VTA to bring thousands of homes online

An effort to develop housing at public transit stations in Santa Clara County has awakened after being dormant for decades — and is expected to rake in lease profits and fuel train ridership.

VTA leaders next week will open the doors to their first new public transit-oriented apartment complex in 20 years, between the Willow Glen and Alma neighborhoods next to the Tamien light rail station. Complete with a child care center and improved transit plaza, the complex will offer 135 affordable apartments roughly 10 blocks from downtown San Jose.

The agency will also break ground later this year on two more apartment projects near public transit stations, where residents will receive transit passes. One is a 195-apartment complex near the Berryessa BART station and the other is a 203-apartment complex at VTA’s Capitol station.

These housing sites don’t just recoup train and bus funding from renters in VTA-owned apartments. They can also boost ridership revenue from people who live and work near VTA stations.

VTA last opened a transit-adjacent apartment complex in the early 2000s. Josselyn Hazen, VTA’s transit-oriented development manager, said these types of projects then went dormant until about 2016.

“That’s when the program really restarted and we built more momentum,” Hazen told San José Spotlight. “We’re now in the early days of seeing the fruits of our labor.”

Ten out of 28 transit-oriented development projects in VTA’s portfolio are now under active development. This is partly because of two $49 million state grants awarded to VTA last month for two projects: The aforementioned Capitol station site, as well as a 268-apartment project near Mountain View’s Caltrain station. The Tamien station project received the same state award prior to its completion.

VTA sold the site for the Caltrain station project to Mountain View, which is being built independent of VTA’s transit-oriented developments. Transit agency officials said it’s still expected to boost ridership revenue.

The 10 VTA projects in active development amount to more than 2,500 new homes, with more than 2,000 intended to be affordable, according to agency leaders.

Income-restricted housing in Santa Clara County generally applies to households making less than 80% of area median income, which is approximately $195,200 — though VTA’s transit-oriented development projects are going lower. For example, the Tamien station project’s affordable apartments will be restricted to individuals and families who range from making 60% to 30% less than the county’s median area income.

“These projects are incredibly important. VTA owns tons of land,” Alex Shoor, executive director of Catalyze SV, which advocates for more housing construction and was previously involved with one transit-oriented project site, told San José Spotlight. ”I don’t know if there’s such a thing as a triple no brainer, but this is a triple no brainer.”

By 2045, VTA projects will bring in more than $60 million a year in ground lease revenue from these housing sites, as well as more than $20 million annually in farebox revenue to VTA, CalTrain and BART.

Hazen said that could reflect about 10% of VTA’s operating fund in less than two decades — and could make a substantial difference the next time VTA grapples with budget pressure through proposed train and bus cuts. The public transit agency’s multiyear budget deficit is expected to reach $14.9 million by 2027. Plans to absorb that shortfall include monthly furloughs. But they also include the expansion of transit-oriented developments.

“I do think the transit-oriented development portfolio has a true ability to support VTA fiscally in the long term,” Hazen said. “Our leases — they’re 85 years, so that’s revenue VTA will receive on a long-term stable basis it can count on when making decisions about service.”

The move comes as the region has existential debates about the value of public transit as a government-subsidized enterprise.

VTA is headed for a potential political fight to advance a regional, half-cent tax measure to the November ballot to fund public transit in the Bay Area. The VTA board of directors in August voted unanimously to opt into Senate Bill 63, which would allow a voter initiative to put the tax on the ballot. VTA employees project the tax could bring in $264 million annually over its 14-year span — an enticing financial boost as the agency grapples with looming multimillion-dollar deficits.

A coalition of transit advocates — Connect Bay Area Transit Committee — is working to gather more than 186,000 signatures across Santa Clara, San Mateo, San Francisco, Alameda and Contra Costa counties to qualify the measure by June 3.

Monica Mallon, a public transit advocate and San José Spotlight columnist, said the momentum for building housing near public transit shows VTA won’t just ask taxpayers to shoulder the burden of improved service.

“It supports VTA’s assurances that they’re trying to generate revenue. (VTA is) not just asking for money all the time,” Mallon told San José Spotlight. “I think that transit agencies need to do everything they can to generate revenue on their own.”

Contact Brandon Pho at [email protected] or @brandonphooo on X.