How S.J. should approach complex housing issues
Amid the complexity that afflicts our lives, some problems have a simple cause. Take our housing crisis: Since 2010, the Bay Area added jobs at a rate at about five times the rate of construction of new housing units. Now, in the words of many, the “rent’s too damn high.”
Yet this malady elicits many more strong opinions than easy solutions. The suffering of our many homeless, displaced, overcrowded, and rent-burdened residents has intensified the urgency for action, but sharply differing views about that action emerge: community advocates urge more tenant protections, builders push expansion of housing supply, and affordable housing proponents encourage more subsidized construction.
All are right — but none completely. Confronting our crisis requires adopting several approaches, but with eyes wide open to the limitations of each.
At City Council meetings, we most frequently hear advocacy for tenant protection. So, we’ve adopted measures requiring “just cause” for evictions, tightening rent controls, implementing a rent registry, and approving Ellis Act protections (which restrict the redevelopment of rent-controlled apartments). While helpful, they have limited impact; since the council approved Ellis Act protections two years ago, they’ve assisted eight families facing eviction annually. In contrast, 8,903 evictions in San Jose in 2018 resulted from tenants’ inability to pay rent, amounting to 96% of cases where eviction protections can do little. Tenant protections can also conflict with other affordability goals; Ellis Act restrictions, for example, prevented one builder from replacing four rent-controlled apartments with 28 rent-controlled units within a 290-apartment downtown tower. After recognizing that the tail was wagging the dog, City Council loosened the rules in October.
Home builders urge that we’d do better by building more housing to reduce rents. They’re also right; insufficient marketrate inventory has tech professionals out-bidding struggling neighbors for older housing stock.
Yet market-rate housing construction faces an important obstacle: development costs. Two independent studies concluded that high construction costs prevent San Jose prevents homebuilders from getting financing. This barrier has become particularly acute with high-density construction, explaining why no residential tower has broken ground in downtown San Jose in more than two years. In response, we’ve liberalized building codes to facilitate cost-effective innovations — such as prefabricated and modular construction, co-living, and microhousing — and we’ve reduced city fees and taxes.
Land comprises a key determinant of development cost, so using land more efficiently can help. Boosting densities and rezoning have enabled tens of thousands more units of capacity in San Jose’s urban villages and downtown, and we’ll ease limits in many single-family neighborhoods near transit. By streamlining approvals and reducing fees, we’re enabling construction of more backyard homes in 2019 than in four prior years combined.
Yet a boom of market-rate construction — while helpful — won’t house our homeless neighbors, nor will it serve many of our teachers, paramedics, nurses, or other essential workers. Making their rent affordable requires funding.
In California, redevelopment agencies traditionally funded the lion’s share of subsidized affordable housing — $40 million annually in San Jose alone. The state eliminated the program a decade ago, however. Neither the countywide Measure A, nor the sizable philanthropic commitments from tech companies — all time-limited sources spread across many cities — fill the resulting gap of ongoing funding.
We need more local resources. Working with a community coalition led by Sv@home, we seek to restore San Jose’s affordable housing funding with Measure E in March. The council recently approved a first-year spending plan that would dedicate all of Measure E’s anticipated $50 million in annual general fund revenue to affordable housing and homelessness solutions. To pay for it, Measure E would increase transaction fees on property sales worth more than $2 million — exempting 98% of San Jose’s homeowners. A citizens’ oversight committee, public hearings on spending, and other procedural guardrails will provide voters confidence and transparency about the use of the funds.
No one remedy will solve our housing crisis. We need multiple approaches to get traction, including tenant protections, housing supply, and an ongoing source of funding. In the year ahead, we’ll work with the community to implement all of these tools to better meet the urgent needs of San Jose’s many struggling families.