As economic uncertainty looms in the state and the rest of the country, San Jose is looking to expand a multifamily housing incentive program that cuts fees and taxes — an initiative that has proved successful in getting more shovels in the ground this year.
Related Articles
Big luxury apartment complex at Santana Row in San Jose is bought Signia by Hilton San Jose seized by lender as lodging woes widen Pleasanton hotel engulfed in massive nationwide default is bought South Bay apartment complexes bought for more than $240 million Dozens of homes proposed for San Jose site in Alviso districtSan Jose approved the program in December after the city experienced a precipitous drop in market-rate multifamily housing development last year due to high interest rates and construction costs. The initiative waived in-lieu fees and 50% of construction taxes for the first 1,500 units of projects in designated growth areas that had submitted complete applications by June 2022 and received a building permit by the end of December 2025.
However, based on developer interest and several hundred units already breaking ground due to the incentives, the city will expand the number of units eligible to 1,800, as it could kickstart a handful of more projects.
“It’s really exciting to see these projects really come forward (and) that was the intent of the incentives we provided,” Vice Mayor Pam Foley said. “We have provided incentives before and nothing happened, but this incentive seems to have really triggered some movement in the development world.”
San Jose has struggled to start new market-rate multifamily projects of more than 20 units over the past few years — averaging about one per year. But last year set a new definition for futility as development crashed to a screeching halt despite a long list of projects waiting in the wings for economic conditions to improve.
The lack of housing development has particularly set San Jose behind in meeting its Regional Housing Needs Allocation, which requires the city to plan for 62,200 new units by 2031, which equates to adding an average of 7,775 units per year. Adding to the concerns of housing advocates and city officials, data showed that the city permitted about 2,666 units last year.
Recognizing the need to adapt to market conditions, the city also extended its downtown high-rise program, which waived some taxes and fees to help projects progress. Earlier this year, building officials approved permits for the construction of the Gateway Tower project in the city’s SoFA District, which will bring 220 units and thousands of feet of ground-floor commercial space.
When the city conceived the multifamily incentive program, it found 35 projects that could be eligible for the discounts.
Along with providing financial incentives for projects that get their permits this year, the program offered a 25% reduction in those taxes for up to 8,539 units of eligible projects starting in 2026.
The Hanover Co.’s 345-unit development at 905 N. Capitol Ave., which received $4.9 million in reductions, was the first project to take advantage of the program a few months ago and noted that it would not have been able to move forward with the incentives.
On Tuesday, the City Council also approved waivers for The Aquino, an eight-story, 278-unit apartment building developed by Urban Catalyst at 498 W. San Carlos St.. That project will receive approximately $4.07 million in fee and tax waivers.
“This is an opportunity to add more stock and not do it in a way where we’re saying yes to something we don’t know that is going to happen,” said District 6 Councilmember Michael Mulcahy, who represents the area.
Mike Walsh, the project director at Urban Catalyst, has assured the city that the developer was ready to move forward with construction, estimating that it would break ground on the project in about 75-90 days.
The city also has decided to add Federal Realty’s Santana Row Lot 12 development at 358 Hatton St. – which has long been targeted for significant development – to the list of projects eligible for the incentives. The Santana Row project proposes up to 258 market-rate units.
Senior Vice President Patrick McMahon said the project hopes to progress within 60 days.
McMahon also emphasized the efficacy of the incentive program and how much of a game-changer it will be for developers.
“This program is the difference between the drawings sitting on a shelf in our office for the foreseeable future and moving forward this summer,” McMahon said.
Read More Details
Finally We wish PressBee provided you with enough information of ( San Jose incentive program spurs multifamily development despite the economic challenges )
Also on site :
- Children evacuated from Swindon school after threats of ‘suspicious package’
- Patrick Mahomes says ‘cut the cameras’ in emotional locker room scenes as new Kansas City Chiefs doc trailer is released
- Anna Camp's Instagram Story about Jade Whipkey Sparks Dating Buzz