More Jobs Before More Housing By Councilmember Pierluigi Oliverio, Willow Glen Times, December 9, 2008

Last week, the San Jose City Council voted to direct planning staff to explore how the city could build more housing in North San Jose (possibly even exceeding the cap, which would go against the incremental plan laid about by the North San Jose vision).

The vision for North San Jose has included “some” housing next to jobs to provide the opportunity for people to live close to their work. It would also allow intensification of commercial and industrial land that would permit San Jose to acquire more jobs equaling more revenues, to pay for our core city services.

North San Jose is the Golden Goose of our Redevelopment Agency (RDA). The tax increment financing that comes out of this area funds our downtown projects, a community center in Edenvale, road paving for SNI areas and gang intervention programs among others. When property is developed in this area and the assessed value rises, the RDA receives that extra money to provide for those items I listed above.

The North San Jose plan is mostly industrial land conversion. I have nervously voted yes to convert land there because there is a plan in place limiting the number of housing units by waiting for equal amounts of commercial development, which equals job growth.  It’s even more important to wait now that the economy has gone sour and job growth is retracting.

Also, because the housing market is at it worst condition in the past 50 years, the 7,000-plus housing units we have approved may wait since they cannot get financing. Yet another reason to not mandate inclusionary affordable housing on Dec. 9, because the housing industry is in a depression.

So here is the dilemma; in my opinion there are other developers beyond the cap who would like to build housing now because they have financing. They want the council to allow for additional land to be converted from industrial to housing before the jobs come.

This is wrong.

San Jose always builds housing far and above any other Bay Area city. These decisions lead us be continually broke; and in my opinion have played a part in our current budget deficit. We need to be patient and wait for the job growth to happen. If we convert industrial land then San Jose’s greatest asset, tax-generating land, is lost forever. This is why I voted no on this item. Instead, I would rather direct planning staff to find ways to increase revenue for the city.

Now remember my Golden Goose reference above? When we develop land in an RDA zone, that added tax increment money goes to RDA to fund all those nice projects the community wants. Even if residential development is done in North San Jose it increases the value of the land and therefore money to RDA. 

However, for example, if we decide to allow 100 percent affordable housing projects that are done through a nonprofit, they pay no property tax. Therefore RDA receives nothing resulting in fewer projects that residents want citywide. Plus affordable housing does not pay park fees or provide land for parks, which is an important part of creating a livable community in North San Jose.

So we need to watch what we as a council approve because it has ramifications to financial well being for all of San Jose.