"After failing to break ground on any market-rate multi-family developments in 2024, the city saw more than 2,000 units of multi-family housing begin last year, with five projects totaling 1,444 units taking advantage of a tax and fee reduction program that the City Council could expand Tuesday. Meanwhile, despite extending a program to encourage more high-rises to be built in 2024, residential density in downtown remains stagnant, so city officials want to explore offering incentives to convert commercial space into homes."
"San Jose's housing data shows it is not on track to meet the state's mandated goal of planning for 62,200 new units by 2031, as developers have repeatedly told the city that projects have become infeasible to build. Over the past four years, construction costs in San Jose have jumped 34.4%, nearly double the California consumer price index. The greater San Francisco Bay Area also is generally more expensive to build market-rate and low-income housing tax credit program projects, according to a RAND study last year."
San Jose is well behind the state's planning goal of 62,200 new housing units by 2031 and is considering expanded financial incentives to spur development. The city saw no market-rate multi-family groundbreakings in 2024 but more than 2,000 units began construction last year, with five projects using a tax and fee reduction program. Downtown residential density remains stagnant despite incentives for high-rises, prompting exploration of commercial-to-residential conversions. Construction costs in San Jose rose 34.4% over four years, nearly double the California CPI, making many projects infeasible and limiting financing options.
Read at www.mercurynews.com
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