SAN JOSE — A residential complex of affordable homes may sprout on a municipal parking lot site in downtown San Jose near the bustle of hotels, the city convention center and office towers.
The development would be located at the corner of South Almaden Boulevard and Balbach Street and consist of 87 affordable units, according to documents on file with San Jose city planners.
With home prices in the Bay Area, including the South Bay, at record levels, and reaching new heights on a consistent basis, modestly priced apartments could potentially be a welcome sight for people seeking to rent affordable shelter.
The residential project would be eight stories high and all the apartments would be offered at below-market rates, according to the proposal from Berkeley-based Satellite Affordable Housing Associates.
“Projects like this are essential to allow people who work and create, and who are really the glue that hold cities together, to be able to afford to stay there,” said Audra Levine, associate director of real estate development with Satellite Affordable Housing Associates.
Affordable housing is defined as a percentage of the median income for the metro area where a development would be located, according to guidelines established by the U.S. Housing and Urban Development Department.
In this case, were the development to be available right now for leasing, the current median household income is roughly $133,000 a year. According to Levine, the HUD guidelines would use 60 percent of that income level as the cap for those who would be eligible, or somewhere around the $80,000 range.
“The folks who could qualify to live in this property are EMTs, paramedics, school teachers, bus drivers, nursing assistants, a number of occupations and income levels would be eligible,” Levine said.
Residents in other occupations might also be an attractive group for the development, according to a 2015 staff memo prepared for the San Jose City Council.
“Due to the property’s location near the cultural and creative urban center of Silicon Valley, there is an opportunity to provide housing for artists in support of efforts to retain cultural workers in San Jose,” the city staff memo stated. “Artists across disciplines provide professional services for nonprofit art organizations through their work as creative entrepreneurs.”
Satellite Affordable Housing Associates intends to use a combination of financial resouorces and grants to develop the apartment complex on the site, which is owned by the city of San Jose.
“The city will be contributing the land for the project, and perhaps some capital funds,” Levine said. “We use funding from the state of California and the fedeal government, and we also work with private lenders to obtain conventional mortgages.”
In 2015, the appraised value of the 0.4-acre property was $2.4 million, the city memo revealed.
The pressure for more affordable housing has intensified lately because of a robust regional economy now producing jobs at a pace that outstrips development of residences in the Bay Area.
Adding to the housing squeeze: Big tech companies such as Google, Apple, Facebook, LinkedIn and Amazon, through a combination of new office developments, leases and property purchases, are occupying offices at an unprecedented pace, and preparing additional sites for their workers.
In downtown San Jose, Google is planning a transit-oriented development near the Diridon train station where 15,000 to 20,000 of the search giant’s employees could work. Plus, Adobe Systems wants to dramatically increase the size of its current three-building headquarters campus in the downtown by building a fourth office tower at an adjacent site.
“We need to include middle-class and low-income workers in our housing equation,” Levine said. “They are now being priced out of the market.”