San Jose Metro Outpaced San Francisco on Apartment Permits This Year

Federal building-permit numbers through June put the San Jose metro area well ahead of the San Francisco metro on new apartment units, even though the San Francisco region holds more than twice the population. A Business Journals review of Census data found builders here secured a 350 percent jump in apartment units approved in the first half of 2026 versus the same stretch of 2025, a gain of more than 2,000 units. Compared with the first half of 2021, the San Jose area roughly doubled its apartment tally. Single-family permits locally stayed nearly flat.

The San Francisco metro, which includes Oakland, Berkeley, Hayward and parts of the North Bay, moved in the opposite direction on apartments. Through June those jurisdictions posted a 13.8 percent drop in apartment permits from the first half of 2025 and a 48 percent drop from 2021, equal to 2,135 fewer apartment units than five years earlier. Single-family permits there rose 12.2 percent year over year but still sat 35 percent below the 2021 midpoint.

Raw totals for all housing types stayed close: 3,729 permits in the San Jose metro against 3,854 in the much larger San Francisco metro. That near-tie on a smaller population base is the detail worth sitting with. Nationwide, builders received approval for 22 percent fewer units than in the first half of 2021, when construction ran at a post-pandemic peak. The South Bay’s apartment spike ran against that national slump.

Permits are not keys in the door. They do signal that lenders, cities and developers found projects worth stamping in a region that still needs tens of thousands of homes to meet state targets. Downtown San Jose towers, mid-rise blocks near transit and scattered multifamily sites all feed that count. Anyone watching whether Silicon Valley can house the people who work here now has a midyear scoreboard that favors the San Jose side of the bay.

Keep an eye on second-half numbers. A strong first six months only matters if the permits turn into occupied units.

Source: Silicon Valley Business Journal

Downtown Parking Lot Beside Hammer Theatre Gets a Final Yes for 168 Affordable Homes

City planning staff signed off September 2 on a seven-story building at 143 South Third Street that will replace a surface lot next to Hammer Theatre Center. Sobrato Organization owns the land. Pacific West Communities will build it. The approved plan calls for 168 apartments: 133 for low-income households, 33 for very-low-income households, and two market-rate manager units. In Santa Clara County this year that means roughly $113,700 for a single low-income renter and $71,950 for a very-low-income one, with higher caps for a family of four.

Five floors of housing will sit on a five-story garage, a block from the San Antonio light-rail station and a short walk from SJSU, restaurants, and the Paseo de San Antonio. Sobrato bought the parcel in 2010 with denser housing in mind. An earlier luxury-office idea never left the paper. This version uses Density Bonus Law and SB 330 streamlining, which is why the director-level hearing, not a long council fight, closed the file.

Neighbors at the hearing pushed back on Saturday construction starting at 7 a.m. The same voices asked for a living edge along the Paseo instead of a blank garage wall. Pacific West’s Lauren Alexander told the room the team is looking at artwork and a rotating gallery on that side. Groundbreaking has no public date yet. The developers want a two-year build if extended hours hold.

San Jose still has a state assignment north of 62,000 housing units to plan through 2031.

City planning agendas: https://www.sanjoseca.gov/your-government/departments-offices/planning-building-code-enforcement/planning-division

Source: The Mercury News

Council Directs a Closer Look at Neighborhood Housing Density

San Jose City Council spent hours on Aug. 18 hearing from residents before voting 8-3 to study several density options rather than lock in a single number. Staff will now analyze 16, 24 and 32 dwelling units per acre in Residential Neighborhood areas that currently sit at about eight units per acre, along with parking standards. A finished proposal is slated to return for a final decision late in 2027.

The debate sits inside the four-year review of Envision San José 2040. Planners had floated a jump to 32 units per acre on most of the city’s residential land as a way to add “missing middle” homes: duplexes, fourplexes, townhomes and small multifamily buildings that sit between a single house and a large apartment block. Mixed-use corridors and Urban Residential areas, including parts of Downtown San Jose, also appeared in the package with higher proposed ranges and extra stories.

State housing targets explain the urgency. San Jose must plan for more than 62,000 additional units between 2023 and 2031. Production so far has lagged that pace, and large apartment projects have struggled to find financing. City housing officials told the council that smaller, scattered buildings can pencil out without heavy public subsidy and can give middle-income households more choices.

Neighbors who filled the chamber raised traffic, street parking and the look of established blocks. Several council members asked staff to treat the city as a collection of different places rather than one uniform map. The study period will include more outreach, environmental review and work on design standards so any future rules can respect existing street patterns while still adding homes.

Anyone who cares about where the next generation of San Jose families will live now has more than a year to follow the details. The city that already mixes Downtown towers with tree-lined streets is trying to decide how those two scales can grow together. That conversation, handled carefully, is how San Jose keeps room for teachers, nurses, restaurant crews and young households without losing the neighborhoods people already love.

Additional information on the General Plan Four-Year Review is available through the City of San Jose Planning Division.

Source: Silicon Valley Business Journal

A Parking Lot Beside Hammer Theatre Moves Toward 168 Affordable Homes

Planning Director Christopher Burton is scheduled to hear a seven-story affordable project on September 3 that would replace a 1.3-acre surface lot between South Second and South Third streets, just south of East San Fernando. The Sobrato Organization owns the asphalt. Pacific West Communities would build. AO drew the plans. The site sits next to San Jose State’s Hammer Theatre Center and across from the San Antonio light-rail stop, which is the whole point of putting housing here instead of another decade of empty spaces after the last show lets out.

Staff have recommended approval. Under the state’s Density Bonus Law the current count is 168 apartments: 33 reserved for very-low-income households, 133 for low-income households, and two market-rate manager units. Earlier filings this spring described 173 homes with a slightly different mix, including extremely-low-income apartments. Numbers often shift as drawings harden. What has not shifted is the claim that nearly every door would be deed-restricted. Sobrato held this lot since about 2010 and once floated a 24-story, 393-unit market tower that never left the page. The new version is shorter, cheaper to finance, and aimed at people who already work or study within walking distance of Paseo de San Antonio.

San Jose’s state housing assignment for 2023 through 2031 is 62,200 units. Council spent recent weeks arguing about whether denser housing should spread into more neighborhoods. This parcel does not need that debate. It already sits in the core, next to a campus, a theater, restaurants, and a train. Residents would not need a car to reach a job on Santa Clara Street or a class on campus. They would need the project to survive financing after the director’s stamp.

Pacific West has become a regular partner on below-market work around Northern California. Sobrato, long an office landlord, has been steering more of its land toward housing. Neither fact guarantees a groundbreaking. An approval on September 3 would still leave tax credits, construction costs, and a construction schedule. The useful test for Downtown San Jose is whether a parking lot that has sat idle beside a university theater finally turns into addresses instead of another rendering.

Source: Silicon Valley Business Journal

Boutique Grocery Heads to Ground Floor of San Pedro Square Housing Towers

An independent boutique grocery store is preparing to lease 12,000 square feet of ground-floor space at the two residential towers located at 188 West St. James Street in the San Pedro Square neighborhood of Downtown San Jose. The space faces San Pedro Square Market and sits within a complex that includes a 22-story eastern tower with 337 units and a 20-story western tower with 303 units.

The market will offer fresh food, sandwiches, a salad bar, a hot bar, burritos, and additional prepared items once the street-level shell is ready. Opening is projected for sometime in 2027. Leasing efforts are being handled by Nick Goddard of Colliers.

Downtown San Jose has long operated with limited grocery options. Whole Foods on The Alameda has served the western edge since 2014, and Sakura Market opened more recently on South Market Street. A new neighborhood-focused market at this central location will give residents of the towers and surrounding blocks easier access to everyday essentials and ready-to-eat meals.

The western tower continues to market condominiums for sale while the eastern tower remains under consideration for potential workforce housing by the San Jose Unified School District. Adding a practical retail anchor at street level should help activate the base of these buildings and support the daily needs of people living and working nearby.

Source: SiliconValley.com

Icon Echo Advances with 645 Homes Near City Hall in Downtown San Jose

Urban Catalyst’s Icon Echo project is moving forward with plans for two eight-story residential buildings that will deliver 645 new apartments in Downtown San Jose. The development covers a 2.1-acre site along North Fourth Street between East Santa Clara Street and East Saint John Street, across from San Jose City Hall and a short walk from Saint James Park.

The unit mix includes 233 studios, 272 one-bedrooms, and 140 two-bedrooms, with 33 of the homes deed-restricted as affordable. Each building rises to 89 feet and features podium-top courtyards, ground-level parking with stackers totaling 527 spaces, and a small retail space on the Icon building. Architect BDE Architecture has designed the exteriors with brick veneer, stucco, and cast stone panels.

A Planning Director’s hearing on the site development permit and vesting tentative map took place on August 12, with city staff recommending approval. The project represents a shift from earlier mixed-use concepts that included office space, reflecting the current emphasis on adding housing in the urban core.

Once built, the complex will place hundreds of new residents within easy reach of transit, civic buildings, and the daily activity of Downtown San Jose. The mid-rise scale fits the surrounding blocks while contributing meaningful density to an area that continues to evolve.

Source: SF YIMBY

Affordable Housing Project Breaks Ground Near Downtown San Jose

Eden Housing has broken ground on a new four-story affordable housing development at 700 East Saint John Street. The project will deliver 68 units, including 48 homes for households earning up to 60 percent of the area median income and 20 permanent supportive housing units for seniors exiting homelessness.

The L-shaped building incorporates ground-level podium parking and forms part of the broader East Santa Clara Master Plan. Design work by Architects FORA includes a façade that shifts from cement panels on the lower levels to darker brown and tan tones higher up, along with painted mural elements. Amenities planned for residents include a community room with kitchen, food pantry, laundry facilities, and recreation spaces on each floor.

The site sits close to Downtown San Jose, San Jose State University, and neighborhood services. It also involves adaptive reuse of the neighboring Building 800, a historic structure that once housed IBM’s first West Coast offices.

Officials including U.S. Congresswoman Zoe Lofgren, San Jose Mayor Matt Mahan, and California State Treasurer Fiona Ma attended the groundbreaking ceremony on August 6. The project adds much-needed homes for seniors and lower-income residents in a central location while contributing to the ongoing transformation of the former hospital area.

Source: SF YIMBY

Bank Takes Ownership of Vacant Housing Site in Downtown San Jose

The empty lot at 51 and 65 Notre Dame Avenue next to Carlysle Street in Downtown San Jose passed to West Coast Community Bank earlier this year after the lender completed foreclosure on a $10 million loan. An affiliate of Palo Alto-based Acquity Realty had paid $20 million for the four parcels in 2021, cleared the former Andy’s Pet Shop building, and never broke ground on any of its successive plans.

Early visions called for a 21-story mixed-use tower that would have combined housing, office space, and ground-floor retail. Later marketing materials scaled the idea back to a 148-unit mid-rise with roughly 4,700 square feet of street-level shops. Neither version advanced beyond drawings, and repeated loan defaults eventually transferred the property to the bank for $2.3 million in January.

The site sits in a compact, walkable pocket of Downtown San Jose close to transit corridors and the broader Diridon area. Bank ownership opens the door for a new buyer to step in and deliver the housing that has long been discussed for the corner. Local residents who have watched the parcel remain idle through several ownership chapters now have reason to expect fresh movement.

A successful redevelopment here would add homes and street-level activity to a part of Downtown that continues to evolve. The location’s proximity to existing amenities and future growth projects gives any incoming owner a strong foundation to build upon.

Source: SiliconValley.com

Three-tower housing project proposed for Downtown San Jose

Westbank and Urban Community are working on a stunning 1,147 unit project that would span a trio of towers. This is the most exciting proposal I have seen in some time for Downtown San Jose.

Each tower would rise 30 stories or roughly 300 feet. Two of the towers would have terraces featuring small trees and plants. The third tower would by a cylinder, a shape no other San Jose high-rise utilizes. The combination of the three look fantastic.

The site of this proposal is the Valley Title lot at 300 South First Street and 345 South Second Street in SoFA. Currently the site consists of a parking lot, a public art project that can hopefully be moved, and a three-story building.

The project would also include a generous 18,400 SQFT of retail and 8,700 SQFT of residential amenities such as a courtyard and gym. Based on the renders, it looks like they are planning for one of my favorite amenities--rooftop swimming pools.

As exciting as this is already, Westbank and Urban Community also have an option to add two more 20-story office towers with a combined 1.32 million SQFT of office space and 60,4000 SQFT of ground-floor retail.

There is currently no planned timeline. The next steps are getting city approval for the proposal, which I'm optimistic will come quickly.

Source: The Mercury News

San Jose State University planning Campus Village 3 Towers

SJSU already has 40,000 students, staff, and faculty and many of those are now living in Downtown San Jose. Now the university is planning it's next steps in allowing as many people as possible to live close to the campus. This is a tremendous challenge given the insane cost of housing in Silicon Valley.

SJSU drafted a new master plan that would house 20% of full-time students on or near campus. They already made some big strides this year by converting the former Fairmont Annex to student housing. When walking around a couple weeks ago I noticed that the students were adding far more vibrancy to the area.

The next big step will be Campus Village 3. This project will add 1,000 beds in a 12-story residence hall along with dining commons and a welcome center. SJSU will also turn the Alquist site from a three-story building to a high-rise rental property for faculty and staff.

Now that SJSU is skyrocketing up college ranking, I'd only expect more pressure in the future to accommodate more students as the university moves away from a commuter-school stigma. SJSU's best days are yet to come.

Source: SVBJ

Spartan Village on the Paseo

After several months of renovation, what was originally the Fairmont Annex tower will now be home to around 700 San Jose State University students that will be living there most of the year. Occupancy is already over 90% capacity. Students started moving in this past weekend.

This is one of the nicest student housing projects I have ever seen. Not only is it centrally located in Downtown San Jose, but it has a sky bridge lounge, a gaming lounge, video screening center, cafe, fitness room, and study rooms. Keep in mind that what are now dorms used to be the fanciest hotel rooms in San Jose and have a view of Plaza de Cesar Chavez.

This should have a significant impact on foot traffic and general ground floor activity around the tower. I think that will improve the retail scene, safety, and the overall vibe around Plaza de Cesar Chavez. It's a win all the way around except for the loss of a couple hundred hotel rooms. There are several new hotels being proposed that will hopefully fill in that gap.

Congratulations to the SJSU students moving into Spartan Village on the Paseo. Your college experience is going to be much nicer than previous generations!

Source: SiliconValley.com

Google might bring an affordable housing project to Downtown San Jose

Google still has one foot in the door for their ambitious Downtown San Jose plans. A mixed-used project with millions of square feet of office buildings in a neighborhood now dubbed "Downtown West" have been put on hold, but Google has continued some of their projects to build culture and vibrancy around the new district. Now it looks like they might move forward with an affordable housing project where an old Orchard Supply Hardware store once stood (San Jose company btw).

Earlier this year they razed a building at 720 West San Carlos and now they are evaluating building an affordable housing project on this site. If there were to move forward, it would signal that Google is still serious about investing in Downtown San Jose. If they return to the original plan, up to 20,000 employees could be working in of the capital of Silicon Valley. The economic impact and cultural impact would be significant, especially considering Google has some of the highest median salaries of any company on Earth.

Source: The Mercury News

 

Iconic San Jose tower will be converting offices to homes

Demand for office space is low and housing is high, which will likely lead to several office to housing conversions throughout San Jose. One of the most interesting proposals is by the owners of the historic "Bank of Italy" tower in Downtown San Jose. The building was San Jose's original high rise, and the company that built it eventually became Bank of America. It was actually the tallest building between Los Angeles and San Francisco between 1926 and 1970... 44 years.

The latest proposal is to convert the 13-story office building to between 125 and 150 homes across at least 11 of the floors, in addition to doing significant interior and exterior renovations. The attic below the spire and cupola would also be used to support the residential component (perhaps as amenity space). The plan also references a 1,400 SQFT lower penthouse and 900 SQFT upper penthouse. It's not clear exactly where those would be--if they are part of the tower component above the attic or the terraces along the side.

Dining and retail spaces are also earmarked for the project, including one with a 2nd floor terrace which you can see in the 2nd and last images below. I'm reminded of the old Scott's Seafood location. This could be a really unique spot for a restaurant overlooking Fountain Alley and First Street!

It also looks like they want to add some dynamic lighting elements to the top of the tower, which would be a nice bonus for the project. Hopefully they can get this completed before the market shifts again.

Source: The Mercury News

Santa Clara County building 213-units of affordable housing in Downtown San Jose

A parcel of land at 675 E. Santa Clara St. at outer edge of Downtown San Jose (16th Street) is going to be redeveloped into affordable housing by the Core Companies and Eden Housing. It would include 113 multi-family affordable housing units, 64 units just for senior citizens, and 36 for-sale BMR (below market rate) townhomes.

There is some pushback from local housing advocates on building height... specifically that it is not tall or dense enough for a new project Downtown. Originally there were going to be a couple four-story building and one 13 to 16 story high-rise. The latest plan has been downsized to an eight-story midrise as well as a five and three-story building. Because of this, Catalyze SV, a local nonprofit focused on community engagement, is not supporting the project as is.

It's worth noting that this isn't sitting right on Santa Clara Street, it's on St. John St. 10 blocks away from San Jose City Hall. It's about equal distance to the core of Downtown San Jose as Little Portugal. While it is a bit of a lost opportunity for another high-rise and maximum affordable housing density, there is enough developable land in the area that some affordable housing and density improvement is better than nothing. 

Source: The Mercury News

StarCity's "co-living" tower moves forward

StarCity is working on the largest co-living project in the United States and it just received final city approvals. Co-living is like a dorm for adults. You get a small private space which typically includes a bedroom and bathroom and other facilities like the kitchen, living area, and laundry are shared between multiple residents. Generally co-living facilities are much less expensive than a typical newer apartment.

StarCity would like to build an 18-story tower with 803 co-living units at 199 Bassett Street. The location is is just three blocks away from San Pedro Square.

I would assume this will be on the higher-end of the co-living spectrum. The building will have a 5,000 SQFT gym, chef-style kitchens, bike storage, co-working areas. As an added bonus, there will be retail on the ground-floor that might include a cafe, grocery store, or bar.

If this gets built, it will immediately increase the Downtown population by a significant number and hopefully provide a more affordable living option.

Source: SVBJ

New SJSU student apartments are pending City Council approval

A 7-story, 86-unit apartment building has been proposed for the corner of E. Santa Clara St. and 11th St in Downtown San Jose. Given that it is two blocks away from the SJSU campus, it would be an ideal housing situation for college students. If it moves forward, there would a total of 171 beds in the building.

The project would also include 5,560 SQFT of retail on the ground floor and 5,700 SQFT of office space on the second floor. A restaurant was also mentioned as a possibility for the ground floor plaza. There would be a total of 67 parking spaces, far fewer than the number of students that would live in the building (some would say this is a positive--teach those young adults how to take transit, walk, or bike to get around).

The next step in moving the project forward is evaluation and approval by the City Council and the Planning Commission.

Source: TheRegistry, Robertee from The San Jose Development Forum

Newly Updated Downtown San Jose Development Map!

Our good friend Mark from Think Bigger San Jose has done something awesome. He's gone and updated a map with all known development projects in Downtown San Jose, both those under construction and proposed. He has even aggregated the total number of residential, hotel, office, and retail units that will come online over the next few years. If all currently proposed projects come to fruition, Downtown San Jose will get another 7,062 residential units, 328 hotel rooms, almost 2 million SQFT of office space, 348k SQFT of Retail, and two new public parks/plazas.

Here is the link to the new Downtown San Jose Development Map! I have also replaced the link on the right in the "San Jose Development" section with the new map for easy access.

New Tech Campus Coming to Downtown San Jose!!!

Downtown San Jose is growing by leaps and bounds when it comes to residential development and retail, but has not been getting a lot of love from commercial developers. That is going to change with a very exciting project on Santa Clara street near Diridon station and the SAP Center.

Trammel Crow is a developer that acquired an 8.5 acre plot of land from Adobe for $58.5 million. Adobe was planning to build an expansion of their headquarters in this area, but instead reconfigured their existing three towers to support a larger number of employees (no more private offices for every employee). I think it was actually for the better. While I'm a huge fan of Adobe and believe they play a vital role Downtown, if they were to build out their expansion it would likely not have been very inclusive to the whole community. Trammel Crow on the other hand is planning the exact opposite.

I'm going to start with the quote from the developer that Nathan ended his SVBJ article with:

"We’ve committed ourselves to making it iconic," he said. "We think it will be a landmark in the South Bay."

Iconic sounds right. Trammel Crow want to build 800,000 SQFT of office space across two buildings 10-12 stories tall. This would be a 10% expansion of all the office space currently in Downtown San Jose today and the first major office project to break ground since 2010. 400,000 SQFT of the project would be built speculatively without requiring a signed tenant. This would also be Class A++ premium office space with huge 40,000 SQFT floor plates and soaring ceilings popular with tech companies.

There would be 325 apartment units in a separate nine-story building. The whole site would be sprinkled with shops and restaurants and even feature a large public plaza along West Santa Clara Street. The beautiful and historic San Jose Water Company building would be renovated and repurposed. 2,400 parking spaces would be built to support the whole project, mostly underground... but hopefully most people won't be driving here.

A big attraction to this spot for the developer is the access to transit at Diridon Station. They are even tentatively calling the project #Diridon. With Caltrain, Light Rail, Capital Corridor, ACE, and a VTA bus hub, this is already one of the most important transit hubs in California. In the future Diridon will also be getting multiple Bus Rapid Transit lines, BART, and California High-Speed Rail. Even the $2 billion Transbay Terminal will not be as well connected as Diridon.

Trammel is expecting to get their building permits in Q1 2016, start construction in the summer, and have the first office building ready for occupancy by the end of 2017. The apartments are slated for 2018. They are also promising a signature look that will make the project a South Bay landmark. I cant's wait to see the first drawings for this!

Source: SVBJ, Hat tip to Josh Russell for sending this in!

Rent Controls in San Jose

I usually try to avoid doing very controversial or polarizing posts, but in this case I can't resist. A couple weeks ago there was an article posting in the Silicon Valley Business Journal about rent controls. San Jose District 3 (Downtown San Jose) Councilman Raul Peralez is proposing to strengthen rent controls in San Jose, specifically by cutting maximum rent increases to 4% and extending rent control to all buildings constructed before 1995 (right now only buildings built before 1979 are rent controlled and the maximum increase is 8% a year). It sounds good on paper, right?

As an econ major, I can't stress how terrible this idea is. Rent controls do not make escalating rent problems better, they make them worse. Sometimes far worse.

Long story short, rent control is a manipulation of the market where demand exceeds supply (see image below). This isn't a guess or assumption, it's a science. With rent controls, there will be fewer rental options available and a greater amount of demand for those remaining units. The stronger the controls, the greater this effect. If you have ever wondered why 50-100 people are all applying for one rent-controlled apartment in SF, this is it.

You may think that if you are already in an apartment, that this will not effect you in a negative way. That couldn't be further from the truth. The stronger the gap between the market and the current rental price, the more likely your landlord will be doing everything possible to get you out of the building. Likely this will include include minimizing maintenance, refusing to do any improvements, trying to convert multi-family rentals to condos, and a variety of other items that I won't even go into. As soon as your are out of the apartment, you will be hit with far higher rents for lower quality units that more people are competing to get (again, SF). Many people will resort to "black market" apartments or tenement housing. Some will become homeless.

The damage does not end there. Rent controls will reduce the market value of all apartments affected. That means lower property taxes for the City of San Jose, and less revenue for services--including the already strapped SJPD and SJFD departments. Landlords will have less incentive to maintain their properties (in fact the opposite when trying to kick people out), leading to substandard housing and blight in both urban and suburban areas.

Thankfully, it seems like Mayor Sam Liccardo does not share the same sentiment on rent control as Raul Peralez. It's a very difficult topic to stand up to, because most voters will not understand economics and the topic of rent control is completely counter-intuitive. Sorry for the soapbox moment, but I really believe this will cause substantial damage to the rental market as can be seen in every single city around the world with strict rent controls (especially SF and New York).

Source: SVBJ

Donner Lofts Affordable Housing Community Breaks Ground

MidPen Housing recently broke ground on a 102-unit housing complex at 156 E. St. John Street. The six-story project is on the former site of the Donner-Houghton estate, which was the home of a Donner Party survivor. Unfortunately, the home was destroyed in a 2007 fire.

The apartment complex includes 2,500 SQFT of retail on the ground floor as well as a community gathering space, computer lab, and exercise facilities. In order to lease an apartment, you cannot earn more than $37,700 as the units are designed for low-income workers and formerly homeless people in the Downtown area. The total cost of the project will be $30.8 million and it is expected to be completed by Summer 2016.

Source: SVBJ