►
Description
City of San José, California
City Council Study Session: Cost of Residential Development in San Jose, November 1, 2022
Pre-meeting citizen input on Agenda via eComment at https://sanjose.granicusideas.com/meetings.
This public meeting will be held at San José City Hall and also accessible via Zoom Webinar. For information on public participation via Zoom, please refer to the linked meeting agenda below.
Study Session Agenda: https://sanjose.legistar.com/View.ashx?M=A&ID=1004843&GUID=D0CE027D-B571-456B-B492-EE23A6DD3283
A
This
is
a
report
on
the
cost
of
residential
development
saturday.
I
think
everybody
knows
why
we're
here.
we've
got
a
housing
crisis.
we've
got
to
find
a
way
to
get
housing
built
and
high
costs
make
it
challenging..
So
we're
going
to
learn
more
and
thank
you
to
our
esteemed
panelists
for
helping
us
in
all
the
ways
you've
like
your
expertize
who's,
taking
ways
that
roselyn
?
yes,
thank
you,,
mayor.
good.
B
Afternoon,
mayors,
city
council,
members
of
the
public.
rosalynn
hewitt,,
deputy
city
manager.,
I'm
joined
this
afternoon
by
nancy
klein,
are
the
vector
of
the
office
of
economic
development
and
cultural
affairs,
jared
ferguson,,
our
housing
catullus,
rachel
indurain,,
deputy
director
of
housing
in
the
office.
In
the
audience.
We
also
have
housing
director,
jackie
moralez
friend,
and
we
have
michael
berio
and
chris
burton
from
planning,
building
and
code
enforcement..
B
I'll
be
introducing
in
just
a
moment.,
so
today
we
are
pleased
to
be
with
you
to
share
the
analysis
from
the
updated
report
on
the
cost
of
residential
development
for
both
market
rate
and
affordable
housing
here
in
the
city
of
san
jose.,
previously
in
2018
and
in
2019
in
the
city
council,
health
study
sessions..
But
now
we
think
it's
very
important
to
share
the
updated
information
and
to
understand
the
changes
in
the
market
since
the
pandemic
and
really
to
understand
how
these
dynamics
can
be
barriers
to
housing
construction
here
in
the
city..
B
So
we
have
a
lot
of
information
to
share
with
you,
today.
you'll
hear
about
multifamily
construction
costs
and
valuations..
You
hear
about
developers,
use
of
risks
and
returns..
You
hear
about
affordable
housing,
finance
and
then
you'll
hear
about
what
things
the
city
council,
as
policy
makers,
can
and
cannot
control
in
this
market..
We
thought
it
was
important
to
provide
the
study
session
to
you,
as
in
the
coming
weeks,.
B
Actually,
on
november
15th
we're
going
to
be
bringing
to
housing
items
to
you.
First,
the
transition
of
the
housing
crisis
workplan,
which
was
first
approved
back
in
twenty
eighteen
by
the
city
council
and
talking
about
transition
transitioning
that
work
and
then,
secondly,
we'll
be
bringing
an
item
regarding
the
residential
high
rise
program
for
your
action..
So
we.
B
B
B
B
B
B
C
C
Today.
well,.
We're
here
to
do
is
to
work
with
staff,
with
rosen
and
with
you
all
to
try
to
understand
better
the
challenges
and
hopefully
by
understanding
the
challenges,
some
solutions
to
help
solve
our
housing
production
crisis.
Right
now,
a
little
bit
more
about
you
all
I
urban
land
institute
san
francisco
is
the
name
of
our
district
council.-
we
are
more
than
just
san
francisco..
We
serve
the
entire
bay
area..
We
have
some
of
the
best
and
brightest
people
in
real
estate.
C
C
C
C
Myself,
my
name
is
eric.,
I'm
managing
partner
at
thirty
seven.,
we've
done
housing
all
multifamily
housing
in
the
bay
area,
san
francisco,,
san
jose,
oakland.
joining
us
joining
me
today
is
libby
saiful,
founder
and
president
of
saiful
consulting.
libby
has
advised
over
100
hundred
different
public
agencies
to
focus
on
multifamily
housing
and
emphasis
on
affordable
housing..
C
C
C
How
complex,,
how
difficult
and
how
costly
it
is
to
produce
housing.,
but
I
think
we
still
scratch
our
heads..
Why
is
it
so
costly??
Why
is
it
so
complex??
What
we're
going
to
do
today
is
we're
going
to
try
to
unpack
everything.
we're
going
to
show
you
the
elements
and
the
segments
and
the
pieces
that
make
it
challenging
and
then
we're
going
to
take
each
of
those
pieces
and
try
to
analyze
it
and
our
experts
are
going
to
try
to
explore
levers
and
tools.
C
D
D
D
D
D
Of
different
ways
to
present
the
information
at
one
level,
anything
in
the
development
world
can
be
a
number
on
a
spreadsheet
and
at
the
end
of
the
spectrum,
you
know,.
We
know
that
these
things
have
real
effects
on
people's
lives
in
the
shelter
over
their
head
and
there's
a
there's,
a
middle
ground..
So
if
some
of
the
information
seems
a
little
bit
calloused
in
the
way
that
it's
converted
to
numbers,,
that's
just
one
way
to
look
at
it.
D
D
And
valuations
of
multifamily
housing
and
then
what
I'll
call
chapter
three
really
discussing?
What
are
some
of
the
levers
that
you
may
or
may
not
be
able
to
pull
depending
on
policy
decisions.
so
risk
in
return?
you
know,,
there
are
many,
many
types
of
real
estate
today..
Obviously
we're
focused
on
housing.
we're
going
to
address
a
little
bit
of
affordable.
D
There
are
market
forces
that
are
so
much
stronger
than
we
are.
and
I
you
know,.
I
try
to
lighten
things
up
a
little
bit,
put
a
picture
of
the
new
coke.
you
know,.
A
lot
of
people
did
a
lot
of
research
and
thought
that
new
coke
was
going
to
be
a
fantasy
tech
idea
and
then
the
market
spoke..
I
think
most
of
us
in
the
room-
are
men.
Remember
that
and
probably
most
people
at
home
watching
remember
that..
D
But
it's
just
an
illustration
that
you
know,,
we
can
think
a
building
is
the
greatest
idea
in
the
world
or
the
worst
and
we're
not
always
right.
the
market
speaks..
So
when
we
talk
about
risk
and
return,,
we
as
developers
really
we
have
our
views.,
but
but
the
financial
markets
and
our
investors
speak
very
loudly
and,
of
course,
every
investor.
As
we
see
in
that
cloud
up
at
the
top
tries
to
get
the
biggest
return
they
can,
with
the
smallest
amount
of
risk..
D
But
the
markets
are
competitive
of
course.,
so
the
investors
that
typically
put
money
in
our
projects-
and
they
can
include
you
large
pension,
funds,,
endowments,,
big
banks
and
investment
banks,
calstrs
and
purs,
as
a
matter
of
fact,
are
some
of
the
largest
investors
in
california.
real
estate.
Investors
often
talk
about
real
estate
in
these
four
buckets,
korkor,
plus
et
cetera,.
D
D
It
is
the
fact
there
are
markets
across
the
country
where
you
know,
the
rents,
move
up
and
down,
depending
on
how
much
that
housing
is
needed.,
but
as
an
owner
of
apartments,
you
can
always
lower
the
price
and
find
somebody
who
needs
to
live
there.
As
an
owner
of
things
like
office,
buildings,,
hotel,
rooms,,
et
cetera.
on
the
riskier
end
of
the
spectrum.
D
Talk
about
the
community
the
developers
are
dealing
with.
This
is
one
illustration
you
could
easily
turn
this
diagram
on
its
head
and
put
the
city
at
the
center
and
have
all
of
your
stakeholders
around,
including
the
development
community
is
one
of
the
spokes
or
one
of
the
nodes..
But
this
is
just
to
show.
D
D
D
Brings
the
team
together
and
they
have
some
expertize
but
they're,
hiring
the
screenwriters,,
the
directors.
they're,
bringing
the
money
together..
That
is
exactly
what
a
developer
is
doing..
We
may
have
anywhere
from
20
to
one
hundred
consultants
or
parties
that
we're
dealing
with
on
any
one
development
project
and
the
more
the
riskier
obviously..
So
now.
D
I'm
going
to
hand
it
over
to
libya
in
a
moment
and
we're
going
to
talk
a
bit
about
the
costs
that
are
associated
with
producing
that
housing..
There's
a
couple
of
different
ways:
we're
going
to
look
at
it..
The
first
one
here
is
what
makes
up
all
of
the
money
that
builds
a
building,
and
so
the
three
simplified
buckets.
D
Here
are
the
debt,,
the
investor
equity
and
the
developer,
equity
and
typically
developers
are
going
out
and
bringing
in
other
equity
investors
and
in
theory
the
equity
is
at
risk,
and
if
the
project
goes,
bad,
equity
can
be
lost.
if
the
project
goes
well,
the
equity
investors
and
the
developer
profit.
But
that
is
not
always
the
case.
D
D
The
bank
gets
paid
back
the
same
amount
of
debt,
but
again
the
investor,
the
developer
benefit
when
things
don't
go
well
illustrated
by
this
left
and
right
cost
on
the
left
value
on
the
right.
It's
the
equity
that
loses
the
developer
and
the
investor
lose
together.
The
bank
still
gets
their
money
back.
D
Then
you
have
times
like
the
great
financial
crisis,
and
this
is
when
value
drops
so
precipitously
or
somebody
has
made
a
new
coke
type
of
decision
where
the
project
is
worth
not
just
so
little
that
all
the
equities
wiped
out,
but
the
debt
is
impacted..
This
happened
during
the
great
financial
crisis
in
08,,
09
and
10,
and
one
of
the
tough
messages
these
days
and
a
few
of
us
have
been
at
some
conferences
over
the
last
couple
of
weeks.
All
the
talk
of
inflation,.
D
All
the
talk
of
economic
uncertainty
is
absolutely
hitting
the
real
estate
markets
and
it
is
causing
more
uncertainty.,
there's
nothing
that
investors
hate
more
than
uncertainty.
and
so
we're
at
a
moment
in
time
where
there
may
be
some
policy
levers
that
you
could
pull
and
still
not
have
an
effect..
D
But
one
of
the
messages
we
want
to
get
across
today
is
that
we're
going
to
be
talking
about
policy
decisions
that
you
make
for
the
long
term,
and
hopefully
it
tees
up
the
cities
that
when
conditions
are,
are
ripe,
then
the
right
kind
of
development
will
come
into
play..
So
I'm
going
to
pass
it
to
libby.
Here
in
a
moment.,
this
is
a
different
way
of
looking
at
the
cost,,
not
just
the
money
that
makes
it
up.
But
what
are
the
the
layers
of
cost
in
those
same
projects.?
D
And
it's
no
mistake
that
we've
highlighted
the
box
that
says
fees
and
extractions
and
or
exactions
excuse.
The
the
fees
and
exactions
can
be
anything
and
everything
from,
you
know,
park,
fees,
development
fees
and
all
sorts
of
benefits
that
come
with
cost.,
and
we
certainly
have
to
acknowledge
everything
that
a
development
project
can
entail,
has
both
a
cost
and
a
benefit
and
that
policy
decision
again
falls
into
your
lap..
So
building
on.
E
What
you
just
said
so,
every
year
exaction,
for
example,
requiring
and
offsite
infrastructure
improvement
to
serve
affordable
housing
or
market
rate
housing
has
a
cost
associated
with
it..
That
cost
has
to
get
baked
into
the
pro
forma,
the
development
budget,
and
it
adds
to
the
total
cost
and
if
the
market
is
good,
as
drew
just
said,.
Development
can
move
forward
with
new
projects
and
it
can
pay
for
a
lot
of
these
costs..
E
E
Really
important
is
that
when
the
market
is
good,
it's
fabulous
but
they're,
typically
short
in
duration,
whereas
you've
got
to
be
thinking
for
the
long
term,
particularly
if
you're
doing
multifamily
housing
in
california
just
the
entitlement
process,,
the
construction
process,,
the
lease
process,
that
is
five
years
minimum,
often
and
so
you're
looking
you've
got
to
make
it
through
usually
more
than
one
cycle
and
it's
very
important
not
to
miss
that
window..
So
we.
E
E
If
there
is
not
sufficient
return
for
the
investor
community
to
have
any
interest,
they
won't
play,
they
won't
give
the
developer
any
money.
If
the
developer
doesn't
think
that
there's
enough
in
it
for
the
developer,
if
they
can't
pay
their
cost
of
staff,
if
they
can't
recoup
their
investment,
then
they're
not
going
to
play
so
that
green
bar
has
to
be
sufficient
enough
to
attract
the
investor
capital
as
well
as
developer
interest
at
the
bottom
side,
the
blue
bar
is
the
land
cost,
the
residual
land
value..
E
E
There
are
two
ways
in
which
those
costs
occur.
In
development.-
one
is
that
that
cost
is
just
an
agreed
upon
price.,
I'm
going
to
agree
to
pay
you
six
million
dollars
for
your
piece
of
property..
Another
way
is
that
a
developer
may
enter
into
an
agreement
with
the
landowner
which
says
you
have
in
essence
a
participation
with
me.,
I'm
going
to
guarantee
to
pay
you
a
certain
amount.
But
if
I
get
these
entitlements,
I
may
pay
you
more..
E
So
there's
that
kind
of
a
deal
and
sometimes
developers
have
to
put
out
the
entire
amount
of
money.
Upfront,
sometimes
the
option,
the
property,
but
at
some
point
their
money
goes
hard..
So
at
some
point
a
developer
has
millions
of
dollars
of
investment
in
a
property
in
terms
of
land
as
well
as
sometimes
millions
of
dollars
in
entitlement
costs
planning
costs
to
pursue
the
development.
At
the
same
time,.
E
Today,
because
that's
the
analysis,
that's
been
performed
in
san
jose
and
they're
going
to
do
this.
This
calculous
station,
where
they're
going
to
be
looking
at,
actually
I'm
going
to
skip
one
slide.
Then
I'm
going
to
go
back
and
then
I'll
go
back
to
the
concept
of
the
other
side,
where
they're
going
to
be
saying
the
difference
between
the
potential
value
that
you
can
get
to
the
potential
value
of
that
apartment
building.
Once
it's
fully
built.
E
E
E
What
we're
going
to
look
at
is
a
theoretical
project
in
san
jose,,
a
multifamily
apartment
development
with
10
percent
to
15
percent
onsite,
affordable
and
a
developer,
who
might
be
comparing
your
inclusionary
housing
requirements
and
your
costs
and
your
revenues
to
a
property
in
another
jurisdiction.
Nearby..
It's
an
existing
retail
property
with.
E
The
proposed
building
characteristics
are
seven
storeys
with
a
two
storey
podium
and
the
investment
community
and
the
developer
are
going
to
run
some
sensitivity.
Analysis
on
this
investment
and
they're
going
to
look
for
initial
scenarios.
they're,
going
to
look
at
what,
if
I
have
10
percent
on
site
below
market
rate
units??
What?
If
right
now.
E
I've
got
a
sense
of
what
I
think
the
off
site
costs
and
the
fees
are,
but
what,
if
those
increased
by
twenty
thousand
dollars
per
unit,
which
can
happen
during
the
development
process??
What?
If
construction
costs
increase
by
10
percent?
we're?
Definitely
in
a
construction
cost
increase
climate
right
now,
that's
been
increasing
about
six
percent
per
year
recently.
and
what
about?
If
we
have
an
alternative,
affordable
requirement
and
so
run
scenarios?
And
you
say,
ok,-
we're
trying
to
hit
six
million
dollars,
we're
running
for
independent
scenarios.,
so
my
base
case
oh,.
E
E
Twenty
thousand
a
unit
that
residual
land
value
drops
construction,
drops,,
the
construct
of
construction
prices,
increase
my
residual
land
value
drops,
and
if
I
have
fifteen
percent
on
site
bmr,
my
residual
land
value
is
less
than
if
I
had
10
percent
bmr
and
it
depends
on
the
income
targeting
which
we'll
talk
about
a
little
later
in
the
presentation
about
how
much
it
affects
it..
But
what?
If
we
also.
E
Look
at
a
fifth
scenario,
which
is
that
we're
allowed
to
have
parking
deduction,
which
is
something
you
as
a
policy
group,
have
actually
allowed,
is
parking
deductions
for
housing
and,
in
particular,
for
ground
floor
retail..
It
can
be
very
important
to
allow
parking
reductions
for
that,,
particularly
if
it's
structured
parking,
because
if
you're
looking
at
the
parking
cost
per
space,
it
is
much
less
expensive
to
do
surface
parking..
E
So
there's
existing
retail
has
surface
parking
much
more
cost
effective.,
but
as
soon
as
you
go
into
a
podium
underneath
housing-
and
this
is
a
seven
storey-
building,-
it's
more
expensive
if,
as
it
goes
partially
below
grade
it's
even
more
expensive
and
if
heaven
forbid
you've
got
to
go
down
to
levels
below
grade,
it
gets
very
expensive
per
parking
space..
So
every
cost
of
parking
can
actually
make
a
difference
in
how
many
units
you
can
produce..
E
So
we've
run
this
analysis
and
you
say
ok,
independently.
Each
of
these
works.
Ok,
but
if
we
run
all
four
of
the
first
scenarios,
well,
actually
the
off
site
fees,,
the
construction
cost
increase
and
the
15
percent
on
site
bmr.
We
put
all
of
this
together.
Then
we
don't
generate
enough
residual
land
value..
In
fact
it's
less
than
a
million
dollars,
and
if
we
were
to
do
it.
E
D
Way
down
here,
we're
actually
thinking
about,,
you
know,
another
way
to
think
about
this.
This
slide
before
is
almost
if
you
envision
the
scales
of
justice.
right.,
and
the
goal
is
that
the
city
is
putting
weight
on
one
side
that
is
costing
the
project,
but
you're
getting
benefit,
and
the
community
is
getting
benefit
out
of
that
in
a
perfect
world,
the
city
gets
all
of
the
benefit.
D
Developer
sentiment,
moves
much,
much
faster
than
public
policy
can
move.,
and
so
the
best
thing
that
you
can
do
as
a
council
is
set
up.
The
policies
in
a
way
that
provides
some
consistency,,
provide
some
predictability
and,
at
certain
times,
you're
going
to
get
a
lot
of
development
and
other
times
you're
on,
and
you
may
be
able
to
pull
some
levers
quickly,
but
many
of
them
take
a
long
time
to
pull
it's
setting
the
stage
for
what
you
want.
C
That
means
the
land
is
not
used
for
housing.,
don't
keep
it
as
a
parking
lot,,
a
car
wash,,
whatever
other
purpose,
that
has
a
higher
value
than
one
million
dollars,
and
that's
also,
if
you
start
losing
opportunities
for
housing,
then
there's
less
housing,
production.
just
to
be
clear
in
this
example,,
the
threshold.
A
E
Summarize
this
is,
if
you
run
these
sensitivity,
cases
individually,
right.,
you
still
have
to
deal,
but
if
you
combine
them,
then
you
don't
have
a
deal..
But
if
you
pull
another
policy
lever
like
reducing
parking,
then
you
get
a
deal
again.
right..
So
what
we
wanted
to
do
with
this
illustration
was
just
illustrate
to
you.
The
importance
of
your
policy
decisions
to
helping
tip
the
scale
as
as
drew
was
just
saying
and
that
it
really
does
make
a
difference
and
may
seem
like
it
doesn't,
but
it
really
does.
E
E
D
Know,
in
the
equation
of
an
income
producing
piece
of
real
estate,,
the
two
ways
to
make
things
better
are
increase
the
revenue
or
decrease
the
cost
and
easier
said
than
done,
of
course.,
and
then
the
third
we're
going
to
talk
about
increasing
certainty
and
most
often
that
certainty
of
process,
but
certainly
of
policy
over
a
longer
time,
you
know,,
makes
development
happen
more
often..
We
used
to
say
in
our
in
our
office
that
a.
D
Perfect
city
to
us
is
a
city
where
you
could
walk
into
city
hall,
with
a
proposal,
with
an
idea
and
a
staff
planner
that
you
speak
to
the
community
development
director,.
The
mayor
and
a
planning,
commissioner,
would
all
give
you
the
same
answer
as
to
what
they
would
like
to
see
on
a
particular
piece
of
land..
That's
almost
never
the
case,
but
that
would
be
perfection..
The
bottom
message,
though,
is
don't
let
perfection
be
the
enemy
of
the
good.
D
E
Want
to
thank
you
very
much
for
making
your
parking
requirements
more
flexible
and
lowering
them..
We
understand
that
you've
alleviated
them
on
affordable,
housing.
we'd
like
you
to
consider,,
you
know,,
being
flexible
in
your
parking
requirements,
particularly
as
it
relates
to
ground
floor
retail
and
in
transit,
friendly
places
for
multifamily
housing..
So
so.
C
For
many,
many
years
we
wanted
to
create
active
streets
and
we
thought
the
way
to
create
active
streets
was
to
enforce
and
require
retail..
I
think
we've
learned
out
that
empty
retail
does
not
produce
active
streets.
occupy
housing
does
produce
active
streets..
So
this
is
another
another
another
thing
you
can
do
to
change
that
policy
to
what's
currently
needed.
this,
probably
one.
D
Nobody
wants
to
jump
on,
but
you
know,
park
vs
park
requirements
again.
If
you
boil
it
down
to
a
cost,
it
can
be
looked
at
that
way..
It
is
certainly
one
of
the
greatest
public
benefits
that
comes
with
new
development
projects,
and
we
have
seen
cities
change
policies,
sometimes
just
in
the
short
term,
to
spur
development
when
that
was
their
desired.
Result.
processing
fees.
E
C
The
same
reasons
that
libby
stated
lower
utility
connection
fees,
you
pay
a
lot
of
different
fees
and
also
inspection
fees
etc.,
and
I
think
the
next
one
I
do
also
touch
upon,
because
I've
been
thinking
about
a
lot.
There's
two
things
for
affordability.
there's
the
number
of
units
that
are
affordable
and
the
average
median
income
of
those
affordable
units..
So
there
may
be
a
way
where
you
balance
the
two
you
can
play
with
those
two..
You
can
have
more
on
affordable
an
increase,
the
affordability
b,
more
work
force,
middle
income
or,
if.
C
You
want
to
target
more
of
the
lower
income,
then
lower
the
number
of
units.,
it's
again
as
drew
said,.
We
don't
want
to
be
callous
about
a
very
sensitive
subject,
such
as
affordable
housing,
but
it
is
ultimately
a
a
number
on
a
spreadsheet
that
you
have
these
two
levers
to
work
with,
and
I
just
wanted
to
add
on.
E
The
utility
piece
not
just
utility
connection
fees,
but
also
the
infrastructure
investment..
I
hear
about
this
a
lot
which
is
both
for
affordable
housing
as
well
as
market
rate
housing.
Where,
as
I
understand
as
a
city,
you
need
that
infrastructure.
So
you
need
the
water
and
the
sewer
delivered
properly..
But
what
can
happen?
Is
there
can
be
these
surprise?
Investments
like
the
public
works
department
didn't
necessarily
let
the
developer
know.
There
isn't
necessarily
a
path
forward
where
a
group
of
property
owners
together
may
make
this
investment..
So
the
first
in
to
do
that.
E
C
C
C
So
maybe
we
can
update
the
sales
tax
on
new
housing
construction.
and
I
guess
a
more
radical
idea
is.
Maybe
the
city
can
help
lend
its
negotiation
powers
to
each
housing
developer
on
an
individual
basis
to
try
to
negotiate
maybe
materials
or
services
on
bulk,
almost
like
a
health
care
system
for
housing.
and
again,.
None
of.
E
E
Think
that
this
one
is
really
important,
and
I
know
that
jackie
and
her
team
and
you
as
city
council
members,
do
everything
in
your
power
to
try
to
secure
more
funding
for
housing..
This
is
incredibly
important..
The
rental
housing
voucher
programs
that
the
santa
clara
county
housing
authority
is
administering
are
particularly
important
to
those
who
are
very
extremely
low
income
levels
and
need
rental
subsidy..
C
Earlier,
developers
only
or
investors
will
invest
when
they
know,
there's
a
target
return:
the
higher
the
transfer
to
transfer
tax,
because
these
investors
are
looking
to
invest
in
exit
in
five
years..
The
higher
the
transfer
tax,,
the
more
the
higher
the
hurdle
to
hit
that
target
return..
So
maybe
reducing
relax
and
transfer
taxes
on
housing
projects
and
don't
worry.
D
We're
really
getting
the
fun
ones
now
limiting
the
effect
of
rent
control..
So
I
know
this
has
been
a
big
topic
in
san
jose.
there's
no
shortage
of
economists
who
who
argue
on
both
sides
of
the
rent
control
debate..
All
I
can
say
with
certainty
is
that,
from
the
standpoint
of
investment
dollars,
it
can
be
perceived
as
a
risk,
and
it's
just
worth
knowing
that
as
you
make
those
policy
decisions,
this
one.
D
D
We'll
get
to
redwood
city
in
a
moment.,
you
know,,
it
was
a
downtown
blossomed
in
the
last
fifteen,
ten
years.,
but
what
allowed
to
blossom
was
a
foundation
in
their
planning
and
policy
that
was
set
twenty
years
prior
to
this.,
the
downtown,
really
blossoming..
And
so,
when
we
talk
about
certainty
and
processing,
it
can
be
the
city
frontrunning
secure..
D
It
can
be
the
city
frontrunning,
what
types
of
uses
you
would
like
to
see
so
that
again,
in
that
perfect
world,
where
a
proposal
comes
in
to
city
hall
and
everybody,
you
know
from
the
mayor
on
down,
knows
exactly
what
the
answer
is
to
say.
This
is
what
we
want
on
that
site..
This
is
what
we're
willing
to
support,
and
this
is
why
this
one
is.
I.
E
Know
a
tricky
one
as
well,
and
it's
only
going
to
work
in
certain
locations,
possibly
converting
office
to
housing..
I
think
as
important,
alongside
of
it,
is
like
the
retail
or
shopping
center
to
housing
conversion
and
also
one
that's
not
up
there,
which
is
church
property
to
housing
or
a
part
of
church
property
to
housing.
E
Eric
was
just
saying
that
aren't
housing.
Now,
how
can
we
convert
them
to
housing??
It's
often
it's
complex
for
staff.,
it's
complex
for
you
as
decision
makers.,
it's
often
complex
for
the
neighbors,
because
they're
used
to
the
existing
as
being
something
different..
So
it
takes
a
lot
of
education,
but
we
think
it's
really
important
to
think
about
these
alternative
locations
for
housing
and
you
and
you've
pioneered
looking
at,,
you
know,
being
able
to
put
affordable
housing
in
industrial
areas,
for
example..
You
know,
chime.
C
In
real
quick.,
I
think
a
lot
of
people
thought,
you
know,
with
the
downtowns
being
empty
and
office,
is
being
empty,.
The
silver
bullet
will
be
converting
underutilized
class
b
and
c
office
buildings
into
housing.
everyone's
looking
at
it.,
it's
much
harder
than
it
looks..
We
are
working
with
other
groups.
You
is
to
try
to
figure
different
archetypes
that
actually
fit..
C
Unfortunately,
there
needs
to
be
some
pain
and
blood
on
the
streets
with
office
buildings
dropping
to
below
three
hundred
bucks,
a
foot
before
that
can
become
a
reality.,
but
that's
something
to
be
exploring
and
we
will
need
the
city's
help
to
relax
requirements
in
order
to
make
that
happen.
so
and.
D
I
touched
on
redwood
city
already,
so
we'll
jump
past
this
one..
This
will
conclude
our
piece
of
the
presentation
so
we'll
throw
in
one
last
hometown
image
as
we
get
to
our
end
and
pass
it
on
to
nevada
and
then
obviously
we'll
be
here
for
questions
after
staff
gives
their
report
we're
playing
the
home
crowd.
F
Familiar
with
our
organization,
in
addition
to
the
twenty
five
hundred
residents
of
san
who
say
that
we
are
proud
to
say
our
mid
penner's
been
paid
and
residents,
we
have
another
three
hundred
and
eleven
homes
in
the
pipeline..
The
picture
to
the
right.
There
is
the
emmanuel
subrata,
a
permanent,
supportive
housing
community.
That
is
one
of
the
case,
studies
in
the
study
session
materials
that
you
have
before
you
today.
F
Going
to
jump
right
into
it
so
that
we
can
have
plenty
of
time
for
questions
in
the
silicon
valley,
the
more
that
you
are
looking
to
reduce
rents
and
subsidize
at
the
lower
there's,
a
lower
affordability
levels,
the
further
we
are
away
from
the
market.,
so
we
have
the
three
boroughs
here.
an
extremely
low
income
family
is.
F
Twenty
thirty
year
old
apartments
would
might
be
able
to
be
that's
probably
where
you're
seeing
a
lot
of
those
groups
that
are
not
in
restricted,
affordable
housing,
how
they're
finding
housing.
This
is
made
worse
by
income
inequality
year
over
year,
you're,
seeing
ten
percent
jumps
in
what
the
area
median
income
is,
and
wages
aren't.
F
Keeping
up
with
that.
I
don't.
Very
few
professions
are
getting
10
percent
year
over
year
increase
when
it
comes
time
for
their
performance
review..
So
people
are,
if
you're
feeling
as
though
many
families
are
not
keeping
up,
it's
because
they
aren't,
they
aren't
keeping
up
with
the
progression
in
the
rate
that
this
is
happening
at
the
market.
F
F
F
Difference
between
what
our
residents
can
afford,
the
the
mortgage
that
we
can
afford
to
support
through
their
income
and
what
we
really
need
in
order
to
to
build
the
housing,
because,
as
your
reports,
suggest,,
affordable
housing
is
not
in
some
cases
is
a
little
bit
more
expensive.
Sometimes
the
market
rate.
We
don't
get
a
haircut
on
the
costs
to
build
but
build
the
new
units.
um,,
that's
what's
known
as
the
gap.
F
Primarily,
the
federal
government
has
the
primary
tool
for
encouraging.
Affordable
development
is
through
the
low
income,
housing
tax
credit
program
and
there's
two
programs
that
drive
slightly
different
results..
But
the
overall
kind
of
rhythm
of
the
programs
is
the
same
uh,
where
we
are
looking
at
the
amount
and
trying
to
maximize
that
amount
of
federal
equity
that
we
can
bring
in
to
our
localities
and
then
using
local.
F
In
that,
usually
in
that
beginning
part
that
in
the
so
nicely
spoke
about
where
we're
we're,
maybe
a
midpoint
has
an
advantage
over
a
serious
regis's
that
at
times,
if
a
city
is
able
to
free
up
some
of
those
early
dollars
for
predevelopment
that
risky
money
that
we're
using
that
and
trying
to
build
something
that
later
on,
we
can
go
together
to
leverage
outside
federal
dollars
and
then
private
investment
from
from
the
equity
community..
So
that's
the.
F
F
F
Potentially
some
version
of
free
land
or
reduced
subsidized
land..
We
have
a
or
emmanuel
subrata
project
again
is
on
a
church
site
and
you'll
see
it
has
the
lowest
land
cost
per
unit
of
example,
studied.,
so
maybe
between
either
land
or
city,
there's,
certainly
a
measure
eight
dollars
from
the
county
and
also
your
housing
authority.
Those
are
the
types
of
sources
that
we're
looking
to
layer
in
to
figure
out
this
gap.,
the
not
so
simple
version.
F
F
When,
at
times
we
must
go
to
the
state
together
to
find
an
additional
program
to
further
subsidize,
those
in
turn
are
usually
driven
by
single
policy
objectives
of
the
state..
So
there
is
a
for
instance,
there's
an
infill
infrastructure
program,
and
so
that
is
going
to
benefit
anything
that's
built
within
the
urban
core
of
most
cities.
F
uh,.
There's
a
multifamily
housing
program
and
that
particular
program
benefits
is
looking
for
deep
affordability..
So
at
each
stage,
are
we
needing
to
go
and
find
another
source?,
there's,
probably
some
other
obligations.
Shall
we
say
that
some
very
specific
obligation,
whether
it's
carbon,
reduction,,
deep
affordability
and
infill,
say
transit,
oriented,
development,,
a
program
for
veterans?
I
could
go
on,
but
every
single
one
of
these
layers,
although
it
may
add
it,
may
take
down
the
gap..
F
F
F
Entitlements
could
stretch
for
years,
sometimes,
especially
if
you
were
looking
to,
if
you
needed
a
general
plan,
amendment
and
really
needed
to
change
the
zoning
um,.
Now
I
would
say
the
flavor
of
affordable
housing.
That's
really
taken
off
and
changed
since
twenty
twenty
is
the
the
the
green
box
here,
the
funding
assembly-
that's
really
not
to
take
anything
away
from
the
art
of
entitling
projects,
but
it's
really
the
funding
assembly,
where
it
has
the
bottleneck
of.
F
I
want
to
give
a
quick
shout
out
to
the
city
staff,
but
also
to
you
mayor
for
your
advocacy
at
the
state
level.
last
year,
at
a
critical
time
at
a
critical
hearing,
there
was
effective
media
strategy
so
as
to
call
attention
to
the
fact
that
not
a
single
four
percent
tax
credit
project
that
was
competing
for
bonds
from
any
of
the
big
three
cities
of
northern
california,,
san
francisco,,
oakland
or
san
jose,
was
in
competitive
range
for
funding..
F
You
know,,
so
that
brought
about
kind
of
a
bigger
picture
policy
question
what's
wrong
with
the
scoring.
If
these
big
cities
can't
get
something
through?,
and
so
that's
because
bonds
are
competitive
now
and
before
twenty
twenty,
they
were
not.
So
when
you
got
you
got
your
project
together,
you
went
and
got
your
bonds.
Now
you
get
your
project
together
and
you
have
to
go
compete
and
I
wish
I
could
I
wish
I
could
say
it
was.
F
It
was
easy
for
us,
but
in
many
cases
we're
competing
against
our
peers.,
so
midpines
is
competing
against
each
and
the
city
in
some
cases,
could
be
competing
against
their
own
projects,
so
that
funding
assembly
continued
need
for
state
advocacy
in
the
resources
to
to
build
out
what
you
are
experiencing
in
a
different
part
of
your
city,
which
is
planning
for
your
regional
housing
needs
allocation.
Where
numbers
at
this
point
for
very
low,
low
and
well,
they
don't.
F
Follow
that.
so
you're
at
the
lower
levels
of
affordability,
you're
having,,
you
know,,
very
large
numbers
in
which
you're
being
asked
is
own
for
and
the
resources
at
the
state
level
and
the
federal
level
are
not
quite
at
that
level
to
support
that..
So
that's
where
we're
seeing
right
now,
the
uncertainty..
So
all
that
just
means
that
all
of
the
good
work
that
your
staff
continued
to
do
and
the
embrace
the
city's
posture
of
embracing
many
of
these
state
financing
tools.
The
streamlining
tools
is,
is
helpful
to
us.
Um,,
I'm
going.
F
In
any
case,
you
can
add
up
to
three
stories.
and
the
city
of
san
mateo
said:
oh,
I
know
you're
halfway
through
entitlements,
but
can
you
go
back
and
look
at
this
and
see
what
you
can
do?,
so
they
wanted
to
maximize
what
is
a
precious
resource
for
them,
which
is
their
land.?
They
don't
have
that
many
publicly
owned
pieces
of
land
to
try
to
make
a
difference.,
and
so
they
really.
F
Compelled
us
to
go
and
take
a
look
at
it
and
we
said
well,
it
would
make
sense
for
us
to
add
two
stories
and
sixty
issue
units.
um,.
Do
we
need
to
add
the
parking
with
that
way
of
the
parking
on
those
new
units
and
so
with
adding
the
two
stories
and
not
requiring
the
parking
there?
We
are
actually
right
across
the
street
from
a
city
on
garage..
So
there's
a
little
bit
of
a
there's,
some
there's
other
parking
that
that
is
around
there.
F
We
were
able
to
lower
the
price
per
unit
by
almost
seventy
five
thousand
dollars
the
door.
So
big
moves
can
be
made
in
this
arena
with
a
couple.
This
couple
great
decisions
and
that's
a
theme
throughout..
So
this
is
this-
is
sort
of
a
these
black
boxes,.
Your
new
state
tools
streamlined
financing
these
at
at
the
bottom
here
public
sector
flexibility..
These
are
the
different
kind
of
dots,.
If
you
will,
that
we
are
in
the
cities
where
we
are
frequent,
fliers.
F
we're
really
asking
our
city
partners
to
come
together
and
help
us
connect
those
dots
and
strengthen
the
connective
tissue,
because
there's
not
a
single
one
of
these
projects
that
we're
working
on
where
we
can
say
it's
just
one
of
these
boxes
that
is
making
it
feasible.,
it's
putting
them
all.
Together.,
that's
the
art
and.
F
Having
in
addition
to
your
to
your
development
partners,,
you
have
many
best
in
class
ones
that
operate
here
in
the
city,
also
having
really
talented
staff
that
can
help
us
see,
which
some
of
the
dots
that
are
possible
to
be
connected
here
and
really
help
us
be
creative
about
what
we
can
go
and
try
to
put
together..
So
we
discussed
the
addition
of
sixty
one
units
that
drives
efficiency,,
streamline
financing
and
the
continued.
F
F
F
F
F
We
are
buying
down
taking
down
those
fees,
usually
when
we
are
obtaining
a
building
permit..
So
we
we're
we're
taking
down
those
fees,
then
and
then
two
years
of
a
construction
loan
where
it's,
where
there's
interest
every
month
that
we're
paying
on
those
fees..
So
if
we
can
defer
that
by
two
years
and
instead
make
it
a
condition
of
us
obtaining
occupancy,,
our
our
cfo,
it's
a
it's
a.
F
And
the
public
sector
flexibility
we
can
continue
to,
and
I'm
curious
to
hear
where
you
may
have
questions
on
this,
but
are
the
internal
champions
and
the
innovation
that
the
public
sector
is
coming
to
us
with?.
This
is
just
really
critical
to
the
secret
sauce
of
making
stuff
happen
right
now..
I
thank
you..
Thank.
B
A
A
A
Your
first
of
all,
thank
you
all
for
the
presentation.,
really
appreciate
it,
and
thank
you
for
your
long
standing
relationship
and
trust,
case,
your
services
and
your
investment.,
our
city,
and
all
that
that
you
guys
are
doing
to
try
to
help
cities
figure
this
out.
eric,.
You
mentioned
the
conversion
of
class
b
and
c
buildings..
I
know
that
the
office
conversions
are
on
everyone's
mind..
I
know
and
serve
as
well
and
work
on
something
now
the
council
member
and
try
to
figure
out.
A
How
can
we
do
this
in
downtown
cervical
cancer.?
This
study,
I
think
in
calgary
kind
of
concluded,
hey,
those
older
50s
and
60s
office
buildings
with
a
smaller
floor
plates,
tend
to
be
more
ideal
because
sunlight
is
at
a
premium,
particularly
with
larger
floor
plates..
I
appreciate
their
really
large
capital
costs
involved
here
around
plumbing
and
utilities.
A
To
make
those
retrofits.,
but
as
we're
thinking
about
trying
to
ready
ourselves
for
a
potential
what
we
hope
might
be
some
builders
or
investors
that
be
interested
in
doing
this,
because
I
think
we
all
see
we're
going
to
we're
going
to
have
lots
of
vacant
office
for
a
while,
for
perhaps
a
very
long
time..
I
think
it's
twenty
five
million
square
feet
now
are
vacant
in
san
francisco.
If
I'm
not
mistaken.,
it's
creeping
down
here
and
frankly,
I'd
love
to
get
some
of
this
older
office
off
the
inventory.
A
A
A
Anybody
else
is
struggling
here
downtown..
What
are
the
non
obvious
things?
We
should
be
looking
at
as
a
city
to
sort
of
facilitate
that?,
and
I
put
it
to
eric
because
he
mentioned
it,
but
anybody
wants
to
jump
in
and
are
there
are
there
experts
out
there?
We
should
be
talking
to
because
I
know
what's
happening
outside
the
bay
area.,
we're
seeing
it.
It
seems.
Like
kansas
city,
I
was
just
talking
to
the
mayor.
I
think
cincinnati
said
they
were
doing
it
like
crazy
out
there..
C
I'm
glad
you
asked
you
all
eyes
on
it.
good.,
we're
on
it
right,
now.
we're
working
with
ginzler..
I
was
just
talking
to
raymond
from
toronto.
There
they've
devised
this
app,
they
call
an
app.,
it's
a
prototyping,
app
to
you
with
different
office
prototypes
in
outsports.,
whether
or
not
this
is
appropriate
for
conversion
or
not,.
What
are
the
costs??
C
I
guess
a
couple
of
observations
I
think
being
on
the
west
coast
with
our
land
was
a
blessing
and
a
curse.
the
blessing
was
we
had
all
this
land..
We
created
different
financial
districts,
residents,
districts,
unlike
the
east
coast,
which
didn't
have
the
benefit.,
but
now
we're
seeing
the
curse
part
of
it..
We
don't
have
housing
next
to
financial
districts
and
have
the
integration,
but
we
realize
we
want
that
because
it's
it's
we
want
to
work
live
play
city
..
C
What
can
the
city
be
doing?,
so
part
of
this
study
and
we
hope
to
have
by
q1
next
year?
Maybe
we
come
back,
roselyn
and
talk
about
our
findings
with
enzler
and
sper
we're
working
with
spurring
as
they're.
Together,
it's
going
to
be
we're
going
to
require
city
partnerships,
whether
it's
relaxation
on
you
know,
accessibility,
relaxation
and
seismic
relaxation
on
other
types
of
requirements
and
fees
and
affordability..
All
of
the
many
of
the
items
were
teased
out.
C
Here
as
things
that
suppress
development,
maybe
for
downtown
office
to
resume
conversions.,
those
elements
can
be
part
of
the
part
of
what
the
city
can
do
to
ensure
that
it
happens.
So
we
can
get
over
the
hump
using
a
lot
of
camel
analogies
these
days.
That's
a
different
type
of
hump..
We've
had
a
drought
for
a
long
time.
A
D
D
Nobody
likes
to
hear
it
but
oftentimes
when
developers
are
looking
at
a
piece
of
land,
they
start
with
the
parking
count
and
then
figure
out
how
many
cars
can
I
park.
Therefore,
how
much
can
I
build
on
top
of
that
parking
and
if
you
have
an
existing
office
building,
one
of
the
advantages
you'll
have
is
that,
although
there's
a
height
limit
because
of
the
airport
flight
path,,
if
you're
taking
over
a
superstructure
that
exists,,
if
it
has
the
right
characteristics
of
seismic,
et
cetera,,
you.
D
Couldn't
even
begin
to
rebuild
that
superstructure
for
three
hundred
dollars,
a
square
foot.,
that's
what
those
buildings
are
going
to
trade
for
and
I
think
they
may
and
they
will..
So
there
could
definitely
some
opportunity
there.
it's
really
studying.
What
is
your
building
stock??
How
are
you
going
to
address
the
things
like
parking??
It's,
maybe
the
low
hanging
fruit,
things
like
school
fees,
maybe
can't
address,
because
you
don't
directly
control
that.
right.,
but
the
things
that
you
directly
control
or
the
areas
I
focus
on
and
we
just
got
back
from.
E
E
Was
done
by
tod?
Development.-
it's
really
interesting,
but
it
didn't
have
much
parking
because,
historically
in
downtown
dallas,
there
are
tons
of
surface
parking
lots.
So
the
office
buildings
themselves
didn't
have
much
parking..
So
the
city
of
dallas
is
allowing
valet
parking
in
a
very,
very
small
amount
of
parking
within
the
actual
building
for.
E
A
A
A
A
A
A
A
C
Willing
to
sign
a
guarantee?,
I
doubt
it.,
that's
we
don't
think
we
take
those
risks..
I
know
that's,
but
I
know
that
that's
a
nonstarter,
because
you
can't
have
a
contingent
liability
impact
bonding
capacity
and
you
have
to
fund
roads,
schools
and
much
more
equally
important
things.,
but
I
do
think
it's
not
worth
completely
dismissing
outright
..
Maybe
there
are
ways
and
layers
of
creating
some
type
of
surety,.
You
know,
in
case
of
massive
default
or
massive
some
type
of
outside
thing
that
maybe
your
controller
or
financial
experts
can
find
a
way
to
larry.
C
E
E
your
idea
of
the
convening
of
really
putting
this
in
a
sustainability
lens
because
they're
all
working
on,,
you
know,,
basically
three
e's
or
two
bottom
line,
whatever
you
want
to
reference
and
to
really
just
say
look,.
This
is
part
of
our
sustainability
mission
as
a
state..
Let's
put
our
money
where
our
mouth
is.,
let's
figure
out
ways
to
encourage
these
lenders
to
allow
for.
C
Thing
I
mean
again,
let
me
raise-
and
I
know
this
might
be
a
third
rail.
You
know
we're
developers.
we're
here
to
ensure
that
money
gets
to
deployed
to
build
housing.
who
owns
it
ultimately
doesn't
matter
to
us.
If
the
ultimate
owner
is
a
public
entity,,
the
jpa
model,
which
they
created
to
a
public
entity
on
existing
value-add
land,
they
didn't
pay
property
tax.,
whether
or
not
that
was
abused
or
not.
We
can
debate.
But
how
do
we
turn
that
into
production?
C
same
concept
if
a
pension
fund
or
another
entity
wants
to
own
new
housing
production
eliminates
fifty
percent
of
your
operating
costs?
All
of
a
sudden,
the
cost
of
housing
and
the
revenue
generated
goes
up
and
then
we
don't
have
to
go
through
the
whole
state
legislature
and
change
the
charter
to
increase
the
exemption
levels
of
welfare
tax..
So
that's
something
of
great
convenience
and
how
do
we
produce
market
rate
housing
that
can
be
owned
publicly
but
developed
privately
so
that
we
don't
pay
property
tax??
I
think
that
is
a
game
changer.
D
D
A
Know,,
I
hope
I
won't
be
around,
but
I
hope
we
accept
that
invitation,
because
I
think
at
least
from
my
perspective,
the
concerns
were
less
qualitative
and
quantitative
in
terms
of
where
we
are
in
the
spectrum
of
risk
and
I'd
like
to
think
there's
a
place
where
we
could
all
get
to
to
move
that
forward
.
in
any
event,.
I
always
learn.
A
In
in
cities-
and
you
know,
as
a
very
first
thing,
I
remember
learning
when
I
ran
for
office
as
a
council
member
sitting
down
with
lou
off,
and
he
said
one
thing
that
no
government
understands
is
the
cost
of
indecision
and
it
absolutely
kills
our
ability
to
move
forward.,
and
I
you
know,.
I
hope
that
we
are
embracing
that
here
in
san
jose,
that
the
cost
of
indecision
to
the
time
we
take
to
get
to
a
decision
is
the
thing
that
is
absolutely
the
biggest..
So
hopefully
we
will
embrace
the
ability
to
decide
quickly.
H
H
D
D
Know,,
how
much
income
does
a
building
generate
over
the
total
cost
of
creating
that
building??
So
that's!
That's
one
metric
investors,
often
regardless
of
their
time,
horizon,,
whether
it's
five
years,
seven
years,
ten
years
or
forever.
Do
you
like
to
look
at
irr
or
the
internal
rate
of
return,
which
obviously
is
time
dependent
and
so.
D
Many
investors,
depending
on
whether
they
are
in
the
business
of
investing,
of
operating
buildings
when
they
buy
them
or
development
projects
that
take
much
longer
to
create,
will
pick
a
time
length
either
seven
years
or
ten
years..
And
even
if
their
business
plan
is
not
to
sell
the
building
in
year
seven,,
they
will
run
the
model
as
though
they
do
just
so
that
they
can
compare
apples
to
apples
to
apples
across
their
portfolio..
But
I
would
say,
a
return
on
cost
and
irr
the
two
most
common,
ok
yeah.
It's.
H
H
And
because
the
fact
that
they
have
numerous
project,
I
think
they're
right
they're,
looking
at
playing
the
long
game,
and
that's
why
I
was
just
kind
of
curious
on
what
that
timeline
might
look.
Like.,
I
think
it's
unique..
Maybe
you
can
confirm
that
when
you
have
such
a
big
developer,
that
actually
is
looking
at
multiple
developments
versus
just
the
one
project
that
they're.
H
D
Public
rates
are
able
to
look
at
a
much
longer
term
strategy
and
then,
of
course,
there
are
some
private
investors,
not
always
necessarily
housing
related,
but
the
subrata
organization
is
obviously
a
bright
shining
example
of
somebody
who
you
know
is
typically
a
long
term
investor,
but
not
every
developer.
Does
that
some
and,
I
would
say,
the
the
impact
of
structured
finance
or
more
institutional
dollars
in
real
estate.
Again
we'll
look
at
five
seven,
ten
year
time
horizons
in
their
underwriting
.
thank
you..
The
other.
H
I'm
curious
about
is
the
scenarios
where
either
you
have
somebody
that's
owned:
land
for
decades,
literally
right.,
maybe
passed
down
through
family,,
whatever
it
may
be.,
and
so
the
residual
land
value
for
them
at
this
point
is
maybe
not
a
factor,
but
yet
they
still
aren't
aren't
developing..
So
it's
obviously
the
other
factors
are
costing
too
much.
H
similarly,.
I
think
we
have
a
lot
of
entitlement
and
that
that
are
not
breaking
ground.
Is
that
the
residual
land
value
at
that
point??
I
understand
it
doesn't
make
a
difference,
because
the
other
factors
are
what
are
just
making
a
project
infeasible
to
break
ground..
So
that
is
the
assumption
or
the
right
function..
It
can
be
a
a.
D
Number
of
things
as
erik
alluded
to
during
the
presentation,
there
may
be
an
existing
use.
That's
not
particularly
glamorous
whether
it's
a
surface
parking
lot,,
whether
it's
you
know,
a
retail
established,
and
that's
long
in
the
tooth.
If
that
existing
use
generates
a
decent
amount
of
income
relative
to
the
value
of
the
land
or
the
or
you
know,.
D
D
.-
and
there
are
examples
of
folks
who
own
car
washes
and
they
say
if
I
were
going
to
build
a
new
building,
I
would
have
to
invest
tens
of
millions
of
dollars
or
more..
I
would
have
to
put
my
you
know,.
The
family
wealth.
That's
been
created
over
generations
at
stake,
because
development
is
such
a
risky
proposition
and
so.
H
H
D
D
E
E
Tied
with
those
properties
that
remain
vacant
a
long
time
and
don't
get
redeveloped.,
that's
that's
one
case
another
case
that
I'm
very
familiar
with
from
some
of
the
work
that
I
do
is
probably
owned
by
a
family
for
a
long
time..
They
go
into
a
trust
situation
or
they're
owned
by
a
number
of
family
members,
where
it's
just
complicated
to
unwind
it
and
sell
it,
because,
and
also
the
tax
implications
are
hard..
So
you
have
to
make
the
deal.
E
H
H
I
I
Levers
or
tools
that
will
be
able
to
use
to
to
be
able
to
help
these
projects
move
forward.
um,
the
conversations
that
have
taken
place
over
the
years
I've
been
on
council
there's
a
sentiment
in
certain
parts
of
the
community
as
well
as
on
council
that
you
know,,
there's
a
fear.
There.
we're
just
going
to
leave,
you
know,
money
on
the
table
for
the
developers..
Can
you
kind
of.
I
C
C
C
C
D
Grim
outlook
with
respect
to,,
you
know,
new
development
investment
relative
to
the
cost
and
that
is
going
to
change.,
but
to
your
point,
you
know,.
I
would
caution
you
on
overreacting
in
the
next
six
to
12
months
and
then
all
of
a
sudden.
You
see
a
lot
of
activity
and
the
answer
moves
too
quickly,
and
you
can't
stop
it
fast
enough
for
you,.
Can't
you
can't
control
it..
What
I
think
san
jose
has
done
in
the
past
and
could
continue
to
do,
are
temporary
measures
where
you
have
abatement
of
fees
or.
D
E
E
E
Try
to
sometimes
say
to
my
public
clients
is:
don't
make
it
so
difficult.,
don't
make
it
so
onerous
that
you'll
never
get
that
developer
to
come
back
in
the
door
again,
and
we
don't
often
think
of
it
that
way.
but
they're
your
customers,
just
like
the
public,
is
your
customers..
I
know
the
public
doesn't
see
it
that
way.,
I
know.
I
mean
I
came
from
a
place
where
I
thought
developers
were
you.
Know,
were
evil
doers,
you
know,,
and
the
landscape,,
whatever
it
was..
E
But
if
you
really
think
about
it,,
they
are
the
ones
that
are
going
to
make
our
world
a
better
place
literally,
if
we
allow
them
to
do
it
and
we
allow
them
to
do
a
good
job
and
we
want
good
development
to
be
moving
forward..
So
I
think
it's
really
that
partnership
idea
is
building
on
what
eric
said..
I
mean.
We
really
are
here
to
be
your
partners..
We
have
great
members..
We
are
dedicated
as
an
organization
to
to
making.
E
E
F
This
distinction
needs
to
be
made,
but
the
affordable
housing
component
is
doesn't
go,
doesn't
have
quite
this
steep
sort
of
market
vacillations..
We
are
pretty
steady,
customer.,
there's
all
manner
of
contractors,
general
contractors
in
this
region.
That
kind
of
like
us.
For
that
reason,
because
we
there
are
some
years
where
I'm
literally
was
the
only
person
pulling
a
building
permit
for
the
whole
city,
and
so
we
were
pretty
consistent.
F
On
that.-
and
so
I
guess
what
I
would
say
in
terms
of
what
tools
could
we
offer
looking
at
some
of
the
state
streamlining
tools
and
seeing
how
the
city
has
used
them?
Sb
thirty
35
is
still
a
relatively
new
innovation..
You
have
done
a
few
of
these
deals..
There
are
little
areas
to
procedurally
smooth
that
out
because
it
has
to
move
all
the
way
through
the
city..
F
So
once
it's
entitled
and
you're
through
the
planning
and
that
process,
it
needs
to
kind
of
continue
to
flow
in
through
the
building
department
and
all
the
plan
check
and
processing
and
permit..
So
there's
a
lot
of
places.
I
think
with
that.
We
could
continue
to
look
to
really
tighten
up
that
those
timelines
and
the
certainty
and.
I
I
Go
through
cycles,
market
cycles
and
when
we're
in
a
down
cycle,
there's
a
pullback
in
the
capital
markets
in
terms
of,,
you
know,
financing
these
projects
when
it
would
seem
like
that
would
be
the
the
best
time
to
undertake
a
project
when
labor
costs,
materials
and
all
the
other
costs
are
less..
You
know,.
I
D
That
we
we
pound
the
table
with
that
message..
I
can
give
you
an
example:
the
great
financial
crisis.
We
had
a
project
that
was
ready
to
go
in
the
middle
of
2009
and
I
won't
name
the
investor,
but
a
life
insurance
company
was
our
investor
and
we
literally
were
banging
on
the
table
saying
this
is
the
best
time
to
build
and
they
looked
at
us
and
they
said
we
can't
build
right
now,
because
nobody
else
is
building
and
they
were
scared
to
look
silly
honestly
and.
D
D
D
D
J
Wanted
to
weigh
in
a
little
bit.
thank
you
for
the
masterclass
on
development
and
the
cost
of
development..
It
was
really
helpful..
We
have
a
lot
of
potential
construction
going
on,
we
think
and
to
understand
what
the
triggers
are
that
are
standing
in
the
way
from
a
developer
actually
pulling
the
trigger
and
getting
the
financing
they
need
and
all
the
other
costs
is
really
helpful..
But
I
had
you.
J
J
a
temporary
incentive
doesn't
provide
certainty,
doesn't
provide
consistency
or
predictability.,
it
does
for
a
short
term.,
but
if
we
lock
it
in
to
that
particular
development,
it
does.,
but
if
we
don't
lock
it
in
to
that
particular
development,,
there
is
no
uncertainty..
So
how
do
we
eliminate
from
our
side?
We
can't
address
the
capital
market..
We
can't
lower
interest
rates..
We
cannot
decrease
the
cost
of
land,
that's
going
to
happen
over
market
conditions..
We
cannot
affect
the
employment
market
or
the
cost
of
materials.
J
D
Maybe
let
me
think
about
it.
This
way,
most
often
the
consistency
that
we
think
about
is
in
land
use
and
planning,
and
the
idea
of
there
is
a
downtown.
There
is
an
area
of
town
next
to
a
park
or
next
to
transit,
where
the
city
would
like
to
see
certain
types
of
uses
and
consistency
and
that
type
of
long
term
planning,
maybe
is
the
best
place
to
to
apply
the
consistency,
aspect,,
the
short
term
levers.,
maybe.
D
When
you
want
that
long
term
plan
to
come
into
play
faster
than
it's
coming
and
so
you're
going
to
make
a
change
that
affects
the
financial
feasibility
to
try
to
be
a
catalyst
and
make
more
projects
go
forward.
That
may,
in
fact
be
consistent
with
that
long
term.
Plan..
Does
that
answer
your
question?
yes,,
such
as
reducing.
J
Parking
minimums
and
and
other
requirements
that
we
may
be
implementing
for
really
good
reasons
or
haven't
implemented
yet,
but
need
to
implement
it
in
a
much
bigger
way..
Of
course,
reducing
parking
minimums
decreases
the
cost
for
the
developer,
but
it's
also
good
for
the
environment
because
it
decreases
the
incentive
of
having
your
vehicles
out
and
living
in
a
vehicle,
a
society
driven
by
the
automobile..
So
there's
lots
of
reasons
that
removing
parking
minimums.
Well,
I,
this
is
really
interesting..
J
J
C
You
should
break
it
up
into
two
two
parts.:
let's
look
at
future
entitlements,
creating
certainty..
How
do
we
create
a
precise
plan
for
the
city,
how
to
ensure
long
term
predictability?
So
we
have
repeat:
customers
of
developers
coming
in
downtown
san
jose
and
let's
look
at
our
current
problem.
the
sites
they're
already
entitled
that
are
stuck,
as
I
think,
vice
mayor
jones
pointed
out.,
mayor
licadho
point
out:
there
are
multiple
projects..
Those
are
what
can
benefit,
what
andrew's
talking
about
the
short
or
the
short
term,
incentives
to
get
stuck
projects
built,
and
you
know,.
C
Again,,
these
are
the
things
that
no
one
wants
to
talk
about:
reducing
affordability,
requirements,,
reducing
parking,
requirements,,
reducing
retail,,
maybe
eliminating
sales
tax
for
materials.
That
city
would
collect.
Things
like
these
would
be
short
term
and
then
the
long
term
would
be
creating
predictability
for
future
planning.
Entitlement.
ok,.
I
want
to
put
a
plug
in
here
for.
F
F
F
F
So
I
think
that
there
are
opportunities
to
look
at
where
you
have
land
within
the
city,
and
I
know
that
staff
is
kind
of
in
the
midst
of
of
one
of
the
best
tools,
and
it
can
be
hard
to
recommit
to
looking
at
that,
because
it
seems
so
academic
or
far
away.,
but
over
and
over
and
over
again.
We
have
sites
that,
when
the
market
conditions
are
right,
they
build
out
and
that
the
using
that
particular
tool
to
remove
a
few
of
the
key
constraints.
F
A
A
A
Uses
that
aren't
necessarily
I
mean
frankly,
housing
isn't
really
active.
it's
not
especially
if
you're
in
an
urban
area
where
people
have
safety,
concerns,
you're,
never
going
to
lease
out
that
space,
that's
right.,
well,,
depending
obviously
on
a
lot
of
circumstances,
can
be
very
challenging
right.,
so
you
know,,
whether
it's
day
care
or
the
gym
or
it's
something.
A
C
C
C
D
The
sidewalk
is
deep
enough
and
the
pop
up
businesses
were
literally
think
of
something
a
lot
better
looking,
but
a
kiosk
in
a
mall
where
it
folded
up
against
the
garage
and
when
it
pulled
out
it
allowed
a
business
to
exist
for
the
day
and
was
only
taking
up
four
to
six
feet
off
the
edge
of
the
garage,
and
there
was
still
plenty
sidewalk
left
for
people
to
walk
past..
But
if
that
business
is
viable,
it'll
be
there
all
day
and
it'll
be
active.
If
that
business
is
not
viable.
D
When
you
fold
it
down,
it's
arguably
more
attractive
than
the
side
of
the
garage,
so
it
we
always
ask.
What
are
you
really
after??
Are
you
after
the
retail
tax
revenue??
Are
you,
after
the
use,
that's
in
a
traditional
space,
or
are
you
after
this
the
active
portion
of
the
streets
and
and
depending
on
what
the
real
goal
is,?
There
are
different
ways
to
accomplish
it
and
that
quasi
retail
space
or
that
flexible
retail
space,
especially
today
with
technology
and
what
pop
ups
can
do
and
how
quickly
businesses
can
move.
Around.
A
A
E
E
More
is
proposed
privately
owned
public
open
space
that
does
activate
during
the
day,
but
does
it
we'll
close
at
night
but
most
probably
depending
on
the
requirements.,
but
it
does
provide
an
urban
oasis
for
people
that
I
think
is
really
important.
and
I
think
in
your
downtown,
you
know,,
maybe
could
use
some
more
of
those.
Those
really
great
you
know,
public
spaces
that.
E
C
A
K
A
L
Council,,
thank
you
very
much.
nancy
klein,
office
of
economic
development,
cultural
affairs.-
just
a
big
thank
you
from
us
to
to
the
panel
very
experienced,
very
knowledgeable
and
very
excited
that
a
lot
of
the
conversations
that
the
panel
is
speaking
about,
whether
it
be
p2p
or
driving
that
process.
L
L
L
M
Just
to
start
with
some
background,
um,
in
april
of
twenty
eighteen,
the
city
council
held
a
study.
Session,
received
the
first
gosta
development
report.
the
first
report
came
as
staff
was
developing.
The
housing
crisis
work
plan
that
would
later
be
approved
in
june
of
twenty
eighteen
and
the
housing
crisis.
M
Work
plan
included
an
ongoing
work
item
to
update
the
cost
of
residential
development
on
a
regular
basis..
The
results
of
the
first
report
suggested
new
residential
development
was
challenged
in
most
areas
of
the
city.
however,.
New
residential
development
in
west
san
jose
was
found
to
be
feasible
and
development
in
downtown
in
north
san
jose
yielded
positive
returns.,
but
those
returns
were
marginal
and
potentially
insufficient
to
attract
investment
in
twenty
nineteen.
M
An
updated
report
was
presented
to
the
city
council.-
this
report
found
similar
results
as
to
the
previous
suggesting
that
development
remained
feasible
with
west
san
jose
and
development
in
downtown
in
north
san
jose
remained
marginal.
the
most
significant
barrier
at
that
time
identified
was
the
cost
of
construction..
M
For
the
first
time,
the
report
looked
at
the
average
cost
of
construction
for
affordable
units
in
san
jose
compared
to
other
cities.
Utilizing
data
submitted
to
the
state
by
projects
receiving
tax
credit
financing
entering
twenty
twenty
staff
intended
to
update
the
report.
In
conjunction
with
its
continued
work
on
the
housing
crisis,
work
plan.
however,
the
work
was.
M
M
M
M
M
Case
in
the
previous
iterations.,
the
report
is
based
on
conceptual
prototypes..
These
are
not
actual
developments
but
reflect
typical
characteristics
of
recent
multifamily
development
in
the
city..
The
data
and
assumptions
for
specific
projects
are
not
available
to
a
city.
developers
generally
treat
this
information
as
proprietary
and
do
not
share
with
the
city
or
with
the
public..
The
report
looks
at
market
rate,
rental
for
sale
for
sale,
multifamily
in
three
different
prototypes,
a
five
storey
low
rise,
building,,
a
seven
storey
mid
rise
building
and
a
twenty
two
storey
high
rise..
M
M
M
This
includes
hard
costs,
which
is
the
materials
and
labor
to
construct
soft
costs,
which
include
taxes,
fees
and
design
costs.,
then,
a
return
on
investment,
a
positive
residual
value
indicates
the
amount
of
development
could
pay
for
land
and
still
be
considered
feasible..
A
residual
value
that
is
zero
or
negative
indicates
a
development
that
is
infeasible
as
there
is
no
remaining
value
to
purchase
land..
Fortunately,.
M
M
These
values
mean
that
no
prototype
is
shown
to
be
feasible.
um,.
The
negative
values
indicate
that,
even
if
land
were
available
at
no
cost,
the
development
would
still
not
be
feasible..
The
results
show
an
extremely
challenging
market
in
the
current
conditions
for
multifamily
housing
in
san
say.
The
report's
findings
are
validated
through
the
recent
experience
of
the
city
shown
in
our
building
permit
data..
This
chart
shows
recent
multifamily
development
with
over
fifty
units.
Since
twenty
twenty.
M
M
Cost
of
construction
remains
a
significant
barrier..
This
chart
shows
the
cost
per
unit
for
the
mid
rise
prototype
in
west
san
jose
in
twenty
eighteen
and
twenty
nineteen..
The
results
suggested
that
this
this
prototype
was
feasible..
However,
the
significant
increases
in
cost
have
made
it
infeasible.
Today
an
index
provided
to
the
city
by
our
consultant.
The
tracks
construction
costs
in
the
bay
area
has
shown
a
seventeen
percent
increase
since
the
start
of
the
pandemic,
through
the
second
quarter
of
twenty
twenty
two.
M
M
M
Largest
component
of
the
city
added
cost
to
development,
our
impact
fees
and
construction
taxes
based
on
the
cost
of
the
prototypes.
In
the
analysis,
these
costs
represent
five
and
a
half
to
ten
percent
of
the
total
cost
per
unit..
These
numbers
are
marginal
compared
to
the
overall
cost
of
the
unit,
but
they
still
add
costs
and
contribute
to
in
feasibility
reduction
of
these
taxes
and
fees
to
zero
dollars
in
the
current
environment.
We're
not
fundamentally
change
the
outcome
of
the
analysis.
M
K
K
Completed
by
century,
urban
is
the
affordable
housing
development
cost
study
as
the
cost
of
construction
rises
for
all
residential
development,.
Affordable
housing
is
impacted
along
the
way.
actual
costs
for
affordable
housing
development
are
all
are
available
due
to
public
documents
posted
by
the
state
for
any
tax
credit
awards..
So
in
this
case
our
consultant
pulled
actual
information
from
15
san
jose
developments
representing
over
seventeen
hundred
units
and
compared
this
to
twenty
seven
affordable
developments
throughout
the
state
of
california..
K
K
K
This
is
due
to
the
need
for
services
space
and
then
within
the
development,
and
also
larger
units..
The
prior
study,
completed
by
kaiser
marsden
twenty
eighteen
reported,
the
average
cost
for
special
needs
units
was
five
hundred
twenty
three
thousand.,
but
in
that
time
period
the
majority
of
units
evaluated
were
studios'.
K
K
K
Trends
that
continue
to
provide
pressure
on
the
cost
for
affordable
housing.
Development.-
first,:
the
construction
costs
have
increased
each
year
by
six
percent.
second,.
The
recent
increase
in
inflation
rates
have
significantly
impacted,
affordable
housing
development
costs,
as
described
by
nevada
in
the
prior
presentation,
many
affordable
housing
developments
have
five
and
six
funding
sources
and
can
take
two
to
three
years
just
to
secure
all
the
funds.
and
this
in
itself.
K
K
K
K
K
K
K
Talked
about
today,
it
is
just
clear:
we
need
to
seriously
consider
strategies
to
reduce
cost.
it
will.
It
will
take
multiple
actions
all
at
the
same
time,
in
order
to
achieve
this
goal,
and
we
want
to
engage
this
challenge
and
work
with
you
together
to
find
ways
to
manage
this
problem.
and
now
I'd
like
to
turn
it
back
to
jared.
As.
M
Rachel
mentioned
at
the
november
15
city
council
meeting,.
There
will
be
several
policy
items
related
to
this
report..
This
includes
our
update
on
the
housing
crisis,
work
plan
and
also
recommendations
on
the
future
of
the
city's
downtown
high
rise
residential
program..
There
are
also
other
future
policy
actions
planned
in
twenty
twenty
three,
including
consideration
of
a
construction
tax
reduction
for
affordable
housing,
as
was
discussed
with
the
council
earlier
in
twenty
twenty
two..
M
additionally,.
The
development
fee
framework
is
intended
to
better
align
our
most
significant
impact
fees
and
taxes
to
allow
for
easier
calculation.
administration
staff
plans
to
bring
forward
a
council
policy
and
other
changes
to
memorialize
the
components
of
the
development
fee
framework
in
fall
of
twenty
twenty
three.
overall,.
The
report
shows
that
new
housing
construction,
especially
in
the
near
term,
is
significantly
challenged
due
to
factors
outside
the
city's
control.
In
the
longer
term,
staff
has
included
two
significant
strategies
in
the
proposed,
updated
housing
element
to
help
speed
up
the
approval
of
new
housing..
M
M
The
other
strategy
is
to
conduct
program
level,
sequoyah
analysis
for
approved
urban
village
plans..
This
would
help
shorten
the
approval
process
by
reducing
the
amount
of
environmental
analysis
required
for
individual
projects..
This
approach
has
been
a
successful
component
of
the
city's
downtown
strategy.,
so.
M
A
O
O
O
O
Tool
by
developers
to
try
to
normalize
giving
them
tax
breaks.,
we
ought
to
give
you
some
room
and
then
we
give
you
four
million..
Oh,
I
don't
want
to
give
tax
breaks..
I
did
hear
an
argument,
though,
about
repealing
a
property
that
I
did
hear..
I
heard
that
loud
and
clear.
ok,.
The
developers
are
the
problem.
why?,
because
developing
is
what
created
san
jose.
manifest
destiny
was
about
land,
takeovers
and
company
and
exploiting
this
land..
This
land
has
not
been
healed
from
that
start,
point.
O
P
P
That's
been
presented
today
represents
kind
of
a
disaster
for
san
jose
if
new
housing
is
not
feasible
anywhere
in
the
city,,
that's
a
huge
crisis
and
I
think
it
needs
a
commensurate
policy
response.,
a
couple
of
things
on
notice
that
are
interesting..
I
have
questions
about.
One
really
glad
that
the
city
is
looking
at
streamlining
the
approval
process
and
using
ministerial
approval
as
a
way
to
address
this
issue..
I
do.
P
P
About
moderate
density
development
in
the
city.,
so
there
was
a
report
that
the
city
commissioned
a
year
or
two
ago
that
indicated
from
off
the
coast,
indicated
that
six
to
eight
alexi's
are
financially
feasible
in
most
of
san
jose
and
would
potentially
produce
housing
affordable
to
middle
income
households..
So
I'm
curious.
If
staff
and
the
consultants
think
that
report
is
still
accurate
and
if
so,
does
that
indicate
a
possible
policy
response
to
help
enable
housing
in
more
of
san
jose?
and
then
I
think
a
I.
P
Higher
costs
we
saw
here
were
about
bay
area,
specific
factors
in
the
affordable
housing
report,
given
the
fact
that
most
of
the
comparison
cities
were
also
in
the
bay
area..
Generally,
though,
I
think
this
is
a
huge
problem..
We
need
a
policy
response,
not
just
looking
at
these,
but
at
zoning
permitting
the
building
code.
Q
Q
complex
solutions
are
needed,
including
using
new
legislation
and
the
pro
housing
designation
elements
that
bring
federal
and
state
dollars..
Yesterday
turner
released
their
new
dashboard
models,
showing
the
significantly
greater
impact
of
strategies
other
than
fico,
and
they
modeled
synergistic
effects.
however,.
The
council
must
focus
staff
on
completing
the
housing
element
as
its
greatest
priority,
so
that
state
and
federal
financing
does
not
in
and
the
fewest
number
of
builders
remedy
projects
are
submitted..
The
city
must
look
at
downtown
beyond
fee
cuts.,
gensler's
reshat,
so
that.
Q
The
city
must
provide
the
staffing
needed
to
help
public
life,
businesses
rebuild
and
fully
fund
the
brief
and
figuration
of
the
downtown
public,
plazas
and
parks
that
are
needed
to
attract
the
knowledge
workers
to
retain
and
stay
and
pay
full
market
rate
that
attracts
equity,
investors.
importantly,
park
fees
have
not
increased
since
twenty
seventeen
and
inflation
impacts
have
reduced
their
value
by
more
than
thirty
five
percent.
A
silent
discount.
Q
R
Service
technicians
and
our
families
today,
I'm
here
to
impress
the
importance
of
skilled
and
trade
labor
labor
being
part
of
this
conversation
and
our
future
in
san
jose
in
twenty
eighteen
working
partnerships
produced
the
study
that
documented
the
cost
to
our
community
due
to
the
low
road
development
model
that
dominates
private
private
development,
particularly
in
residential
construction..
It
should
outrage
every
member
of
this
council
that
little
has
changed
since
then..
R
The
report
told
you
that
over
half
fifty
four
percent,
specifically
of
blue
collar
construction
workers
employed
in
the
santa
clara
county,
earn
less
than
forty
thousand
per
year
with
few
or
no
benefits..
Nonunion
contractors
also
are
the
key
players
when
it
comes
to
wage
theft,,
misclassification
and
unsafe
work
conditions.
more
importantly,.
It
depletes
the
economic
development
during
and
after
the
project.
workers
who
are
brought
in
from
outside
will
not
buy
local,
do
not
reside
local
and
all
the
while
push
out
our
local
skilled
and
trained
workers..
R
The
report
also
noted
that
latino
and
african-american
construction
workers
are
paid
thirty,
eight
percent
less
than
white
workers
on
average.,
therefore,
to
ensure
our
future
is
being
built
in
a
responsible
manner
that
pay
fair
wages
with
fair
conditions,.
I
ask
that
your
staff
provide
alternatives
to
fee
waivers
that
include
employing
our
local,
skilled
and
trained
workforce..
Thank
you
very
much
for
your
time
and
consideration
louise.
our.
N
Mayor.,
council
members,
we
are
working
partnerships
and
my
comments
today
will
focus
on
the
consultant's
study
that
was
commissioned
and
on
the
downtown
high
rise
subsidy.
This
plan
to
come
back
in
two
weeks
so
that
subsidy
for
downtown
high
rise
developers
was
first
pitched
as
a
temporary
stimulus
to
help
jumpstart
downtown
development
during
the
great
recession.
that
was
around
two
thousand
and
nine.
Since
then,
it's
been
extended
over
and
over
and
over
for
thirteen
years,
and
every
time
it's
been
promised.
This
is
just
temporary..
N
This
is
because
of
market
conditions,
and
every
time
it's
promised
we'll
find
another
way
to
make
up
for
the
affordable
housing
and
so
far,
every
time
that
promise
has
been
broken
at
this
point
well,
over
one
hundred
million
in
subsidies
has
been
granted
through
this
program.,
maybe
much
more..
I've
never
seen
the
city
provide
a
cumulative
total,
but
we
keep
trying
the
same
approach
over
and
over
again,,
putting
more
and
more
into
these
subsidies,
and
it's
not
working.
It's
not
working
to
produce
housing,
that's
affordable
for
our
neighborhoods.,
we're
woefully
behind
our
affordable
housing.
N
Goals..
It's
not
working
to
produce
good
jobs..
Four
years
after
council
voted
in
twenty
eighteen
to
attach
workforce
standards
to
subsidies,
nothing's
been
done.
and
from
the
consulting
report
we
just
saw
every
type
of
development,
including
those
subsidized
high
rises
as
now
feasible..
So
it
doesn't
look
like
it's
working
to
spur
development
either..
So
if
we've
been
doing
this
over
and
over
again
for
13
years-
and
this
is
where
it's
gotten,-
isn't
it
time
to
step
back
and
try
something
new?,
but
this
consultant
study.
N
S
Am
a
goondas
course:
I
am
with
you
a
local
three,
nine
three
representing
thousands
of
seattle's
plumbers,,
pipefitters,,
steamfitters
and
acr
technicians
and
their
families.
today,
I'm
here
to
impress
the
importance
of
skilled
and
trained
labor
part
of
this
conversation
and
our
future
here
in
san
jose..
The
report
in
front
of
you
today
accepts
racial
disparities.
By
accepting,
as
a
matter
of
fact,
the
developers
will
build
into
their
performance
a
building
process
that
results
in
the
use
of
low
road
contractors
that
that
in
our
area,
have
already
been
proven
to
exploit
out
of
town
workers..
S
Let's
be
clear:
residential
investors
seeking
a
15
to
20
percent
return.
Exploiting
san
jose's
construction
workforce
has
become
an
acceptable
method
for
them
to
compete
for
that
capital..
This
is
a
matter
of
choice
for
the
developers,
not
because
the
cost
of
construction
here
demands
it..
It's
simply
a
choice
to
put
profit
over
people.
That's
profit
over
our
local
workforce,
profit
over
safety,
profit
over
a
community's
future
to
allow
for
reduced.
S
S
Staff
should
supply
alternative
strategies
to
encouraging
the
rapid
construction
of
residential
projects.
they're
out
there..
Additionally,
we
believe
reduction,
we
believe,
reductions
of
fees
and
taxes
to
trigger
a
prevailing
wage
requirement..
You
should
have
your
legal
counsel,
make
a
determination
on
this
concern..
Thank
you
very
much,.
T
T
T
Is
under
producing
housing
even
before
the
pandemic.,
let
me
give
you
some
numbers..
You
could
write
them
down
in
twenty
eighteen,
the
city
issued
building
permits
for
two
and
nine
hundred
and
seventy
three
units
in
twenty
nineteen,
the
city
issued
building
permits
for
two
thousand
six
hundred
and
sixty
three
units.
put
that
in
context.
Your
stated
city.
T
U
As
we
look
to
propose
solutions
to
address
obstacles
to
construction,,
there
must
also
be
a
form
of
accountability
in
place
since
houses
continuing
to
meet
their
housing
goals
of
all
income
levels
and
balance,
production
of
housing
at
the
sake,
deeper
levels
of
affordability
will
only
result
in
further
income
inequality
and
further
heighten
the
risk
of
displacement
that
is
taking
place
throughout
the
city.
in
addition,.
The
ulli
presentation
made
mention
of
modifying
forms
of
tenant
protections
for
the
sake
of
new
development..
U
At
this
juncture,
any
modifications
to
existing
existing
tenant
protections
should
be
structured
in
a
way
that
would
further
support
tenants,
not
add
to
the
extreme
vulnerability
renters
have
faced
over
the
past
couple
of
years.
Through
this
comprehensive
study
and
presentation,
there
may
be
more
questions
than
answers
as
to
how
we
both
address
hurdles
towards
production
and
ensure
that
we
are
doing
so
in
an
equitable
manner
and
equitable
manner.
Excuse
me
for
the
betterment
of
all
residents
housing..
V
Yes,,
thank
you
very
much..
First
of
all,
as
painful
he
said,
this
was
a
master
class
and
I
want
to
thank
roselyn,
huie
and
nancy
klein
of
the
team
for
really
doing
a
great
job
in
a
comprehensive
time..
A
couple
of
things
that
I
just
want
to
have
to
take
into
consideration.
The
recent
experience
in
florida,
hurricane
in
we
saw
devastation.
V
Of
a
number
of
homes
here
in
california,
not
far
from
us.,
we've
lost
during
the
period
of
time
that
eric
shaynak
was
referring
to
where
we
barely
met
the
two
thousand
house
per
year
that
wasn't
even
the
target.,
we
barely
were
able
to
create
two
thousand
homes
per
year..
We
lost
over
thirty
thousand
homes
in
the
north
bay
due
to
wildland
fire..
These
are
these
are
types
of
problems
that
we're
going
to
face
in
the
future,
from
flooding,
from
fire,,
earthquake
and
other
events..
V
A
W
W
W
W
W
W
W
W
M
The
decisions
we
were
mentioning
were
really
longer
term.
The
downtown
high
rise
program
pieces,
obviously
the
more
near
term,
but
it
is
a
little
bit
urgent
right
now,
because
the
program
the
projects
have
to
complete
construction
by
june
of
twenty
twenty
five,
and
so
really
the
window
has
really
closed,
or
that
they
really
need
to
start
now
or
very
soon,
to
kind
of
meet
that
timeline..
M
W
L
W
W
M
Yeah.,
so
part
of
the
thinking
in
this
goes
back
to
kind
of
the
panel
discussion
about
certainty.
You
know
and
the
near
term
versus
the
long
term,
and
so
just
you
know
so
in
the
near
term,
providing
that
certainty
to
those
developments
that
might
move
forward
and
then,
in
the
long
term
signaling
to
the
market
where
we
might
be
headed
in
terms
of
their
requirements,
moving
forward.
and
so
messaging
that
now
and
having
that
in
place
is
important..
M
W
W
Decisions
that
we're
making.,
I
understand
that
we're
hoping
to
think
conditions
are
going
to
improve.
we're
hoping
that
people
will
do
what
vice
mayor
jones
suggests,
which
is
not
overreact
at
the
current
time
and
understand
that,
if
there's
long
term
profitability
to
building
that,
that
should
take
some
point
exist
again
and
that
people
aren't
going
to
completely
shut
down
their
work..
But
I
I
just
I
guess,
I'm
after
the
presentation
we
heard
here,
I'm
a
little
uncomfortable.
Given
we
heard.
W
L
Wanted
to
pop
in.,
I
from
staff's
point
of
view,
obviously
we're
we're
at
jennifer's
and
the
council's
pleasure
right.
Now.
there
may
be
a
few
projects
were
a
limited
number
of
projects
that
would
go
and
if
we
in
effect
make
it
yet
more
costly,,
they
really
won't
be
able
to
go..
So
to
your
point
about
with.
L
Everything
going
on,:
why
do
it
now??
Because,
in
conversations
that
we
have
with
key
developers,,
they
are
going
to
try
to
go
and
drew
mentioned
that
there
are
outliers.
That
may
want
to
take
a
big
action
in
order
to
impact
the
market
overall.
So
that
is
what
we're
hoping
to
to
make
feasible
because
they
are
on.
W
W
D
D
Can
typically
be
built
in
five
stories
and
are
associated
with
one
level
of
cost.
once
you
get
higher
than
that
you're
into
type
three
wood
construction,
which
has
a
greater
cost
per
square
foot.
But
you
can
get
greater
density,
so
there's
a
trade
off
there
and
we
did
a
project
in
downtown.
We
call
the
peerce,
which
appears
to
be
eight
storeys,
but
it's
you
know,,
two
of
concrete,,
five
of
wood
and.
D
The
very,
very
top
level
have
loft
mezzanine
spaces,
so
there's
not
an
elevator
stop
at
that
highest
level.,
that's
the
extreme
that
you
can
do
with
wood
construction..
So
seven
storeys
nominally
eight.
If
you
do
that
mezzanine
and
then
everything
above
that
would
be
type
one
which
is
yet
more
expensive
and
you
have
to
get
much
taller
and
eight
storeys,
typically
to
start
to
make
type.
One.
yeah,
and
I
understand
that..
I
guess
I'm.
W
Also
thinking
about
within
the
type
one,
what's
the
sensitivity
analysis?
I
mean
if
it
were
24,
25,
20,
you
know.
In
other
words,
I
know
we
have
height
limitations
in
certain
parts
of
our
city..
Obviously
we're
dealing
with
that..
We
we
have
places
where
we
don't
maybe
don't
have
the
same
height
limitations
and,
of
course,
I'm
always
interested
in
north
san
jose.
But
what
can
we
get.
W
C
C
M
M
W
Obviously
it
gets
more
expensive.
The
more
you
build,
but
it
also
denser
the
more
payoff
they
get.,
so
presumably
there's
a
curve
of
height
to
cost
to
pay
back,
not
necessarily
cost
cost
will
go
up
but
height
to
the
residual
or
whatever
the
you
know.
Measure
we
want
to
use.
Is
I
just
so
I'm
sorry.
I.
G
Just
to
follow
up
on
jake's
comment.
yeah.,
there
is
a
point
where
the
costs
do
start
flattening
out
in
terms
of
the
height.
We
would
have
to
run
from
analysis
to
determine
where
that
is
so
that,
with
additional
residential,
you
do
start
seeing
an
increase
in
value
or
negative
residual
value,
because
your
costs
are
starting
to
flatten
out.,
but
we'd
have
to
run
from
analysis
to
determine
at
what
height
that
would
occur.
thank
you.
W
W
About
saying,
well,
we're
going
to
do
this.
we're
going
to
we're
going
to
push
through
some
some
or
extend
what
we
have
going
on
in
downtown
to
make
down
some
downtown
projects
feasible
without
thinking
about
what
how
we're
going
to
make
sure
that
the
projects
that
we
have
in
the
pipeline
in
other
parts
of
the
city
are
going
to
happen
as
well..
I
just
want
to
throw
that
out.
There.
I'm
not
sure
we
have
an
answer
at
this
moment,
but
you
know,
we've
approved
some
projects
in
other
parts
of
the
city..
W
W
I
know
parking
is
one.
I
really
look
you
know,.
I
look
forward
to
that
conversation
but,
as
I
said,
I
just
I
guess
it's
back
to
when
I
saw
the
presentation
my
my
take
away
was
this
is
very
complicated
and
we
have
a
lot
of
levers
and
we
should
really
understand
what
levers
are
going
can
have
the
most
impact.,
and
I
also
want
us
to
be
consider.
W
W
A
A
So
if
that's
the
big
lever
we
pulled
it.,
there
are
others
we're
still
working
on,
and
I
know
it's
jerry
described.
We've
got
a
process,
improvement
coming
that
will
hopefully
expedite
approvals.
If
the
council
is
willing
to
do
so.-
and
I
think,
there's
going
to
probably
be
some
community
pushback
on
some
of
out
around
making
these
decisions
ministerial
for
example.,
it's
going
to
take
some
courage
to
push
forward.,
but
I
really
think
this
conversation
needs
to
be
an
end
and
not
order..
A
We've
got
to
do
all
these
things
because
it's
not
even
a
close
question
for
most
of
these
projects
as
to
whether
or
not
they're
feasible..
We
know
that
what
we're
looking
at
is
a
median
or
mean
picture,
but
we
know
the
only
thing
that
is
going
forward
are
the
ones
that
are
really
the
extreme
situations..
Maybe
they
have
a
very
unique
source
of
funding
like
a
pension
fund
or
maybe
a
sovereign
fund
with
very
patient
money..
Maybe
they
don't
pay
taxes
like
if
it's
a.
A
A
I
think
it's
probably
going
to
be
a
long
time
before
we
see
another..
It's
already
been
since
twenty
seventeen,
since
we've
seen
a
ground
breaking
in
downtown..
So
that's
half
a
decade
in
the
middle
of
what
was
perhaps
the
greatest
economic
boon.
This
valley
has
ever
seen
in
the
heart
of
this
valley.
We've
seen
zero
high
rises
break
ground
and
a
half
decade,
while
other
cities,
seattle,
l.a.,
all
throughout
the
country,
have
seen
many
dozens..
I
think
we
counted
sixty
cranes
in
the
air
in
seattle
at
one
time.
A
A
A
Building
trades,
who
advocate
strongly
is,
as
they
often
do,
and
they
yes,
they
should
absolutely
be
at
the
table
in
these
conversations..
But
the
suggestion
was,
for
example,
that
you
know,,
if
we're
going
to
reduce
costs,
and
we
ought
to
have
things
like
local
hire..
So
let
me
ask
drew,
you
develop
both
affordable
and
market
rate
housing..
I
know
you
use
labor
and
nonunion.
I'm
sorry,
union
nonunion
labor.
tell
us
what
local
hires
are
going
to
do
to
cost.
yeah,
yeah.
D
D
D
D
Building
a
one
hundred
percent
union
project
and
we're
very
proud
to
do
it.
we're
building
it
with
pension
fund
money
from
the
unions.
But
that's
not
what
drove
that
decision,
and
and
in
the
final
council
hearing
when
the
land
price
was
being
determined.
There
was
an
open
transparency.
That
said,
we
could
pay
much
more
for
the
land
with
an
open
shop
construction
or
we
can
pay
less
for
the
land
with
union
construction
and
the
carpenters
union
and
the
msp
unions
were
in
the
room
with
us..
They
were
supporting
us
and
they
spoke
for
our
project..
D
But
right
before
the
vote,
the
mayor
of
that
town
made
a
very
clear
point
to
say
to
the
union
representatives.
We
are
making
a
policy
decision
to
support
you
and
we
are
taking
less
money
for
the
land
so
that
you
can
make
the
wages
that
you're
making
that
you
can
support
the
causes.
You
support.
right.
and
it's
a
choice
and
like
every
policy
choice,
we've
talked
about
today,.
There
are
costs
and
benefits,
and
that's
a
good
thing
for
a
city
to
do.
A
A
D
C
C
A
And
I've
heard
similar
comments
from
others
who
are
required
to
use
prevailing
wage,
that
there
is
a
difference,
whether
they're
constrained
in
that
way,
or
not,
that,
even
if
everybody
is
getting
paid
prevailing
wage,
the
issue
isn't
what
the
laborers
are
getting
paid
or
the
carpenters.
It's
it's,
this
diminished
pool
of
subcontractors
and
what
kind
of
rates
they're
getting
now.
F
F
F
A
W
Want
to
come,
back.
yeah,
just
follow
up..
I
remember
the
question
I
was
going
to
ask,
but
also
something
else
was
triggered
by
the
mayor's
comment
about
seattle
versus
san
jose..
So
let
me
just
understand,
I
mean
there's
obviously
differences
and
are
all
the
differences
now
between
building
in
places
like
seattle
versus
san
jose
construction,
costs,,
land,
costs,,
those
the
two
big
differences,
so
sequel,
equal,
ok,
equal.
W
Costs.,
so
we
ought
to
do
some
advocacy
to
try
to
fix
that
problem
as
well.
I
mean,
there's
other
solutions,
this
obviously
not
immediate,
but
there
are
solutions
to
this..
So
the
question
I
was
going
to
ask
was
we
were
talking
about.
I
know
this
goes
against
that
whole
comment
about
uncertainty,
a
little
bit
but
you're
talking
about
developed
projects.
W
That
may
happen
if
we
were
to
give
some
some
of
this
cost
reduction
in
some
way,
you
know,,
given
this
menu
of
things
we
can
do,.
I
wonder
whether
it
makes
sense
to
work
with
developers
to
say
what
are
the
things
on
this
menu
of
things
that
will
make
this
project
affordable
for
you
and
work
on
a
case
by
case
basis
during
this
particularly
challenging
time,
as
opposed
to
creating
long
you
know,
any
kind
of
blanket
policy
that
we
have
to
then
make
projects
fit
under
it..
W
L
M
I
just
wanted
to
add
to
the
importance
of
having
this
report
regularly
kind
of
gives
you
the
check
and
ability
to
know
what
the
conditions
are
to
kind
of
make
those
decisions
regularly.
right.,
so
that
you're
not
necessarily
always
making
these
long
term
things,,
not
having
kind
of
a
third
party
check
on
what
the
realities
are
right..
Maybe
I.
F
Could
just
add
one
point
there
that
I
think
in
the
affordable
of
ecosystems
that
that's
very
common
that
you
see,
a
deal
by
deal
basis,
a
lot
of
this
public
sector
flexibility
when
I
have
a
chance
to
kind
of
engage
with
other
cities
about
white
codify
some
of
this.
It
just
speaks
to
staff
time
and
that
many
of
on
the
affordable
side,
these
innovations
that
we've
come
up
with,.
It
would
just
help
other
projects
move
more
quickly,
so
that
you
don't
end
up
having
to
have
really
complicated
development
agreements..