September 27, 2007

What’s the rush?

Let's look at the bigger picture and make affordable housing a reality through better planning

By Pat Dando
President/CEO, San Jose Silicon Valley
Chamber of Commerce

Lately, San Jose’s mayor and city council have routinely deferred big policy decisions to the context of the General Plan review, where there will be opportunity for thoughtful discussion and where they can weigh the impacts on the city at large before making decisions on land use policy.

It is a positive trend that has become its guiding principle—until now.

The city of San Jose is on the verge of redoing its General Plan—the foundation for its future sustainable growth. Decisions on Coyote Valley, North First Street and Evergreen have been deferred and are instead being folded into the General Plan. This is positive thinking in that it will lay the foundation for future growth that will be smart and strategic.

Suddenly, during a late-night council session, there was a rush to make a decision to implement citywide inclusionary housing mandates in transit areas near current and future Light Rail and BART stations. Inclusionary housing, also known as inclusionary zoning, refers to city planning ordinances that require new residential construction to include a certain percentage of low income “below market rate” (BMR) housing. The idea of providing affordable BMR housing near transit corridors is good in concept. But, because the General Plan review process will consider studies and potential alternatives that could prove better for the “bigger picture,” we’re wondering why the rush?

If there’s any place that we want to have more development quickly, it is in transit areas because our federal funding for BART will depend on the number of housing units around future BART stations. We don’t want to discourage that. But at the same time, we don’t want to create disincentives for developers who have a choice to take their projects elsewhere should the cost of doing business in San Jose become prohibitive.

With inclusionary zoning mandates in force in all redevelopment areas and agreed to in Coyote Valley, nearly two-thirds of the city already requires low-income housing. Since most of the new development proposals in San Jose will focus on transit-oriented development, the ruling would essentially impose the requirement on all new development and create yet another environment that would be less than business friendly and would raise the cost of housing for the market rate buyer. This could produce unintended consequences.

Recent studies show that in cities such as Newark and counties such as San Benito implemented inclusionary housing ordinances have backfired. Measures designed to grow the supply of affordable housing over the past two years have in fact failed to produce significant results. Currently, Oakland is considering taking similar steps, but is being advised to instead make inclusionary housing part of a broader discussion of housing affordability.

The San Jose General Plan Envision 2040 Task Force will convene this month and we feel any proposal that will affect the cost and number of houses built should be addressed at that time. It would also allow for feasibility studies and a proper course of public discussion. San Jose already builds more affordable housing than any other major city in California, so what’s the rush?

Pat Dando is president and CEO of the San Jose Silicon Valley Chamber of Commerce. She served 10 years on the San Jose City Council, her final four years as vice mayor, and was a top aide to California Gov. Arnold Schwarzenegger.

This article has been previously published in the Chamber Advocate and the Silicon Valley/San Jose Business Journal.