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.