If local governments strongarm developers into paying for housing viewed as a public need, will that have unintended consequences for the local market? That's the concern of many real estate agents in San Jose. Last month, the U.S. Supreme Court declined to hear a case concerning a San Jose, California, zoning ordinance aimed at increasing the development of affordable housing in the supply-depleted Bay Area. Real estate agents in the area are worried that the ordinance could actually discourage developers from pursuing their affordable housing projects, further constricting the housing supply in San Jose and driving home prices up even further. Bay Area prices causing housing demand pressure California cities and counties, particularly those located in the Bay Area, have been struggling with high housing demand pressures due to huge job market gains for at least a half a century -- and San Jose is definitely no exception. According to Zillow’s most recent estimates, t...
- In 2010, San Jose's City Council in 2010 approved an ordinance requiring new residential development projects of 20 or more units to sell at least 15 percent of the for-sale units at a price the city would determine to be "affordable" or pay a $122,000 in-lieu fee.
- The California Building Industry Association (CBIA) filed a lawsuit arguing that the ordinance was invalid.
- The Supreme Court has declined to hear the case -- meaning the ordinance will move forward, developers are still on the hook, and agents in San Jose might see fewer transactions.