San Jose City Council OKs $17/sqft developer fee to help struggling renters
Source: San Jose Mercury News
Facing an affordability crisis in the biggest community of pricey Silicon Valley, San Jose leaders on Tuesday took their biggest step in years to help low- and middle-class workers struggling to afford skyrocketing rents.
Capping two years of debate, the City Council voted 7-3 to enact a new fee on developers for most new rental buildings, with the pot of funds going to build subsidized, cheap housing in one of the nation's costliest rental markets.
Supporters led by Mayor-elect Sam Liccardo argued developers are getting rich enough off the current building boom while locals, already unable to buy costly houses, are being priced out of San Jose entirely or forced to spend the majority of their paychecks on rent. Opponents led by outgoing Mayor Chuck Reed feared the developers would simply pass the cost onto renters, driving up costs even higher, and worried builders would look to other, cheaper cities to construct apartment buildings.
The fee, which several other Bay Area cities have already adopted, is $17 per square foot on most new rental buildings that are completed after mid-2016, though high-rise downtown buildings would be exempt for five years. It would generate $20 million to $30 million annually to build new apartment complexes with subsidized rents. ... Rents have increased by 49 percent in San Jose over the past four years, with the average unit now costing $2,230 per month, according to RealFacts data cited by the city.
Read more: http://www.mercurynews.com/bay-area-news/ci_26965926/capital-costly-silicon-valley-takes-biggest-step-years
