A residential area in San Jose, California, is pictured.
Marcio Jose Sanchez/AP

The city has an ambitious plan to build more homes, but it’s not set up for success just yet.

As the affordability crisis deepens in America’s most expensive cities, many are adopting ambitious plans to increase their housing supply. New York City Mayor Bill De Blasio has pledged to create or preserve 200,000 units of affordable housing, following the 165,000 preserved and created by his predecessor, Michael Bloomberg. Seattle has completed or begun construction on more apartments in the 2010s than in all of the previous 50 years combined. Even the notoriously growth-averse Bay Area has made some major strides: In 2011 San Jose committed to creating 120,000 new units of market rate and affordable housing by 2040.

Whether San Jose can actually build these homes is another question. A new report by the Bay Area urban planning think tank SPUR says San Jose’s land use rules may keep the city from meeting its ambitious housing goals—and that would have broader economic impacts that the city can’t afford. In response, the think tank suggests a number of policy changes, including updating the city’s zoning code, doing away with outmoded auto-centric regulations, and hiring more long-term planners.

“The economy is at a point where we cannot grow anymore,” says Teresa Alvarado, Executive Director of SPUR San Jose. “We’re going to impede our opportunity for growth and economic prosperity if we’re not providing housing options.”

The Bay Area’s already severe housing crunch has only gotten worse throughout the tech boom. Between 2010 and 2015, Santa Clara County, where San Jose is located, added 171,000 jobs and 29,000 housing units. The Bay Area as a whole performed even worse, adding 546,000 jobs but only 62,600 housing units, according to the report.

Jobs and housing units added in Bay Area counties between 2010 and 2015 (SPUR)

San Jose is actually ahead of the curve, producing more housing than many neighboring cities, but it’s still far short of what it needs in order to keep up with job growth. This problem is likely to only grow more acute in coming years, as tech companies like Adobe and Google open up massive new facilities in the city.

While the city has done a good job paving the way for transit-oriented job growth, a number of policy roadblocks will make it difficult to produce the necessary amount of housing in these areas, the report says. For instance, many of the areas designated as “transit villages” in the city’s general plan haven’t actually been rezoned for higher density. This means developers often need to apply for zoning exemptions to build what the city has already mandated. Rezoning would also protect these projects from burdensome NIMBY lawsuits.

The villages are organized into three phases of development, which dictate when housing can be built in each one. Notably, commercial development is not subject to the same rule. The idea is to provide a buffer for future transit and infrastructure improvements in these areas, but SPUR argues the city should allow new housing construction in all the villages right away. That would provide an incentive to get infrastructure projects done faster, and establish a critical mass of riders who will be ready to use transit when it comes online.  

The report makes a number of suggestions as to how the city can accelerate the production of below-market-rate housing, ranging from new taxes on high-end real estate transactions, to expedited approvals for 100 percent affordable developments. With the federal government likely to cut funding to affordable housing efforts, cities will have to get creative. One idea is to build more housing that’s affordable by design. That would include eliminating parking minimums, allowing developers and renters to save space and money that would otherwise go toward costly parking spaces. Anticipating a future of self-driving cars, garages that are built should be easily convertible to other uses, which some forward-looking new constructions have already begun doing. Finally, tying impact fees to square footage, rather than the number of units in a new development, will encourage developers to build smaller, cheaper units.

A new affordable housing development in San Jose that was made possible by federal funds (SPUR/ Bernard Andre)

Many of the incongruities in San Jose’s housing plan may stem from its dearth of long-term planners: It currently has fewer per capita than any other large city in California, according to SPUR. Thinking strategically about the city’s future will be essential as it prepares for a number of transformative projects, like the extension of BART to San Jose, California high-speed rail, and the massive new Google campus west of downtown.

The proposed Google project, in particular, which could bring as many as 20,000 new jobs to San Jose, “puts some more urgency behind the housing the city intends to build,” says Laura Tolkoff, SPUR San Jose Policy Director. But San Jose is far from alone in these problems. The report concludes by urging other Bay Area cities to adopt similarly visionary housing plans, buttressed by the proper policy framework.

For cities across the country, this report serves as a reminder that in order to solve our housing and transportation woes, future plans should get rid of the policies that helped cause them in the first place.

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