San Jose City Council to explore new policies to help build housing
The San Jose City Council is pictured in this file photo.

In an effort to keep up with the growing housing crisis, the San Jose City Council on Tuesday decided to explore cutting taxes on high-rise developments, reducing fees for low-income housing and looking into acquiring existing market-rate apartments to use as affordable units.

The new initiatives came as lawmakers received an update on a 34-point Housing Crisis Workplan and reviewed housing production numbers for last year.

While the city was close to meeting state-mandated housing goals for market-rate units, Councilmember Maya Esparza – who proposed reducing fees for affordable housing projects – pointed out that San Jose only met 61 percent of its goal for affordable housing units. She added that the city was far behind on extremely low-income units by only meeting 12 percent of its goal.

“We need to remember that there are those in our city that need a little bit more of our support,” she said.

Mayor Sam Liccardo authored a plan to cut taxes for high-rise developments. Liccardo proposed cutting taxes by 50 percent and redirecting the remaining money to an affordable housing fund.

But Mathew Reed, policy director at Silicon Valley at Home, said the mayor’s memo didn’t reference his 10,000 unit affordable housing goal. It only mentioned the larger 2017 goal of building 25,000 units in the next five years.

“We wanted to remind council that 10,000 of these are intended to be affordable,” Reed told San José Spotlight. “We cannot afford to lose focus.”

To help meet that affordable goal, Vice Mayor Chappie Jones proposed that the city explore acquiring market-rate housing and turn it into affordable housing. “Through purchasing market-rate apartment homes, those needing affordable units could be given access to safe places to live in a timely manner,” Jones wrote in his memo.

All the housing plans brought forward by the council on Tuesday received unanimous support and had little debate.

Numbers snafu

A day before the meeting, Deputy City Manager Kim Walesh, Planning Director Rosalynn Hughey and Housing Director Jacky Morales-Ferrand issued a memo correcting housing production numbers from last year. A comparison between the two sets of data showed that the city overshot its affordable housing numbers by 689.

Original numbers.

The supplemental numbers that were issued a day before the meeting.

The original housing production report erroneously stated the city approved planning permits for 271 extra units and building permits for 417 extra units in 2018. None of the market rate unit production numbers had to be corrected.

Louise Auerhahn, director of economic and workforce policy at Working Partnerships USA, was among the first to notice the change and alerted her Twitter followers.

“The revised numbers show that out of nearly 4,000 housing units permitted or approved last year, only 6 percent were affordable,” Auerhahn told San José Spotlight. “We need to be looking at solutions that add to affordable housing, not proposals to further subsidize luxury downtown homes while zeroing out their affordable housing contributions.”

During Tuesday’s council meeting, a housing department official issued a statement to San José Spotlight about the last minute correction.

“The supplemental memo clarified the city’s tracking of affordable housing units,” said spokesman Jeff Scott. “In the original memo, all entitled affordable units were counted. In the supplemental memo, only affordable units entitled during 2018 were included. It is important to note that all the units will be built. They all remain in the city’s pipeline of affordable housing.”

San Jose abandons plan to bank with Chase

San Jose lawmakers gave JPMorgan Chase the boot after it won a bid for the city banking contract and reopened the search.

For the last decade, San Jose has contracted with Wells Fargo for payroll transactions, debt payments and wire settlements. However, the contract expires in June and Chase had won a bidding war to become San Jose’s next bank.

But both Wells Fargo and Chase have been accused of wage theft. Chase is currently facing 20 wage and hour judgments ranging from $253 to $38,254. Councilors on Tuesday grappled with waiving a city policy that prohibits San Jose from doing business with companies with wage theft violations.

“I have no interest in lowering our standards,” Peralez said.

The council unanimously approved a memo co-authored by Councilmembers Magdalena Carrasco, Sergio Jimenez and Peralez that would explore creating a public bank under the recently proposed California Assembly Bill 857.

Councilmember Johnny Khamis pushed back on the idea of creating a public bank and drew on his 19 years of experience in that field, illustrating the complexity of San Jose starting its own bank.

The council also approved a proposal from Liccardo to examine the Good Jobs First report to identify companies the city does business with that may have wage theft violations. Despite Liccardo’s opposition to contracting with Chase, he questioned the stringent policy and whether the city could find companies with a clean slate.

“We need to think seriously about these requirements that we are imposing,” he said.

Contact Grace Hase at grace@sanjosespotlight.com or follow @grace_hase on Twitter.

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