All right, good afternoon and welcome everyone.

I would like to call to order this meeting of the San Jose City Council for the afternoon of January 27th.

Tony, would you please call the roll?

Kameen?

Here.

Campos?

present

tordios

here

cohen

here

ortiz

present

mulcahy

here

duan

here

candelas

here

casey

here

foley

here

mahan

here

you have a quorum

thank you welcome again now if you're able please stand and join us in the pledge of allegiance

I pledge allegiance to the flag of the United States of America, and to the republic for which it stands, one nation, under God, indivisible, with liberty and justice for all.

Thank you.

Today's invocation will be provided by the Westmont High School Jazz Band and

Councilmember Kamei will tell us more. Thank you so much. This year we're

pleased to emphasize our youth voices here in San Jose and to highlight the

amazing skills of students from across the city. I learned this from Vice Mayor

Foley. Today we are excited to hear a performance from the Westmont High School

School Jazz Club, the group of students who take the time from their schedules to come together

and practice the art of jazz music. Westmont High School has a steady music program that offers band,

guitar, AP music theory, and concert choir. They also have a competitive marching band,

winter guard, and winter percussion. The students from the jazz band joining us today take time out

of their lunch breaks to practice and perform famous pieces from historic artists such as Duke

Ellington, Chick Corea, and Hank Levy, and Yoko Kano. Students in the Jazz Club's executive board

select the music they play each semester and are supported by the Westmont High School Music

Director, Christiana Mandler. Today, the jazz band will be performing a nightingale sang in

Berkeley Square. Please join me in welcoming the Westmont Jazz Club.

¶¶

ORCHESTRA PLAYS

ORCHESTRA PLAYS

Thank you.

All right, Westmont High Jazz Band.

Thank you.

That was beautiful.

We're on to our ceremonial items.

Councilman Condellis, if you would join me at the podium,

we will recognize San Jose Police Department's robbery unit.

All right, while I wait for the robbery unit to come out and stand behind me, I'd like

to just offer a warm welcome to everybody.

Today, I am proud to recognize a team whose work is absolutely essential to public safety

in San Jose, our San Jose Police Department's very own robbery unit.

I'm honored to be joined at the podium by members of the robbery unit, led by Captain Jennifer Bible,

and our city manager, Jennifer McGuire, and Santa Clara County District Attorney Jeff Rosen,

as well as Deputy Chief Brian Spears.

On September 5th of last year, our community was shaken by a brazen robbery at Kim Hung Jewelry,

located just off of Aborn Road.

This wasn't just a crime against a storefront.

It was an attack on a family-run small business, and it struck at the heart of our Vietnamese community,

and it shook the sense of safety, dignity, and belonging that every resident deserves to feel in their own neighborhood.

In the aftermath, our city leaders and the leaders of the county made it clear that this would not be ignored.

On the night of the robbery, in fact, the captain sent me a text to reassure me,

making it very clear that his officers would be put to the test, that this was a task that they prepared for and were ready to deliver.

The robbery unit stepped forward as a driving force behind a complex, multi-jurisdictional investigation,

an effort that demanded coordination, precision, and persistence, and that they did what they always do.

They put in the long hours and relentless follow-up, the detailed casework, and the tough decisions that most people don't see but everyone benefits from.

That's the daily grind of this unit, knocking down leads that go cold, tracking patterns,

building cases, supporting victims and families on some of their worst days,

and staying focused even when the work is exhausting and the spotlight is elsewhere.

Their tenacity and grip paid off.

They not only caught 15 perpetrators, they restored trust

and helped disrupt the pattern of violence too often seen on TV and on social media.

And through close collaboration with the Santa Clara County District Attorney,

their work has translated into real accountability, strengthening public safety across the South Bay

and sending a message that San Jose will not look the other way when our communities are harmed.

To the members of this robbery unit, thank you.

This commendation is not only about what you've accomplished in this case and the countless hours worked,

it's how you do the job with integrity, discipline, and purpose.

You do this for the work, for the people who depend on you, often without recognition.

So today, we are recognizing that effort and lifting you up.

On behalf of the mayor and the entire council and the community that you serve,

thank you for your courage, your professionalism, and your commitment to our city.

Now, that being said, I'd like to invite Deputy Chief Brian Spears to share a few words

and then our very own district attorney as well.

Deputy Chief.

Thank you, sir.

I'm here to just share a few words with you.

With persistence, professionalism, and teamwork, they take some of the most complex and emotional charge cases and see them through, often under intense pressure and with limited time.

Their work requires sharp investigative skills, long hours, and an unwaveringly commitment to victims who often experience one of the worst moments of their lives.

Because of this unit's dedication, offenders are held accountable, patterns are disrupted, and our community is safer.

On behalf of the San Jose Police Department and the community you serve, thank you for your relentless efforts, your integrity, and your service.

Your work does not go unnoticed, and today we are proud to see you recognized.

And I'd like to pass it to Santa Clara County District Attorney Jeff Rosen.

Thank you, Deputy Chief.

Grateful, humble, and proud.

Not only because of this thoughtful and meaningful commendation,

I'm proud that we all live and work in San Jose and Santa Clara County.

The officials responsible for the public safety of our county,

including Councilmember Candalis, Mayor Mahan, all the members of the City Council,

and of course the police officers and prosecutors behind me,

we never look at one robbery of one small jewelry store as just another day in the big city.

Uh-uh.

We are here, ready, able, and very willing to take on organized retail robberies.

Perhaps the masked assailants who smashed their way into that jewelry store on Akon Road

and knocked over the elderly owner as they smashed his jewelry cases that he'd spent a lifetime

building. Perhaps they thought the family-owned business was an easy mark. Their plan didn't count

on the San Jose Police Department, whose officers stopped at nothing to track and arrest these

suspects. They didn't count on the prosecutors in my office, Deputy DA Bobby Philbrook, who has this

case right here, and his supervisor, Michael Gilman, who helped the San Jose Police Department

review more than 20 search warrants and filed charges against the perpetrators as the evidence

came in. We wrote motions to keep these violent offenders in custody, pending a hearing about the

source of any monies they might proffer for bail to ensure they didn't use any of their ill-gotten

gains to pay for their release. Once they were in court, we appeared on almost a dozen bail motions

to keep them in custody. It was a relentless effort. Today, 12 of the 15 remain in jail

after my office persuaded a judge that these crooks were a risk to the safety of our community.

Once most of the perpetrators were identified, including the robber who knocked over the 85-year-old

owner of the store, Mr. Zhao Buoy. Everybody remembers that video and remembers this old man

being knocked to the ground. And I'm sure many thought, how is that person who knocked him to

the ground going to be identified? But they figured it out. They figured it out. And that

guy's in custody with additional charges. We took this case to the grand jury in December.

they returned an indictment on all of these offenders. These multiple cases are now

consolidated into one large case with the trial date set for February 2nd. We continue to advocate

for them to remain in custody and for state prison sentences if they choose to please guilty,

accept responsibility, and make restitution to the victim and his family. We're also preparing

for trial if they choose that route. More than happy to. So I'm proud today. I'm proud that San

Jose and Santa Clara County is a place where when you make the bad mistake of targeting a mom and

pop business, or any business for that matter, you will be found, you will be caught, and you will be

prosecuted. That robbery gang should have kept driving and gone somewhere else. Now they're going

to prison. Thank you.

May we present the commendation?

agree

All right.

Thank you.

All right.

Thank you, Council Member, Mr. DA, City Manager, and Chief.

We're on to our next ceremonial item.

Council Member Duan, if you would join me at the podium,

we will recognize Anuk.

Council Member, there he is.

Today, I am pleased to recognize Anak Eyeglasses for his dedication to serving underserved

communities here in San Jose.

For the family who are already struggling to meet basic necessities, access to vision

care should never be an added burden. Anak, step in to ensure that children can see clearly,

learn confidently, and fully participate in school without families having to choose between

eye cares and other essential. Anak has also been a value community partner of the San Jose

Public Library's 7Tree branch. They regularly attended library events to provide vital resources

to the community. When the 7Tree branch manager shared that adult ESL learners were struggling

to see the board during class, Anak immediately responded by offering free eye screenings

and providing glasses so the student could fully engage in learning.

As one ESL student shared,

I can see the board.

I read what it say.

One sentence perfectly captures the meaningful difference Anax made.

This impactful work is made possible by an extraordinary team

led by founder Poonam Goyal, along with dedicated doctors and volunteers

who generously give their time, expertise, and resources.

In many cases, they have even contributed their own finance and funding

to sustain the nonprofit organization and continue serving those in need.

Their commitment goes beyond service.

It reflects a deep belief that clear vision is not a luxury, but a basic need, and that every child and learner deserve it.

Thank you, Anak, for all the work you do and for the lasting difference you make in our community.

Please.

Thank you.

I will keep it short.

I know that you have a big agenda today, Mayor Mahan,

and other council members.

Thank you, Council Member Don.

I strongly believe that education is the most powerful path to get out of poverty.

Our mission is simple but urgent.

No child should be left behind in school due to a parent's inability to afford proper eye care.

Through our work, we have seen children diagnosed with treatable eye disease, eye disorders.

Also, if it was not recognized in a timely manner, they could have lost vision.

Some of our children were diagnosed with childhood cataract.

Some are diagnosed with color blindness.

And a little girl right here in Santa Clara County, if not taken care right away, she would have lost her vision.

Through our optometrist diagnosis, she saw an ophthalmologist and had a surgery in her eyes,

and the school nurse sent us a really sweet letter.

If you go to our website, you will see all that there.

My only dream is that children should be able to dream and reach the stars,

and that can happen only with 2020 vision.

And thank you, everybody here, for recognizing our work,

not only in the city of San Jose or in the Santa Clara County.

We are up from north in Tahima County to Kern County,

all across California and in New Jersey.

It is run by all volunteer team at this time.

No one is making any income or salary here.

Everybody is devoting their time.

And the beautiful young women behind me are the face of, and they are doing everything they can to help the communities in California get 2020 vision.

We not only support the school students, we also support in Santa Clara County partner nonprofits like Bill Winston, Catholic Charities, Home First, you name, and they are all getting free vision care through ANAC.

And ANAC in Hindi, Hindi is a language from northern India.

It means eyeglasses, and that is my home country.

That's why we name the nonprofit ANAC.

Thank you, everyone, for listening to me.

Before we present the commendation, I would like to present Anak Eyeglasses with a grant of $5,000 so the team can continue with their amazing work.

Thank you.

day.

Let's move.

Good afternoon.

January 27th is International Holocaust Remembrance Day,

which commemorates the anniversary of the liberation of Auschwitz-Birkenau.

The Holocaust took the lives of 6 million Jews, 1.4 million Polish people,

nearly 300,000 Romani people, members of the LGBT community, and other political dissidents.

Remembering the lessons of the Holocaust seems as important as ever in the times we find ourselves.

This is the fifth year I have recognized Holocaust Remembrance Day at City Hall,

and it is particularly discouraging that it seems more poignant than ever

because of a disturbing escalation in anti-Semitism even in our own community.

On a day meant for remembrance, we are reminded that hatred did not end with the Holocaust.

It persists, and it demands our attention, our courage, and our resolve.

A few years ago, as part of Holocaust Remembrance Day,

we hosted an exhibit at City Hall remembering the righteous among nations

who hid children to keep them safe from the Nazis.

In an eerie parallel this weekend, I was reading about people in Minnesota hiding children from our government.

So we must never forget.

In this moment, it is more important than ever that we remain strong and vigilant while also holding fast to compassion and clarity.

We must confront hate wherever it happens, not with fear or silence, but with moral courage and a clear commitment to human dignity.

Our hearts and thoughts are, as always, with the victims of the Holocaust and with the survivors who endured unimaginable loss.

But remembrance alone is not enough.

Honoring survivors also means caring for them,

especially those who are still with us today

and who often face profound challenges as they age.

Here in our own community,

Jewish Family Services of Silicon Valley and Jewish Silicon Valley

partner each year on Operation Dignity,

a January campaign dedicated to supporting Holocaust survivors' emergency needs.

The campaign seeks to raise $110,000,

matched dollar for dollar by Kavad Shef,

generating $220,000 to assist survivors,

many of whom live solely on limited SSI income and have no financial cushion for unexpected expenses.

These funds provide critical support such as dental care, hearing aids, home safety items, and essential repairs,

enabling survivors to age in place safely, independently, and with dignity.

By addressing these needs, Operation Dignity helps survivors maintain their health, their independence,

and their connection to the communities they help build.

Today, as we proclaim International Holocaust Remembrance Day,

I want to recognize Jewish Family Services and thank them for the work they do

to support survivors and others in the community.

CEO Susan Fraser is here, along with the staff of Jewish Family Services,

and I think Susan is going to say a few words.

Thank you, Council Member Cohen, and thank you, Mayor Mahan and Council Members.

I am honored to be joined today by our incredible staff of Holocaust Survivor Support Team from Jewish Family Services right here.

Today, we honor nearly 300 Holocaust survivors, now mostly in their 90s, living right here in the San Jose area.

As children, they hid, they were displaced from their homes, they starved, and they lost their families at the hands of the Nazi regime, solely because they were Jewish.

The reality of the Holocaust still echoes because our survivors are here to remind us.

Their resilience is profound, yet trauma remains.

Our staff specialized trauma-informed care honors both their age and the weight of their past.

The fact that our survivors are living into their 90s is a true testament to the care that this team has provided our survivors.

We must never forget that the Holocaust began with dehumanization.

When we see a group being stripped of their humanity today, we must pay attention.

History may not repeat exactly, but dehumanization is always a warning.

Caring for survivors isn't just about their past.

It's about ensuring that we never allow dehumanization take hold again.

Thank you, community and council members, for standing with our survivors today

and for choosing a future where everyone's humanity remains intact.

And thank you to our committed and caring staff at JFS

who are ensuring that our survivors are living their final years with quality and dignity.

Thank you.

Thank you.

Thank you.

All right. Thank you all very much for those beautiful ceremonial items.

We are on to orders of the day.

Does anyone on the council have any changes to the printed agenda?

I'm not seeing any.

We do have an adjournment today.

We are adjourning today's council meeting in memory of Max Ryan,

a member of our city team who was one of the victims

in a horrific triple homicide back in September.

We are joined by Max's mom, Carla, today,

and other friends and loved ones.

Thank you all for being here today.

Max worked on the front lines of our collective efforts to end the crisis of homelessness we witness on our streets as a member of the Homeless Response Outreach Team within our housing department.

After Max's untimely passing, I sat down with his parents, Donal and Carla, and learned just how important public service was in his life.

I learned how proud Max was of the work he was doing to lift up vulnerable neighbors.

He had recently taken on a leadership role within our Homeward Bound program

and excitedly called his mom to tell her that because of his and his teammates' work,

25 of our homeless neighbors had been reconnected to the people who loved them.

He gave 25 people another chance for a better life, a chance to go home.

Donald and Carla, you raised a compassionate, caring leader.

We are so grateful for the time he gave to our city.

Max was taken from us far too soon.

We'll work hard every day to make sure that every part of our justice system

does more to prevent tragedies like what happened to Max.

His passion for helping others lives on here at the city of San Jose.

So I want to thank Max's family, friends for being here

and hand things over to Councilmember Campos,

who brought a number of us together to hear stories about Max earlier,

which I really appreciated.

Councilmember.

Thank you.

As the mayor mentioned, this meeting will be adjourned

in memory of a former Housing Department employee, Max Ryan,

who passed away on September 16, 2025.

And we are privileged to have members of the Ryan family here with us,

including Carla, his mother. Thank you so much for joining us so that we can uplift Max's

contributions to our community. Max spent his career on the front lines of the city's homelessness

crisis, connecting unhoused individuals to shelter and with their families, and he did so with so

much care. He was committed to seeing the humanity in everyone, and his empathy transformed many

lives, and the impact of his compassion will reverberate for decades to come. Max's empathy

transcended work. It was one of his signature qualities, one he's fondly remembered for.

He was also known for his creativity and curious mind. He was a brilliant student who appreciated

art, music, and all the joys life brings through creative expression and inspiration. Max was a son,

grandson, brother, nephew, and friend, and he leaves behind a loving family who admired his

many talents and his dedication to those he loved. He will be remembered for his kindness,

his tireless work ethic, and his enduring legacy of service to the most vulnerable residents of San

Jose. Thank you to Carla Ryan for joining us to honor Max's legacy. There are so many people in

this chamber and in this building who are grateful to have called Max a colleague and a friend.

They will always cherish the time spent together. And I would like to invite Carla Ryan to the floor

to provide remarks.

Hello. Good afternoon, Mayor and Council Members. I'm Carla, Mother of Max Ryan.

I think this is a little too long for me to read. I've heard so many nice things, it's hard to

stay stoic. But I do miss him every single day. He brought us tons of joy at home.

he was a great big brother

there literally is no way to describe losing a child

he was only 26 years old

he really should have had a full life ahead of him

but instead

a terrible act of violence

took him away

Max believed deeply in kindness and dignity

He served the homeless people who are so often ignored and treated them as human beings who mattered.

He was creative and disciplined.

He was an avid reader, a writer, a singer, a saxophone player.

He loved yoga and hiking, and he always kept a running to-do list just to stay on top of everything.

He always showed up for his family, his friends, and for work.

He was great around the house. He did things without even being asked, like vacuuming, washing dishes, fixing things that I so miss now.

My son should have grown older. He should have had the chance to build a life.

Instead, it was stolen, and it was not really inevitable.

It was preventable.

A violent offender previously charged with gun crimes, including attempted murder, was given probation instead of prison.

Judges hold enormous responsibility, and that responsibility must put the safety of the innocent people first.

For that reason, I urge you not to support Judge Robert Hawk in the upcoming election.

He did not protect the people of San Jose, and my son paid the price.

The man who killed my son showed no compassion.

He killed two young women and my child.

this level of violence is

something that can't be

accepted in our community

not only am I a grieving mother

but I'm also a long time citizen of San Jose

and I just want you all to know

that I want his life to matter

and hopefully it matters to you

so please use your voices

and power to make sure this,

or, you know, do your best

to make sure this doesn't happen to another family.

Okay.

Thank you so much for listening

and honoring my son, Max.

Thank you.

Thank you for being here with us today, Carla,

and for raising a loving and compassionate young man

who served our city so well.

We're grateful to you and to Max

and his life absolutely mattered

and will be remembered here in the city of San Jose.

Thank you, Councilman Ocampos,

for bringing forward today's adjournment.

I also want to just take the opportunity,

since we're joined by members of the homeless outreach team,

Councilman Ocampos gathered the team

before adjournment today to hear some stories from Max,

and I just really want to thank them again

for the very difficult work they do out in the community,

serving people who, as Carla said, are so often overlooked and forgotten

and treating them with dignity and helping them turn their lives around.

So I just want to thank you all again for the really hard but important work

and the compassion you bring to it every day.

Thank you.

And I know you'll carry on Max's spirit and mission in the work you continue to do.

With that, we are going to move on to our closed session report.

Mayor and Council met in closed session and authorized the city of San Jose to join an amicus brief brought on behalf of the state of Minnesota,

who's being sued by the United States government,

challenging Minnesota state laws,

city of Minneapolis ordinances,

and Hennepin County ordinances as well

that prevent civil immigration enforcement

in those jurisdictions of federal immigration law,

similar to the state of California's laws

and the city of San Jose's ordinances.

And the council has authorized a micus brief

to be filed in that case.

Thank you, Susanna.

I appreciate that.

We're now on to the consent calendar.

And just before we jump into these items, due to the very large number of hefty items with staff presentations

and the high volume of expected public comment today, just from the beginning,

we're going to go to one minute to make sure we can hear from everyone today.

and if there are any other adjustments to the agenda,

I'll be sure to call those out as we go,

but we'll do one minute for all public comment today.

Thank you, Tony.

So we're on to the consent calendar.

Are there items that council would like to pull from consent?

And I am aware of two, I believe.

Council Member Condellis, item 2.7, is that correct?

Thank you.

And then Council Member Kamei, item 2.10.

Are there any others? I'm not seeing any, so we'll start with Council Member Condellis.

Thank you, Mayor. Yeah, I'm going to keep it short.

Pat Waite has led the District 8 Community Roundtable for many years.

He has a genuine commitment to the people of his community and is always willing to help and step up,

not just my office, but the community at large.

I've known Pat for many years, and while we may not agree on everything,

I do value his candid feedback and perspective, and I'm confident the commission will benefit from his experience in leadership,

and thank you for his appointment to the citywide position on the board.

And with that, I can go ahead and move the consent agenda.

Is that okay with Councilman Kameh?

Great. Thank you. I appreciate that, Councilman Kameh.

I agree. Good choice, and I appreciate your comments.

Councilmember Kameh.

I too will be brief. I just wanted to recognize and thank the entire council and the mayor for being so supportive of the Suckaway Farmhouse acquisition and move to San Jose History Park.

There's been a lot, this has been over a year effort, and there's been so much community support as well as especially community partners, History, San Jose, PacSJ, Japanese American Museum of San Jose.

I want to recognize the work of city staff and the Office of Economic Development and Cultural Affairs

and the developer for all working together.

And together, it's going to be wonderful for future generations to come

to learn about what has happened in that SACOA history.

So thank you so much.

Thank you, Councilmember.

Okay, I don't see any other hands.

We have a motion on the consent calendar as a whole from Councilmember Condellis.

Tony, do we have any public comment on consent?

Yeah, I have a few cards.

Jeanette, come on down.

Betsy, also come on down.

And then I have Nicole with Rue Ferrari,

but I'm not sure if she wants to speak on this item.

If this is not the item you want to speak on,

you don't have to come on down.

But the agenda item is vague.

So Jeanette and Betsy, definitely come on down,

and possibly Nicole.

Hi, I'm Betsy.

First, I want to say that I'm so sorry to hear about Max Ryan.

My brother's been homeless for a long time,

and Max was one of the only people who always answered the phone when I called or texted him.

He was always available, so I'm heartbroken.

But I do want to say that for the homeless people, it's definitely an emergency.

Their cars have been taken and towed, and they're not going to get them back.

They have no way to call 911 or the Here For You hotline

because they can't charge their phones.

They don't have electricity or running water,

and with their cars gone, they don't have a way to charge their phone.

So it's definitely an emergency, and they've moved into the storm drains.

So instead of having at least a vehicle that can provide some sort of shelter,

they're living in the storm drains to get out of the elements and to stay warm because it's cold out.

Okay, thank you. Mike Sodergren, come on down.

Hi, I'm Mike Sodergren, president of Preservation Action Council.

I just wanted to personally come up and thank the council for the support of the preservation of the Sokoway Farmhouse,

which tells such a great story about such a dark time,

and is a message to us for the future as well,

and not just the Japanese Americans,

but any American citizen that is being treated as though they're not a citizen.

I want to highlight that this is an example of where preservation and housing meet comfortably together.

this historic place made way for over 1,500 new homes

and we, like the rest of the citizens at San Jose

are for economic development, we're for housing

and we are for historic preservation

we just want to thank you, Rosemary Kamei

especially for your diligent support

in raising over $800,000

through

Back to council.

Great. Thank you, Tony.

Let's vote.

Motion passes unanimously.

Thank you.

We're on to the report of the city manager.

Jennifer.

Thank you very much, Mayor and City Council. I do not have a report today.

All right. Thank you.

Okay, we're on to item 3.3, Annual Report on City Services for Fiscal Year 2024 through 2025.

We will have a presentation from our City Auditor, Joe Royce, and Supervising Auditor, Allison Pauley.

I'll turn it over to you.

Good afternoon, City Council and Mayor.

My name is Joe Royce, City Otter.

I'm here with Allison Pawley from our office, and we're pleased to present our office's

18th annual report on city services.

The report provides performance data on the cost, quantity, timeliness, and public opinion

of city services.

It builds on the city's existing performance measurement and reporting efforts.

As part of the report, as part of our review, we selected performance data to provide reasonable

assurance that it fairly represents the city's service levels and overall performance.

I do want to note that our review is not intended to provide absolute assurance of the accuracy

of every data point, but rather to assess whether the information presents a fair picture of

performance. And while city departments are included in the report, it's not intended to be

a comprehensive set of performance measures for every user. To begin, I want to give a little

context to understand who we serve as a city government. It's a population of nearly 980,000.

San Jose is the 12th largest city in the United States and the third largest in California.

The city maintains an ethnically diverse population, about 42% Asian, 30% Hispanic or Latino,

and 21% non-Hispanic white.

43% of San Jose residents are foreign-born, and more than half speak a language other

than English at home.

The median age of San Jose residents has increased by two years since 2015 and was over 38 years

of age in 2024.

As seen in the chart on the lower right of the slide, the number of individuals over 65 has increased, while the number of individuals under 14 has been in decline.

In 2024, San Jose's median household income was over $148,000.

However, this varied by race, with black and Latino households making less than Asian and non-Hispanic white households.

However, the cost of living is among the highest in the nation.

For example, the Observe Rent Index for San Jose remained above other large California cities in the past year, and the median home price was $1.7 million.

Meanwhile, 13% of households earned less than $35,000 in income and benefits, and as you all are aware, there is a sizable homeless population.

In 2425, the city's overall expenditures from all funds totaled $5.2 billion, and of that,

nearly $1.8 billion was from the general fund, or about $1,800 per resident.

Overall, there were roughly 7,000 full-time equivalent positions in the city in 2425,

and San Jose employed about 7.1 individuals per 1,000 residents, which is fewer than any

of the other large California cities that we surveyed, although we want to note that

the type and range of services may vary across jurisdictions.

2025 marked San Jose's fifth year conducting a community opinion survey

developed in coordination between our office, the city manager's office, and True North Research.

The 2025 survey revealed widespread improvement in resident satisfaction,

resident ratings of city services, and perceptions of city government

across nearly all topic areas compared to last year.

55% of respondents rated the overall quality of life as excellent or good.

59% were satisfied with the city's overall performance in providing municipal services,

and both showed statistically significant improvements from the prior year.

Satisfaction ratings for every city service trended positive between 24 and 25.

12 services saw statistically significant improvements.

The largest increase was for cleaning up litter and trash that people dump along streets, sidewalks, and public areas.

This rose from 15% excellent or good to 28%.

Among resident priorities for specific changes to make San Jose a better place to live, addressing

homeless issues was the most commonly mentioned, followed by providing more affordable housing,

beautifying the city or landscaping, and improving public safety or reducing crime.

These align with four of the 25-26 City Council focus areas.

It should be noted that responses around providing more affordable housing encompassed both the

provision of housing designated as affordable housing, as well as housing affordability generally.

The city provides a wide range of services for its residents and businesses,

and the administration has selected its top six performance measures across the city's key lines of business,

also known as city service areas, or CSAs.

These include community and economic development, environmental and utility services,

neighborhood services, public safety, transportation and aviation, and strategic support.

We've included these CSA level performance measures in our report and additionally we

have interactive dashboards on our website which is what you see on the slide.

We include dashboards for each CSA.

We've continued to work to align our reporting with changes the city administration has made

to performance measures across CSAs and departments as well as the city council's focus areas.

Now I'd like to provide some additional highlights for the different CSAs.

And although all departments are included in the report, I will not discuss each.

I primarily want to give a picture of the city's performance across the different CSAs,

as well as provide a bit of context around performance.

The first CSA we'll cover is public safety.

And it should be noted that one of the city council's five focus areas is increasing community safety.

The police department handled 1.1 million calls for service

and respond to about 165,000 Priority 1-4 events in 24-25.

The department respond to 45% of Priority 1 calls within six minutes,

which is slower than the target of 60%.

The citywide average response time for Priority 1 calls was 8.1 minutes,

which is, as I noted, slower than the six-minute goal

and slower than the prior year.

90% of 911 calls were answered within or in less than 15 seconds,

which met the target that the department said of 90%.

In the fire department, they responded to around 111,000 incidents in 2425, including 4,800 fires.

They responded to 63% of priority one incidents within its time standard of eight minutes.

It's a decrease from the prior and slower than the 80% target.

I want to point out that providing fire protection and prevention

continues to be one of the highest rated services in the Community Opinion Survey.

The next CSA will cover is community economic development, which includes two of the City

Council's focus areas, building more housing and growing our economy.

San Jose's housing production fell short of the annual regional fair share number unit

goals in 2425, with 28% of the annual allocation being completed.

Developers did complete 79 new affordable units with City Help during the fiscal year,

And 36% of rent stabilized units did not have a rent increase in 24-25.

San Jose had an average daytime foot traffic of over one, this is downtown foot traffic,

excuse me, of over one million people per month.

Nighttime average monthly foot traffic was around 830,000.

Both were up from the prior year.

91% of development projects had first reviews completed on time for the planning permit

process, which is below the target of 100%.

And 59% of projects had first reviews completed on time for the construction process, which

is below the target of 75%.

Lastly, the average number of days to meet to the next available building inspection

was four days, which is above the target of two days, though it is an improvement from

the prior year.

Next, we have transportation and aviation.

The airport served 11.4 million passengers in 2425, which is a decrease from the prior

year.

The airport surveys passengers and found that 81% rated their overall satisfaction as very good or excellent, which is below their target of 87%.

However, they note that 83% of flights were on time, which is above their target of 80%.

The airport similarly continues to be one of the highest rated services in the community opinion survey.

Moving away from the airport, 14% of the city's planned bike network was completed as of 24-25.

As part of the pavement maintenance program, 147 miles of street were resurfaced and 61

miles were preventatively sealed.

Overall, Department of Transportation rated city streets as good at 74 out of the 100

on the Metropolitan Transportation Commission's Pavement Condition Index.

You can see on the chart this has steadily increased over the past decade.

The map on the slide shows the ratings across the city's transportation network.

The dark blue represents good or excellent streets, and the darker orange or red signifies streets that are in poor or failing condition.

Next, we have environmental and utility services.

San Jose Clean Energy served 351,800 businesses and residents.

84% of San Jose Clean Energy power was carbon-free, of which 65% was renewable.

The city's sanitary sewer, storm sewer, and regional wastewater facility all met their targets for being online and functional,

at least the infrastructure assets.

San Jose Municipal Water and South Bay Water Recycling nearly met their targets.

The city's regional wastewater facility maintained 100% compliance with pollutant discharge limits

and stayed within the total gallon discharge requirements.

And overall, 62% of waste was diverted from landfills in 24-25, which falls below the goal of 70%.

Next, Neighborhood Services, which addresses the City Council focus areas of reducing unsheltered

homelessness and cleaning up our neighborhoods.

An estimated 6,500 San Jose residents were homeless when the 2025 San Jose Homeless Census

was conducted.

This represents a point in time count and may not reflect all homeless residents.

Through the collective efforts of the city, county, and nonprofit service providers, 1,400

San Jose households received assistance into housing.

Across the city's emergency interim housing sites, shelters, and other temporary housing

programs there was an 89% utilization rate, slightly below the target of 92%.

Beautify SJ provided on-time trash pickup to homeless encampments 95% of the time, exceeding

the goal of 85%.

Beautify SJ collected 5,290 tons of illegally dumped material, and of general code program

cases 61% were resolved within processing time targets, which is below the target of 65%.

Moving on to parks, 79% of developed park acres had a park condition assessment score of 80%

or better, which was above PRNS's goal of 70%. In 2425, city libraries had 3.8 million visitors

continuing the growth since the pandemic. Libraries are open for nearly 60,000 for nearly 60,300 hours.

Total circulation was around 7.7 million materials, of which 2.2 were e-resources, which has grown in significance in recent years.

The library also continues to be one of the highest-rated services in the Community Opinion Survey.

The last will cover strategic support.

91% of the city's positions were filled as of June 30, 2025, and the employee turnover rate was 9%, both of which met citywide targets.

Public Works and its partner departments completed 42 capital projects in 2425,

41 of which were completed on budget.

97% of general vehicles in the city's fleet were available when needed,

as were 100% of police and fire vehicles.

Lastly, 64% of SJ311 customers were satisfied with the service.

However, that's below the target of 80%.

On the finance side, the city met its general obligation bond rating targets

for each of the three leading national agencies,

and finance managed $2.61 billion in city cash and investments

with an average return on investment of 3.7%.

Additional performance measures for the remaining departments,

including the city attorney's office, the independent police auditor,

the office of emergency management, and others, are included in the report.

I want to thank all of the departments that contributed to the report.

It would not be possible without their support.

With that, we are happy to answer any questions.

Thank you.

thank you Joe and Allison appreciate that this is always one of my favorite reports of the years

we get a really valuable snapshot of how we're doing how our residents perceive our work

Tony do we have public comment we have no cards for this item okay great coming back to the council

then offer a couple remarks and questions and then turn to colleagues again I think this is

probably the single best snapshot we have every year of how residents feel about the services

we're providing. So it's a really valuable and deep data dive. I want to thank the city manager

and her team for making sure we have all of this data at our fingertips and that it is accurate.

It is really good to see, as Joe started with, that we're seeing a very clear and measurable

improvement in public perception over time. I think that is both a rebound from a very difficult

time during the pandemic, as well as a testament to our focus and really doing a lot of problem

solving together with the administration on how we improve unsheltered homelessness, where we've

obviously had some big gains, reduce crime, clean up our neighborhoods, and make it easier to build

housing and other things along those lines. So a lot of positive trends. Joe, I was a little

surprised to see we're, you know, what I'm hearing statewide is the cost of living and particularly

housing costs being top of mind for everyone. It's only what I hear at the grocery store as well.

I was surprised though that build more affordable housing was at 14% and down from 17% last year.

Did we get anything in the anecdotal data or interviews that helps us understand how people

are thinking about this issue? I'm going to turn over to Allie who's kind of dug into some of the

verbatim responses that we received in that? Thank you. Yeah, so we did see that there was a mix of

the people who responded, who were categorized and that provide more affordable housing. We saw

a mix of what was causing that. So most of the responses were about affordability of housing,

generally the cost of housing. A small percentage were about the technical definition of affordable

housing so we did see some mix as a as to why it dropped slightly in the 17 percent to 14 percent

we don't have more data in terms of that but they the question does ask like what is one thing that

you could change now often people do mention multiple things but it could be that there were

just some other things that that came up for people when we asked okay yeah it's just a little

surprise we'll just have to keep an eye on it going forward it's just surprising because it

it seems to be going up statewide.

Okay, interesting.

And you confirmed last year,

and I think we haven't changed the wording,

but we're talking about that response

to housing affordability with a lowercase a,

as I know you confirmed last year, Joe.

So the verbatim responses are categorized

by the survey consultant,

so it's a good point that that title that's put on it

of provide more affordable housing

is something we can talk about.

is like, is that the right title for it?

Because a lot of it, as I said,

is about the cost of housing, the cost of rents,

even the cost of buying a single family home.

But they aren't prompted with something

like affordable housing as a category.

Yeah, I think that's important

because there are multiple strategies

for getting at that issue.

And I don't want us to overly constrain our thinking

based on the wording, as I pointed out last year.

So I think it's an important call out.

On homelessness, I think in the summary slide,

It is important when we're giving top lines that we distinguish between experiencing homelessness and experiencing unsheltered homelessness.

When we say 6,600 people are homeless in San Jose, the public understands that generally to mean people living out in tents.

And I just, we have made a tremendous amount of progress in giving people safety and dignity.

And I just want to make sure whenever we communicate top lines that we do just distinguish.

that's not to minimize the insecurity and hardship of being homeless, even if sheltered,

even if in transitional housing. I think both are important, but we need to educate

our community on the different aspects of the challenge and what we're trying to do,

given how much we're investing in at least giving people safety and dignity.

I do want to ask, though, on shelter operations, Eric, if I could turn to you. It looks like we're

at 89%. I think our target was 92. I think we've discussed wanting to get that target up to 95 as

a sort of stretch goal. Can you give us a little insight, bless you, into what we can do to increase

that utilization rate? These are obviously, this is expensive infrastructure. We've built it to save

lives. How do we fully utilize it? Yes, so part of, you know, the time capture for this report

compared to our daily dashboards, which shows higher utilization, is that differential. As we

were opening up numerous sites and bringing them online, particularly during this period between

July 1 of 24 through the June 30th of 2025, there was Via De Oro, Branham, a lot of sites in

transition to bringing folks inside. So it's some of the differential in the numbers, and our

dashboards that we have today now show that consistent rate of 96% as we've stabilized

while still continuing to open up some more beds. I see. So as the sites are kind of become mature

in their operations, you are pretty confident

we'll be around that 95% ambitious target.

Okay, that's good to know.

That wasn't clear to me from the services report,

but I appreciate that context.

Okay, last question.

I may have more, but I want to turn to colleagues here.

I wanted to note, so beautifying the city

actually went up slightly as a concern.

Most of the other top ones, it seems like, declined,

although it looks like the priority

around residents wanting us to clean up the city

went from 10 to 11 percent, so marginal, but the others were actually declining multiple percentage

points. At the same time, satisfaction with 311, which we've made some investment in, and I know

has been a priority of this council we've talked about a lot in recent years, certainly in all of my

budget messages and throughout our budget processes, the satisfaction actually decreased

again marginally, but it doesn't feel like we're moving in the direction we want, which is

people are using 311, having a great service, and they're seeing the results out in the community

because so many of those calls involve those on-street conditions.

It's an abandoned vehicle.

It's graffiti.

It's illegal dumping.

It's a pothole.

It's a streetlight.

It's kind of basic physical infrastructure that people touch and feel every day.

I'm just curious if we have a theory as to why we're not seeing progress yet

and if there are things in flight that might lead us to change that this year.

So that's probably not a question for Joe, though it could be if you want to weigh in.

might be more for Lee or certain departments.

Yeah, actually, I'll ask Lee to.

Or for Jennifer.

Yeah, actually, that's something we are working on very strongly

and also with our customer service initiative,

but I'll let Lee tell you more.

Yeah, honestly, that finding is pretty important

for us making a shift kind of overall

in our customer service work plan

where we're really looking at service optimization

and then customer experience separately under the same umbrella.

And I would say, I think for some of those metrics, the real big indicator once you dive into some of the data that brought down the 311 experience, a lot of it is really attributed to large junk pickup.

And the ability, which I know some of you have referenced several times to us, the ability of that program to kind of link up specifically with 311 and for us to transmit the correct data and procedure.

So that will be the pilot program that we'll go through in the customer experience journey.

I also think there's a few things, Mayor, that you just pointed out.

There's various areas where we dramatically improved on performance and outputs, I would say,

not necessarily outcome or public trust, and that will take a while.

And those are things where I think it's good now that we have the survey data to be able to go back in

and actually look, should we pivot from measuring an output to an actual outcome

that gives not only you a better picture,

but us for staff as we're trying to tweak

some of these things on a more continuous basis.

Yeah, that makes a lot of sense.

I appreciate that.

That sounds right to me.

And love free junk pickup.

I had a great experience when I used it last year,

although there was one item left there.

I don't know what I did wrong,

but I didn't want to give it five stars.

But anyway, so I'm sure we'll continue to optimize.

It is a great service,

but I know there's still improvement we can make.

All right, let me turn to colleagues.

Councilman Campos.

Thank you, Mayor.

And thank you, Joe, for the presentation.

I have no questions.

It was a great report, and I would just like to share some reflections, highlighting some

concerning revelations from the report.

So first, looking at the city's demographic trends are troubling.

The population of older adults, those over 65, is increasing rapidly.

And yet the number of young people in our community is decreasing.

Between 2015 and 2024, those under the age of 14 decreased by about 49,000.

That's enough to fill the shark tank almost three times.

Young people are the present and the future of our city.

And if we want to provide a city where our neighbors can age in place, we need to do better.

especially when almost half of our residents feel that San Jose is a poor

place to retire. Second, there is a gap between how much our residents earn and

how much it costs to live here. The median household income in San Jose is

noted at $148,000. That means half of our residents earn less than that and this

is clearly seen in our black and brown communities where the median income for

black households is approximately $82,000 and for Latinos around $104,000. Again, that means half of

them are earning below those figures, which is already well below the city's median. Moreover,

about one in 10 families in San Jose earns less than $35,000. And in one in five of our neighbors

receiving supplemental income or public assistance. This is because the cost of living and rent in

particular is so expensive, about $2,900 on average in the year 2024. In September 2025,

the SF Chronicle reported that nearly half of San Jose residents are rent burdened,

meaning they're spending over 30 percent of their paycheck on rent. And this is not a sustainable

way to live, let alone build a thriving city. Third, our economic challenges are not just

individual, they're communal. As a city, we are also facing some serious financial issues.

The city has around $1.7 billion in deferred maintenance and infrastructure backlog. Streets

that aren't getting repaved, traffic lights that aren't getting fixed, storm drains that aren't

getting upgraded. Meanwhile, the actual 2024-2025 general fund revenues were about $1.5 billion,

which means even if we used every general fund dollar we had, it would still not be enough to

address even our deferred infrastructure needs. San Jose is at a critical point demographically,

not enough young people, and financially, our residents are having a hard time affording to

live here, and the city is facing some financial obligations that we'll need to compromise on.

Soon we'll be entering into the budget season, and we are likely going to have to tighten our

belt at the same time there are only so many notches before we run out. So if we want our

residents, whether they're 5 or 75, to feel like they can have a thriving life in San Jose,

we need to do better. As a council we must develop and implement the policies that will make it

easier for people to live and thrive here across all stages of life and I encourage my council

colleagues and our residents to come together and collaborate as we truly innovate solutions

that make San Jose work for everyone. Thank you. Thanks council member. Councilman Cohen?

Yeah, thank you.

And I also want to just start by thanking you for the report.

I look forward to this every year.

There's so much information, so rich with data,

and you can see that there's so many different layers to what's in here

that teach us what's happening in our city.

And so this really is one of the most valuable resources that I use throughout the year.

I use as we're preparing the budget.

I use as we're making decisions about policy.

There's a lot in here.

but also I want to allow a moment to commend our council for progress that we're making,

because the data does show progress in a lot of areas.

And, you know, the graph, the table that shows the top 10 priorities,

let me just ask a clarification question.

I think I heard you say people are choosing one, or are they choosing multiple, naming multiple?

They can have multiple, so there can be duplicates across.

So if they mention multiple categories, they'll appear multiple times.

That's what I thought.

So the good news is if people are allowed to mention multiple things

and except in one case, which is pretty much flat, beautified city, I mean 1%,

the numbers are down significantly in some categories.

And so I think that does show that the things that we have been focused on are working.

But the report also shows that the areas that are not what we're considering to be top priorities

are also thriving in some cases or have some issues in others.

and I just want to highlight some of those and ask a few, I'm going to ask a couple questions, I think, as I go along.

But the numbers about park condition, road condition, we have made a significant stride in the last five years.

Numbers are going up a lot.

I was really, I'm really excited to see that in our parks and parks that the utilization of our community centers is almost at,

it looks like an all-time high.

Maybe there was a year in 1819 that's a little higher, but there's a graph on page 96 that shows that people are using services at our community centers.

These are the kind of things that concern me as we head into difficult budget years, how we preserve this.

Our library usage has been steadily climbing since COVID and is back almost at 2019-20 levels.

And it's very gratifying to see how popular our libraries still remain.

circulation is up

visitors are up

but if you look at the graph that shows

hours open per 100 city residents

we are still far below

many of our peer cities

so as we move forward

again I want us to keep that in mind

because this is a service that people

want and a service that

might not be as easily available

as it is in other places around

California

there's a lot of great news in the

Environmental Services Department under some of the core services we provide.

I do want to call attention.

I think we've talked about this at the T&E Committee, so I won't call anybody down to

answer a question about it, but our recycling numbers are improving except in our commercial

space.

I think I saw that graph that shows that commercial recycling is far down.

We've put a lot of effort into teaching our residents what's appropriate for their recycling

spins, but I'm concerned that we're not keeping up with that in our commercial program, and

perhaps it's something for us to talk about at T&E and other places going forward and

how we might improve that.

The last category I wanted to ask about, and I think I'm going to ask the fire chief on

this one.

I know he's, Chief Sapien is way up there, but give him a minute to come down.

I've noticed that our response times, both in police and fire, are declining a bit, or

we're having fewer of our calls meet our goals.

And I'm wondering if we, if I can find out from our fire chief, if we have any thoughts

on why our response times seem to be trending in the wrong direction in fire.

Hi, council member.

Thank you for the question.

Robert Sapien, fire chief.

We do take note of our performance and, in fact, measure on a monthly basis.

I think the principal driver that we've been focused on over the last several years post-COVID has been a bit of a disruption in emergency medical services

in that we've had some faltering of our ambulance providers' ability to respond with the right resource,

and the result is resources from the fire department remaining on scene for longer periods of time.

What we see happening over and over is that when that first due engine is occupied at a call and can't leave,

then we get a response from a unit that's further away.

And over time, we see more and more late responses.

That's the primary driver right now that we're seeing.

We do believe at some point things will stabilize and we'll get back to normal.

We also have on the horizon the opening of Station 32 and Station 36,

which were both enabled by Measure T.

we should see some smoothing, but we do see

over time, you know, as traffic patterns change and those types of things, those are all

things that can impact response times. But right now

I would say the main driver is our EMS system performance. Okay, thank

you. And I know that that's something that we've been discussing and hopefully that's something that we

can work towards and improve, especially as we get to the county

works on a new contract for ambulance provider. Yes, thank you. Okay, thank you.

I will then also just point to the police response time by district.

I know later this year we're finally maybe going to be seeing our police redistricting.

Is that correct?

And I know that District L and District R still lag way behind the rest of the city as far as response time.

and I'm hopeful that you'll be able to make me feel confident

that our redistricting is kind of focused on trying to balance out

our response time better across the city.

Yes, it is, Council Member.

So Paul Joseph, Chief of Police.

We are undergoing a redistricting of our patrol deployment

and we're going to change from 16 to 12 districts

and the reason for that is to get better supervision of the officers.

We just don't have enough sergeants to support the 16-district model.

But in addition, the really important part of this is to even out the calls for service load between the districts that remain.

And so the lines that we're operating with today were drawn 25 years ago,

and there's been so much change and so much growth in the city since then that you have the imbalance that you described.

But we're very confident that the redistricting will help with that.

Yeah, I'm happy that we're finally at that point where we're going to unveil this redistricting that we've been talking about for a while,

given some of these concerns.

But thank you for that answer.

Okay, I think that's all the questions I have for today, but thank you for again for the thorough report that helps helps guide us in the work that we do

Great, thank you councilmember

We may still need a motion

Thank you second

wonderful

Tony

We already took public comment. We didn't have any actually let's vote. Thank you

Motion passes unanimously

Great. Thank you all very much.

We are on to

Item 8.1,

Actions Related to Senate Bill 79,

Statewide Standards for Transit-Oriented

Development. I'll turn it over

to Chris Burton as soon as he and the team are ready.

Thank you, Mayor and City Council.

Chris Burton, Director of Planning, Building, and Code Enforcement.

I'm joined today by Minira Sandhir, Deputy Director, and Jared Ferguson, Principal Planner.

We're here to provide an update and discuss our next steps and direction on implementation

of Senate Bill 79, which includes statewide standards for transit-oriented development.

So just as a little background as we get into this, SB 79 was signed in October, October 10th of last year, and ultimately takes effect on July 1st of this year.

The short of it is essentially supersedes local zoning and allows residential on all sites that currently allow residential and commercial uses throughout the city within a half mile radius of transit oriented development stops.

And we'll go into a little bit more detail of what that means and sort of how that plays out.

Throughout San Jose, again, because much of the work that we've done over the last decade in facilitating housing,

you know, it applies to a lot of zoning districts.

Essentially all zoning districts, with the exception of light and heavy industrial agriculture and open space,

have some residential component.

So that means that a significant portion of the city is applicable.

also based on the types of transit that are included in the bill

and again we'll discuss exactly where this is in a moment.

We have 56 stations in or adjacent to the city

that are applicable to SB 79.

That results in over 40,000 parcels

that are now currently available for a higher degree of residential development

than they currently include.

There are some complexities in the way this bill was written.

Some very technical information.

We'll try and touch on a little bit of that in a moment.

But essentially, that half-mile radius stems from the pedestrian access point on stations.

So think of a traditional station.

That's the door.

Obviously, when we're talking about light rail stations, we're working out right now on kind of what that means sort of from platform access point and some of those aspects.

So there's a considerable amount of work just to understand kind of how this applies and where it applies.

ultimately what the law states is that

MTC will be responsible for providing the final map

we're engaged with them on what that looks like, we don't have that so everything we're doing

currently is based on our assumptions on interpretation of the law

just as a refresher on this, SB 79

only applies in urban counties so as far as the Bay Area

that's Santa Clara, Alameda, San Mateo and San Francisco

We're obviously in touch with a lot of cities across the state on implementation

and the impact as it relates to different environments.

I think as we see it, the impacts in San Jose are somewhat unique

to what some of the other bigger cities are dealing with.

And so really our goal today is to talk about what we see as an initial sweep

of what implementation will look like,

but also how do we prioritize our resources and our work going forwards.

There's a very tight timeline to really consider how we want to affect implementation,

and so that's why we're going to bring it before council today to really enter into that discussion.

So with that, I'm going to hand it to Gerard to dive into the details.

All right. Thanks, Chris.

So as Chris mentioned, the bill centers around the half-mile radius from transit-oriented development stops,

and the bill specifically sets out a specific definition for those TOD stop

and separates them into two tiers.

The first tier, tier one, is, sorry, the transit type in tier one is heavy rail,

and then also very high frequency commuter rail.

So how that applies to San Jose are electrified Caltrain stations,

BART stops, and future BART stops.

So in or adjacent to the city, we have four Caltrain stations that are electrified,

and then six BART stations that are either planned or under operation.

So 10 total stations in Tier 1.

And then Tier 2 is light rail and high-frequency commuter rail

and then bus rapid transit with dedicated lane.

So all of our light rail stations as well as our two planned light rail stations

at Story Road and Eastridge.

So for a total of 44 light rail stations either in or adjacent to the city

and then two bus rapid transit stations along Alum Rock with dedicated lanes.

So as Chris mentioned, the official map is produced by the regional planning,

so MTC is responsible under the law for producing the official map.

However, in order for us to start doing the analysis, we had to put in a lot of work

so that we could understand what stations qualify and start to look and do some analysis

in order to prepare for this meeting.

So we produce a city draft public map that we've shared in the memo,

looking at the stations across the city.

So the purple here are those Tier 1 stations,

so Caltrain and BART stations, along with their pedestrian access points.

And then the blue are light rail and bus rapid transit stations throughout the city.

so the bill sets certain development standards within the half mile radius the city cannot

preclude a development from achieving and it kind of sets three different levels so for parcels that

are adjacent to the tod stop so within 200 feet of the pedestrian access point it affords the

highest level of density. And then at a quarter mile it decreases and then at a

half mile decreases further and then depending on tier one and tier two there

are different standards within those stops. To kind of orient you with this

level of development our transit residential general plan designation is

our most kind of our outside of downtown our densest land use designation that we

typically apply in close proximity to transit stations like our BART stations, and that runs

from 50 dwelling units an acre up to 250 dwelling units an acre. So at each level, it sets a maximum

height, maximum density in dwelling units per acre and floor area ratio that we're not allowed

to preclude a development from achieving. It also sets a minimum density of 30 dwelling units an acre

in San Jose unless the city has a higher minimum density defined in its zoning.

So some other provisions of SB 79.

There is required, on-site affordable units are required in projects with 11 or more units.

Additionally, sites that have three or more rent or price controlled units are not eligible

to utilize SB 79.

So in San Jose, if there are sites with three or more units subject to the apartment rent ordinance

or subject to our mobile home rent ordinance would not be eligible for SB 79.

Projects under SB 79 are eligible for state density bonus law,

although the city is not required to allow a greater height than the maximum height allowed under SB 79,

although we could choose to allow that under density bonus.

Additionally, SB 79 also allows transit agencies with sites within the TOD zones to set their

own development standards for sites that they own prior to July 1st of last year.

For these projects, generally the approval pathway will be a site development permit

which is approved at our directors hearing level.

that would otherwise be eligible for SB 35, SB 423,

so the state streamlining bill could utilize that route,

which is a ministerial approval, so no public hearing.

Additionally, we do believe many of these projects

would be eligible for the recent CEQA exemptions

allowed under AB 130 and SB 131,

which took effect July 1st.

so getting into more of the finer details there are several kind of three buckets that are afforded

to cities that can exempt certain sites areas or larger areas from the provisions of sp79

the first bucket is a more permanent exemption that we'll talk about in a minute there's an

option for what's being called delayed effectuation, so a temporary exemption of either sites or areas,

and that delays the effects of SB 79 until when you're following the next housing element.

And then the third option is a more permanent modification of SB 79 through a, what's called

in the bill, a TOD alternative plan or alt plan, and we'll talk a little bit more about each of

these categories. So the first in the permanent exemptions, the bill defines industrial employment

hubs. This is kind of a unique term in that bill, and it defines them as contiguous areas of at

least 250 acres, primarily dedicated to industrial use that were designated in a city's general plan

prior to January 1st as an employment lands area.

And the city must choose to opt in,

or jurisdictions must choose to opt into this exemption

through an ordinance that gets approved by the state, by HCD.

And so this was a specific exemption the city advocated for

during the process of SB 79,

especially to protect North San Jose and Old Edenvale

from the impacts of SB 79.

So there are six areas that would qualify for this exemption

that meet that 250-acre threshold

and that are primarily dedicated to industrial use.

There is a map included in the report of those areas.

You can kind of see where they are in relation to the entire city.

And they were on that earlier map as well

with the stations overlaid on them.

The other permanent exemption allowed is for sites where no walking path of less than one mile to the stop exists.

So a parcel could be within the half mile radius of the station, but a walking path of less than one mile to the station doesn't exist.

This, again, the city is required to opt into through an ordinance that must be approved by HCD.

We estimate there's likely over 2,000 parcels that could be eligible for this.

We'd like to look more in detail at those sites to understand which ones truly have some barriers,

such as freeways, and which ones might be just slightly outside of that area.

Additionally, this is really where we need to wait on those final maps to really understand where those walking paths are.

And there are a lot of questions as well in terms of how the walking paths are measured from a methodology standpoint.

So getting into the next category, delayed effectuation.

So again, this allows a temporary exemption of either individual sites, TOD zones or stations, or low resource areas until one year following adoption of the next housing element, so 2032.

Again, the city must opt into these through an ordinance approved by HCD.

And then there's some very detailed calculations that I'll try to explain as best I can.

And so at a TOD zone level, so at the station level, at least one-third of sites in that area, in that station, have to, or sorry, in that TOD zone, have to allow at least 50% of the density granted by SB79.

And then additionally, cumulatively across that station area, the city has to allow greater than 75% of the average density created through SB79.

And then there are some specific site level exemptions that are available.

So sites that allow more than 50% of the SB79 density, sites located in very high fire severity zones or vulnerable to one foot level sea rise,

or sites that contain locally designated historic resources that were designated prior to January 1st of 2025 can be temporarily exempted.

Additionally, low resource areas, either at a citywide level or a station level, can be exempted if they meet certain levels of density discussed here.

So we wanted to do some analysis to understand how the city may or may not be eligible or how we would fare under this.

Now, we couldn't do all 50 stations, so we wanted to pick a sampling, kind of a representative sample of stations in the city,

and a sample that would sort of be broadly representative of different levels of zone capacity around stations.

So we looked at an example of where the city is planned for high density around a station.

So we looked at the Berryessa-Bart station, where we have a planned urban village that's approved.

with higher densities around the BART station there.

And then kind of a medium density station.

So looking at the Tamien station, which has Caltrain and light rail,

is a tier one station where there's a specific plan area

that's been adopted for quite some time.

And then looking at the Snell light rail station.

So an area further out, lower density, with a light rail station,

with an urban village that does not have an adopted plan.

So looking at the criteria I talked about on the last slide,

so there's kind of a two-step measurement.

So looking at whether or not the city's capacity is 75% of the allowed density under SB 79,

it does seem as though the Barriess Barge Station might cross that threshold,

at least on the first category.

but then looking at at least one-third or 33 percent of the sites must allow 50 percent of the SB79 density.

And so we're not quite at that threshold.

And again, I just want to caveat that the way in which these calculations are done,

there's a lot of questions in terms of how to interpret some of the language in the bill,

how these exactly sites are counted, how the methods of calculation,

It's all sort of evolving in real time.

The bill says that the state is required to come out with guidance around this,

but it's not required to come out with that guidance until July 1st, which is when the bill takes effect.

So there's a lot of learning.

As Chris said, we're talking with other cities,

trying to understand how they're evaluating these station areas and how they're doing these calculations.

But generally speaking, at a high level,

we don't think that it's likely that we would meet the delay at a station level in many of these cases.

And kind of the best example of that is looking at kind of the station area maps.

Now, so this is the Snell station area.

The green dot is the pedestrian access point to the light rail station there.

The pink sites, those are generally the urban village area.

or the urban village boundary.

And you can see the red circles there are the half mile radius

and how much further the half mile extends beyond

what we've typically planned as a station area.

And so, you know, kind of given the size of these half mile buffers,

our existing zone capacity, you know,

is far below what would be required to meet either the delay

or even kind of the alternative plan that I'll talk about in a second.

So the third option, the TOD alternative plan or alt plan,

it allows a more permanent modification or exemption from the SB 79 standards,

and it can apply to an individual stop, multiple stops, or citywide.

We could adopt it at any time,

but it must be reevaluated under the next housing element if we choose to pursue it.

Again, the alternative plans must be submitted and approved by HCD, and it sets standards

around density.

So at a citywide level, we must maintain equal or greater net zone capacity.

So we have to look at what existing developed units or FAR is on site.

And then at a site level, you can't reduce a site 50% below what 79 allows or greater

than 200% of what it allows.

So it's kind of a very tricky balancing game where you can sort of spread density out,

but you can't necessarily pull it away individually from sites.

And then at a station level, you can't reduce a station more than 50% as well.

So it really sets a higher bar even than the delay in terms of what levels of zone capacity

you would need to have in order to qualify for these plans.

so getting into the near term and we'll go through the all of the recommendations that

we're making today but specifically on the industrial employment hubs we believe it we

believe it's important for us to move relatively quickly with this exemption given the July 1st

deadline and the specific timeline defined in the bill around obtaining approval from HCD for an

ordinance for the exemption. So in SB 79, we're required to submit the ordinance to them before

adoption, 14 days before adoption. So that would be before a planning commission hearing on the

ordinance and then at 60 days of enactment so that's 30 days from second reading we have to

send the ordinance to the state and they have 90 days to review it we would like the effective date

to be well before July 1st and ideally we're hoping to have HCD approval before July 1st

although with their windows the 90 days would extend beyond that so that that's the sense of

urgency that we're kind of operating under. We've had initial discussions with them and, you know,

informed them that we'll be pursuing this option, and we hope to work with them proactively as we

go through it so that we're as much assurance as we can get that what we put forward would be

approved by them. And with that, I'll pass it over to Chris to go through our list of recommendations.

Thanks, Jared. So hopefully, as you can see from all of these brief details, there's a

complex level of analysis that goes through this. And currently, we're really trying to

balance the resources we have available to undertake this work. When you look at the

different alternatives available to cities, they require differing or varying amounts

of analysis. Most of it is fairly in-depth and fairly labor-intensive. And obviously,

we're already operating under a significant workload within our citywide planning team.

So within that, we're trying to prioritize this work, you know, given what's available, given our initial analysis of what's in the bill, to really focus on where we'll get the most return.

Now, obviously, a general plan is built on a foundation of preserving our employment lands.

It's critical that we maintain a balance of uses within the city and preserve the opportunity for employment for as many residents as possible.

It's sort of, you know, woven through our entire land use planning.

So ultimately, that is the path that we intend to take first.

Our recommendation is to be back at council in March with that ordinance that both exempts our industrial areas,

as we've outlined in the memo and in the maps attached,

but also we will have to pass an ordinance that essentially implements SB 79 and calls out all the provisions within the zoning code.

That's our priority number one, and that's where our focus is.

There's some other work that we believe is an opportunity that would then continue beyond that.

The first is really looking at those sites that have no walking path less than one mile.

Again, there's probably somewhere in the region of 2,000 sites,

and our current understanding is that we would have to do the analysis

and demonstrate that each of those sites is outside that radius.

So that's a considerable amount of work, but we believe that there's an opportunity there.

We do want to spend time sort of doing that analysis

and making sure that future improvements align with that consideration.

And then lastly, also to take a look at historic resources.

So obviously, with a lot of the work that's gone on around CEQA,

there's a shifting environment about how we consider our approval process around historic resources.

So we believe that there's some opportunity to do some work there.

But ultimately, we're phasing this work because our goal is to ensure

that we have the exemption of our employment lands in place prior to an action of the bill,

and then everything else we'll do as much as we can.

The July 1st date doesn't put a stop on our ability to continue to do this work

and continue to do analysis.

Our concern ultimately is that we'll get to that point,

and as we've seen with the housing element and the builder's remedy process,

there's an ability for anything that we've not excluded by that point

for somebody to come in with what's called an SB 330 premium application

and lock in a development proposal prior to us enacting our exemptions.

Obviously, the market is going to be looking at the best opportunities,

and we believe largely that's our employment land,

so that's really why we're focusing in that area first

and ensuring that that comes first.

So beyond that, staff's available for questions.

Great. Thanks for the thorough background on SB 79.

Tony let's go to public comment please

Okay I have a few cards for item 8.1

When I call your name please head on down

First person to the microphone

Just go ahead and start speaking

You'll have one minute per person

The other people just line up behind them

Up the stairs

I have Allison

Triana

Jeanette

Allie

Josh

And the final card is anonymous

and Mike Sodergren.

Come on down.

Good afternoon.

Toronto Crane Senior Transportation Planner with the VTA.

The VTA staff have been working and meeting with the city staff regarding SB 79,

and we do hope to continue this collaborative process,

and we do share the city's overarching goals

of advancing housing production.

VTA did submit a comment letter a few hours ago,

and we did provide some hard copies

to the city clerk today,

and I would like to just highlight

a few of the points made in that letter.

First, VTA requests further coordination

and opportunities to collaborate with city staff

before any council action on proposed SB 79 exemptions.

VTA does have considerable concern

regarding the potential exemptions near BART stations

and the VTA, Cerrone, and Santa Teresa sites.

Coordination together is vital to outcomes that are both transit supportive

and consistent with state policy objectives.

Reducing residential potential in these areas undermines ridership

and counters the core intent of SB 79.

Again, VTA requests opportunity to coordinate and collaborate with the city

before finalizing exemptions, and we're happy to meet with staff about this.

Thank you.

Thank you, next speaker.

Good afternoon, Allison Singalani, Director of Policy with SV at Home.

We commend PBCE staff for their work of preparing this very thorough memo on such a complex topic

and recognize the tremendous amount of work ahead.

We appreciate staff's foresight in aligning this work with the general plan for your review

and leveraging both to prepare very intentionally for the next housing element cycle,

which will be here before we know it.

We ask council to protect PBC staff capacity to do this work on a very tight timeline established by the state.

We support staff's recommendations, except that we do support the memo from Mayor Campos, Tortillas, and Cohen

not to direct staff to return to council with an ordinance temporarily,

exempting historic resources as those continue to be protected by the CEQA process.

Thank you.

Thank you. Next speaker.

Hi, I'm Jeanette Holdsworth from District 6, and I'm writing, writing, I'm speaking in support of the memo issued by Campos, Torreos, and Cohen, increasing the density, which I think is really important in our area.

but I would also ask for consideration for what Councilmember Mulcahy has asked

because what I see as a neighborhood person who lives in a neighborhood,

there can be significant pushback,

and directing the council to increase their policy options and analysis

would also potentially avoid expensive litigation

and would maximize efficiency down the road.

Thanks.

Thank you. Next speaker.

Good afternoon, Mayor, Council, and staff.

My name is Allie Saperman. I'm with the Housing Action Coalition.

We strongly support item 8.1.

San Jose is a major transit hub, and our housing and transportation goals rise or fall together.

We won't meet our general plan or climate commitments without significantly more homes near BART, Caltrain, VTA light rail, and frequent bus corridors.

Transit investments deliver their full benefit only when paired with enough housing to close stations and major lines,

especially for lower- and moderate-income residents who rely on transit and benefit most from reduced transportation costs.

As you implement SB79, we urge you to focus on what drives real production.

Apply TOD standards broadly and consistently.

Pair increased capacity with streamlined objective approvals.

Right-size parking and design standards to reflect transit access and protect feasibility.

and coordinate anti-displacement strategies while allowing for overall capacity to reduce pressure on rents and prices.

Thank you so much.

Thank you. Next speaker.

Good afternoon, Council and Mayor.

I am the unknown person, but just to state the record, my name is Greg.

I am here on behalf of both Young Dems of Silicon Valley and DSA of Silicon Valley.

I'm here to speak on the issue of SB 79 and how it is very impertinent that we make sure that this is passed, this ordinance that was initially set by the state that is now being passed down to the city.

My mother is a Filipino, very proud to be a Filipino, and she has grown up here in the San Francisco Bay Area since the 70s, and she has seen no improvement in transit whatsoever since around the early 80s when they bulldozed through parts of Oakland and then parts of San Jose.

we need to create affordable housing within the transit-oriented spaces in order to make sure that people can have access to their transit spaces as well.

Thank you. That's your time. Next speaker.

Thank you, Mayor and Council. Josh Burrows.

Just some general comments on SB 79.

The staff recommendation seems to include a very broad brush exemption over square miles of land, especially in the North San Jose area.

These are huge chunks of lands.

If you look around the periphery of these areas served by transit, there's hundreds of parcels out of what's called 100,000 parcels that are proposed to be exempted that could be great candidates for housing.

with the advent of AI data centers

and not doing single-story concrete tilt-ups anymore.

I think the revenue in jobs per acre in these areas

is a lot different than it was a decade ago.

I think there's a way to preserve employment land

but also allow people to walk or bike,

to work or take light rail,

especially in the North San Jose area

where, frankly, I think there's a 100 to 1 jobs

to housing ratio even with the current capacity that we have.

Thank you.

Back to Council.

I think you had one more there.

I didn't see you in line.

That's okay.

Hi, Mike with Preservation Action Council in front of you again.

We support Councilmember Mulcahy's memo

for the reasons he's stated in the memo,

but also as he is the liaison to San Jose's Historic Landmarks Commission

with the experts in determining the impact

to designated and eligible historic resources.

The memo largely supports the earlier memo by the mayor, council members Campos, Tadeus, and Cohen,

and the spirit of the staff recommendation to delay effectuation of the work.

We recognize that all actions require staff time and resources,

but the city has a GIS-based mapping of its historic resources already in hand and should be able to use that.

The state has provided a way for the city to protect its local authority and land use decisions for its industrial employment hubs and its historic places.

I suggest we take that.

Back to council.

Great. Thank you.

I appreciate the amount and complexity the work staff is doing.

And obviously, as we saw in the presentation, there's a lot of deep thought and planning going into this.

the state is in the big picture doing the right thing and really pushing to make it easier to

build housing statewide, and I applaud them for that. They've done quite a bit in recent years

to create an environment in which we can build more housing. That said, the state is a blunt

instrument, and in the largest state in the country, 400 some cities, 40 million people,

the application of this framework could have very different impacts in different places.

And one of the things we know about our city that is unfortunately fairly unique amongst big cities

is the percentage of our land dedicated to employment use, jobs, is quite small, around 13-some percent.

I was in Phoenix on a study mission with some colleagues here a couple years ago.

I think they told us 33% of their land was available for employment.

And the reason that matters, as I'm sure most of us are aware, is that that's really where the tax base is.

That's where we get the net revenue into our general fund that allows us to provide services to everybody, residents and all those employers and their employees.

So it is very important that we take steps to ensure that we exempt land that is vital for good, high-paying jobs for tax base.

And that's the intention of the bill authors, but it also leads to literally months worth of work for some of our staff and a lot of complexity that we're trying to get right here.

I say that in part to just quickly transition to the issue raised by our colleagues at VTA, where I serve as the vice chair on the board, and a number of us serve as board members.

And very much appreciate and agree with the need for coordination and supportive alternatives where appropriate.

We are in a race against the clock and need to get this right for our industrial and key employment land and absolutely have the ability to partner with agencies like VTA and others going forward to then use a scalpel to fine tune what we're doing.

And so I just want to make that point, but let me ask our professional staff to maybe confirm that and add any additional context on that point.

Yeah, absolutely.

So SB 79 sits on top of our local land use provision.

So to the extent that we needed to go in and look at an individual site that was in part of a larger exemption,

we could absolutely go through and add housing, say, to that site.

Okay.

Can you say just a little more about VTA's specific concern and how we will follow up and be a good partner to them,

assuming we move forward today, as I think we need to do?

Yeah, absolutely.

And we have been meeting with VTA up to this point.

And I think, as was noted by the speaker, we're generally in line with this.

There are specific provisions in the law that relate to local transit agencies

and their ability to use their own land.

And so when you think of North San Jose, obviously specifically the Cerrone site,

would fall into one of these industrial exemptions.

And so if there was a discussion that needed to happen in the future

about other potential users on that site, we can do that on a local level, right,

and continue as we have in large areas of North San Jose included residential overlays

on industrial lands or made changes to the general plan.

We can look at that at a local level without creating risk

on the rest of our employment lands by not including the exemption for that area.

So we retain the flexibility site by site or even in larger areas

to come back and create that overlay and create that flexibility with partners.

What we can't do once this is implemented and lose it

is go the other direction, as I understand it.

Can you just remind everybody of the time crunch?

So July 1st, it goes July 1st and the real time crunch.

And again, I'll recall with some discomfort, our process of moving through the housing element and the fact that we have to get HCD approval on this ordinance and that there is a specified timeline with which they get to review it.

So while we want this ordinance in place by July 1, the reality is it has to be back in front of council in March.

Yeah.

Okay.

So we need to move incredibly quickly, which also brings up the point on historic assets.

And I just, I think, I want to thank all my colleagues, those in the group memo, Councilman

Mulcahy for his thoughtful memo.

I do think it would be helpful as we get to that topic.

I'll let the discussion and debate play out here.

I know everybody wants to chime in.

If we could confirm the extent to which critical historic assets already have some protections

through CEQA or other mechanisms.

And if we were to include the council member's recommendation,

how or to what extent,

what we would need to do to make sure we don't miss

the really critical outcome here,

which is that we protect these lands on time

and that we don't delay the larger efforts.

I just want to make sure we get to that in the discussion.

Okay, so I just highlight those for colleagues.

Let me turn now to Council Member Tordios.

Thank you, Mayor.

I want to start by just thanking city staff for all of the work that has already gone into SB 79 implementation,

both preparing for today's presentation, but also all of the work that was mentioned happening behind the scenes with the bill's author last year,

making sure that we did safeguard our important industrial employment lands up in North San Jose.

That said, I do want to acknowledge the fact that I think SB 79 provides the city a number of unique opportunities.

You know, last year we embarked on our general plan four-year review,

and one of the major objectives of that review is identifying where we are going to find the capacity

for our upcoming seventh cycle housing element.

And I think SB 79 is in some ways a gift in that it will give us a lot of additional capacity,

tens of thousands of units of capacity close to our transit centers,

and that means less pressure as the city moves forward,

finding additional residential capacity further from transit in less connected single-family areas.

That said, we know that many of the station areas covered by SB 79

have already been slated for growth in the city's urban village strategy, but we've also seen over

the past decade how time-consuming and costly to staff it can be to actually do these site-by-site

urban village plans. So again, having this new baseline created by SV79 will hopefully allow

staff to focus their efforts on our urban village plans to things that are site-specific, things

like design guidelines, interface with open space, and public realm improvements. And given that

later today we will be talking about our inclusionary housing ordinance. I do want to also

just call out what was pointed out by staff that all of these SB 79 projects will require

on-site affordable units. Personally, I'm very sensitive to ensuring that we get SB 79's

implementation correct in large part because District 3 is one of the most heavily impacted

districts in the city. We have one electrified Caltrain station, two future BART stations,

eight light rail stations, and three additional stations that are in other districts technically

that have TOD spheres that cover District 3 as well.

The memo that we collaborated on with the mayor's office

and council members Campos and Cohen,

I think helps to address a number of the unique challenges

that we see for San Jose in terms of SB79's implementation.

First off, it directs staff to evaluate increasing density minimums

in downtown and in other major growth areas

so that we can ensure that come July 1,

SB79 does not unintentionally serve as a de facto downzoning

that allows a proliferation of projects at lower densities

than we want in some of these major growth areas.

That's something that staff is currently able to do in these growth areas

via the discretionary review process,

but given that the minimum density required under SB79

is only 30 dwelling units per acre,

this, again, feels like a time-sensitive issue

to make sure that we do not unintentionally get a flood of lower-density projects

that are then locked in via the SB330 preliminary applications.

And second, our memo directs staff not to prepare an ordinance delaying effectuation

of SB 79 sites on sites containing historic resources.

And I know that this one is a controversial topic on the council, but there's a couple

reasons that we think this is reasonable.

First is just, as was mentioned, any local action here would only be a temporary delay

of a couple years until the start of the next seventh cycle housing element.

So I think there's a question of the value of staff's time amidst competing priorities

putting in place this temporary condition.

The second, as was again mentioned,

is that SB 79 does not exempt projects from CEQA review,

so any projects impacting historic resources

will still have to be cleared through both CEQA

and the city's own historic preservation ordinance.

And then finally, I will just note

that at least here in District 3,

there are actually a number of SB 79

transit-oriented development sites

that are in existing historic districts

and conservation areas

that are either in or directly adjacent to downtown.

And I think many of these areas would actually be good candidates

for infill development on sites that do not have protected structures,

places like the Reed City Landmark District near Sofa

and the Market Almadin Conservation Area near the Convention Center.

So any sort of broad district-level delayed effectuation

I think would risk sacrificing opportunities to build

denser infill housing in some of these ideally situated growth areas.

So I know there's a lot of hands up here.

There's at least one memo with kind of a different perspective on the question of historic preservation,

but I will get things started by moving the joint memo from my office,

as well as Mayor Mahan and Council Members Cohen and Campos.

Thanks, Council Member. Appreciate the second.

Let's go to Council Member Ortiz.

Thank you, Mayor.

Today I want to speak today from the perspective of East San Jose.

From the neighborhoods and corridors that I represent and have spent years working to uplift.

I fully understand and I know we all understand the intent behind this state policy.

The goal for more housing, especially near transit, is an honorable one.

We need housing. We need affordability.

We need solutions to a crisis that is hurting families across our city and really across our state.

But we also have to be honest about one thing.

Not every neighborhood is starting from the same place, with the same infrastructure and the same support for the local economy.

On the east side, we've been in the middle of a long overdue revitalization effort.

We've been working corridor by corridor to rebuild vibrant local economies and support small businesses.

SB 79 could be a threat to these long-valued commercial spaces.

We're not trying to turn our neighborhoods into bedroom communities,

places where people only sleep and then they leave.

We hope to create complete communities.

Policies like this, if applied without care, risk undermining that progress.

Because what happens when land values spike overnight?

There's a family-owned taqueria, a market, an auto shop, or a salon operating there,

businesses that have served generations of residents, they're suddenly sitting on land

that's now more valuable for redevelopment than for staying as a small business local storefront.

The owner gets pressure to sell, rents go up, and leases do not get renewed. And that's how you lose

the economic heart of a corridor, not because the business fails, but because the land becomes more

valuable than the community in which it serves. This is happening in real time right now along

Alum Rock. We have multi-family housing being built. Great housing. I support this housing.

Many of it is affordable housing, but it's replacing commercial spaces that have long served

East San Jose family-owned businesses that provide multiple jobs to our community. And we also have

to keep in mind that, and I understand we have specific areas of the city in which we

have identified them as places for jobs, job growth, places for development, but we also

cannot forget about our local neighborhood and business corridors.

And I also just want to say that, you know, some of our neighborhoods have done a lot

of development.

Communities like East San Jose have carried a significant share of affordable housing,

multi-family housing, and densities for decades.

We didn't need these type of policies in order to develop in our backyards.

So just as we implement this policy, we just have to protect the jobs that currently exist on our corridors

and the entrepreneurs that have essentially breathed life into our neighborhoods.

Because affordability is not just about housing units.

It's about whether working families can still afford to live, work, and build their future

in the neighborhoods that they have traditionally called home.

And that's the lens in which I will continue to see this conversation and vote towards this item.

Thank you.

Thanks, Council Member.

Appreciate those insightful reflections.

Let me go to Council Member Mulcahy.

Thank you, Mayor.

I'm certain each of our offices through staff briefings understand that SB 79 has placed a heavy and an unexpected burden on our city

and other cities in California, for that matter.

It's another example of an unfunded state mandate that requires local government to interpret,

implement, and enforce complex new rules without the resources to do it effectively.

In fact, SB 79 explicitly states that no state reimbursement is required for the local costs it imposes,

which makes it functionally an unfunded mandate.

Now our planning staff is working hard.

Thank you, Jared, for walking us through.

You know, it's clear as mud, I think, to most.

I know you're working hard, but these constant changes from Sacramento strain our capacity

here at home, slow down our system, and divert attention from our priorities already underway,

Updating our general plan, meeting our housing element obligations, and our own policy work

that will fit San Jose's unique housing crisis.

In this crisis environment, every new law without support undermines our ability to

deliver efficient, effective services to the people of San Jose.

And think about every other planning department throughout the state going through the same

process of interpreting yet another one-size-fits-all Sacramento policy.

Literally thousands of staff hours throughout the state are being refocused away from their

own work to figure out how to implement this new expansive demand to try and fix California's

housing crisis.

So a big thank you to Chris, Manira, Jared, and the entire PBCE team for your work to

unravel the impacts of SB79 on our city.

Regardless of the author's intent, it was clear from the outset this bill would pose

significant challenges for local jurisdictions, and the confusion created by last-minute political

changes to the bill only compounded those challenges.

I believe that each of us on the dais fundamentally agree that we need more housing, and District

6 has been a proven leader in advancing housing at all affordability levels.

However, SB 79 has been extremely unhelpful and has diverted substantial PBCE staff time

and as noted in the staff memo, implementation will also require significantly more budgetary

resources than originally anticipated.

One example we heard is extensive staff time spent identifying pedestrian access points

for each transit stop requires considerable engagement with VTA staff.

For these and other reasons, I sent a letter to our legislative delegation expressing my

opposition to SB 79.

So I want to take a moment to follow up with PBC and IGR and just ask, as we're going through

this process, do we even have the time to understand how we're going to help influence

any state, you know, what our state-level advocacy will be to make any changes in this

next legislative process?

Thank you, Councilmember.

I'll have Jared jump in on this in a second as well.

I think, you know, at this point we see that there is opportunities around cleanup bills.

There's certainly conversations going around.

I think the challenge, obviously, just given the timeline to implementation

and the reality that any of those changes are made prior to us moving into implementation

and the way that some of these other state laws stack on top of each other

is, you know, there will be a race for key sites that people see development opportunities on

and then maybe cleanup will come after the fact.

So it's definitely something we're aware of.

It's definitely something that we're engaging on as much as we can.

But right now, our priority has to be around what can we do to really preserve those key opportunities in the city.

Jared?

Yeah, there's various cleanup kind of being discussed, you know, kind of more specific technical cleanup and then kind of bigger picture cleanup as well.

I think in sort of the near term, there's been discussions of could there be at least a longer delay before it takes effect to give cities additional time,

which is something I think we're supportive of.

I don't know the reality of that

given just the short timeline until July.

In the longer term, I know we've had discussions as well

or at least had the thought around,

to Council Member Tordios' point,

around looking at this capacity,

looking forward to our next housing element,

is on having some assurances

that if we use these sites in our next inventory

that we have our ability to count those

and not have very strict scrutiny applied to those sites be put on when we do that analysis

so that when we get to that next housing element process that it's not such a headache

would be really helpful, I think, to have that clarity going into preparation of the next housing element.

So I think that's sort of a longer-term policy change that we'd like to see sort of considered

as cleanup or follow-up to this piece of legislation.

Thank you for that.

I know it's on our IGR team's scope, but just want to make sure that we're elevating these issues and, you know, you're taking notes and making sure that you're communicating with other departments across the state because I know that this is reverberating in other departments and your other colleagues.

So turning to the memo from Mayor Mahan and Councilmembers Campos, Trudeos, and Cohen, I fully support asking PBCE to evaluate our downtown core and to thoughtfully plan targeted upzonings.

District 6 includes part of this downtown core and I agree it makes sense to focus

growth in areas near frequent transit that works and employment centers that's precisely why I

opposed SB 79 in the first place San Jose understands this need for more housing and

no one knows our city and its needs better than our own residents and local government not

Sacramento. That said, I want to respectfully express my opposition to the memo removing the

recommendation directing staff to return to council with an ordinance exempting historic resources

from SB 79 implementation. While I understand there may not be support for a full exemption,

and that's not what I'm requesting, I do believe this issue warrants further study and a return to

Council with potential pathways forward. District 6 is home to many historic resources and is

disproportionately impacted by SB 79 due to significant overlap with SB 79 zones as shown

in the map that Jared shared with us earlier. According to the staff's memo, this work would

need to be completed by early March for the Planning Commission. I would therefore hope we

could return to council before then with additional analysis of how SB 79 applies to historic

resources along with policy options so we're better informed.

I have a question for Chris, and there was made reference earlier.

Do we have the data?

Do we have the information we need that is not going to, you know, be an undue burden

on the staff, you know, to come up with a game plan around this?

So, obviously, as a department, as was mentioned, we have GIS layers that identify our historic

resources throughout the city.

So we have opportunity to sort of look.

I think the bigger question is really about the implications of other state laws relative

to CEQA.

So the passage of AB 130 and the statutory exemptions on CEQA have really changed the

game to some extent.

Now, certainly we don't anticipate, and AB 130 doesn't allow somebody to come in and demolish historic resources.

However, it does allow people to impact them in ways that typically our secret process would pick up,

but under those provisions it would not.

So I think the critical aspect is less about the individual sites

and more about understanding the different layering of state law,

so we can at least give you an insight onto those pieces

that you can be more informed about the potential impacts of SB 79.

And what would that timing look like to be able to come back?

Could you meet the deadline?

So as far as passing an ordinance on all of the historic resources in the city,

potentially not. I think that's questionable.

I think some of those are probably less at risk than other sites,

which is why we've prioritized employment.

I think the critical aspect for us is doing that analysis on AB130 relative to SB79, particularly around historic.

And that's going to give you the insight onto what's likely to occur, what could occur, and whether or not we should pursue that.

So I think that level of analysis is something we can do nearer term without going all the way into full implementation on an ordinance.

So say that again. Talk like, you know, I was going to move to, you know, I can't do

a friendly amendment. I'm going to try to do a replacement here. But tell me what that

would look like. How would that inform the council on this issue?

Right. So, so again, you know, it would allow you to see what are the impacts on, you know,

sites that are, so obviously we have our register already. We know what all our historic resources

are. The real question is, is how could they be impacted by this

law? And that ultimately stems from the use of CEQA. So the

memo is proposed. It says don't go and analyze this because

CEQA takes care of it. I think what we're saying is, well, there is some exposure to

historic resources because of these new laws around CEQA.

And so what we want to do is say, well, these are the potential impacts that we could see.

and moving forward, again, July 1st is not a deadline

where everything has to be done by.

We can continue to do this work beyond that point,

but that would allow council to say it's worth it,

it's not worth it, continue down this path.

So I think that high-level analysis, that initial pass on AB 130

is something that we currently intend to include

in the memo that we'll bring back in March.

So as we move forward the ordinance on employment lands,

We'll have an update on our interpretation on AB 130 and SB 79 at that point.

So my red light is beaming here.

So you can come back to us on the analysis to determine whether we can rely on CEQA to protect our historic resources.

Yeah?

Take a friendly amendment to that, to include it?

And it's in March?

Correct.

I would love to be back sooner if I could, but I think this is the likely time frame.

So March would be when we bring the ordinance on employment lands, and we would include it as a part of that discussion.

Okay.

I would take it.

Okay.

And the seconder?

Okay.

We're not striking A.

What we're essentially doing is we're relying on staff in their memorandum coming back in March

to help determine whether or not we can rely on CEQA

to protect our historic resources,

as opposed to what you look...

It'll go down, so my hand was up.

Got you.

Yeah, it's okay.

I was concerned about staff work.

I also know that if it comes back and says there's more to do,

it won't be able to be done in time for the March cycle

to get approved by July anyway.

So I just want to make sure we're not detracting from the most important things staff has to do to get us to get some of these other really crucial and important things done by March.

That's my only concern.

But if we don't think that we'll do that, then I'm okay with accepting it.

Right.

So as I said, I think the analysis on AB 130 is something that we can absolutely accommodate, right?

And so the relationship between the two bills.

By the time we're back to you in March, we should be done with the industrial work.

That's our plan.

So, you know, from March onwards, absolutely we can prioritize what work comes next between the historic, between the, you know, the thousand feet.

You know, we'll continue to use this to inform the four-year review.

You know, we'll be looking at how all these things move together.

It's really about how do we prioritize and sequence the work rather than an either or.

Okay.

So I believe I heard a yes from the seconder.

Okay.

Yes.

All right.

And Councillor Mulcahy, did you get the answer you needed there?

Is that clear?

I'm satisfied.

Satisfied for now.

Okay.

We'll take it.

All right.

And Councillor Cohen, please remind me, were you next?

I was, yeah.

Then the floor is yours.

Thank you.

And thank you to staff for this work that, unfortunately, we've had to thrust into the

middle of all the other work that you do.

And I can only imagine what it's like in some cities, the other 482 cities, some of which

much smaller and don't have the extensive staff that we have in San Jose to try to work

this through.

I really appreciate the comments of some of my colleagues, particularly Councilman Ortiz's

comments about how this applies and whether we're really thinking about the holistic building

of community and neighborhoods as part of this.

This is a broad brush which is very disappointing in some regards.

This idea that half a mile works in every area just doesn't make sense to me, and I'll

talk a little bit about some of the impacts in my district, but I know there are similar

ones in others.

Clearly I believe that transit-oriented development is important, and we have worked really hard

in the city to zone appropriately around transit.

In fact, we have density going up.

The tallest building in East San Jose is going up right now in Berryessa that dwarfs anything

in the area because it's next to a transit station and because that's how we've zoned

it.

And so, you know, I believe we've done great work in building our general plan and developing

our housing element to identify land to do what we have to do, but preserve the ability

to make local decisions.

And this has really thrown a wrench into that.

So I'm going to start there.

I really appreciated our staff's work to get the exemptions that are here that we're working on,

but it was frustrating to learn that the exemptions weren't,

these areas are exempt because of the way they're zoned.

These areas are exempt, but only if you then go and identify every parcel

and do all this work and spend all this time and then come back with an ordinance.

And it has to be done, by the way, within three months.

I mean, the ludicrous nature of that is just kind of shocking to me, and it's disappointing.

Anyway, having said that, North San Jose,

I'm just going to discuss that a bit

because clearly this industrial exemption applies broadly

to half of my district, but it's important

because that's the area of the economic driver in our city.

And so we do need to make sure this gets done.

These are actually lands that I know are being eyed

for conversion all the time.

Back with the builder's remedy time,

we had all kinds of proposals for pieces of property

along that corridor.

And without this exemption,

I don't doubt that we will see more.

And so I think we ought to,

this is of crucial importance.

But it doesn't mean that there's not a lot of housing

proposed for this area.

It's an industrial, it's a commercially zoned area,

but there's 24,000 housing units in our housing element in that area as well

and lots of property.

And as I talk to developers, I tell them,

I offer them a trip and a joint car ride around North San Jose

looking at these properties and saying,

here are all the opportunities that are here.

So I'd like to think we have the opportunities for the housing

that everybody's demanding without having to sacrifice

any of this important industrial land in North San Jose.

The other thing that I'm concerned about,

it and I know that this comes second but I you know and I'm thinking it's probably less crucial

in terms of people eyeing properties at this point but if I have the map in front of me with

all these circles on it and if you look down east San Jose but particularly the north portion along

the light rail line you'll see circles that start at a light rail station and emanate out by half a

mile, of which 40% of that circle is across a freeway from the light rail station. There is no

walking path. There's a freeway between it. But the circle, because of this broad general bill that

was passed, creates a nonsensical situation in which without any ability for us to, in the way

it currently stands, without any ability for us to say, hey, that doesn't make sense, somebody can

come in on the other side of 680 and put in a large, dense project that isn't providing

transit-oriented housing for people.

So I think it's also important that we do the work on the one-mile walking distance

to make sure that we protect that property.

Having said that, and that's my frustration here, it should be obvious from any planning

map whether a property is within a mile, and we shouldn't have to go and identify them

mall and pass an ordinance listing every property in the city that should be exempt, but there we

are. So I just want to make, I want to ask you the question about your timeline and what your

thought is about when we're going to address that second element here after we get the first one

coming to us in March. Yeah, I mean, we want to move as, I think, as quickly as we can. I think

it's evolving. Like I said, we need to wait for the official map from MTC. We need to understand

how they're going to measure that one-mile walking path exactly.

So I think as we know more, we can share with council that timeline,

but it's not going to be as quickly as the industrial,

but that it would follow along as quickly as we could do

that's feasible for us in time and resources

and our understanding of how to proceed with it.

Okay.

And what is our belief of how this will be interpreted?

So if there's a delay because every city in the state

is sending in their plan in March and April or May,

and HCD is going to have to approve them all

and will clearly not get them all done by June 30th.

What do we believe will be the path forward

if we don't have actual stamp of approval by July 1st,

if a project comes in but we've already submitted the plan?

So as long as the ordinance is in place prior to July 1st, it is effective.

Now, if it's still under HCD review

and ultimately they ask us to make changes,

then there is a period where projects could potentially be allowed to be submitted while we update the ordinance to meet whatever thing that they deem is missing from the ordinance.

Okay. It's sort of like the builder's remedy again. All of a sudden there's this gap.

That's right.

All right. I hope this wasn't an intentional trap for cities, but I'm glad that we are doing our best to address this,

and hopefully these are more straightforward requests that HCD will approve and not send back and forth a review.

But thank you for the work you do, and look forward to seeing the next step.

Thanks. Appreciate your comments and questions. Councilmember, Vice Mayor.

Thank you. Thank you for the very complicated presentation.

This is a mess.

It's a mess what it's going to do potentially to our community

and how it's going to allow these higher density properties

not necessarily that close to transit,

but close enough according to the Senate bill.

So that's a frustration.

I think my colleagues have already said it.

much more eloquently than I can, except I'll add I really dislike when local control is taken away

from city council on particularly an issue like this. But I have a few questions. We have some

schools that are being consolidated, and some of them are in the path of SB 79. So I'm curious if

SB 79

does apply to

public quasi-public

PQP

parcels?

Yes, PQP would be eligible

for SB 79 if it's in the half

mile.

Okay.

And

do we have an idea

given the cost of constructions

and the other constraints

on development in San Jose,

how many projects

we actually expect to see from SB 79?

So I think that's potentially the one saving grace.

Obviously, given the density ranges,

so a minimum of 30 to the acre,

we've not seen a ton of projects coming through north of that,

and generally it's been in areas

where we would expect that type of development.

That being said, I think what we've seen

through implementation of the state laws,

whether it's changes to SB9 around ADUs.

Every time something comes along, people work at it,

try to figure it out,

especially when there's this sort of window of opportunity

where cities are trying to scramble to preserve sites.

I think the biggest challenge we face is that we anticipate

it won't be huge amounts of projects, but there will be projects.

And the challenge is, is with the number of stations

and the breadth of area around each of those stations,

is they're going to be sporadic and distributed

randomly all over the place.

So we won't see a contiguous nature of development that can allow for an area to evolve and change, you know, as we would typically expect it.

It's just going to be piecemeal all over the place.

Thank you.

I know that's kind of a crystal ball approach to look at this, but that's my assessment, too, that we're not really, every parcel that is eligible isn't likely to be pulled by a developer to build these projects.

A couple more questions. Since SB 79 generally goes through the city's normal planning process, correct? What discretion does the city have to deny projects that don't conform with our general plan?

we can't preclude them from achieving the densities there and we have to apply the same

standards to those projects as we apply to all and so the project would still be subject to

housing accountability act so our discretion is pretty limited in terms of denying as long as

they're meeting our meeting so we'll just add obviously you know based on objective standards

From our design guidelines, there is ways we can influence development,

but ultimately our ability to say no based on the general plan is removed by this bill.

Okay.

And then the final question is about IHO.

Do SB79 projects, are they exempt from IHO?

Are they eligible to build on-site or pay in lieu?

So SB 79 requires on-site affordable in projects with 11 or more units.

It's at a specific level of affordability unless a city's own program has a higher percentage requirement

or requires a deeper level of affordability.

Okay, so they can't buy it out, they have to build it.

All right, thank you. That's the end of my questions. Thank you.

Thanks, Vice Mayor.

Before I come back to Councilman Ortiz, I don't think we've heard from Councilman Kamea on this issue yet.

Then we'll come to Councilman Ortiz.

Thank you so much.

I'll be brief because much has been covered by my colleagues.

But I'm just curious in terms of if things are going to be dependent on the MTC maps,

do you have any idea when those might be available?

Yeah, we've been in conversation with them.

Hopefully maybe February, March is what they've sort of told us.

And we've been working closely with them, sharing data, and hopefully it'll be soon.

But that's kind of what they've told us so far.

Okay, great, great.

At least you're sort of in connection with them.

So, you know, I'm very, very concerned about what this does for staff capacity.

And I totally understand in terms of wanting to know and have the information.

but I think that it would be helpful as these things happen to remind us all about what you're

going to push away or deprioritize because the last time I remember you were you know

oversubscribed and I believe it was like 101 I don't know how many what the percentage was

that, you know, work versus capacity.

So I think that as we start going into these budget cycles,

it's always great to say, oh, well, you know,

how about this and how about that and a little bit more here.

But then that means you deprioritize something else.

So I think it's important to remind us things that we're waiting for

that take two years and we're wondering, where's that thing?

So that would be very helpful because I think that

we want you to do it all.

So there you go. Thank you.

Council Member, on that note,

we'll be back in front of the Community

and Economic Development Committee in April

with an update on our

citywide planning work plan, which is when we

show you how the balancing act is going

and how far out we're looking for

those other items.

Great. Thank you.

Council Member Ortiz?

Thank you, Mayor.

um it's a quick question so the city many of our council offices in partnership with the office of

economic development has been prioritizing the business improvement districts right i'm currently

working on one uh in partnership with uh council member tordeos uh ranging from santa clara street

all the way to um alum rock and so what are we doing in order to you know i guess protect this

this progress because it seems like we're kind of working on one side and like in hurting us with

the other with the other hand right and so are we working with office of economic development in

order to make sure that you know all this work being done by staff isn't being done in vain and

how can we protect um some of these commercial spaces yeah thanks council member and it's

absolutely sort of top of mind and we're working right across our whole uh community economic

Development City Service, the whole CSA with all the partner departments to really understand

the implications. I think our impacts to small business and the impact they have on our

neighbourhoods and communities is a primary concern for us. It's certainly something that

throughout, every time we look at urban villages, it's a real critical importance to ensure that

we're preserving opportunities for small business. And ultimately, in this case, the state is taking

away many of the tools that we have to really create those protections.

Now, that's not to say we're going to stay silent on this.

I think, as with many cases, the sort of best offense is a good defense.

And so making sure the commercial viability of these areas maintains and persists, which

is really the intent behind the business improvement district work, is how do we continue to provide

resources and support through those programs to make them really strongly commercially viable

areas. And that changes the economics, right? So as the economics change, it preserves that

opportunity for small business. Or as people look at redevelopment, it continues to push

for them to include spaces for retail and small businesses. Unfortunately, this law doesn't allow

us to mandate it. We can't require it to stay commercial. We can't require them to provide

commercial, but I think

in the past, certainly the

economics right now don't always support it, but in the

past, when we've seen very strong commercial

presence, it can be in development's

best interest to integrate it into

their development. So absolutely

we're doing the coordination so we can

look to that and do everything we can

to help offset those impacts.

Appreciate that.

I understand the city's done

some great work in certain areas in order

to improve the economy.

Unfortunately, that hasn't been the case in East San Jose, and I'm practically dragging our departments to give East San Jose some attention,

whether it's the entertainment zone, the bid, working in partnership with Jessica at School of Arts and Culture on the cultural district.

And so I don't really have confidence that, you know, moving away from this conversation, people are like,

oh, we're just going to really, you know, dive into East San Jose in order to improve the economy.

Well, I'd hope, I'd like to see that.

Unfortunately, for years in this city, that hasn't been the case.

So is there something more concrete?

Is there an incentive that we can provide for developers on commercial corridors to put these commercial spaces?

I just feel like what you said was very abstract and not really specific.

Yeah, because it's very difficult for us in the context of the law and our land use controls.

It's very difficult.

Now, I think the conversation about incentives and how we can get development to sort of continue to include commercial spaces is an important one.

I don't know that we've got anything right now, but it certainly warrants another look and a deeper dive on that topic.

Okay.

Just to be clear, I'm not pro-housing.

I'm happy to have housing.

It's the commercial spaces that I want to make sure that we're protecting.

protecting because once Pink Elephant's gone, once Bacalau Grill is gone, once our Portuguese

bakeries on Alum Rock are gone, we're not going to have those again. And with that goes the heart

and soul of East San Jose. Thank you. Thanks, Council Member. That's a great point. Okay.

I don't see any other hands. We've got a motion. We satisfied Council Member Mulcahy, even though

He didn't get his memo in there.

Close enough.

Tony, let's vote.

All right.

Motion passes unanimously.

Thank you, Tony.

Thank you all very much.

We are on to item 8.2,

Soft Story Seismic Retrofit Pilot Program.

And we do have a staff presentation.

We'll turn it over to Eric as soon as he's ready.

mislabeled on my notes here i'm sorry we're on to downtown are we on to downtown resi

steven all right i apologize but eric you're on downtown residential as well aren't you

Okay, then you have the floor either way.

It's all yours.

Sorry about that.

Okay, thank you, Mayor and Council.

So Eric Sullywan, Director in Housing.

As we begin this series of staff recommendations,

I just wanted to really take just 10 seconds just to thank my staff

who are sitting in the audience today,

particularly Deputy Director Banu San, Cupid Alexander, Sarah Fields,

Executive Project Manager Carly Wolak,

and Division Manager Chelsea Bass and Emily Hissop.

And a special thanks to Constantine Veronen,

who did a lot of the deep fiscal analysis that we're going to see here

in bringing forth this item.

And I also wanted to thank Deputy City Manager Rosalind Huey

and Assistant City Manager Lee Wilcox for their continued support

to getting these items to execution.

And as with all of our incentive programs,

my fellow directors John Risto, John Cicerelli, and Jim Shannon

for all their collaboration on this work,

as well as with members of council who over the last few months,

we've had a lot of great dialogue, as well as with staff,

about all these items being brought forward.

And so now I'll jump into the first item here,

which is our downtown residential program.

And I'll begin first by just quickly highlighting

some community engagement that we've done

with all the items coming forward.

We have spent months reaching out, engaging in meetings,

having one-on-one meetings, group meetings, collaborative meetings, virtual meetings, in-person meetings,

receiving as much feedback as possible in order to move these items forward.

And so the current downtown program, just to kind of place that a bit, is really focused on new construction

and has particular criteria set to that new construction, also broken out into two phases.

And what it is we're looking to do with the proposed program is to add a component to that,

which is for conversions of office to residential.

As we saw within the cost of residential development study

we brought forth to council in December,

there are challenges and headwinds to bringing on more development,

as we heard from the conversation previously,

needing to expand and grow our economy

and creating new jobs and preserve our corridors

are different ways in which we are addressing and facing different problems.

And so what this item presents is an opportunity to bring forth, taking some of that over a million of unused office space and bringing it forward for affordable housing, much of it for overall housing, and much of it that is also affordable, as you will see from the data that we're, for the projects that we have underwritten.

And so what is being proposed and what is the opportunity that this creates is that office to residential conversions create a chance to take, at generally a lower cost than new construction, an opportunity to bring those unused office spaces back to life, to add them back onto our tax revenues,

to take advantage of market opportunity here

as we're seeing higher financing rates and loan terms,

as we had discussed in the cost of redevelopment study

back in December, that are real headwinds.

And so these projects require significantly less capital attraction

in order to move them forward.

So we're really taking advantage of the existing built environment

in order to expand our housing stock within downtown.

And so what is being proposed here the goal is to catalyze that construction similar to how we brought forth the

multifamily development of phase one back last year and we were able to get to

You know over a thousand units and we'll address that again here later today

We are looking at taking this a similar approach with a phase one and phase two approach

Waiving in lieu fees indeed restricted unit requirements construction taxes and parkland in lieu fees as well

In addition the intensive program we broken out into two phases

Phase one kind of targeting that first set of 500 units again as I mentioned

We did a lot of underwriting working with a lot of the project sponsors to ensure that we're appropriately

Tailoring this incentive in order to get to that catalytic event and then a phase two

Not less than about thousand units that we're targeting with little reductions in some of those fees and again

this is pulling from the central downtown program. It's not a different set of targeted units. And

then listing quickly what our eligibility requirements might look like. So then, as I

mentioned at the top of the presentation, as we were going through this underwriting, and as we

had discussed during the cost of residential development study session in December, we're

seeing a lot of these rents are staying below the affordability level you know

we continue to have a challenge within downtown of getting market rate rents

above our AMI structure for affordability so as you'll see in this

graph you know eighty one hundred and one ten percent AMI as we looked at

averages across all the rents we were able to collect on the proposed

projects the overwhelming majority of them are falling within affordability

ranges so we're getting effectively naturally current affordable housing out

of what is being proposed in addition to overall housing stock production. And so

the overall impact to the incentive program is just about 16.4 million in

the combined assessments across the different departments to which they are

waiving fees and taxes. And that is the quick review of the downtown incentive

program. Thank you. Thank you. Tony do we have any members of the public

who wish to speak. Yes, I have about 30 cards for item 8.2. When I call your name, please come on down. You do not have to speak in the order that you are called. First person, the microphone will get one minute. Everybody gets subsequently one minute. Line up after you're here at EME because I constantly check back to see how many people are lined up. I'm going to start with calling five to six names and then I'll continue from there. Maya Harris, Danny Mangan,

Erica Valentine, Tony Miranda, and Wascar Castro, come on down.

Thank you, members of the council, Mayor Mahan,

and thank you to Eric and staff for this thoughtful analysis.

I'm Maya Harris with J-Paul Company,

and as you know, J-Paul is committed to downtown

from new office towers to reimagining a new future

for our older existing office stock.

We're here because we're committed to seeing downtown succeed,

and conversions are a way to bring activity and stability back to the core.

We generally support the staff recommendation.

However, we do have some concerns about the timeline

and pulling building permit by the end of this year.

I want to express my support for the replacement memo

from Mayor Mahan, Vice Mayor Foley, and Council Member Tordios,

and a shift away from deadlines toward the unit count approach.

Conversions move forward when the building conditions are understood

and the design makes sense and all the pieces line up.

So we want downtown to recover, we want housing that people can afford,

and we want projects to break ground.

Thank you. That's your time.

Next speaker.

Good afternoon, Mayor and Council.

Wasker Cashville Working Partnerships USA.

Earlier today we submitted a letter in partnership with the South Bay Labor Council and the Building

Trades to express our support for the memorandum co-authored by Council Members Kamey and Candelas.

Today we have an opportunity to both craft policy and create new homes that ensure that

we are able to provide prevailing wage and apprenticeship opportunities at the same time.

We would like to thank Council Members Kamey and Candelas for putting forth recommendations

that create an incentive-based approach to grant full incentives for developers that

utilize certain forms of labor standards on projects. We look forward to working with

everyone on further opportunities to create housing and good jobs in this city. Thank

you very much.

Thank you. Next speaker.

Good afternoon, Mayor, Councilmembers. My name is Danny Mangan. I'm a union rep with

Sprinkler-Fritters UA Local 483. I'm here today to speak in support of the Downtown

residential incentive program in particular the memo authored by council members Kandellis and

Kamai. You know we are building right now in downtown but the fact is we need more more housing

and right now you know it can it can be difficult for some developments to pencil out in today's

market so which is why I support providing the maximum incentives possible especially when those

incentives are tied to prevailing wages and skilled apprenticeship programs.

Good jobs help workers support

their families and stay rooted in this city.

That minute went quick. Also, the 100% construction and tax

fee and waiver is a smart use of public dollars that encourages developers to invest

in workers as they build. Thank you. That's your time.

Next speaker. Emmanuel Zendéjas, come on down, and Jeanette.

Go ahead.

to build much-needed long-term long overdue housing that we also attach three labor standards one per

million wage to avoid human trafficking number two local apprenticeship programs to invest in our

community to build our community number three local skilled and trained we have a 20-year

investment of housing and our residents deserve housing that is going to be safe and built with

people that are trained to build I realize the 500 units in phase one have already been

or developed, decided upon, I ask that 501 units and beyond that you adopt the labor standards.

Thank you. Next speaker.

Honorable Mayor, distinguished council members, and a hard-working city staff,

I'm here to address you and express complete compliance and just urge you to vote for both,

all three of these ordinances actually are in front of us today.

My name is Tony Miranda. I co-chair of the San Jose Chambers Housing and Land Use Committee.

Earlier this month, City Housing Director Eric Sullivan presented a presentation to our HLU committee,

which is comprised of construction real estate industry experts, businesses, as well as other businesses,

community members, and nonprofit organizations.

He explained all three of these ordinances covered under Agenda Items 8.23 and 8.4,

and after some discussion, we wholeheartedly and unanimously approved support for all those

and provided you all with a letter stating the same.

Professor, an executive director of the South Bay Office

of a National Construction Management firm,

at least with other side, the developer cost card

for these vital projects, and I can tell you

that our industry is actively creating new techniques

with more cost-effective ways to build these types of projects.

By working both...

Thank you, next speaker.

Allie Sapperman, come on down.

Derek Castron, and Vanessa Tapia, come on down.

Go ahead.

Hello, city council and mayor.

My name is Emmanuel Zendijas, and I'm a business rep for local 104 sheet metals union.

And I just want to say thank you for taking this time.

Currently, we have a housing problem.

I've been born and raised in San Jose my whole life, homegrown.

And we, at our local 104, we, of course, we provide an apprenticeship program where it provides a career for many individuals in this area.

And I don't see why that San Jose can't grow and fix this housing problem that we have with local union members.

I hope you guys support this memo, and thank you for your time.

Thank you. Next speaker.

Hello again. I'm Jeanette, District 6 resident, a mom missing my kid's football game, not paid to be here.

When a significant portion of our residents are rent burdened,

we cannot be sitting here saying that our rents are naturally becoming affordable.

The impact of housing instability is something that has impacted me in my life.

I do think it's applaudable that we are converting properties that is in the right direction.

But as we face a budget deficit and a housing crisis, we need to collaborate in order to thrive.

This means that big money needs to share and not hoard.

Public investment needs to require public benefit.

Two of the three projects that housing department recognized under the DRIP program have still significant vacancies.

Building does not equal housing.

It does not necessarily produce housing.

I absolutely support the mayor and others in their memo who talk about the wage requirements.

And I appreciate Councilmember Camay and Candela's inclusionary, but we also need to have truly affordable units.

Thank you. That's your time. Next speaker.

Good evening, Mayor and members of the City Council.

My name is Vanessa Lemos Tapia, and I'm an organizer with the South Bay Labor Council.

And I'm here today on behalf of working families in San Jose to urge your support for the Candelas and Kame Memo.

For years, our city has worked to address the housing crisis while also striving to create good, stable jobs.

These goals are not in conflict.

We strongly support the building trades efforts to ensure more construction in San Jose is built with a skilled union workforce.

Without a strong workforce, we would not meet our housing goals.

And without quality jobs, working families will continue to be pushed out of the communities they help build.

The Condellas-Kamai memo represents a balanced opportunity to keep current projects moving while setting higher workforce standards for future development.

Even as downtown development faces real market challenges, labor standards such as prevailing wage and apprenticeship opportunities do not make projects infeasible.

We urge the council to adopt a tiered incentive structure within the downtown high-rise incentive program that rewards developers who commit to prevailing wages and strong workforce standards.

Thank you. That's your time.

Next speaker, also come on down, Kelly McElvey, Dev St. Julian, and Azazel Holmquist.

Good afternoon, Mayor and Council.

My name is Allie Saperman on behalf of the Housing Action Coalition.

Speaking in support of staff's recommendation of item 8.2,

we support the proposal to expand and rename the program

to include commercial to residential conversion projects in the downtown planned growth area.

Conversions are one of the most practical near-term strategies to turn obsolete office space into much-needed housing, while reactivating underused buildings and supporting a healthier, more resilient downtown economy.

We also support staff's recommended financial package for eligible conversion projects, including when it is paired with limited-time performance-based incentives.

These waivers and fee reductions are exactly the kind of targeted accountable tools needed to help conversions finally pencil,

especially given the high cost and technical complexity of retrofitting older commercial buildings into safe, code-compliant homes.

We urge you to adopt staff-recommended updates day point two and keep this momentum going.

Thank you.

Thank you.

Next speaker.

Hi.

Thank you for the opportunity to speak on behalf of the associated general contractors of California and our nearly 1,000 members.

AGC supports the downtown residential incentive program as well as the expansion into the office to residential conversion.

Given the hard cost of construction and from what we learned in the city's cost of development study,

high-rise tower-style apartment buildings are not penciling.

When things cost more to build than can be sold for, they don't get built.

as I'm sure everyone would likely agree working for a loss is not a realistic proposition.

So expanding the downtown incentive program into the office to residential conversion would add upwards of a thousand more units as quickly as possible,

which is what the construction industry would like to do. They want to put shovels in the ground. They want to build homes.

We've already seen the success of it with several projects that added 1,200 units over the past few years.

and we'd like to see more projects like that.

There's no one-size-fits-all solution to housing on affordability.

Thank you. That's your time.

Next speaker.

Adolfo Gomez, come on down, and Brian Kurtz.

Hi, my name is Kelly McCauley.

I'm a resident of San Jose.

I've been here in the South Bay for my whole life.

This is a great thing that we're trying to do,

but the thing we need to remember is San Jose is a working-class town

and always has been.

We need to stop planning for housing that is going to help people

who make more than the people who already live here. We need to make housing for people who

work minimum wage jobs and have to take three to four jobs to be able to afford their rents.

These 80% and 110% AMIs are not going to help the regular people. As Councilmember Campos noted,

we're losing children. We're losing diverse neighborhoods. This is not okay. As Councilmember

Ortiz noted, people need to be more valuable than the land. The community needs to be more valuable

than the land. We don't want new people here. We want to retain our current residents. Please help

us do that with doing this the right way. Thank you. Next speaker.

Good evening. Good evening, Mayor and City Council. My name is Azazel Holmquist from District 6.

I'm a member of Surge Santa Clara County. I'm speaking today to ask for changes to

incentive program. Affordable housing is a racial justice issue, and we want to build a San Jose

that's affordable for all of us.

Also, as we acknowledge that there is not enough affordable housing

for San Jose residents who need it,

we need to stop punishing our neighbors who can't afford rent.

It is time to stop the encampment suite,

stop the tows of lived-in vehicles,

stop the criminalization of homelessness,

and work with our unhoused neighbors on solutions,

including more safe parking.

Please alter incentive programs

so that public investment receives public benefit.

Thank you.

Thank you, next speaker.

Also come on down, Ed Davis and Drew Siegler.

I'm Deb St. Julian, a D2 resident, a Surgeon Urban Sanctuary member.

I'm urging you not to change your inclusionary policies.

It's great you're going to convert commercial to residential.

In my world, we could do this and not exclude people from 0 to 50%.

and still pay people proper labor wages.

The people I go to church with right here,

they live in personal supportive housing.

They have HUD vouchers.

And some of them wait in line every day,

3.30 down here at Salvation Army.

I don't want to throw these people under the bus

and raise our AMIs up to 80 to 110 percent.

So don't somehow all your brill,

I know you all have all these brilliant people.

Figure it out.

Include them.

Thank you.

Next speaker.

Hi.

Good afternoon, Consul,

Mayor and the staff of the city of San Jose.

I'm coming here representing my small business

in downtown San Jose.

and see how much is being affected.

I'm reducing ours and our staff, you know, we went from 40 to 30.

We need density in downtown San Jose,

so I think moving forward from commercial to residential

could be a way to create more density in the next 5, 10 years for San Jose.

We know then the launch crowd we used to call

or the office people working in our offices

used to be something that would take care of some of the small businesses in downtown.

We don't see that coming back anytime soon.

So I think we're seeing in another cities

that the density can be created

to convert those buildings to housing.

And I think having more density in our downtown

can help a lot of the small businesses

to keep tripping and basically keeping the doors open

and the employees employ it.

Thanks.

Thank you, next speaker.

I'd also like to call Josh Burrows down,

Julian Lake, Leah Tennisgetter, and Isabel Minyon.

Good afternoon, Mayor, City Manager, Council Members.

I'm Brian Kurtz.

I'm the new CEO of the San Jose Downtown Association.

This is my first engagement with several of you here,

and I appreciate the opportunity to be here.

I'm here in strong support for 8.2,

revising and expanding the incentive program for downtown.

The staff proposal is necessary and helpful,

and I urge you to go one step further

by removing the timeline restrictions and phased unit caps that are incorporated,

consistent with a memo from the mayor, vice mayor, and council member Tordios.

That clarity matters in a process that can take years from ideation to entitlement.

We know a few things.

First, the office market has fundamentally changed.

This item allows underutilized buildings to become much-needed housing instead of remaining blighted.

Cities across the country are proving that fewer barriers mean faster housing delivery

and stronger downturns, downtowns.

Second, as the popular phrase goes, the math just doesn't map.

Construction costs and capital markets are beyond your control,

but developer fees are...

Thank you. That's your time. Next speaker.

Good afternoon, Mayor Mann and council members.

My name is Ed Davis, and I'm the chair of the board of directors

of the San Jose Chamber of Commerce.

I'm here today to strongly support 8.2.

including the removal of the timeline.

The Chamber has served the San Jose business community for 140 years,

and our mission has always been centered on driving economic progress,

supporting businesses of all sizes, and advocating policies that strengthen our city.

One of the most consistent priorities we hear from our members

is the need for more active, populated downtown.

I worked in downtown San Jose for 41 years at the end of this month,

and I've been part of many conversations about how we ignite growth and sustain momentum.

The common thread has always been people.

More residents living downtown to support our streets, our businesses, and our public spaces.

This proposal helps do exactly that by incentivizing mid- and high-rise residential development.

It supports increased housing production, grows foot traffic, and...

Thank you. That's your time.

Next speaker.

Good afternoon, Council and Mayor.

I'm Isabel Megan with the Silicon Valley Leadership Group.

SVLG supports this housing initiative.

We believe that this initiative contributes positively to

and maintains the economic vitality of our region.

SVLG is committed to keeping our region at the forefront

of the world's innovation ecosystem.

These housing measures are critical for making that possible.

Thank you for the opportunity to speak.

Thank you.

Next speaker.

Good afternoon, Mayor and Council members.

Leah Tennesketter, President and CEO of our Chamber of Commerce.

I'm speaking in strong support of 8.2, the Downtown Residential Incentive Program.

The Chamber has an active land use committee.

I want to thank Eric and his staff and Vince Rocha from the Mayor's Office for really spending time

with our committee so that we could provide input and vote on these issues.

The Chamber is in support of the staff recommendations to streamline implementation and expanding eligibility to include that commercial to residential conversion.

We also very much support removing the timelines by which construction permits need to be pulled for any incentive program that we have.

We really need to move to a unit count.

These changes align the program with the reality of real estate development, current market conditions, and improve the feasibility for mid and high rise projects.

More residents in the downtown create more economic boosts for our businesses and current residents.

Thank you.

Thank you.

Next speaker.

I'd also like to call, it looks like Vidal, David Carrillo, Frank Hewitt, Catherine Hedges.

Come on down.

Hi everyone.

Josh Burrows here.

Thank you, council and staff, for your leadership.

and including this office conversion.

Ultimately, and acutely in the downtown,

this is an anti-blight policy,

which will add thousands of residents downtown

to support our small businesses, arts organizations, and nonprofits.

I believe the revised memo from the mayor, vice mayor,

and council member Tordios is very well-rounded.

Thank you.

Thank you. Next speaker.

Also, I think the name it says either Brody or Brandy.

It's pretty faint and Josh Tucker come on down

Go ahead good afternoon mayor Mahan and City Council. My name is Julian Lake

I'm a resident of San Jose and I'm speaking on behalf of the Bay Area Council

Our members include developers contractors and many other types of business leaders who are in strong support of items 8.2 8.3 and

and 8.4. San Jose and our region are in dire need of housing. The reality is that we cannot meet our

current or future housing needs without policies that actually allow housing to get built. These

three items work together to move projects from paper to production. Item 8.2 strongly supports

expanding the downtown residential incentive program to include commercial to residential

conversions. Downtown has a real opportunity right now to turn obsolete office space into

much-needed housing. The proposed time-limited incentives include waivers of key construction

taxes and reduce inclusionary requirements for eligible conversions, which is exactly

what is needed to make these projects financially feasible. We respectfully urge you to approve

items 8.3. Thank you. That's your time. Next speaker. Good afternoon, Mayor, Council,

staff. I'm Catherine Hedges, a member of Showing Up for Racial Justice.

Showing Up for Racial Justice. I want to see a San Jose where everyone's

housing needs are met, but more handouts to developers

when we don't get a significant public benefit from

affordable housing included in it will not get

us there. Adaptive reuse to create more housing is a good idea, but

the city needs to ensure

that affordable housing is part of it.

The entire

Tannery Arts Complex in Santa Cruz

is a beautiful

reused project. It's 100%

affordable. It enables

working artists who

could otherwise not afford to live in

Santa Cruz live there. San Jose

can do the same kind of things

if we work with affordable developers

and not luxury developers. Affordable housing

is what people get housed

not this. Thank you. That's your time. Anil Babar and Lori Ketcher come on down.

Good evening. John Tucker with the City Employees Union. I want to start by saying that city workers

in our unions are not opposed to housing production, downtown revitalization, or good

union construction jobs. That said, we do have some serious reservations about 8.2 as proposed.

Earlier tonight, you received the annual report on city services, and we heard that 911 responses

are down residents are asking for longer libraries and overall resident satisfactions with core city

services are low people are telling you the basics are not where they need to be at the same time

city departments have been warned by the city manager that budget shortfalls hiring freezes

and potential cuts against that backdrop item 8.2 would expand downtown incentives by waiving

and reducing building taxes fees and and more and that is a real revenue that city relies on to

fund basic public services we understand the goal of encouraging downtown housing and conversions

but incentives should come with clear public benefit and guard rails especially when city

services are slipping and budgets are tight so while we support housing and downtown

viatility we urge the council to pause item 8.2 thank you that's your time

i've called all of the cards for item 8.2 so if you submitted a card and didn't hear your name

please line up. Go ahead. Good afternoon, Mayor and City Council. My name is Brady Coggins. I work

with West Bank, who's the developer for Bank of Italy. I'm here to thank Eric and his staff for

all the work they've put in into this resolution. We want to give our support for this resolution.

This resolution will help us revitalize the Bank of Italy, which is one of San Jose's most

important landmarks, and help bring much-needed housing and energy to downtown San Jose. Thank you.

Thank you. Next speaker.

Hi, Mayor and Councilmembers.

My name is Lori Katcher.

I am a D6 resident and voter and a member of SEARCH Santa Clara County.

I am speaking to ask for changes to this incentive program so that public investment actually receives public benefit.

I also applaud this conversion from commercial to residential.

I just want to ask, like, who were actually in the focus groups that were included?

I venture to guess that our most marginalized community members were not included,

and I don't understand how 80% AMI is considered truly affordable.

for those who need it most.

I think you're speaking on another item.

Sorry?

I think you're speaking on the inclusionary ordinance.

Go ahead.

That's your time.

Yeah, I think the 80% AMI is relevant to the inclusionary 8.4,

which is the inclusionary updates on the agenda.

Thank you.

I'm speaking on item 8.2.

Are we talking about the conversion from commercial to residential?

Yeah, but there's no 80% AMI.

That's why I was confused.

That item's in two more items, but go ahead.

Okay, sorry.

I saw a chart up there.

I guess my point is this.

We need truly affordable housing for our lowest income.

residents and I'd like that to be included when we're considering this conversion. Thank you.

Thank you. Next speaker.

Isn't the multifamily housing incentive program also connected with the inclusionary housing ordinance

to some extent? So I do support having or converting commercial buildings and units

into residential housing, but I also fear the weakening of the IHO when we do that.

And I believe it's important to study the consequences and the impact that will have

on our most vulnerable communities.

And then also it's important that we are able to generate in lieu of fees that we will be

able to use for affordable housing.

And so I feared that we're just going to continue to reinforce to developers that we'll just, like, have them pay zero fees or very low fees and not be able to reap the benefits of actually public and low affordable housing.

And I believe...

Is that your time?

Me again. Hi, and I have a feeling we're going to be seeing a lot more of each other lately.

I'd like to applaud the city and also thank you, Governing Body, for the work that you've been doing.

But yet again, it seems like the IDD community is left out.

My name is Hadia Fane, Vice President of Marketing and Development for Life Services Alternatives.

If you don't mind, avert your eyes to that young woman who's standing right there.

She has on a hashtag. Hashtag lead us home. Hashtag lead us home too.

hashtag don't forget the IDD community

because we fall below most AMI, right?

And so I'm hoping that we'll reallocate those funds

to much needed populations

and put it for the intended use as where it was for Measure E.

And again, I'm speaking on behalf of people who can't speak for themselves.

And so I thank you for listening to all of them.

Back to council.

Okay, thank you Tony. Thanks to all of our public commenters. I just want to remind folks that the primary action or question before us here is whether or not we take a high-rise residential incentive for downtown, whereas we just saw in our cost of development study on the current rate of cost increases versus income increases, the next high-rise residential building we'll get in downtown might, if we're lucky, pencil in 18 years.

That's what the chart showed, which was, I think, disturbing for all of us who want to see a lot of dense housing get built right here in our urban core where we're putting billions of dollars into transit infrastructure.

We have an amazing public university, so many other amenities, and a great need for housing.

So the primary action here is actually very simple, which is to say we have this incentive for new high-rise residential that past councils of different persuasions have consistently approved and that this council in our budget process last year actually directed staff to extend to a new type of high-rise development that previously was not really available to us, which is the conversion of empty commercial buildings.

Sadly, since the pandemic, we have a few commercial buildings downtown that are sitting empty.

They're generating less revenue than they could.

They're not providing jobs.

They're not really doing anything.

And they could provide hundreds of homes.

And so that incentive that we're extending is not any different, at least in the staff proposal, than what we already do for new residential.

So I just want to clarify that.

That's the primary purpose.

Now, we are talking about, through the memos, some other potential tweaks to this long-running incentive.

And while I know folks don't like the idea of an incentive, we have in our policies at the city an ability to do that and not consider it a subsidy if the projects would otherwise be infeasible, i.e. our own fees and regulations.

What we've created is created a world in which that kind of housing just can't get built, but we still want it.

And so that's kind of the rationale for this.

Now, there's still some things up for debate here, as I'm sure we'll get into.

But I just wanted to clarify a little different from the IHO item coming up that that's kind of the core of this.

So I'm going to turn to colleagues, and then I may have more to say or some additional questions.

But let me go to Councilmember Tordios first.

Thank you, Mayor, and thank you to all of the members of the public who came out to speak on this item and gave public comment letters.

As we explore changes to and expansion of the Downtown Residential Incentive Program,

I just want to acknowledge that this has already proven to be an effective tool to help encourage new construction.

Since 2017, we've seen three new towers come under the ground that all leverage this program.

So I think that it's shown that it can be effective.

At the same time, we have to recognize the severe financial feasibility challenges facing downtown high-rise construction,

as outlined in last year's Cost of Residential Development study.

I'm a firm believer that any forward-looking post-pandemic vision for our downtown

must include a significant amount of new housing in order to address our housing shortage and bring

the sort of vibrancy back to our streets that helps to support our local businesses, improve

public safety, and support the economic health of our city. You know, there was mention amongst some

of the public comments questioning what the public benefit of getting this new housing is,

but I think the housing itself is a form of public benefit. Having more people, living in dense,

climate-friendly, fiscally responsible housing in our downtown core. I would also say that a larger

property tax base, generating ongoing revenue for city services is a public benefit, as is

revitalizing blighted and empty buildings that are littering our downtown core. For that reason,

I believe that continuing to evolve and expand this program is in the best interest of both the

city and our residents. Expanding this program to include office to residential conversions is a

common sense way to address the ongoing challenges that have been cited about high vacancy rates

throughout downtown, while encouraging the conversion of empty buildings into desperately

needed housing. As we actually look at ways to incentivize housing growth downtown, I think we

also have an opportunity here to encourage builders to pursue higher labor and workforce

development standards, encouraging equitable economic development in the process. Our memo

provides the strongest and broadest set of labor incentives ever proposed for the city's residential

incentive programs and would encourage high road construction with prevailing wage and apprenticeship

program opportunities. And notably, our memo would create this high road incentive tier

immediately, not at some indeterminate point in a future phase, and it would imply this incentive

tier to both office conversions as well as ground-up residential projects. So while I acknowledge that

there have been multiple memos that speak to the question of labor standards here, and I appreciate

the thoughtful back and forth with other members of our Brown Act, I do want to call just attention

to the fact that the alternative memo here would only apply labor standards to 1,000 units in a

future phase 2 conversion program, whereas our memo would open the door to high road incentives

available to both ground-up construction and conversions,

covering all 10,000 units proposed with the increased unit cap.

We do acknowledge, as has been mentioned,

that all of these incentive programs come with trade-offs,

incentive programs that include fee waivers,

inherently trade potential revenue for the city,

in exchange of trying to get additional housing production.

And in the case of our memo, we propose going a step further

to offer deeper incentives in order to incentivize

higher labor standards for our construction workforce.

I think one important thing to consider here is that these fee reductions only have an impact if projects actually get built.

And again, here I will point to the difficult history of downtown residential development.

There's been only one new residential tower that has broken ground downtown in the past eight years.

So while I completely understand concern and hesitancy from some of my colleagues around further fee reductions,

I think history has shown that the impact to city revenues here is likely to be minimal.

But what these restructured incentives will provide is certainty to builders as they make long-term development and investment decisions downtown, as well as additional motivation for these builders to strive for the highest labor standards and best workforce development standards.

And for those reasons, I would like to move acceptance of the joint memo from myself, Mayor Mahan, and Vice Mayor Foley.

Thanks, Councilmember.

Really great articulation of the rationale and need for this if we want to see more housing in downtown.

I appreciate it. Let's go to Councillor Condellas.

Thank you, Mayor. Thank you, Eric, for your presentation as well as the work to bring us this item today.

I also want to take a brief moment to thank everybody who came out and spoke in support or questioning the actions taken today.

And this is part of the public dialogue that's so critical to the well-being of our city.

And I deeply appreciate that.

And I also want to thank the members of our Brown Act for the thought partnership as we work through some of these policy considerations.

And, you know, while this is downtown, this is everybody's downtown.

And I completely appreciate the opportunity before us to capitalize on these commercial to residential opportunities.

From the very beginning, I've been a strong supporter of this incentive in order to spur development with our ultimate goal of getting more housing in downtown San Jose.

In fact, the last time we visited this item, we heard from the development community that the actions that we were taking on that day would deliver shovels in the ground by the end of that year.

You know, but here we are sometime later, and unfortunately, it didn't happen.

And the reality is the capital market looks worse than before, and here we are having to adjust our policy the best way we can.

And, you know, we can look at it with our eyes wide open.

City fees have the ability to move the needle, but the greater ability comes from market forces.

and, in fact, quite frankly, reduction in development timelines to give that greater

assurity to our development partners.

But while this is our second crack at doing more, I am fully supportive of expanding the

program to include these office-to-residential conversions.

Ultimately, this is an incentive, and creating that urgency and competition is the goal.

We need housing now, not whenever.

and why I believe a time frame and something that we've been discussing that was part of the original staff recommendation to consider.

And there was another part of our memorandum while we were exploring this policy is workforce benefits like a health care in Luffy

as to something that the city of Berkeley recently did

and they implemented in something that I believe would be prudent

for our administration to at least explore.

And that was, I believe, item two in my memo.

But that being said, I'd like to offer up a friendly amendment,

Councilmember Tordillos, to add at least for the first phase

of your group memorandum to December 2027

to make sure that we actually have an opportunity to revisit this in about two years' time

and also give that certainty that I know you mentioned in your remarks,

as well as directing the city manager to explore workforce benefits

and return to council, as in my memo.

Just to clarify, so end of 2027 for that first 500-unit phase of the conversion program?

Correct.

Yeah, I would accept both of those.

Thank you.

Great.

And the seconder does as well.

Wonderful.

Okay.

Thank you.

Let's go to Councilor Casey.

Candela sort of stole my thunder there.

I was understanding the desire to get rid of a rigid timeline, but also concerned about

not having any sort of timeline.

The goal here was to induce action, so I didn't want us to pass this and then have it fall

dormant.

So I wanted to provide some sort of backstop.

I like the direction you're moving in, Council Member Candelis,

but I would even be open to sunsetting it in five years

or revisiting it in five years.

Two years still seems like, I know it seems like a ways away,

but in terms of the development process,

that could actually limit some of the development that could come online.

Would you be open to extending it out a bit further?

I do think we should revisit it at some point.

I don't want to have it open-ended.

I want to induce action,

but if you'd be open to extending it out a bit further out.

You know, I think the two-year window is what I was comfortable with for December because that is a touch point.

If it's working and we saw the 500 units come online, then that is an indicator for us as a council that, hey, keep the momentum.

But having the window longer, I think, escapes our opportunity to act and to evaluate the policy that we're putting forth now, if that makes sense.

No, it does.

I guess the concern is folks that have had experiences with San Jose, even that two-year window, they won't even consider it.

They'll just decide, you know what, why go through all the rigmarole if ultimately we're not going to be able to get in under the wire.

So giving them a healthy, a wide enough berth to actually try to do it, but not so much so where they just, it's endless.

They can do it whenever they want to.

Because I do believe folks would look at 2027 and decide it's just too soon.

Yeah, originally I was, you know, I was contemplating an 18-month window, a year and a half to July 1st.

So December 2027 was my, you know, my ability to provide more leeway.

And, you know, with regards to creating that certainty in the market and that stability, quite frankly, there is none.

I mean, Eric, would you like to offer up some insights on that certainty, or do you have some insights on that aspect?

Thank you, Councilmember.

So in looking at capital markets, there's never certainty.

There's always the tension between the timing for capital attraction versus on the other side,

how do you get to your target return on cost?

And so that creates a continuing challenge around how best to target and frame these incentives in order to ensure we can get to production.

How do you balance also the tension between long terms of extensions as well as considering sort of the balancing act of the need to continue to fund city services?

So these are always the tensions that we have at play.

I would say to the question of is there certainty in capital markets the answer is certainly no and

so where do you find the balancing acts between the two to ensure that we can provide stability

for additional production while also acknowledging that there is a interest in ensuring we can

incentivize some projects to go forward now as opposed to later thank you and so yeah to final

finalize that point councilmember Casey while I appreciate the intent I'm not comfortable with

the extension beyond December 2027 and would respectfully maintain my amendment as is. Thank you.

All right. Appreciate the response from the council member. I do just want to go to the

maker of the motion and the seconder since ultimately it's their call on this. Thank you,

Mayor. Yeah, one of the reasons that I'm okay with this kind of end of next year is keeping

it scoped to that phase one first 500 units on the conversion side. I think given that these

projects are a little bit further along, the buildings have been identified as potential

good candidates. Some of them are hopefully moving forward very quickly. That gives us a little bit