SAN JOSE, CA - In a contentious meeting, San Jose took a first step Tuesday toward requiring developers to sell homes at below-market rates in an effort to boost affordable housing throughout the city. Developers and property owners have slammed the proposal, arguing that a requirement to build affordable housing would cut into their profits, stifle development when the economy is already weak and force builders to go elsewhere.
But San Jose City Councilman Sam Liccardo, who proposed the idea, said creating more affordable housing won't hurt developers as much as help the disadvantaged. "These are tough times undoubtedly for housing developers, but we also know these are tough times for people who need housing," Liccardo said. "But these hard times will change for housing developers. They are not going to change for the residents who need housing. "It will continue to be a place where teachers, health care workers, police officers, have difficulty living here and contributing to the community because of high housing costs."
After more study of the proposal, the council will formally vote on the matter this fall. If San Jose were to adopt the housing policy, officials would not be breaking new ground. One out of three jurisdictions in California already require developers to set aside up to 20 percent of their units to sell at below-market rates. In addition, the city already requires builders in redevelopment areas to set aside 20 percent of their market-rate projects for affordable housing or pay a fee to build such housing elsewhere. San Jose has built about 2,700 affordable units in redevelopment areas since 1980 and about 17,000 citywide.
Developers, real estate agents and other business groups argued that a mandatory citywide affordable housing policy goes too far. They felt ignored by city officials leading up to the meeting and asked to be included in future talks. The vote was 7-4 in favor of the proposal, with council members Pete Constant, Nancy Pyle, Dave Cortese and Pierluigi Oliverio in opposition. "We do have serious concerns," said Jody Hansen, spokeswoman for the San Jose Silicon Valley Chamber of Commerce. "This policy is likely to discourage new investment in this city. The council should not rush to adopt new policy until all the facts and consequences are on the table."
Arcadia Homes' Brad Durga said his company has been doing business in San Jose for 50 years. The economy is so bad, he said, that the company was forced to do its first layoffs last year. He said the housing policy would further thrash the development community. "This is a matter of survival for our industry," Durga said. "Any new fee, whether it is a park fee, a public works fee, especially a fee that has the magnitude of this, raises the question of can we afford to do this?"
But for some, the real question was not whether developers could afford to make less of a profit, but whether the working poor should have places to live. "We really have a responsibility to make sure that this is a place that we can not only be proud of, but also a place that engages every person," said Phaedra Ellis-Lamkins, executive director of the South Bay Labor Council.
Several social justice advocates contended that more affordable housing makes a broader statement about the city's values. "Today we have an opportunity to cut poverty in the city of San Jose and at the same time be known as an inclusive community," said Greg Kepferle, chief executive officer of Catholic Charities in Santa Clara County.
But the meeting also included some tense moments. Councilman Oliverio took the strongest stance against the proposal. Requiring developers to sell some homes at below-market rates only drives up the price for the other units and prices out entry-level home buyers, he argued. He used himse
Source: MercuryNews.com