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Hello Gilroy! And Happy Thanksgiving! For this month’s spotlight, and for discussion with you at my upcoming Conversation and Coffee with the Mayor on December 4, together with City Administrator Jimmy Forbis, I’d like to focus on recent state housing bills applicable to cities across the state and what they mean for Gilroy. Keep in mind that the goal of these housing bills is to address a state-declared housing shortage, a shortage largely determined by the measure of job growth vs. housing growth in California. Prior to the state’s intervention, City Councils everywhere often imposed annual numerical growth limits on housing in their cities irrespective of housing demand. Such limits on housing supply while job and economic growth were rising caused the price of housing, and the cost of rent, to rise, a benefit to existing homeowners at the expense of non-homeowners.

To prevent cities from limiting housing growth, the state has stepped in with many overriding legislative actions that not only increase housing supply but also attempt to provide more “affordable” housing. Unfortunately, these state-wide bills cannot address the specific circumstances of a particular city (such as the fact that Gilroy has enjoyed neither the job growth or viable transit services of other cities), and that’s what I’d like to talk about here and on Saturday, December 4 at 9:30am in Council Chambers if you can join me.

Additionally, Jimmy Forbis will provide an update on the potential Sports Park development with the San Jose Sharks and the status of redistricting for the Santa Clara County Board of Supervisors.

Mayor Marie Blankley, CPA

As I hope many of you have already heard me say by now, affordable housing is defined as a percentage of a county’s Area Median Income (AMI). In 2021, Santa Clara County’s Area Median Income for a family of 4 is $151,300. That means that county-wide (Palo Alto to Gilroy), the same number of families make more than $151,300 annually as make less than $151,300. A Gilroy family looking to purchase or rent low-income housing must earn between 50% and 80% of AMI, or $82K-$120K annually, the same as a family in Mountain View, Cupertino, Sunnyvale, or anywhere else in the county. For very low-income the threshold is 30% to 50% of AMI, or $50K-$83K. If a Gilroy family cannot meet these county-wide thresholds (even with county housing voucher assistance), the affordable housing built in Gilroy goes to people outside of Gilroy who can meet those thresholds. Absent job growth and viable transit service in Gilroy, adding housing for new residents in Gilroy increases the demand for driving and exacerbates already congested highways as those moving to our lesser expensive community must then commute north to work, to say nothing of the added burden on city services. Because Gilroy is at the bottom of the Santa Clara County income chain, housing meant to be affordable in Gilroy arguably does more to attract people to Gilroy than it helps our existing residents in need of housing they can afford. This dilemma is something well-meaning state-wide and even bay area-wide housing criteria, such as through RHNA (regional housing needs assessment), cannot address city to city. Something as basic as parking space requirements as it relates to housing can have far different consequences from one city to another, for example, depending on a city’s proximity to jobs and transit and their residents’ need to drive to work.

Signed by Governor Newsom in September 2021, these bills go into effect January 1, 2022. SB 9 allows for ministerial approval of two-unit housing in single-family residential zones, and for ministerial approval to split single-family lots into two parcels. This means that what is currently a single-family lot in a single-family residential zone may be subdivided for up to 4 total units (via combination of a home, duplex, and/or accessory dwelling units). Neither of the two newly created parcels may be smaller than 40% of the original parcel, and neither parcel may be smaller than 1200 square feet. There is nothing in SB 9 that requires the housing units it creates to be affordable. They will be market-rate housing, intended to be of a lesser market value per unit than the pre-existing single-family home. If the lot is within one-half mile of a quality transit stop (the 68 bus and the Gilroy Transit Center in Gilroy’s case today), then no additional parking at all is required for the additional housing units. Otherwise, one parking space is required per unit. This is a very simplified explanation, so if you still have questions and concerns, you’re not alone. The legislation is too new to understand all the impacts yet.

 

SB 10 also has no requirement that the housing it creates be affordable, but like SB 9, it is intended to create lesser expensive market-rate housing. SB 10 focuses on fast-tracking high-density housing, allowing CEQA to be bypassed for ease of rezoning housing neighborhoods near mass transit. I don’t yet have a definition of mass transit for this purpose, but only the 68 bus line qualifies as high-quality transit in Gilroy today (because of its 15-minute frequency).  SB 10 allows for up to 10 units (14 with density bonuses) on a single lot. Again, this is a simplified explanation—there is still much to decipher.

Understand that city councils do not have jurisdiction to override or change these state housing laws that directly impact our own land use and zoning adoptions. Similarly, the city council has no control over the population growth that may result without proportionate balance on Gilroy’s job growth and public transportation infrastructure and services. 

See my August Spotlight newsletter here for detailed information on current housing projects in Gilroy. Since then, there have been no new large housing projects, but I would like to provide an update on a potential development for which a landowner/applicant recently asked the city to initiate the LAFCO process necessary to eventually build. Any application to LAFCO must come from the city at the request of the landowner, and this is the start of a lengthy (many years) process to development if LAFCO approves. The would-be development is on the east side of Santa Teresa Blvd near Gavilan College. The applicant has removed their request for the city to initiate LAFCO proceedings at this time.

To all, my heartfelt wishes for a very Happy Thanksgiving! I hope you’ll join me for coffee and further discussion on December 4.