State law may overshadow San Jose affordable housing policy

A controversial policy that could make affordable housing more attainable is coming back to the San Jose City Council—but it might be a moot point if a similar policy is passed at the state level.

The Community Opportunity to Purchase Act, or COPA, is a policy that would give qualified nonprofits first rights to make an offer on a residential property and keep more affordable housing in the community. The council was set to consider a local policy in March 2022, but it was postponed and now set to come back in early April or May. Opponents say it unfairly disrupts the free market—curbing potential profits and homeowners rights. Proponents say it limits displacement and preserves housing affordable.

The policy is coming back with changes that reduce barriers for what makes a nonprofit qualified to participate in COPA. It also creates a clearer and extended timeline for nonprofits to make an offer and purchase a property. A nonprofit has 15 days from notice of sale to indicate they want to make an offer. If the owner accepts the offer, the qualifying nonprofit has 120 days to secure financing and close the transaction.

“I think these changes are really good,” said Thao Le, organizing co-director for the South Bay Community Land Trust, which seeks to create and expand community control of the land in order to provide permanent affordable housing to residents. “It’s more accessible for community based organizations that are mission oriented to be able to make COPA work.”

San Jose’s latest COPA proposal also changes exemptions so that a single-family house with up to one secondary unit does not qualify for COPA. Kristen Clements, division manager for San Jose’s housing department, said the move is because it wouldn’t be cost effective for the city to subsidize single-family housing. It adds on to a short list of exemptions including inherited properties, among others.

“Selling a single-family home or a condo or a townhome is a different submarket that moves at a different pace than larger developments,” Clements told San José Spotlight.

The city council started exploring COPA as a strategy in 2020 as part of its 10-part anti-displacement plan. Several cities have adopted COPA or similar policies. Clements said in San Francisco the city has preserved 234 homes since it adopted COPA in 2019. In Washington D.C., the first city to implement a similar policy in 1979, thousands of units have been preserved, according to San Jose officials.

On Tuesday, Assemblymember Ash Kalra introduced a similar policy—AB 919, the Stable Homes Act—which would give tenants, local public agencies and mission-driven nonprofits a first opportunity to purchase or match an offer on rental housing properties when owners choose to put them up for sale. Under AB 919, a tenant would have first opportunity to purchase the property by making an initial offer.

“When low-income people are priced out of their homes, we see increased housing instability, overcrowding and financial burdens that make it impossible for working families to afford other essentials,” Kalra said. “It also harms our environment, as displacement means workers have to move farther from job centers and become mega-commuters.”

He said AB 919 could be an “instrumental piece” in solving the state’s housing crisis by allowing families to stay in their homes, build generational wealth and preserve at-risk affordable housing.

Not everyone agrees with Kalra or the local COPA proposal. Santa Clara County Association of Realtors President Will Chea said he opposes COPA because it interferes with the free market and the rights of homeowners.

“It allows corporate nonprofits to unfairly cut the line in front of community members looking to access homeownership opportunities,” Chea told San José Spotlight. “It will add to the bureaucratic process and take valuable staff resources and taxpayer dollars to administer. Sometimes there is nothing that can be done to make a bad policy acceptable.”

Contact Jana Kadah at [email protected] or @Jana_Kadah on Twitter.