State approves San Jose's plan to bring 62,200 housing units to city by 2031

San Jose officials are breathing a sigh of relief after state housing officials approved the city’s housing blueprint for the next eight years.

The California Department of Housing and Community Development notified the city Monday that the housing element the city adopted last June was in “substantial compliance,” which effectively shuts off any "builder’s remedy" projects submitted in the future.

"We’re glad to receive HCD’s stamp of approval on the Housing Element our Council adopted last June, confirming that we are in substantial compliance with state law," San José Mayor Matt Mahan said in a news release. "Our community is in desperate need of housing at all affordability levels — we need to grow smart, fast, and near transit."

San Jose, like every other city in Santa Clara County, missed the initial deadline of Jan. 31, 2023 to have its housing plans approved for 2023-2031. Since then, eight other local governments have received some form of approval before San Jose became the ninth.

Other cities in the county that have received approval are Campbell, Gilroy, Los Altos, Los Altos Hills, Milpitas, Morgan Hill, Mountain View and Sunnyvale.

For the current eight-year housing cycle, San Jose is required to add 62,200 housing units. The current housing period added new requirements from the state including providing a more equitable distribution of new residences.

San Jose’s plan also required the city to take more than 130 policy actions to meet the state’s approval, Planning Director Chris Burton said.

One big reason why the state's approval is a big deal is that San Jose received the most builder’s remedy project pre-applications in Santa Clara County.

Builder's remedy applications prevent local governments that don't have an approved housing plan from denying development projects that are out of line with local planning and zoning guidelines. The caveat is that these projects have to be primarily residential and contain at least 20% affordable housing.

Before San Jose’s approval, the city had received 29 pre-applications and 14 formal applications under the builder's remedy provision.

The preapplication step locks in development standards at the time it was submitted but a formal application must be submitted within 180 days.

Projects that were submitted prior to the date of substantial compliance would still be allowed to move forward.

The builder’s remedy also has been used to rescale projects that had already received planning approval.

For example, the Berryessa Flea Market site was initially approved for 3,450 homes before its owners reduced the plans on the 61.5-acre site. The new proposal is to build 940 units and remove millions of square feet of office space that were initially planned.

Representatives of the owners, The Bumb Family, said it was necessary to make the project feasible given the lack of demand for office space.