Alarmed by a steadily worsening housing crisis, San Jose’s mayor on Monday proposed construction of 25,000 residential units over the next five years in the Bay Area’s largest city, a plan that would far outstrip that community’s historic pace of home building.
“Our region does face a housing crisis; it is a crisis at all levels of income, one that affects our least affluent neighbors the most,” San Jose Mayor Sam Liccardo said at an event to announce the proposal for 5,000 residential units a year.
About half of the proposed 25,000 housing units should be built in downtown San Jose, and roughly 10,000 should be affordable units set aside for people with moderate, low or very low incomes, the mayor recommended during the event, at a senior residential development in San Jose’s Japantown.
Requiring 40% new construction as social housing seems to become a trend. If this continues, 40% of the total market will become social housing after the current housing are all replaced with new construction. This suggests that we should go out to buy buildings which is 100% market rate and then wait. Someday, a 100% market rate building will be scarce and will be worth a lot.
I’m wondering how the 40% social housing building will be valued in resale. How much discount will it be? I think that the management burden will be heavy on the 40% social housing and the income will be low. How will the rent amount be determined for the 40% social housing?
Also for the ultra high end condo building, will people be willing to pay $10M for a condo when the same unit sells for 300k?
Is the city going to wave the $150k/unit in fees and permits that they charge? It seems government leaders still don’t get basic economics. Unless the govnernment is going to fund construction and eat the losses, how will building actually get done? Requiring such a high percent of affordable units is a sure way to make sure nothing gets built.
It’s not feasible… No builder will build 40% BMRs… this is completely bullshit… Why do poor people deserve new construction… Build mid to highrise Class A multi family … Give the poor cash for class C existing units… Suspend fees and codes for the last 30 years… would cut costs in half…Government caused the housing shortage… Government should do its part to fix it… Not just demand a give away to unions and the poor…
The poor can live in Sacramento with commuter trains… The rich value time… The poor can commute… I will take cash subsidies for my Sacramento apartments… Unless you want to give me cash to build in San Jose… But San Jose apartments each cost $3-400k to build… My Sacramento apartments only cost $75k per unit… The Mayor doesn’t know math
When you are so negative, good news are like a surgery in your nuts. Maybe because what happens doesn’t benefit you? Instead of bitching, why not join the ones looking at benefiting from this? Unless you are not on their league.
““We have an opportunity to do something now to ensure that this does not become a valley only for the affluent while leaving behind thousands of families who have made their lives here,” Liccardo told this news organization after the event.”
Several developers attended the event, and said they have a considerable number of units in the pipeline that could speed the mayor’s proposal well down the road to the 25,000 target.
If you are not part of the solution, don’t be a part of the problem.
All the dysfunction makes RE a great investment in those areas. They’ll never build enough to meet demand. As long as there’s not a Detroit or Flint type population decline, then RE will keep going up.