Land Use Fellowship, Study Visits

San Jose’s Land Use Challenge Statement

San José, with a population of more than 1 million and the tenth largest city in the nation, is the largest and most urban city in the 1.9-million Silicon Valley metropolitan area, and plays an increasingly important role in the continuing growth of the regional, state, and national economies. San José has an impressive array of companies from stellar Fortune 100 and 500 companies, as well as many entrepreneurial startups. However, San José is the only US city of more than half-a-million people that functions as a bedroom community rather than as a true urban center, as more residents leave for work in other cities than workers commute into San José.

Only 15% of the city is designated for employment uses. This imbalance and conversion of previous industrial lands over time for non-employment generating uses has led to significant fiscal, economic and environmental misalignments and quality of life challenges, both for San José and for the Silicon Valley and Bay regions, over the past three decades.

To facilitate job growth, visionary leaders designated large swaths of land in North San José and south San José for campus industrial, office/R&D and manufacturing purposes in the 1980’s. To further achieve a better balance and secure a more sustainable economic foundation, the City’s General Plan, Envision San José 2040, continues to recognize North San José as a premier employment center. North San José is the largest employment district at approximately 4,850 acres, because of its proximity to regional transportation infrastructure, including Norman Y. Mineta San José International Airport, an existing light rail line, and accessibility to several major freeways and the Guadalupe River and Coyote Creek trail systems. The General Plan provides for growth capacity within the North San José boundary for up to 100,000 new jobs and 32,000 new housing units through 2040.

In 2005, the City adopted the North San José Area Development Policy (NSJADP) to support the implementation of a unique vision for the North San José Area. The NSJADP policy governs new development and mitigations, and it establishes a specific procedure for the allocation and timing of development capacity within the policy area. The NSJADP has been amended several times since its initial adoption in 2005, and it currently accommodates 26.7 million square feet of new office/ R&D development, 32,000 residential units, 2.7 million square feet of retail, and 1,000 hotel rooms.

When the NSJADP was created, the City’s Redevelopment Agency was poised to fund most of the identified infrastructure improvements. However, with the state’s dissolution of California redevelopment agencies in 2011, the City then assumed financial responsibility for the $519 million of investments in public infrastructure planned in North San José.

The City also adopted a standardized Traffic Impact Fee (TIF)—currently estimated at $14.40 per square foot—to provide certainty to the development community regarding the infrastructure requirements associated with this level of intensification, and to ensure adequate funding for the roadway improvements included in the NSJADP. The development and improvements were divided into four equal phases with prerequisite triggers to be met prior to opening up a subsequent phase. The City is currently in Phase 1 with residential development fully allocated (8,000 housing units); however, only 15% of the commercial/industrial development target has been constructed, even with the recent economic recovery.

Since the adoption of the NSJADP, the City has faced many implementation challenges that have resulted in a continued single-use campus, auto-oriented office district with minimal amenities and less active public space than employees and residents desire. Other challenges facing North San José include:
• It is presently a disjointed community without a sense of place, disconnected by a sea of parking
• An abundance of single- and two-story structures that do not maximize density nor provide significant amenities
• The low density of residential development produced in Phase 1 will require Phases 2-4 to provide higher-than -anticipated residential densities
• The traffic impact fees in San José are higher than in neighboring jurisdictions and have created disincentives for new industrial development
• Little of the new housing are affordable units
• Neighboring jurisdictions have approved imbalanced developments that will have adverse impacts on regional transportation systems and housing availability, including North San José.

The City of San José hopes the Rose Fellowship will help advise us how to infuse retail and other amenities in the area to transform this suburban, campus-style employment area into a vibrant, urban, mixed-use employment district, and provide insights and answers for the following questions:
1. What specific locations within North San José should be designated as hubs for focused, market-based, place-making opportunities?
2. What land use adjustments should be made to the North 1st Street Transit Employment Center Core to reflect these adjustments while not limiting the potential for industrial and office development?
3. How can the City balance a “jobs-first” approach with the need and desire to build housing (both market-rate and affordable) and create a vibrant, mixed-use district with a broad range of amenities for residents, workers and visitors?
4. What mechanisms or incentives are needed for the City to attract retail and other essential amenities to North San José?
5. What short-term or temporary activation tools should the City utilize to stimulate North San José? What long-term tools?