All new rental housing projects that create 3 to 19 units are required to pay an impact fee for the provision of affordable housing.

Note: AHIF will be phased out, once existing projects complete their requirements. Projects with five or more residential units will now be subject to the Inclusionary Housing Ordinance (IHO).

A commercial linkage fee is an impact fee levied on commercial development for the provision of affordable housing. The San José City Council voted on December 11, 2018 to pursue a nexus and a feasibility study on a potential commercial linkage fee in San José. The Council also decided to include a separate study for the Downtown Core. The City Council is expected to consider the fee in August 2020.

• Nexus Study - July 2020
• Feasibility Study - July 2020
• Staff Report - July 2020

Allows 100% deed-restricted affordable housing developments on sites (outside of existing Growth Areas) or properties with a Mixed Use Commercial or Neighborhood/Community Commercial land use designation if they are 1.5 acres or less, the site is vacant, and has existing housing on one side. Additional criteria apply.

Envision 2040, Chapter 4, Pg 31: Policy H-2.9

The City will grant Density Bonus(es) (SJMC 20.190) when a developer makes a request and includes restricted or senior units in the housing project, as specified by the State Housing Density Bonus and Incentives Law.

Diridon Station is a major transit hub located at the western edge of Downtown San José. Multiple planning efforts affecting the station area are underway. First, four partner agencies (California High-Speed Rail Authority, Caltrain, City of San José, and VTA) are working together on a plan to expand and redesign the station in anticipation of significant new transit service. In addition, the City of San José is updating the plan guiding development of the surrounding area and reviewing a mixed-use development plan proposed by Google.

Diridon Station Area Affordable Housing Implementation Plan

The DSAP specifically addresses Affordable Housing and Displacement concerns. The goal is to ensure that 25% of all housing in the Diridon Station Area at the time of build-out is rent-restricted for lower- and moderate-income households, and to minimize impact of Diridon Station projects on vulnerable residents. Construction of developments that integrate affordable and market-rate homes, as well as standalone affordable developments will be prioritized.

The City is also working with Google to address these issues.

Memorandum of Understanding with Google

The Draft Plan is available on the San Jose Diridon Station Area Community Engagement Fall 2020 webpage.

High-rise residential projects located in the Downtown Core Area are eligible for certain fee reductions.

Construction taxes: Downtown high-rise projects obtaining certificate of occupancy before June 30, 2025 are eligible for a 50% reduction in construction taxes.

Inclusionary Housing Ordinance (IHO) In Lieu Fee: The IHO In Lieu Fee for Downtown high-rise is set to $0 beginning in 2020 and will gradually increase to the full amount by June 30, 2025. See the chart below.

Parks Fees: High-rise projects in the Downtown Core are subject to a separate, lower parks fee category specific to downtown high-rises.

Certificate of Occupancy for 80% of dwellings must be obtained on or by June 30, 2025 for discounted In Lieu Fee rate.

If you have further questions, please email Jerad Ferguson, Housing Catalyst, Office of Economic Development, at jerad.ferguson@sanjoseca.gov.

North San José is primarily an industrial area that is home to many high-tech companies and is an important employment center in the City. The boundary is defined as north and west of Interstate 880 and south of State Route 237.

The North San José Development Policy is intended to guide ongoing commercial and residential development in North San José. One of its key goals is to provide new high-density residential development in proximity to employment centers. Affordable housing units should be provided as part of new residential development, with a goal of 20% of new residential units within the Policy area designated as affordable (i.e. below market rate).

The City is working to update the North San José Development Policy to allow for additional housing and facilitate further development.

The Parkland Dedication and Park Impact Ordinances (PDO/PIO) were adopted in 1988 and 1992 to help create or improve recreational facilities, such as parks, trails, and community centers.

A 50% reduction in the fee is provided for deed-restricted affordable housing units that offer housing to households at or below 80% AMI. Developers can also receive credit to reduce parkland fees if they provide on-site recreational amenities such as picnic areas, publicly accessible recreational plazas, community gardens, community gathering spaces, fitness rooms or swimming pools.

Accessory dwelling units - also called ADUs, secondary units, or granny flats - are small living units, including a kitchen and bathroom, on properties zoned residential with a single-family home, duplex home, or multifamily building in place.

Recent changes to the City's municipal code make it easier to build ADUs in many areas of the City - in additional zoning districts and on smaller lots.

Tiny homes on wheels (THOWs) are a type of ADU; they are allowed only on single-family properties and have different requirements and a simpler, lower-cost permit process.

The Housing Department encourages affordable housing to be constructed throughout San José to achieve socio-economic integration at the neighborhood level. The Department discourages concentration of extremely low-income units in census tracts where the poverty rate in the census tract is 20% or greater. The City is in the process of creating a new Siting Policy, which will drive where 100% affordable housing will be located in the City.

To learn more about the Siting Policy, please visit our expanded Siting Policy webpage.

NOFA Addendum that describes the current Siting Policy

Some residential housing projects can go through a faster streamlined approval process, according to state law.

SB 35: Streamlined Approval for Affordable Housing Development
Signed into law in September 2017, SB 35 is a bill streamlining housing construction in California counties and cities that fail to build enough housing to meet state-mandated housing goals. Such places must either increase housing development on their own or be forced to accept housing developments that meet certain criteria.

AB 2162: Streamlined Approval for Supportive Housing Development
Signed into law in September 2018, AB 2162 requires that supportive housing be a use that is permitted by-right in zones where multifamily and mixed-use development is permitted.

The City recently adopted an ordinance to specify how the City will implement the review and approval requirements of California Government Code Sections 65650 et seq. ("State Supportive Housing Law"), 65660 et seq. ("State Low Barrier Navigation Centers Law"), and 65913.4 ("State Streamlined Ministerial Approval Process").

The City makes available surplus land for development. The Real Estate Services Unit of the City will publish the list of surplus properties, when available.

Urban Villages are walkable, bicycle-friendly, transit-oriented, mixed-use communities that provide both housing and jobs. The development of urban villages is one of the major strategies embodied within the Envision San José 2040 General Plan. Mixed-use development is allowed within Urban Villages on designated parcels, and adopted Urban Village Plans should be referenced to understand where housing is allowed. Additional details on Urban Villages, Land Use Plans, and a list of approved Plans are available on the Urban Villages webpage.

Affordable Housing

The UV policy includes an affordable housing goal. At least 25% of the units built in an Urban Village should be deed-restricted affordable housing with 15% of the affordable units targeting households with income below 30% of Area Median Income (AMI). Note: This is a goal, not a requirement to be imposed on individual projects.

There are specific rules that govern the displacement of households due to land development.

Affordable Housing Early Approval

Residential developments that are 100% affordable to low- (up to 80% AMI), very low- (30-50% AMI), and extremely low-income (up to 30% AMI), can proceed within an Urban Village that does not have an approved Urban Village Plan on sites that are currently designated commercial if the project meets certain criteria.

Envision 2040, Chapter 7, Page 19-20: Goal IP-5.12: Urban Village Planning

Signature Projects

Mixed-use development can occur on sites currently designated commercial in an Urban Village without an adopted Urban Village Plan under the Signature Project Policy. In order to qualify to be considered a Signature Project, a project must provide a minimum amount of residential and commercial that is calculated by staff from the overall number of jobs and housing units assigned to a particular Urban Village. Signature Projects are intended to serve as a catalyst, promoting the development of the entire Urban Village area.