San Jose wants industrial land exempt from housing law

With just five months before landmark housing legislation takes effect throughout California, San Jose officials are racing to exempt broad swaths of the city from the law.

Sen. Scott Wiener’s Senate Bill 79, signed into law in October, aims to encourage denser housing construction around transit hubs. In San Jose, the law would cover 40,000 parcels of land, in many cases pushing up the maximum height and density limits for newly constructed residential buildings, according to city officials.

In response, city leaders plan to invoke certain exemptions written into the law, including one that allows cities to exclude land already designated for uses related to job creation. The City Council on Jan. 27 directed staff to return in March with a measure to exempt about 6,600 acres of industrial land, mostly located in North San Jose.

While some city leaders are welcoming the housing boost SB 79 could deliver, others resent the uncertain impacts it may bring to San Jose’s cityscape.

“This is a mess. It’s a mess what it’s going to do potentially to our community,” Vice Mayor Pam Foley said at last week’s council meeting. “I really dislike when local control is taken away from city council, particularly on an issue like this.”

Officials said six areas will be covered by the city’s exemption, including North San Jose, Old Edenvale, Monterey Business Corridor, East Gish, Mabury and Berryessa International Business Park.

San Jose plans to apply for another SB 79 exemption that allows cities to exclude parcels of land with no direct walking paths leading to a transit stop. Meanwhile, officials are also reviewing the law’s potential implications for historic properties.

The city faces a tight deadline to get all this work done: It must certify its exemptions with state authorities well before July 1, when SB 79 officially takes effect.

San Jose lobbied Sacramento during the drafting of SB 79 to make sure it included the exemption for industrial land. City leaders fear that turning over too much of the city’s scarce industrial land to residential uses would undermine an important source of tax revenue.

“The percentage of our land dedicated to employment use is quite small, around 13%,” Mayor Matt Mahan said at the meeting. “So it is very important that we take steps to ensure that we exempt land that is vital for good high-paying jobs — for the tax base.”

Backers of SB 79 have said the law’s core aim is to create dense, urban residential communities within walking distance of public transit. To make that happen, the law targets neighborhoods surrounding major transit stops, setting minimum limits for housing density and building heights within a one-half-mile radius. San Jose has 56 such sites, including stops for Caltrain, BART, VTA light rail and bus rapid transit.

Officials with the Department of Planning, Building, and Code Enforcement have been poring over the intricate housing legislation for months to determine what it will mean for the city.

As part of their analysis, staff reviewed the expected density changes from SB 79 on the neighborhoods surrounding three major transit stops — the Berryessa BART Station, Tamien Station and Snell Station. The review suggests the law’s impacts will vary widely across the city.

In the case of Berryessa BART, staff determined the surrounding area already allows for a slightly higher density than what would be called for under SB 79. In contrast, SB 79 will lead to a dramatic increase in the density limits surrounding Snell Station. While current zoning allows for roughly 3,200 homes in the area, that limit will rise to 37,000 — a more than tenfold increase — once the law takes effect.

But even as officials seek exemptions from SB 79, some of San Jose’s housing boosters have complained that the city’s proposal for exclusions goes too far.

“The question would be, is there a more surgical approach?” land use consultant Erik Schoennauer told San José Spotlight. “Because we want to have housing in North San Jose. So wouldn’t it be nice if there were parcels in North San Jose that could take advantage of the SB 79 process?”

Faced with such questions, Mahan raised the possibility that the exemptions could be further refined after the initial measure is passed.

“We are in a race against the clock and need to get this right,” Mahan said.

Contact Keith Menconi at [email protected] or @KeithMenconi on X.