Housing Policy to Pay Attention to Right Now in Sacramento

JOIN US VIRTUALLY ON WEDNESDAY, AUGUST 27TH 12PM

Join SV@Home for our next Policy in Action@Home as we break down the latest developments from the Capitol with insider guest Leslie Rodriguez, Partner at California Strategies and Board Chair of the SV@Home Action Fund.

We’ll unpack:

– What’s in (and out of) the state budget

– The housing bills gaining traction and the ones quietly dying

– How this legislative session could shape housing access in our region for years to come

This is your chance to get the real story behind the headlines and what it means for our local work.

RSVP now and join the conversation.

ADD TO YOUR CALENDAR
August 12, 2025

From Data to Action: Turning the Grand Nexus into Stronger Housing Policies

Share:

The Grand Nexus Study is moving from research to real-world impact, equipping Santa Clara County cities with the tools to adopt or strengthen Inclusionary Housing Ordinances, Residential Impact Fees, and Commercial Linkage Fees. Here’s how each policy works, which cities are considering them, and why right-sizing matters.

In our last article, we introduced the Grand Nexus Study—a multi-jurisdiction effort providing Santa Clara County cities with the legal and economic analysis needed to strengthen affordable housing policies. By measuring how new development drives demand for affordable housing and what contributions are financially feasible, the study equips cities to adopt impactful, legally defensible tools.

This work is now shaping three key policies:

  • Inclusionary Housing Ordinances (IHOs) require larger residential developments to set aside a percentage of units at Below Market Rate (BMR) or pay an in-lieu fee. Mountain View’s IHO, updated in 2019, prioritizes on-site production and has delivered more than 1,900 affordable homes and $87 million in leveraged funds. Morgan Hill has paired inclusionary requirements with in-lieu fees to help finance standalone projects like Royal Oak Village and the forthcoming Magnolias veteran housing. Gilroy, Los Altos Hills, and Sunnyvale are exploring IHOs for the first time, while Santa Clara and Mountain View are reviewing updates to existing programs.
  • Residential Impact Fees apply to smaller residential projects that fall below IHO thresholds, ensuring every unit contributes toward affordable housing needs. Gilroy, Los Altos Hills, and Sunnyvale are considering these fees for the first time, aiming to capture contributions from projects that still generate housing demand but wouldn’t otherwise be subject to inclusionary requirements.
  • Commercial Linkage Fees (CLFs) charge new commercial developments—such as office, retail, hotel, or industrial projects—for the increased housing needs created by their workforce, particularly serving lower-wage employees. Gilroy, Sunnyvale, and Santa Clara are evaluating CLFs for the first time, while Los Altos Hills is exploring an update to its existing program. Even with current headwinds in the commercial market, establishing these frameworks now positions cities to act quickly when development rebounds.

One of the most valuable insights from the Grand Nexus is the need to calibrate policies so they are both impactful and achievable. When requirements are set too high, projects can become financially infeasible; when too low, the community’s housing needs go unmet. Each city is working within its own market conditions, housing demand, and development patterns—Mountain View can sustain higher on-site requirements, while Morgan Hill’s blended approach leverages in-lieu fees alongside on-site production.

The outcomes of these programs are more than figures in a policy report. They result in new homes for low- and moderate-income families, permanent supportive housing for residents exiting homelessness, affordable rentals for essential workers, and dedicated funding that cities can combine with state and federal resources. They also foster more inclusive, mixed-income neighborhoods, ensuring that growth benefits a wider range of residents.

As the Grand Nexus draft reports are finalized this summer and recommendations take shape in the fall, cities will begin translating the data into concrete proposals for IHOs, Residential Impact Fees, and CLFs. These discussions will determine how each tool is structured and applied, and there will be opportunities for both the development community and advocates to help shape them. SV@Home will be closely following these conversations and sharing ways to engage in the months ahead.

Stay engaged as your city considers these tools. Public hearings and workshops this fall will be key moments to weigh in on how IHOs, Residential Impact Fees, and CLFs are structured—helping ensure they are right-sized and deliver community benefit.