San Jose leaders to give housing developers a break on park fees

Desperate to see more housing built in San Jose, lawmakers voted unanimously Tuesday to give developers a break on fees at the expense of local parks.

Housing developers are required to either add parks and community centers into their project plans or pay a fee to the city that will go toward supporting parks in the area.

The city’s rules grant qualifying low-income housing developers a 50% per-unit break on parks fees as an incentive to build. Now, the San Jose City Council approved giving moderate-income housing developers — developers that build individuals for people who make roughly $99,100 per year or 100% of the area median income — that same discount.

Councilmember Pam Foley said she’s concerned about the plan’s impact on parks but ultimately pushed it forward due to San Jose’s housing shortage.

“Our memo and the proposal does not reduce land that is used for parks. It reduces fees that are potentially generated,” Foley said. “But those fees are small in relation to the overall impact and need for having more housing.”

Tim Beaubien, director of government affairs for the Santa Clara County Association of Realtors, praised the city’s initiative.

“Moderate-income, missing-middle housing is often forgotten — as it cannot receive the same public subsidies as lower-AMI affordable housing. It will not receive the same private financing that market-rate will,” Beaubien said during the meeting. “This type of housing supports our public service and first responders such as nurses, teachers firefighters, police officers, paramedics and many more,” he said.

But the move sparked concerns from local parks advocates who worried the fee reductions would hurt San Jose’s open space.

Parks and Recreation Commission Chair Daphna Woolfe said the commission supports creating housing at all income levels. But Woolfe fears building more housing without funding parks will make San Jose a “less desirable” place to live.

“As COVID-19 has shown, being outside is critically important for our physical and mental health.” Woolfe wrote in a letter to the council. “Many parts of our city are already park deficient. Any new construction would need to be placed near existing parks if new parks are not being funded.”

Under current building guidelines, housing developers in San Jose must reserve at least three acres of space for parks and recreation facilities for every 1,000 residents expected to live in their new rental or for-sale housing projects.

If a developer doesn’t want to create space for parks, they can pay a fee per unit they build.

Fees paid by residential developers are the city’s main way of funding new parks and recreational facilities for residents, according to Nicolle Burnham, deputy director of the city’s Parks, Recreation and Neighborhood Services Department.

“Any time these fees are lowered, we reduce our opportunities to acquire new parks and to provide and improve recreational amenities,” Burnham said.

Park goals

Everyone in San Jose should be a 10-minute walk or less from a neighborhood park by 2040, according to goals set in the Activate SJ plan. The plan also calls for each resident to get 500 square feet of community center space in their neighborhood.  Woolfe reminded the council in her Feb. 23 letter that San Jose is far from meeting its goals.

“Quite simply, this is an equity issue, as those who are less affluent often do not have access to outdoor space in their homes,” Woolfe said. She added that San Jose already gives fee breaks to developers of housing for people with lower incomes.

Just last week, the council made adjustments to its Inclusionary Housing Ordinance — which sets guidelines for how much affordable housing a developer must create per new development. The changes reduced developers’ fees if they chose to include housing for people with extremely low incomes onsite.

This with proposed cuts to parkland fees shows city leaders are working to solve the housing crisis, but trying multiple strategies at once makes it difficult to determine what actually works, said Councilmember David Cohen.

Still, Cohen said fee cuts are at least “worth a try.”

He said if the incentives really do work as planned, the increase in development may make up for the initial reduction in park fees.

“We’re still years away from having the resources we need to build the parks that we need,” Cohen said at Tuesday’s meeting. “That’s my concern right now: How do we find the money we need to build the parks we’re going to need in some of these places where we’re building more housing?”

Cohen said further study is needed. He, along with Councilmembers Sergio Jimenez and Foley, requested city staff report back every year to show how or if city parks are negatively impacted by the fee cuts, should they be implemented.

Contact Carly Wipf at [email protected] or follow @CarlyChristineW on Twitter.