Land use and housing policies are complex with many stakeholders and quality of life goals.  The City will explore strategies to increase housing capacity, facilitate small multifamily housing, and streamline housing development approvals.  

What's going well 

The City is a regional leader in adopting pro-housing policies and this is reflected in land uses. 

Challenges     

There is still not enough housing being built to meet demand across income levels. 

What the City is doing

We will explore strategies to facilitate more housing production through policy changes that facilitate more housing and streamline City approval processes.  

• General Plan 4-Year Review: The City is completing a taskforce process and community engagement on potential updates to the Urban Village strategy approach, planning for more housing, and considering changes to job growth targets and the balance between jobs and residents 
• Downtown Ministerial: The City will evaluate expansion of the Infill Housing Ministerial Ordinance into Downtown. This would remove environmental review for some projects and speed up the development process.  

There is an opportunity to streamline and improve analysis and communication of our development services process. The development services process is how housing is approved by the City including: granting permission to build certain projects, begin construction, and for people to begin living in residential buildings.  

What’s going well

We exceeded our timeliness goal for multifamily residential building permit reviews the last two quarters of FY 2024-2025. 

Challenges

Although the City works across teams and departments to coordinate project reviews, building housing in San José is still seen as overly complex. Most projects are delivered successfully, but many customers are unaware of tools to track project status, leading to growing concerns. 

What the City is doing

• Performance Communication: We will analyze options to better communicate our progress in delivering timely and efficient services to customers.
• Standardize Environmental Review: Staff identified the opportunity to further standardize permit conditions and CEQA procedures via technical guidelines to create a more predictable experience for customers.
• Analyze State Law Impacts: With the passage of recent CEQA streamlining state legislation, the City has a new opportunity to implement streamlining measures to remove or reduce CEQA review timelines.
• Fee Estimator Expansion: We will continue to improve predictability of City fees by adding multifamily new construction to the development fee estimator by December 2025. 

There is an opportunity to align City housing policy with what is profitable to build in the private market to increase production.  

What’s going well

Last fiscal year, the City passed incentive programs to reduce housing development costs and help move projects out of the entitlement planning phase. 

Challenges

San José remains a very expensive place to build housing, and developers struggle to design projects that are profitable. 

What the City is doing

• Cost of Development Study Session: Analysis of affordable and market housing development costs in San José.
• Review Opportunities to Move Existing Projects Forward: Review a portfolio of entitled planned housing projects with various requirements that present financial feasibility challenges in today’s market.  
• Analyze Effectiveness of Existing and Market Rate Housing Incentive and Affordable Housing Financing: Analyze effectiveness of the market rate housing incentives and affordable financing housing program.
  • Since approval by City Council on December 10, 2024, the Multifamily Housing Incentive program has facilitated 1,444 total housing units from entitlement to construction. This includes 1,216 market rate units and 228 affordable units. 
• Alternative Financing for Housing Preservation: Provide alternative financing programs to preserve housing at all income levels.