San Jose needs high-rise housing incentives for downtown
The following appeared on the “Viewpoint” page of the Silicon Valley/San Jose Business Journal on May 12, 2006
By Eric Sahn
As hard as we’ve worked in the past 30 years to revitalize downtown San Jose, the city’s core still lacks completeness that comes from a balance of living, working and shopping.
Why?
The simple answer: people go home . . . to Willow Glen, Almaden Valley, the east side, west side, Cupertino, Fremont, Los Gatos, Morgan Hill, Gilroy and Modesto.
Downtown won’t be a 24-hour location until people can actually walk home. We’re talking lots of people – lots more than those filling the 10,000 units built (or planned) between 1980 and 2010.
Once critical mass is achieved, we’ll see a downtown full of life and culture and diversity and identity – and retail.
But it will take more housing than currently planned, and more patience. San Jose needs only look at Los Angeles. That city center has gained 10,000 new residents (6,600 new units) in the past seven years – and it still can’t attract quality national retailers to new mixed-use developments.
Like L.A., San Jose cannot rely on 9-to-5 office workers (OK, 9-to-9 in our Silicon Valley world) or the current base of residents to support retail. Beyond our dining and entertainment core, soft goods, fashion and service retailers require substantially more people to make their businesses viable.
The City Council’s incentive to exempt high-rise residential in certain downtown redevelopment areas from providing affordable housing has been a catalyst for a couple of projects; however it expires June 30. Considering that not a single high-rise condo unit has yet been sold (leaving many wondering what the ultimate market value of the housing will be) it seems obvious that the mayor and City Council should extend the affordability waiver for at least another year. Even better, the waiver should stay in place until a certain number of high-rise units are built and sold.
The other necessary policy correction involves the proposed 44.8 percent increase in park fees for each new downtown residential unit. Because high-rise projects impact park demand differently from suburban development, a different (reduced) fee structure is needed for downtown.
The task ahead is to balance competing needs. Yes, we want to increase housing opportunities for lower-income working families. Yes, we want more resources for parkland acquisition and maintenance. However, the whiff of improving business conditions must not be stifled by public policy decisions that could have the effect of unintentionally stopping the progress now under way. Downtown is not far enough along as a high-rise housing market to halt city incentive policies.
Eric Sahn is a principal at DJM Capital Partners, Inc. and vice president of the San Jose Downtown Association.
