Image: The San Jose Spotlight

A relatively obscure policy change coming to the City of San Jose can help reduce transactional and procedural expenses, enabling affordable housing to be built faster and at a lower cost.

On January 28th, San Jose’s City Council directed staff to modify a city policy to allow an affordable housing developer to use any approved bond issuer in the state of California. The Mayor, Vice Mayor Foley, and Councilmembers Kamei and Cohen authored a memo proposing a permanent change to the policy. The City of San José has been an outlier in the Bay Area by requiring bonds be issued through the City unless a special exemption is granted, which can add delay and increase costs. By removing the requirement for bond issuance through the City, San Jose can reduce transactional and procedural expenses, enabling affordable housing to be built faster and at a lower cost.

This policy change came under consideration because three older affordable housing developments requested exemption to pursue bond financing to resyndicate (extending the timeframe of affordability and investing in necessary remodeling to extend the useful life of the apartments). The bond issuers they identified are the California Housing Finance Agency (CalHFA), California Statewide Community Development Authority (CSCDA), and California Municipal Finance Authority (CMFA), which all specialize in bond issuances for affordable housing. These agencies are able to offer a faster and more cost-effective service. 

The City Council approved the process for exemption to move forward, which involves a series of public hearings, and also adopted the memo from the Mayor et al. While this alone is a relatively small change, it follows a pattern of reducing and eliminating barriers to the development and preservation of affordable housing in San Jose. SV@Home appreciates the City’s leadership, and we look forward to continued partnership to advance the development and preservation of affordable housing in the city.