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Silicon Valley has the highest housing costs in the U.S.

Report says both incomes and costs soaring in the state’s tech capitol.

It’s the best of time and the worst of times in Silicon Valley, at least according to Joint Venture Silicon Valley, a regional think-tank that issued its annual Silicon Valley Index last week.

The 2019 index, a “comprehensive report based on indicators that measure the strength of our economy and the health of our community,” describes the Valley as materially successful but fundamentally anxious, as new wealth puts additional stress on those most vulnerable.

The report defines Silicon Valley as a broad region encompassing parts of Santa Clara, San Mateo, and Alameda Counties, ranging from Daly City to Union City to Gilroy to Scotts Valley.

The index includes some data from San Francisco for context but does not include the city as part of its larger regional definition. Most of the data covers 2017, with some references to 2018 as well.

 

Read more at Curbed SF 

 

 

Stanford Shopping Center wants to tear down a Macy’s store to make room for luxury retailers

The Macy’s Men’s store at Stanford Shopping Center could soon be replaced by retail heavyweights.

Simon Malls, the mall’s operator, proposed tearing down and replacing the 94,337-square-foot building with a Restoration Hardware and a Bashford luxury retailer, the Palo Alto Daily Post reports.

The men’s department store would be then merged into the shopping center’s main Macy’s store, Simon Malls Spokeswoman Solana Tanabe told the post.

A three-story, 43,581-square-foot Restoration Hardware store would reportedly take over the direct location, with a one-story 28,000-square-foot The Wilkes Bashford shop built on the nearby parking lot between Sand Hill Road and Pistache Place. Simon Malls is also looking to construct two 3,506-square-foot buildings as part of the plans.

Simon Property Group bought the mall from Stanford University back in 2003 for $333 million, though it still leases the land from the university. The surrounding region —  which includes Palo Alto, Menlo Park, Woodside and Atherton — is prime for luxury stores, with Stanford’s median home value estimate is just of $3 million, according to Zillow.

Restoration Hardware reportedly will be designing its building to include a rooftop restaurant and garden, as well as second-floor terraces. Simon Malls also has an alcohol permit in the works.

 

Read more at San Francisco Business Times

 

Santa Clara approves agrihood, city’s largest affordable housing project in pipeline

Santa Clara has approved its largest affordable housing project in the pipeline — an “agrihood” that will combine urban living with farm life. 

The city approved the project, a public-private partnership between the city and developer The Core Cos., last week. Called Agrihood, the mixed-income property will have 361 apartments, with 181 of those below market rate, 160 of which will be for low-income seniors. A 1.7-acre urban farm and community retail and open space will complete the neighborhood.

The city had the site earmarked for senior housing for more than a decade.

“This project was borne out of a dire need to bring affordable housing through a truly creative, community-driven process. The Core Companies has kept this mission and urgency at the center of its work and dialogue with the city and community stakeholders,” The Core Cos. Senior Development Manger Vince Cantore said in a statement. “Santa Clara’s seniors have already waited more than a decade for housing at this site. An available below-market home for a senior can be the differentiator between a comfortable, safe environment in which to spend one’s golden years, or an extended period of financial stress and uncertainty.”

 

Read more at Bisnow Silicon Valley

 

WeWork takes new downtown San Jose site amid expansion

WeWork is leasing a new downtown San Jose location, a clear indication of an ongoing expansion by the co-working titan in the core area of the Bay Area’s largest city.

The newest WeWork location is at 152 N. Third St., a downtown San Jose office building owned by a group led by Gary Dillabough, a realty investor who is partnering with WeWork on the Bank of Italy office tower project a few blocks away.

The interest from WeWork in the North Third Street building appears to point to a rising focus on downtown San Jose, spurred by potential major developments in the area by tech titans such as Google and Adobe Systems.

WeWork agreed to lease 75,000 square feet at 152 N. Third St., according to commercial realty experts and information from sources with knowledge about the WeWork plans at that office building. The WeWork operation on North Third Street also shows up on the company’s website as a “just announced” location.

“It’s very encouraging that WeWork is getting more interested in downtown San Jose,” said Mark Ritchie, president of Ritchie Commercial, a realty firm.

In addition, WeWork has taken space in one of the Riverpark Towers office high-rises at 333 W. San Carlos St. and the tower at 75 E. Santa Clara St.

“WeWork is now into four buildings in downtown San Jose,” Ritchie said. “152 N. Third St. should function very well as a co-working building.”

 

 

Read more at The Mercury News

 

 

Could anti-price gouging laws slow rising rents in California?

California lawmakers are exploring new ways to limit skyrocketing rents.

Crooning in the shower is not Chad Regeczi’s thing.

That’s why when he learned last year his monthly rent would go up $300 so the new owners of his La Mesa apartment in San Diego County could upgrade his bathroom with a sound system, he was bemused.

“300 bucks!” he said. “I mean an iPod costs less than that. Everybody has got a phone now. Who needs a Bluetooth speaker in a bathroom apartment? It’s just weird.”

Regeczi, a VA employee, said the 30 percent rent increase didn’t match the condition of his apartment. But he felt powerless to challenge his landlords on the hike.

“Who’s gonna tell them no?” he asked. “There are no rules to how much your rent can go up.”

That may change. Talk is underway about putting a law on the books that would bar California landlords from raising rent beyond a certain percentage.

Oakland Mayor Libby Schaaf said in November the rule would mimic limits on what businesses can charge during natural disasters.

“When there’s a fire, you pass an anti-rent gouging ordinance,” Schaaf said. “The state has a fire. It’s called the housing crisis.”

Rents are surging in some California cities where there is no rent control by double, even triple digits, according to mayors and tenants rights advocates.

And more than half of the state’s renters pay more than a third of their income on housing, according to the California Budget & Policy Center. And a third of renters spend more than half of their paycheck on a place to live. The real estate firm Zillow reported last month that communities where people pay more than a third of their salary on rent, see a faster rise in homelessness.

 

Read more on East Bay Times

 

 

Downtown San Jose, Oakland opportunity zones attract investors, spur development plans amid Google effect

Developers eye projects in downtown San Jose and parts of Oakland, bolstered by tax incentives keyed to opportunity zone.

Developers and a new crop of investors are eyeing projects in downtown San Jose and parts of Oakland, bolstered by opportunity zones enabled by President Donald Trump’s tax-cut initiative.

Potentially the first project in a local opportunity zone would be development of a brand-new office and retail complex on South First Street in downtown San Jose at the site of the old Lido night club, said Erik Hayden, president of Urban Catalyst, a company that as formed an opportunity fund that would provide cash for selected developments in designated areas.

“These opportunity zones are ways to create greater economic activity in lower-income areas,” Hayden said. “They were originally presented to the Obama Administration but didn’t get a lot of traction. Then they became part of President Trump’s tax cuts and jobs act. San Jose Mayor Sam Liccardo very successfully lobbied Gov. Jerry Brown to get downtown San Jose included.”

Investors who plunk down cash for an opportunity fund can “defer or eliminate federal taxes on capital gains,” according to information on the state’s Department of Finance site.

The Lido night club site, currently a two-story building at 26 and 30 S. First St., is now owned by a partnership led by Gary Dillabough, who has emerged as one of downtown San Jose’s most active realty investors and developers. Among the properties Dillabough-headed groups have bought: the nearby Bank of Italy building, a historic office tower at the corner of South First and East Santa Clara streets.

 

 

 

Read more on The Mercury News

 

 

 

Big downtown San Jose housing towers, retail, restaurant complex pushes ahead

A big development that will bring downtown San Jose two striking residential towers containing more than 600 dwellings, along with spaces for a restaurant, coffee shop and retailers, is slated to push ahead with construction this month, according to a realty executive.

Miro is a housing high-rise that would dramatically reshape San Jose’s skyline and become its tallest towers.

The project has gotten through a three-month delay after workers hit an aquifer and water poured into the construction site, creating a large pond that had to be controlled and pumped out.

Now that project developer Bayview Development Group has vanquished the water woes, contractors are expected to begin pouring the surface concrete slab within the next few weeks, a necessary prelude to construction of the vertical components.

 

The development would include two towers that each will rise 28 stories and will also offer 18,000 square feet of commercial space, including enough room for a sit-down restaurant, a coffee shop and other retailers.

 

The project fronts on East Santa Clara Street as well as the corners of North Fourth and North Fifth streets. It’s right across the street from San Jose City Hall.

 

 

Read more on East Bay Times

 

 

Neighbors rise against plan to replace Red Cottage Inn with bigger hotel

Owner wants to tear down small hotel for Hampton Inn with three times as many rooms in Menlo Park, but residents call it too massive.

The owner of a Menlo Park hotel who wants to replace it with three times as many guest rooms is facing fierce opposition from a neighborhood group that threatens to appeal the project if the city approves it.

Sagar Patel, who owns the 28-room Red Cottage Inn at 1704 El Camino Real near the Atherton border, said his proposal to raze the hotel and build a taller, 68-room Hampton Inn in its place checks off all the city’s approval boxes. He’s also made a number of concessions sought by nearby residents, such as better screening for privacy, after meeting with them over the past 16 months, he said.

“I was under impression that we meet (Downtown) Specific Plan requirements and that’s the holy grail,” Patel said. “Not only did we meet them, we exceeded them.”

Residents say they aren’t pleased because after Patel came forward with a proposal in the spring that would have placed all parking underground and set back the building 36 feet from their homes, he later scrapped it saying the concessions would be too costly and without warning, presented a different plan to the Planning Commission during an October study session.

In the latest proposal, parking would be at ground level and setbacks reduced to 10 feet.

“He decided he couldn’t afford underground parking and he changed everything,” said Deborah Melmon, a member of Park Forest Plus, the group opposing the new hotel.

Melmon said the current proposal places the edge of the three-story building 17 feet from her master bedroom window and living room on Buckthorn Way.

“He’s gone from a hotel that a lot of time and effort was spent on trying to compromise with the neighbors … and suddenly changed it up on us,” she said. “If the Planning Commission votes to approve the plan, we’ll appeal it; if it doesn’t, he will. Either way it’s going to end up at the (City) Council.”

Patel said he is tweaking the proposal to possibly put the parking back underground, though in a less expensive fashion, before going back for possible approval in February.

 

 

Read more on The Mercury News

 

 

Stanford sues Santa Clara County over housing law

University claims it’s been unfairly targeted by ‘inclusionary housing’ ordinance.

Stanford University on Wednesday filed two lawsuits against Santa Clara County Board of Supervisors, charging county officials of unfairly and illegally targeting the university with a recently adopted law that aims to promote more affordable housing on campus.

The university is contesting the new “inclusionary housing” law, which the board approved on Sept. 25 and which requires the university to designate 16 percent of all new housing units as below-market-rate housing. The two lawsuits, filed in state and federal courts, allege that the county’s law violates the Equal Protection clauses of the U.S. and California constitutions, which prohibit government entities from treating one individual differently from others in similar circumstances.

The university also indicated that it plans to sue the county over a separate law that the board had also passed on Sept. 25, one that significantly raised the “housing impact fees” that Stanford has to pay for every square foot of new development. Under the law, the fee is slated to go up from $36.22 to $68.50 per square foot.

In a lawsuit filed in U.S. District Court, Northern District of California, Stanford takes issues with both policies, though the new suit only pertains to the “inclusionary housing” law (Stanford has a later deadline for challenging the ordinance on impact fees). It argues that the county is illegally forcing Stanford to bear the burden of solving what the county itself had determined to be a regional problem: A severe shortage of affordable housing.

By targeting Stanford with its new affordable-housing requirement, the county is violating the 14th Amendment of the U.S. Constitution, which prohibits states from denying “any person within its jurisdiction the equal protection of the laws,” the university alleges in a complaint.

“The County ordinance impermissibly singles out Stanford University,” Geoffrey L. Robinson, of the firm Perkins Coie LLP, wrote on behalf of Stanford in the federal lawsuit. “Through its ordinance, the County has intentionally imposed affordable housing requirements exclusively on housing development constructed by Stanford.”

Read more on Palo Alto Online

 

San Jose moves toward ordinance limiting Section 8 discrimination

Landlords in San Jose would no longer be able to advertise that they don’t take rental vouchers.

San Jose took a step toward making it harder for landlords to turn away would-be tenants who use vouchers to help pay the rent.

This week, the San Jose City Council directed the city attorney’s office to draft an ordinance aimed at giving renters with subsidies, commonly known as Section 8 vouchers, a fair chance on the private rental market. The so-called source of income ordinance would not force landlords to take the vouchers, but it would ban them from judging potential tenants who use subsidies differently from those who don’t and from explicitly advertising “No Section 8” on apartment listings.

If everything goes according to plan, the council will vote on the ordinance in the spring.

While a number of landlords blasted the proposal, saying it would force property owners to navigate convoluted regulations and paperwork, the city’s Housing Department said an ordinance is necessary to make sure families are able to find affordable housing.

Right now, there’s no law that prevents landlords from turning away voucher holders, and a city survey found most do, leaving low-income families scrambling to find homes in one of the nation’s tightest housing markets. Several national studies suggest that when cities and states have such ordinances in place, the percentage of landlords turning away voucher holders goes down and more people with vouchers are able to find places to rent.

“Voucher discrimination is happening in San Jose,” said Jacky Morales-Ferrand, the city’s housing director.

Several landlords told horror stories about Section 8 voucher holders who left rental units in bad shape. But tenants and tenant advocates countered that there’s no evidence voucher users are any better or worse than people who don’t use subsidies.

“We can’t judge the actions of a few and put it on the majority of the people,” said Robert Aguirre, who has used vouchers. “Not all Section 8 holders destroy property or disrespect the people around them.”

“We see clients all the time who are not able to rent housing, have to move away from San Jose, have to live in cars. … it’s absolutely heartbreaking to see that and this ordinance would help,” said Nadia Aziz, an attorney with the Law Foundation of Silicon Valley.

 

 

Read more on East Bay Times