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Nearly all the cities in Santa Clara County — including San Jose — are moving so slow in meeting state housing goals that hitting the numbers looks like a pipe dream, a data analysis by San José Spotlight shows.
Every eight years, the state decides how many homes need to be built in order to keep up with population growth. That amount is divided across regions, counties and cities. The majority of cities in the county have grappled with meeting their housing goals and industry experts say they’ll continue to struggle, especially with affordable housing.
The county needs 128,773 new homes by 2031 across all its cities, 72,848 of which must be affordable, or below 120% of the area median income. In 2023, the area median income for a family of four in Santa Clara County was $181,300.
For the county to meet state housing goals, it would need to facilitate building about 16,09 homes every year, 9,106 of which must be affordable. But for the past five years the county wasn’t even close.
San José Spotlight compared housing progress data from 2018 to 2022 published by the state’s Department of Housing and Community Development to the county’s goals for the 2023-31 cycle, along with each city’s goal, which is established by the Association of Bay Area Governments.
Of all 15 cities in the county, only three have gotten close to the pace needed to achieve their 2031 housing goals: Gilroy, Monte Sereno and Morgan Hill. But none have come close to their affordable housing goals.
To meet its state-mandated housing goals, San Jose — the county’s largest city — would need to build 7,775 homes every year until 2031. In the past five years, the most the city gained in one year was 1,710. In January, the state approved the city’s housing plans covering the next eight years, with an outline of how the city hopes to add 62,200 homes by the deadline.
Most cities’ housing gains are well below the average. Santa Clara saw its peak housing production in 2020, when it added 1,432 homes to its stock, close to the 1,454 pace needed to meet its overall goal of 11,632 by 2031.
Other cities, like Cupertino, Palo Alto and Saratoga, have had years where no housing was built at all. Of the county’s 15 cities, nine have their housing plans approved. Cupertino, Los Gatos, Monte Sereno, Palo Alto, Santa Clara and Saratoga have yet to get state approval. The county’s housing plans have also not been approved yet.
Land use consultant Erik Schoennauer said it’s integral for cities to keep up a steady pace of housing development. If a city falls short in the first few years of a new housing cycle, the city has to make up that deficit in future years, which is difficult.
“You gotta create the environment so that the private market will build housing at a pace that achieves the goals,” Schoennauer told San José Spotlight.
Schoennauer said the largest barrier to building more housing is cost. Unfortunately, city governments are limited in what they can do. Streamlined processes and setting aside more land for housing are two major parts, he said, adding that the time it takes to build housing makes the cost of building more expensive.
Developers are also looking for a city’s process to be predictable, according to land use consultant Bob Staedler. He said cities need to put more resources into supporting the development process to meet the state’s goals.
“There hasn’t been a concerted effort to make housing a priority and to move heaven and earth to make it a reality,” Staedler told San José Spotlight.
Cost and process issues are compounded with affordable housing, Schoennauer said, and federal, state and local governments should do more to subsidize development.
“It’s mind-boggling that California, the fifth largest economy on the face of the earth, cannot set aside enough funding for affordable housing,” he said. “The No. 1 economy on the face of the earth and the number of dollars that go into the production of affordable housing is peanuts.”
Santa Clara County would need 9,106 new affordable homes each year to meet the 2031 goal, but in previous years, it has barely constructed more than 1,000 per year. San Jose would need 4,311 new affordable homes annually to meet its 2031 goals. The most it’s gained in the past five years was 259, in 2020.
For Sandy Perry, vice president of the board of the South Bay Community Land Trust, that’s unacceptable.
“Market rate housing doesn’t do anything to solve our affordability crisis,” Perry told San José Spotlight.
San Jose gains an average of less than one affordable home per 1,000 residents, based on housing and population data from 2018, 2020 and 2022. In those years, Morgan Hill had the fastest average, gaining about seven affordable homes per 1,000 residents.
Perry said affordable housing is what county residents actually need, and many cities don’t do enough to facilitate building it.
For example, he pointed to San Jose Mayor Matt Mahan’s March budget message, where Mahan suggested the city could explore pausing the city’s inclusionary housing rules, which mandate that new or renovated multi-family homes be 15% affordable housing. Perry said regulations like that are critical.
“So producing new housing depends on the rents rising, but that doesn’t help the people of San Jose,” Perry said. “The people of San Jose want affordable housing.”
This historical review doesn’t account for procedural reforms or rezonings that were implemented as part of the Housing Element just last year. (I mention rezoning because this article covers the whole county, but Mountain View had essentially none.) The hope is that the reforms will accelerate housing production, at least when interest rates come down.
I should also point out that Sandy Perry is factually wrong about the effect of market-rate housing. Each person who moves into new market-rate housing frees up a spot in older market-rate housing, whose price drops as a result. Think of all those new apartments as “yuppie containment zones”.
Lots of affordable land and space in South San Jose and the East Bay. Run a bus every 20mins and everyone will flock to it.
I find it mind-boggling that it costs Mountain View $1,000,000 to build a 2+2 BMR unit. With costs like that, we’re never going to make progress on BMR housing. With costs like that we can barely keep up with Market Rate housing. Working on the supply side has failed and there is no reasonable prospect of it succeeding. We need to work on demand: no more good jobs! Without the high paying jobs people won’t move in and demand will at least moderate giving us some time to deal with the supply issue. We have a reputation for being business hostile: let’s own it! Don’t hire here!
Working on the supply side has failed only because we haven’t tried nearly hard enough. (Especially our neighboring cities.) If you’re severely dehydrated, one glass of water won’t help you feel better.
I agree with ivg, and with Seth’s point on costs (not his solution LOL).
ALL additional housing inventory helps, not just subsidized housing. I’ve seen Apple employees rent ‘class C’ apartments that would normally be rented by more ‘blue collar’ workers. The Apple employees make more income and can drive up the cost of the class C apartments. We need more of everything.
Also, a friend built a house in Mountain View. The build was delayed 6 months because of required migratory bird studies! It took 3 years to build their house. Every permit, every safety and efficiency feature, was at some point approved as a ‘good idea’, and I’m sure they all are, but the collective sum of them makes housing extremely expensive. And still we keep adding requirements and wondering why housing is so expensive.
We’ll only get affordable housing when the supply of housing, at all price points, exceeds the demand.
“The majority of cities in the county have grappled with meeting their housing goals and industry experts say they’ll continue to struggle, especially with affordable.”
The industry experts are completely right. The State’s incentives to developers are completely inconsistent with the “goals” they have set for towns and cities. The state provides perks to developers under density bonus laws when 11% of a new project is affordable units. Guess what? Over the past 8 years, only about 11% of all units created in MV were affordable. What does that mean? ALMOST ALL of the new units constructed are expensive, market rate units that are UNAFFORDABLE to most of the population. The “solution” to the high cost of housing being offered by the State (thanks to YIMBY advocacy) is to create EVEN MORE unaffordable housing.
““You gotta create the environment so that the private market will build housing at a pace that achieves the goals,” Schoennauer told San José Spotlight.”
Exactly true. Unfortunately, building affordable housing requires FUNDING. The State has delegated responsibility to build this housing to local governments, BUT THEY HAVEN’T provided the funding. State “goals” are unfunded mandates. The State “requires” MV to build 11,000 total units, 6,000 of which are required to be affordable. Obviously we are not going to meet that target. 11% of 11,000 is 1,210. IF we manage to build 11,000 units, only 1,210 of them will be affordable, because for-profit developers build as few such units as they possibly can. And then, using bills like SB 35 authored by Scott Weiner (D-SF), developers get even MORE PERKS for failing to build the affordable units that are needed!
This all makes sense because the founders of the YIMBY movement are mostly tech bros who are primarily fighting to help high wage workers. See “YIMBYs ate the world—except for SF. Now its founders are up to new tricks” – https://sfstandard.com/2022/11/01/yimbyism-ate-the-entire-world-except-its-own-backyard/
“Two dozen of San Francisco’s top YIMBYs gathered in a spacious Bernal Heights backyard in September to discuss the movement founder’s latest venture: a $1 million cash reserve to take San Francisco to court should it stymie any new housing projects.”
“YIMBY founder Sonja Trauss, who led a group discussion about the annals of housing policy … likened the Sue San Francisco Fund to a denial-of-service (DoS) attack on the city … The denial-of-service portion is because we could send threatening letters for every single missed housing deadline,” Trauss said, describing the money as ready-to-go ammunition to sue San Francisco over housing deadlock.”
“The crowd of mostly male tech workers—the “hoodie caucus,” in the words of one industry observer—rippled with excitement. This was a problem that could be solved with software and automation, which was squarely in their domain.”
The YIMBY movement is primarily focused on helping highly paid tech workers. The
“The majority of cities in the county have grappled with meeting their housing goals and industry experts say they’ll continue to struggle, especially with affordable.”
The industry experts are completely right. The State’s incentives to developers are completely inconsistent with the “goals” they have set for towns and cities. The state provides perks to developers under density bonus laws when 11% of a new project is affordable units. Guess what? Over the past 8 years, only about 11% of all units created in MV were affordable. What does that mean? ALMOST ALL of the new units constructed are expensive, market rate units that are UNAFFORDABLE to most of the population. The “solution” to the high cost of housing being offered by the State (thanks to YIMBY advocacy) is to create EVEN MORE unaffordable housing.
““You gotta create the environment so that the private market will build housing at a pace that achieves the goals,” Schoennauer told San José Spotlight.”
Exactly true. Unfortunately, building affordable housing requires FUNDING. The State has delegated responsibility to build this housing to local governments, BUT THEY HAVEN’T provided the funding. State “goals” are unfunded mandates. The State “requires” MV to build 11,000 total units, 6,000 of which are required to be affordable. Obviously we are not going to meet that target. 11% of 11,000 is 1,210. IF we manage to build 11,000 units, only 1,210 of them will be affordable, because for-profit developers build as few such units as they possibly can. And then, using bills like SB 35 authored by Scott Weiner (D-SF), developers get even MORE PERKS for failing to build the affordable units that are needed!
This all makes sense because the founders of the YIMBY movement are mostly tech bros who are primarily fighting to help high wage workers. See “YIMBYs ate the world—except for SF. Now its founders are up to new tricks” – https://sfstandard.com/2022/11/01/yimbyism-ate-the-entire-world-except-its-own-backyard/
“Two dozen of San Francisco’s top YIMBYs gathered in a spacious Bernal Heights backyard in September to discuss the movement founder’s latest venture: a $1 million cash reserve to take San Francisco to court should it stymie any new housing projects.”
“YIMBY founder Sonja Trauss, who led a group discussion about the annals of housing policy … likened the Sue San Francisco Fund to a denial-of-service (DoS) attack on the city … The denial-of-service portion is because we could send threatening letters for every single missed housing deadline,” Trauss said, describing the money as ready-to-go ammunition to sue San Francisco over housing deadlock.”
“The crowd of mostly male tech workers—the “hoodie caucus,” in the words of one industry observer—rippled with excitement. This was a problem that could be solved with software and automation, which was squarely in their domain.”
The YIMBY movement is primarily focused on helping highly paid tech workers. It’s frightening to see YIMBY leaders willing to use technology in order to get “solutions” that disproportionately help high wage workers.