UPDATE: Settlement paves way for more homes in North San Jose

San Jose has cleared the last legal obstacle facing the construction of thousands of homes in the north part of the city.

The San Jose City Council voted unanimously Tuesday to approve a settlement with Santa Clara County, ending a decade-long legal dispute that has blocked San Jose from pursuing housing developments in the northern part of the city. Officials say the agreement will make way for roughly 24,000 homes in the area—20% affordable—to help San Jose address its housing crisis. The area hasn’t seen new housing for roughly a decade, officials said.

“We’ve all thrown up our hands on this issue for many years,” Mayor Sam Liccardo said. “But we’re finally at a point where we can say we can build housing again in North San Jose.”

San Jose resident Kathryn Hedges urged the city to build affordable housing for those with low incomes.

“These are the people who need housing the most,” she said.

San Jose has long envisioned North San Jose, the area between Highways 237 and 101 and Interstate 880, as a prime location for growth. The city adopted a plan in 2005 to transform the area, dubbed “the economic engine” of San Jose, into a walkable job hub with tens of thousands of homes, hotels and retail all connected by public transportation.

The plan came to a halt when Santa Clara, Milpitas and Santa Clara County sued San Jose, citing concerns over a lack of traffic mitigation measures in the area. In 2006, city and county officials came to a settlement that put conditions on San Jose’s ability to build housing in the area and essentially stopped development in North San Jose.

San Jose officials have spent the last few years fighting the restrictions on housing in the area—an attempt to address the growing housing and homelessness crises that have driven thousands of residents out of the city and pushed at least 6,739 people into the streets.

Earlier this year, San Jose officials negotiated with Santa Clara to adjust a prior agreement by agreeing to invest roughly $28 million in traffic improvements. Liccardo and District 4 Councilmember David Cohen then spent the last few months hashing out a new settlement with Santa Clara County.

“All of us have the mutual interest in solving the housing crisis (in the area),” Cohen said at a news conference Monday. “Over the next decade, we hope to build tens of thousands of housing units in North San Jose.”

The agreement with the county requires San Jose to address traffic and congestion by redesigning the interchanges of Interstate 880 and Montague Expressway, and McCarthy Boulevard and O’Toole Avenue by 2024. It also asks San Jose to widen Montague Expressway between North First Street to Lick Mill Boulevard and help pay for other projects along the expressway. City officials estimate the settlement will cost between $45 million to $75 million over the next 20 years.

Santa Clara County supervisors called the settlement “historic” and “monumental.”

“Reaching this settlement was important,” Supervisor Otto Lee, who represents the area in North San Jose, said at a news conference Monday. “As we continue to build more housing in Silicon Valley, we must be mindful of all the impacts housing will have on transportation infrastructure and traffic.”

Advocates say building housing in North San Jose will help the city activate the area and take advantage of its potential as a job center. VTA also is betting big on nine residential projects on its land next to light rail, including North San Jose, to help make it easier for workers to get to their jobs.

Mathew Reed, policy director of SV@Home, said bringing affordable housing to the area also means workers living closer to large tech companies such as PayPal, Cisco Systems and Google. SV@Home is a membership organization that advocates for policies and programs that increase the supply of affordable housing.

“This is not only an opportunity to open up housing in North San Jose, but to open up housing that is accessible to a really broad range of people in the city who work here and live here,” Reed told San José Spotlight. “I would expect that you would see a lot of activity relatively soon, which is tremendously important.”

Contact Tran Nguyen at [email protected] or follow @nguyenntrann on Twitter.