Joint Housing Commission & Planning Commission Study Session - 2026-02-25
Meeting Intelligence Preview
Meeting Summary
The joint Housing Commission and Planning Commission study session reviewed the 2025 Housing Element Annual Progress Report, revealing San Jose has permitted only 17% of its 62,200-unit RHNA allocation through three years of the eight-year cycle. Staff reported that only about one-third of the nearly 32,000 entitled units are currently financially feasible due to high development costs. On January 27, 2026, City Council extended the Multi-Family Housing Incentive Program and Downtown Residential Incentive Program, updated the Inclusionary Housing Ordinance, and approved $1.6 million for soft story retrofitting plus a $2 million congressional earmark.
Key Decisions (7)
Multi-Family Housing Incentive Program Extension
City Council extended the multi-family housing incentive program targeting particular areas across the city to encourage development through reduced or eliminated fees and taxes.
Downtown Residential Incentive Program Extension with Office Conversion
City Council extended the Downtown Residential Incentive Program and expanded it to include conversion of office buildings into housing in the downtown corridor. The Bank of Italy building is currently undergoing office-to-housing conversion under this program.
Inclusionary Housing Ordinance Update
City Council approved several amendments to the inclusionary housing ordinance, which requires approximately 15% deed-restricted affordable housing within market rate development, with 12-13 different pathways to compliance.
Soft Story Retrofit Funding
City Council approved $1.6 million for initial soft story investment to retrofit small multifamily buildings built before early 1990s building code changes. Additionally received $2 million congressional earmark from Congress member Liccardo.
Mobile Home Rent Ordinance Update
City Council adopted alignment of mobile home rent ordinance with state law and directed staff to return by end of calendar year with program updates after extensive community outreach.
SB 9 Housing Expansion in Historic Areas
Zoning ordinance changes allowing additional types of housing or SB 9 type housing in historic areas and R-2 zoning were completed with final City Council approval in January 2026.
Group Homes Zoning Changes
Zoning ordinance changes around group homes for seven or more persons in single family neighborhoods were completed with final City Council approval in January 2026.
Zoning Changes (2)
Historic areas and R-2 zoning districts citywide
City of San Jose
Single family neighborhoods citywide
City of San Jose
Development Activity (2)
Bank of Italy Building Conversion
Office to residential conversion project, currently under construction with scaffolding visible
City Infill Housing Ministerial Approval First Project
First project entitled through the new streamlined ministerial approval pathway for housing in urban village growth areas
Market Signals (5)
Housing Demand
San Jose has permitted only 17% of its 62,200-unit RHNA allocation through three years of the eight-year cycle, with only about one-third of 32,000 entitled units currently financially feasible.
Commercial Demand
Four office buildings are in the pipeline for the new office-to-residential conversion program in downtown San Jose, indicating interest in repurposing commercial space.
Sentiment
Cost of development study shows San Jose faces higher labor and material costs than peer cities like San Diego and Sacramento, contributing to slower housing production.
Housing Demand
First-time homeownership is down significantly in the Silicon Valley region according to the 2026 Silicon Valley Index, with affordability challenges persisting despite moderate price softening.
Infrastructure
SB 9 uptake remains very low citywide with only a few dozen applications, partly due to owner-occupancy requirements and high startup costs for small-scale development.