San Jose housing plan certified by state a year past deadline

Tardy by one year, San Jose’s housing plan for the coming years gained a stamp of approval from state officials this week.

After the city failed to get certification on an initial version of the housing element in June 2023 — already six months past a state deadline — San Jose officials sent a revised version of the plan to California’s Department of Housing and Community Development for review on Nov. 29.

The element is a detailed planning effort mandated by the state that documents how cities and counties will accommodate and encourage needed homes to be built over the coming years to address the housing and affordability crisis.

San Jose’s target for the 2023-31 cycle is 62,200 additional homes, according to state allocated goals. Of that, 15,000 are slated to be reserved as affordable to people earning less than half of the area median income. The area median income in Santa Clara County for a family of four in 2023 was $181,300.

City housing and planning officials worked closely with state officials, making tweaks to the plan and adding more information as late as Monday, the same day the state granted the city “certification and congratulations” for its plan, city officials announced Tuesday afternoon.

“I am proud of our staff who worked hard and thoughtfully through this process. I also want to thank our community members who provided feedback on this important plan for how we address our housing needs,” City Manager Jennifer Maguire said in a statement.

The state’s certification will put an end to developers using a provision of state housing law known as the “builder’s remedy,” which lets builders bypass local planning processes if a city or county hasn’t received approval from the state on its housing plans.

San Jose received nearly 30 applications for projects under the remedy rules in 2023.

While some applicants proposed dozens of homes on lots where city officials don’t support adding housing, others proposed to significantly scale back previously approved projects — sometimes by thousands of homes. That’s the case with an updated plan from the developers of the San Jose Flea Market site.

While the city will stop receiving new builder’s remedy applications, it’s unclear what will happen with the applications already submitted. City officials told San José Spotlight in the fall that state law on the subject is vague, and the courts may need to weigh in.

City reports examining the issue also suggest officials believe San Jose may not need to honor those applications.

Bob Staedler, a San Jose land use consultant, said the city should be on solid ground if it wants to deny those applications, because city officials have been working for months to implement critical portions of the housing element plans, including planning map updates and rezoning large swaths of the city to allow for more homes.

“I think they can show that they were working in good faith to implement a housing element that they believed would be certified in the near term,” Staedler told San José Spotlight.

Erik Schoennauer, a San Jose land use consultant who is representing the developers looking to downsize the flea market site project, said the city must honor applications like theirs, because they were filed while the city was not in compliance with state mandates.

“The city can have its opinion, sure. But these projects have the right to proceed forward, and the city is mandated under the law to respond to applications filed with them,” Schoennauer told San José Spotlight. “Its black and white.”

Developers could sue the city if it chooses to deny builder’s remedy applications, but Staedler thinks it would be tough for a developer to win a case.

“I think it would be hard to go to a judge, go back in time and to have them basically nullify an approved housing element because there was a small window of time where (San Jose) wasn’t in compliance,” Staedler said.

The housing element isn’t only about planning for tens of thousands of homes, officials said. Gov. Gavin Newsom’s administration is requiring more detail and accountability from planning officials at local levels than in past planning cycles, including fair housing policies.

“It includes strategies for dismantling housing segregation and strengthening access to housing for all groups,” Deputy City Manager and Interim Housing Director Rosalynn Hughey said in the statement.

Certification from the state also lifts the threat of losing out on major grant funds for San Jose, including $59 million in One Bay Area Grant funding it was set to receive from the Metropolitan Transportation Commission.

“We’re glad to receive HCD’s stamp of approval on the Housing Element our Council adopted last June, confirming that we are in substantial compliance with state law,” Mayor Matt Mahan said in the statement. “Our community is in desperate need of housing at all affordability levels — we need to grow smart, fast, and near transit.”