Google has committed to building affordable housing near Diridon Station as part of a massive San Jose campus.
In a recent letter to the city’s housing department, Google’s real estate developer said the tech giant would build affordable housing at 402 W. Santa Clara St., near the intersection with Delmas Avenue.
“We are committed to fulfilling our inclusionary requirement through delivering affordable housing onsite,” Alexa Arena wrote in the letter, first reported by San Jose Spotlight.
When developers build housing in San Jose, they generally either have to construct some affordable housing on site or pay fees that the city uses to increase its supply of homes available to low- and moderate-income families elsewhere.
But the city has offered some exemptions to the requirement — for downtown high-rises, for instance, or for projects already in the works when the fees were approved.
According to city documents, the Google development — which goes by the project name Diridon Delmas Park — was eligible for an exemption obtained by the site’s previous owner, which would have saved it about $4.8 million in fees.
Instead, Arena said, the company will forgo that offer.
“Based on our analysis and our shared goals to contribute to the city’s affordable housing priorities, we intend to move forward with a program that complies with the Inclusionary Housing Ordinance,” Arena wrote.
San Jose’s deputy housing director, Rachel VanderVeen, said that had Google stayed in the pipeline, the company would have had to meet a series of requirements, including having certificates of occupancy for half the units, by early 2020. By pulling out of the exemption pipeline, the company can develop the area under a more relaxed timeline.
A Google spokesman said the company didn’t have anything further to add beyond the letter itself.
Maria Noel Fernandez, the head of Silicon Valley Rising, an organization that has raised concerns about Google gentrifying the area and pushing residents out of San Jose, said the group was “cautiously optimistic this is something that’s going to be a trend in how they operate.”
In a new report to the City Council, housing director Jacky Morales-Ferrand said the city has allowed a total of $128 million in subsidies on nearly 30 other projects, such as The Graduate, a residential tower downtown geared toward students, in an effort to increase its housing stock. The city also brought in $170 million in one-time revenue from taxes and other fees, putting it about $42 million ahead, Morales-Ferrand added.
“As a result of exempting these projects from their affordable housing fees, a total of 7,477 market-rate residential units will be built and an estimated recurring tax revenue of $7.6 million will be collected annually,” she wrote in the memo.
Some organizations see the fee waivers as a significant loss, however.
Leslye Corsiglia, the executive director of the affordable housing advocacy organization SV@Home, said the $128 million could have paid for more than 1,000 new affordable homes. And, she said, the $170 million in one-time revenue isn’t dedicated specifically to the housing department.
“As the city looks at housing fees over the next six months, we want to ensure that they don’t continue to develop policies that support market rate housing at the expense of affordable,” Corsiglia said.
Google was not the only developer to turn down an exemption. Eight other projects from developers such as Sobrato and Robson Homes similarly withdrew from the pipeline.
Last year, Google purchased several parcels west of Highway 87 from San Jose, and the tech giant has been buying up other property in the area for years. The company is slated to build out a large campus that includes office space, housing, retail and other elements near Diridon Station.