San Jose gets to work on its Anti-Displacement Strategy

Last September, the San José City Council adopted a 10-part Citywide Residential Anti- Displacement Strategy to address displacement in the City. The Strategy includes three high-priority recommendations, two of which are directly related to the San José Challenge Grant: establishing tenant preferences for affordable housing and exploring a Community Opportunity to Purchase program to give non-profits the right of first offer when properties go up for sale. Council also directed staff to “jumpstart this work with the first three recommendations of the Strategy and convene a working group to further develop the details of the proposed policies and programs.” 

After six months of planning and preparation, the San José Challenge Grant Team has begun the process of directly engaging the community on three priorities: 1) co-creating the Community Opportunity to Purchase (COPA) program, 2) moving enabling legislation to support tenant preferences, and 3) supporting the growth of the South Bay Community Land Trust, our local community land trust. 

COPA outreach: Moving away from “Decide, Announce, Defend”

Beginning with the first SOMOS Mayfair hosted event in late March 2021, San José Challenge Grant partners have adopted a “dual-track” community engagement approach. 

On one track, hosted and developed by SOMOS Mayfair, grassroots community members are invited to learn more about the potential of the COPA policy and help to make it a reality through organizing and advocacy. The SOMOS Mayfair-led process is meant to create a community vision for COPA that will inform the City’s policy. This enables SOMOS Mayfair to help garner community support for COPA and to participate in shaping the policy through the City-led process. 

On the other track, managed by the City and run through a facilitator, stakeholders with expertise in housing, development, real estate, policy are convened to help craft the City’s policy with input from community members at larger advisory meetings. The City-led process is meant to move away from a “decide-announce-defend” model of decision-making that many cities use, where decision makers decide on the policy first, announce it to the public, and defend what has already been decided. 

By bringing together a diverse and representative group of people who have expertise in housing policy alongside a larger community forum for the general public to participate, we will co-create a policy that works for all stakeholders and focuses on the needs of our most impacted populations. 

SB 649: Using tenant preferences to prevent displacement 

Recent studies have shown the effect of displacement on our families, our seniors, and our low-income workers. Displaced children experience more absences, lower school completion rates, and increased educational delays or behavioral problems. The emotional toll of displacement and living with the threat of displacement is significant, affecting mental wellbeing, sense of belonging, and community cohesion. 

Along with the financial and health impacts of this crisis, displacement is detrimental to our environmental and climate goals. In coastal cities like San José, increasing housing costs and the lack of accessible affordable housing are forcing families to commute long distances, some over 4 hours daily, to work. This out-migration in search of affordable housing puts more cars on the road, increases congestion and greenhouse gases, and reduces the time parents are able to care for children or elderly parents. Other families are simply choosing to leave the state entirely as evidenced by recent Census data pointing to anemic state population growth and relocation data showing massive movement to lower-cost states like Nevada, Arizona, and Texas. 

Local tenant preferences have been shown to be an effective tool to help create neighborhood and community stability and stop displacement in communities most at risk. By prioritizing specific groups of potential tenants who are most at risk of displacement, tenant preferences can limit displacement, reduce harm of families and seniors, drastically shorten commute times and decrease vehicle miles traveled.

But preferences – such as for Anti-Displacement and Neighborhood residents – require the population to be explicitly acknowledged by the state or federal government. Without this acknowledgement, there can be legal uncertainty for affordable housing developers and lenders who want to use tenant preferences in conjunction with federal tax credits and tax-exempt bonds for affordable housing. The state legislature could address this uncertainty by making an explicit finding that 1) State funding could be used on projects that use these kinds of preferences, and 2) these local ordinances are consistent with state and federal fair housing law if they support a pattern of local policies and programs that foster diversity and housing choice.

In coordination with the City of San José’s Housing Department, SOMOS Mayfair and the Bay Area Housing Action Coalition, Senator David Cortese (D-San José) introduced SB 649 in February. The bill would create a State policy that supports housing for populations facing displacement, aligning tenant preferences with federal tax code requirements and thereby qualifying affordable housing projects that use tenant preferences for tax credit or bond financing. The bill passed the California State Senate in mid-May with a vote of 37-0. It will now go to the State Assembly and hopefully to the Governor’s desk in summer or fall 2021. 

In addition, to use the preferences on State-funded developments, City staff are researching, analyzing, and creating findings to satisfy the California Department of Housing and Community Development’s requirements. 

Pilot Demonstration Project: Growing Land Trust Capacity

In November 2020, The South Bay Community Land Trust, in a partnership with SOMOS Mayfair and the City of San José’s Housing Department, received a grant from the Silicon Valley Community Foundation to support the development of a Pilot Preservation Demonstration Project. The pilot project will help the South Bay Community Land Trust build the necessary capacity to grow and do future projects in San José. 

The core group (SB CLT, SOMOS Mayfair, and the Housing Department) is collaborating with the Land Trust to help move this project forward, including community outreach, identifying funding, and developing a feasibility plan. With the support of SOMOS Mayfair, which has deep roots in some of the most impacted areas in the City, the Land Trust will mobilize support for these models of preservation. In addition, the City’s Housing Department is exploring funding sources to help support preservation projects in San José. 

SBCLT, with participation from the PBF partners, has worked to build capacity by hiring a land trust consultant to assist with the pilot preservation demonstration project. They have held community education forums and hosted a pilot project stakeholders kickoff event attended by affordable housing developers, community organizations, policy experts, and potential funding partners.

Path Forward

In the next phase of work, the San José Challenge Grant Team will continue its COPA community outreach efforts. Our current goal is to develop a draft policy framework by fall 2020 and have the policy adopted by early 2022 with implementation starting in early 2022. Our team will also work for the passage of SB 649 and after the State’s approval, request City Council’s approval for a tenant preference ordinance that reduces displacement risk. 

By the end of the year, we are hopefully standing in front of the South Bay Community Land Trust’s pilot demonstration project, with project partners, current and future residents, and the sense that this is just the first of many.