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Changing The Housing Mindset.

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Why San Jose’s Housing/Job Imbalance Will Be Difficult To Fix.

With the prospect of Google building a massive campus near Downtown San Jose and more viable public transit options, the city is on the cusp of a revitalization. But two main components will be important for its future: jobs and housing. The city needs ongoing job strength to attract residents and keep developers and investors coming, Steinberg Architects President and CEO David Hart said during Bisnow’s Silicon Valley Hot Projects event Thursday. With the prospect of more jobs coming with Adobe and Google expanding, housing is greatly needed. “Job strength is fueling housing here,” Hart said. Upgrades to public transit, including the future electrification of Caltrain and BART’s extension into San Jose, will create better access to the city’s core, he said. Gridlock on local freeways also is pushing people to consider Downtown San Jose as a viable destination to live and work.

“[Transit improvements] put San Jose in a key position to live here and get to jobs or live elsewhere and get to the jobs that are here,” Hart said. “Developers are looking at San Jose … because they see … that all the elements are coming together for this to be a good place for investments.” Steinberg Architects is working on several housing projects throughout the city, including a 600-unit project across from city hall, the Museum Place mixed-use project and a project near San Pedro Square. Hart said the South of First area will be the next building boom in San Jose. It recently completed an apartment complex, The Pierce, in this district, and his firm just started on another condo project in that area. San Jose has been behind with building housing. Over 20 years ago, the city decided to keep land for corporate headquarters instead of building more housing, Polaris Pacific partner Paul Zeger said. Without housing, there has not been enough critical mass to support the vitality of restaurants, retail and civic life.

San Jose has been trying to reconcile the need for more housing through the creation of mixed-use communities, or urban villages, which create a mix of housing and office development. The current priority has been to build housing first and then office later. “We’re getting much more involved in office space, not just because it’s a viable business opportunity, but because it’s an integral part of making Downtown San Jose the hub … that it can become,” Hart said. Republic Urban Properties President and CEO – West Coast Michael Van Every said so far these villages are unbuildable. Not all of these villages are in locations that can support major employers, such as areas of Winchester, he said. “You better believe in jobs in San Jose because in order to have the housing, you must have the jobs first,” he said. The general plan needs to be fixed to allow for housing to come in when the market is ready, he said. Part of the ongoing problem is San Jose is hoping that surrounding cities, such as Santa Clara, Gilroy and Morgan Hill, will build more housing, but those cities also have been slow to do so, he said.

“Housing just doesn’t happen in these smaller communities,” Stanford University Managing Director Steve Elliot said. Menlo Park, for example, brought in Facebook, but housing is fought tooth and nail, Elliot said. Menlo Park created a plan that promoted more housing, but developers like Stanford University still have to battle and convince local neighbors that housing is right for the community. Housing is integral in bringing jobs into areas and recruiting employees. “Stanford competes not against Silicon Valley companies, but universities in markets that a professor making a professor’s salary can afford a very nice house, and that’s not the case here,” Elliot said. “We have a real competitive disadvantage that we need to address.”

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