The San Jose City Council on Tuesday will decide whether or not to extend a program that drastically reduces the cost for developers to build high-rise buildings in the downtown area.
The city started the program in 2012 to reduce fees and requirements as incentives to developers to build, and it has been renewed every couple of years. Now, with nine high-rise projects underway, it’s time for city leaders to decide if the program should continue.
Labor and housing advocates are against another renewal, saying the nine developers would get $67 million dollars in what they call "subsidies" for "luxury housing."
"We should not follow the Washington, D.C., Donald Trump model of subsidizing billionaires," said Sandy Perry of the Affordable Housing Network.
Ben Field of the South Bay Labor Council added: "What does the city get in return? No affordable housing, no money for transportation and traffic infrastructure and no good quality jobs."
Officials with the Silicon Valley Organization, the Silicon Valley Leadership Group and At Home, along with developers and realtors said in a news conference the South Bay is the most expensive place in the country for construction, and developers operate on a 5% profit margin. Fees can be up to 15% of the cost, they said.
They scoffed at the description "luxury housing."
"These aren’t luxury apartments," said Matt Mahood, CEO for the Silicon Valley Organization. "This is market rate housing in downtown San Jose. It’s for people who work in the downtown core or commute out of the downtown core using transit."
The group said some projects have shared living quarters.
"Eleven-hundred people in 260-rooms? That doesn’t sound like luxury to me," said Scott Knies of the SJ Downtown Association. "That’s sharing bathrooms, little teeny rooms."
The two sides are likely to face off during Tuesday's meeting over the idea of luxury housing as well as the significance of donations from developers to the mayor’s election campaign.
Mayor Sam Liccardo put out a statement Thursday, saying high-rise housing will not get done unless the city reduces the cost to build them.