San Jose lawmakers implement controversial state housing law

San Jose adopts—and looks to build on—a state law that permits denser development in single-family neighborhoods.

The City Council voted 9-1-1 Tuesday to adopt an urgency ordinance to implement Senate Bill 9, a state law that allows more homes on single-family lots. Councilmember Sylvia Arenas did not respond when asked for her vote. The council also voted 9-2 to drop Opportunity Housing, a local initiative with a similar scope. Councilmember Dev Davis voted no both times, and Councilmember Matt Mahan also voted no on dropping Opportunity Housing to focus on SB 9.

The state law takes effect Jan. 1.

The local urgency ordinance allows residents in single-family neighborhoods to subdivide lots into two—provided the lot is no smaller than 1,200 square feet—to create up to four units total per parcel.

The city is also looking for ways to potentially expand how the law works locally. Councilmembers asked staff to examine how to make SB 9 projects more affordable, and to explore the feasibility of building them in historic neighborhoods.

“We know the need for housing is dire across our whole city, and much more so than when I was growing up,” said Councilmember Raul Peralez. Having grown up in a rent-controlled fourplex in Cupertino, Peralez said he knows firsthand the benefit of dense, affordable housing. Being evicted from his home in 2019 also gave him a jarring realization about how bad the city’s housing market has become in recent years.

Davis, who signed a statewide initiative to upend SB 9 by restoring local zoning powers, said she resented the state upending San Jose’s General Plan, which envisions densifying housing in urban villages set up around transit corridors. She spoke of her experience living next to a house with 8-10 residents. She said multiple residents have told her about their fears of seeing their neighborhoods change with the addition of too many people.

“I’ve had multiple (people) tell me, and I feel the same way: ‘I don’t care what my neighbors look like. I just care how many of them I have,’” she said.

Councilmember David Cohen said fearmongering over the law has overlooked the point that many San Jose residents live packed in small homes due to lack of housing. He also noted the League of California Cities—a staunch critic of SB 9—recently decided to not support the initiative cited by Davis because it would radically upset zoning control in the state.

“There are some pretty sinister, unintended consequences in that initiative,” Cohen said, claiming it would allow cities to disregard regional housing goals and worsen the state’s lack of housing.

What about loopholes?

Councilmember Pam Foley grilled city staff on details for how SB 9 will be enforced, such as making sure corporations or family trusts don’t violate the law by purchasing adjoining lots for development.

“How are you going to follow up on the trust to know there isn’t a violation occurring?” Foley asked.

Staff explained the city will at minimum develop a tracking program to monitor purchasers. But staff made it clear some provisions of SB 9 are murky, such as the requirement for developers to attest they intend to live in a property for at least three years. City officials said they hope for clarification on several issues from the state early next year.

SB 9 is unlikely to have an immediate or dramatic impact on cities. An often-cited study from UC Berkeley found that only 5.4% of all single-family lots in California are feasible for redevelopment under the law. San Jose planning officials have repeatedly said sweeping changes in single-family neighborhoods are unlikely due to financial and site limitations.

These details haven’t prevented SB 9 from becoming a lightning rod for San Jose residents, many of whom urged the city to apply strict development standards on SB 9 projects. Sandra Delvin, a board member of the anti-SB 9 group Families & Homes SJ, presented a letter signed by 4,000 residents worried about the law.

“This proposal would forever change the character of San Jose neighborhoods by allowing a single-family home to be demolished without community input or public hearing,” she said.

Resident John Nourse described a nightmare where he watched helplessly from heaven as his family’s neighborhood was ruined with parking structures, fourplexes, dumpsters and power outages.

“Even the city realized their Opportunity Housing idea had done nothing but create more angry taxpayers, but it was too late to correct,” he said.

Several residents asked the city to proceed cautiously—or not at all—with its interest in expanding SB 9-type projects to San Jose’s historic conservation districts.

“Older and historic neighborhoods—designated or not—are already contributing immensely to our existing housing stock that is affordable, that is walkable, that is dense,” said Ben Leech, executive director of the Preservation Action Council of San Jose. “The danger is the unintended consequence of incentivizing the loss of those (houses) for market-rate housing.”

Renters, homeowners and housing advocates spoke in favor of SB 9 coming to San Jose, arguing it’s an incremental but vital step for addressing the city’s growing housing crisis.

“When the vast majority of our city, 94%, is walled off for people if they don’t have incomes over $200,000 a year, we have a serious problem,” said Poncho Guevara, executive director of Sacred Heart Community Service. “The fact that this gross inequity has been maintained by city policies is frankly a moral failing.”

Contact Eli Wolfe at [email protected] or @EliWolfe4 on Twitter.