s revenue. The majority of people who live in affordable housing are either currently working citizens or are seniors who have worked in the past and are now retired. They have paid taxes in the past and/or currently pay taxes. They also spend their dollars locally, which generates tax revenue for the city. Some affordable housing properties have high calls for police service, just as some market rate properties do, but most affordable housing communities are filled with law-abiding citizens who work, pay rent, go to school, shop, pay taxes, etc. Affordable housing isn’t just about buildings; they are communities filled with good, hard working people who contribute to society in many different, invaluable ways.
That’s all well and good, but you’re ignoring the big questions. How much is too much, and how do we pay for what we already have.
San Jose would be better off with local senior CITIZENS occupying the typical D6 crime incubators currently set aside for criminals on parole and prop 36 flunkies.
Luigi, why don’t you try to illustrate the problems your district has because of places like 1800-2100 Evans Lane, 701 Curtner Ave, 1501 Almaden Ex, and that monstrosity that went up just south of 2nd Harvest food bank?
Concentrated Burglary rates on all streets in walking distance from those places? Coincidental? Go ahead, deny the obvious.
Remember the “Willow Glen Hot prowler?” He received free quarter at one of those places while helping himself to the contents of his “neighbors” homes many many times.
Have you managed to miss the freak show every time you drive your Prius through the intersection of Curtner/Canoas Garden?
Why haven’t you proposed converting some of these NO INCOME housing spots into market rate housing?! It works both ways you know, if you have the courage to go against the highly entitled guilt ridden constituents who share the same ostrich hole in the sand.
Polish up those Foster Grants and look at the real problems.
PLO, please do tell more to the tax-paying citizens of San Jose, who have seen their once prosperous and vibrant city turned into a cesspool, that one of the main reasons for the downward spiral is that subsidized housing is a bigger drain on City resources than ever disclosed.
I find it very alarming that these developments are typically exempted from paying taxes and fees, revenue to the City that pay for public improvements and public safety that are for the benefit of all citizens.
It is criminal that “…this mindset has led to the city sacrificing more than $100 million in foregone tax and fee revenue.” $100 Million Dollars?! There is a reason that these special interests keeping coming back for more and it’s because the Council is giving away the house.
That is revenue that was due to the City, but it was sacrificed for someone else’s greater good… developers that already get subsidies from many other sources. San Jose’s tax-paying and law-abiding citizens lose out.
These subsidized housing developments generate a high demand for public safety calls as well. Every future development, and current ones as well, must be assessed a perpetual annual fee to fully support the numerous public safety calls they will undeniably cause.
The value of property here in San Jose is based on several factors, not the least of which is its proximately to the job market, including one sector of the market that is desired worldwide. As evidence of this, workers pay a premium to live here, something that would not be true were the economy still based on agriculture (in which case residential property values might be thirty to forty percent of their current value).
Paying a premium to live somewhere is a concept familiar to millions of seniors, many of whom pay extra to live next to a golf course, near their grandchildren, behind a guarded gate. But proximity to the job market is not a big draw with the gray haired set, so few of those with the money to entertain options would pay extra to live here.
So why is taxpayer money being used to pay a premium price providing something to those who cannot pay that is considered a poor value to those who can? If the price of housing in San Jose makes it a deal-breaker to the well-to-do senior set, isn’t that proof enough of the absurdity of the city absorbing that premium for seniors of lesser means? San Jose is not a retirement village! Erecting subsidized senior housing near jobs is on par with locating a wheelchair community on a hillside. Absent subsidies, private enterprise is not going to invest in affordable senior housing here. Available property here should be respected for its premium value and made available to the most productive segments of our population—taxpaying residents and businesses. Then maybe someday this city can pay its bills!
Of course, accumulating Northern California’s largest population of elderly poor is just the kind of distinction that’s turned San Jose into a perennial punchline.
Remove subsidized housing and maybe a few more families will, after pricing local options, open up their homes to grandma. It’s not only a matter of decency and tradition, it has long been the law of the land.
KathyI speaks in defense of the “affordable housing industry” from a perspective (that of the proponent blinded by compassion) that was once recognized as just one of many perspectives but is today treated as if it stands alone in its legitimacy. It is a delusion that, given the seemingly endless and growing list of consecrated public responsibilities, is as understandable as it is destructive.
Despite the compassionate Left’s flexible embrace of expanded word definitions (marriage, choice, opportunity, etc.), its view of the words “needy” and “affordable” remains decidedly narrow. The “needy” are whoever they say they are, the determination based on criteria of their choosing (which now seems to include smart phones, official Raiders wear, and custom tire rims). In the case of affordable housing, neediness has been expanded to include the desire to live where one chooses, with little or no regard for the forces of the free market (which continues to dominate the lives of the less than needy). Even more remarkable is the fact that affordability is now treated as a financial factor effecting only the needy, with the abilities and needs of those footing the bill left ignored.
The question to be asked is a simple one: where does the taxpaying public’s right to basic services end and the needy’s right to taxpayer money begin? It is indisputable that basic services to San Jose residents have been drastically cut, impacting not only their safety, quality of life, and property values, but their city’s ability to compete for the jobs and revenues that come with commercial investment. Yet the giveaways continue, our population of the services-swallowing needy grows, and the only solution coming from city hall is for more taxes.
KathyI implies that, despite requiring our tax dollars, the needy really do pay their own way. Sorry, Sister, but that Kool-aid was already served with the illegal alien invasion, and we can’t afford another gulp.
The affordable housing industry has been driven by local progressive politicians’ inability to resist grabbing at any “free money” dangled before them.
Now, thanks to some measure of fiscal responsibility brought to us by Tea Party Republicans, sequester cuts may lead to a reduction in the federal block grants that the Department of Housing and Urban Development has used to bribe us into turning our City into something we don’t really want.
The only people who will be hurt by these cuts are those in the affordable housing division of Government Industries Inc..
Otherwise, the rest of us will be just fine.