Heidi De La Cruz Velazquez is a working 23-year-old who’s never had her own bedroom. On Wednesday, she and other struggling San Jose tenants rallied on the site of a proposed 1.1 million-square-foot tech campus to ask large developers to pay for affordable housing.
“We’re charging you. You owe us,” said De La Cruz Velazquez, whose family of six working adults lives in a two-bedroom apartment. “If you want to come here, you’re going to have to find a way to make sure I can stay.”
With more than a million Californians out of a job since the pandemic hit, Silicon Valley’s decade-long housing crisis is under added pressure as many tenants are shielded from eviction thanks only to local eviction bans. To help increase affordable housing, the City of San Jose is proposing a $10 per-square-foot fee on new commercial space being built downtown, and a $5 fee elsewhere. The money, which the city said would generate roughly $14 million over the next three years, would be used to build and fund affordable housing projects. The city is expected to vote on Sept. 1.
The rally and car caravan in support of the proposed fee was organized by Silicon Valley Rising, a campaign backed by labor groups including Working Partnerships USA, where De La Cruz Velazquez works for the covid assistance hotline. Organizers and tenants, who say they wish the fee was higher, went on to deliver over-sized invoices to proposed development sites around the city, billing Boston Properties, the developer behind the proposed tech campus in downtown San Jose, $618,651,629 while Apple’s invoice was for more than $1 million. That’s the cost, organizers say, necessary to create substantial affordable housing in San Jose.
Opposing the measure are real estate developers, who argue the fee would increase the cost of construction and scare off potential new developers whose projects could bring jobs. “It’s not the right time to be taxing job creation,” said Eddie Truong, director of government and community relations for the Silicon Valley Organization, which acts as the region’s chamber of commerce.
Right now, San Jose charges such a fee on residential buildings, not commercial ones. A study released by the city and prepared by Keyser Marston Associates found that the industry could sustain as much as a $30 per-square-foot fee. But the numbers date back to before the pandemic, the report acknowledges, and companies have lost a lot of that leeway since, according to Truong, who said only a select few developers will be able to pay the fee, leaving medium-size contractors out.
“We already always lose up to Mountain View and Palo Alto attracting all the paying jobs,” Truong said. “This fee would just incentivize that.”
This article is part of The California Divide, a collaboration among newsrooms examining income inequity and economic survival in California.