A new phrase has entered the public vernacular: Opportunity Housing.
This innocuous-sounding phrase refers to allowing, by right, the construction of multi-unit residences on properties zoned as single-family residential. It would allow property owners to skip what is today a rather lengthy process, requiring public hearings and input from concerned neighbors, when desiring to raze an existing home and replace it with up to seven new units up to three stories high, thus increasing housing availability throughout our city.
San Jose’s General Plan Task Force, in the process of the quadrennial review of the Envision San Jose 2040 General Plan, voted at its Aug. 20, 2020 meeting to recommend that our City Council explore Opportunity Housing for properties with a residential neighborhood land use designation.
The council will eventually consider a proposal for implementing Opportunity Housing. Currently, community activists are coordinating educational meetings that include presentations from people for and against the proposal, as well as members of the San Jose Housing Department.
Nobody disputes the urgent need for more housing in Silicon Valley. Citizens for Fiscal Responsibility (CFR) has often stated that the best solution to our housing shortage is to build more housing at all price levels and at first glance, Opportunity Housing seems like it may help that effort. Proponents assert that allowing more dwelling units on existing properties throughout the city will increase the supply of housing available for people struggling to afford today’s housing costs.
The median list price of a house is $1.3 million, while the average monthly rent for an apartment is $2,500. It is calculated that a household’s annual income must be at least $240,000 to afford that median house (with a down payment of $260,000). The average apartment, assuming 30% of the household budget goes to housing, requires total annual income of $100,000, roughly equivalent to San Jose’s median household income level.
CFR is concerned that Opportunity Housing is an unproven concept. There is no data supporting or disproving the working hypothesis that it will create more affordable housing. Cities have no experience with it. The state of Oregon is currently the only state that has adopted Opportunity Housing in general, but it does not go into effect until 2022. Minneapolis is the only major city to adopt it, but they are currently tied up in court over determining whether an environmental impact report is necessary.
One thing is certain: Opportunity Housing will eventually create denser neighborhoods than our traditional single-family zoned ones. We can easily project the problems this will create for residents. Many neighborhoods already struggle with inadequate parking, both on and off street. Allowing up to seven residential units per property will exacerbate what is for some an already insufferable situation. Additionally, streets serving most San Jose single-family neighborhoods were built to service one or two vehicles per lot; adding more dwelling units will add more vehicle traffic, making already unacceptable intersection service levels intolerably worse.
Additionally, our city already struggles with providing the core services that we residents deserve. Citizens for Fiscal Responsibility is concerned that enacting Opportunity Housing will require additional general fund spending simply to maintain current service levels. Opportunity Housing will also increase pressure on critical infrastructure, especially for water delivery and sewage disposal, driving increased capital spending to make up for decades of deferred maintenance.
In the business world, leaders of established companies typically do not bet the entire company on unproven products. They instead employ a process such as “proof of concept” plus test marketing to avoid irreversible consequences. CFR believes that San Jose should adopt a similar approach with respect to Opportunity Housing.
If the City Council concludes that Opportunity Housing is an appropriate tool for addressing our housing shortage, CFR believes the best approach involves an initial implementation within a one-half mile “walkshed” surrounding one or two of the new transit hubs. This may help provide an aesthetic transition from the relatively large-scale urban villages to our smaller scale single-family neighborhoods. This can also provide the data needed to determine the efficacy of Opportunity Housing in our attempts to create more affordable dwelling units in our city.
San Jose residents who have invested their lives in their homes have a right to the quiet enjoyment of their houses. Our existing general plan reflects a commitment to this need to preserve and enhance existing residential neighborhoods. Planned new dwelling units are justifiably concentrated downtown or in “new, vibrant urban villages” located near transit hubs. Adopting citywide Opportunity Housing runs counter to the promises made in the existing general plan.
Our city and its elected officials have an obligation to the residents of San Jose. Inhabitants of areas zoned for single-family dwellings moved there, in part or in whole, because those were the kind of neighborhoods in which they wanted to live and raise their families. It would be a gross violation of the public trust if the San Jose City Council took it upon themselves to unilaterally enact a citywide Opportunity Housing policy. One might argue that even a limited adoption by the council would be problematic.
Ultimately, Opportunity Housing may prove a valuable tool in addressing San Jose’s housing affordability. However, the adoption is such a significant break from established zoning policy that it should only be decided by San Jose voters, whether enacted as a test case or across San Jose. Citizens for Fiscal Responsibility urges the San Jose City Council to heed this advice, and asks that residents send that same message to their council representatives and our mayor.
To learn more about our position, visit www.cfr-sj.org.
Pat Waite is president of Citizens for Fiscal Responsibility, a nonpartisan organization focused on San Jose and Santa Clara County.