An aerial image of a part of the city of Santa Clara and North San Jose. Photo by The 111th Group.
May 18, 2022

San José Spotlight: Amended settlement allows new housing in North San Jose


The Cities of San Jose and Santa Clara have finally taken steps to open up North San Jose for higher density market-rate and affordable housing. Mathew Reed, Policy Director for SV@Home, said his organization wants to see greater density in residential projects. “North San Jose must be built for the future, not our lower density past,” Reed said.

BY: Eli Wolfe┃San José Spotlight
PUBLISHED: May 18, 2022

A legal obstacle that blocked new housing in North San Jose for almost a decade has now been removed, thanks to an amended settlement between San Jose and Santa Clara.

San Jose councilmembers voted unanimously Tuesday to approve an agreement with Santa Clara, which will free the city to pursue housing development in North San Jose. The city envisioned such development under the North San Jose Area Development Policy created in 2005.

The policy called for 26.7 million square feet of office or industrial space, 2.7 million square feet of commercial space and up to 32,000 homes in North San Jose, which is roughly defined as the area between Highways 237 and 101 and Interstate 880. But litigation with Santa Clara and Santa Clara County produced a settlement more than a decade ago that effectively capped housing development in the area.

The amended agreement with Santa Clara will eliminate housing restrictions, allowing developers to construct thousands of new homes and commercial projects in the northern part of the city, which Councilmember David Cohen referred to as “the economic engine” of San Jose. Councilmembers are also pushing for 20% of new homes to be affordable, and to have a high capacity for residents. As part of the amended agreement, San Jose will pay for $28 million in traffic improvements.

Mayor Sam Liccardo said it’s imperative San Jose be able to build more homes, given the severe shortage of houses—especially affordable ones—in the region. The state has also imposed strict mandates to reduce greenhouse gas emissions, putting pressure on San Jose to reduce the number of vehicle miles traveled in the city. A 2020 state law—Senate Bill 330—did away with housing development caps across the state, weakening the justification for local restrictions.

“For a whole host of reasons, we have got to retire this plan,” Liccardo said, referring to the old settlement that restricted growth in North San Jose.

One party unhappy with the change is Santa Clara County. The county’s legal representative James Williams said in a recent letter the government is “surprised and disappointed” with San Jose’s course of action. Williams added the city’s action could constitute a breach of contract with the county and urged officials to defer a decision on the amended settlement pending further talks.

“It is simply not reasonable for the city to expect the county to agree to revised settlement terms without sufficient time to evaluate them,” Williams said, adding if the city moves forward, the county will have no choice but to pursue legal remedies. The county has raised concerns about development exacerbating traffic on the Montague Expressway.

‘Built for the future’

Cohen, who represents a large swath of North San Jose in District 4, expressed confidence the city will be able to resolve its disagreement with Santa Clara County. Cohen said he hopes the city increases the allowed density for residential homes in North San Jose.

“I’ve long said North San Jose is an area of the city that can support taller buildings and higher density,” Cohen said. “While we do have some great apartment complexes in North San Jose now, I wish they had been a little taller.”

Councilmember Matt Mahan, who is running for mayor, took a more adversarial approach in a memo that criticized the county for trying to obstruct the amended agreement, despite having ample opportunities to discuss plans for the area. He later told San José Spotlight the county’s saber rattling is unproductive.

“I am extremely disappointed to see the county executive and county counsel threaten legal action over a very reasonable, common-sense agreement between the cities of San Jose and Santa Clara,” Mahan said. “It’s more than ironic that the county is touting its progress on homelessness when they’ve seen a 3% increase since the last point in time count, and they are literally the last obstacle to adding 25,000 homes in San Jose.”

According to the most recent survey, San Jose’s homeless population grew by 11% during the pandemic, rising to 6,739 people.

Housing advocates and developers urged the council to move forward with its plan for North San Jose. Mathew Reed, policy director for SV@Home, said his organization wants to see greater density in residential projects.

“North San Jose must be built for the future, not our lower density past,” Reed said.

Land use consultant Erik Schoennauer said as long as there are disagreements between local governments there will be a cloud over North San Jose that discourages developers.

“Even if the issues of disagreement are tangential to new development, just the fact that there is that risk of litigation between two public agencies represents risk,” Schoennauer said.