The Housing Policy We Need
The San Jose City Council is planning an Aug. 18 vote on high-density, by-right "missing middle" housing city-wide, writes Pat Waite of the group named Citizens for Fiscal Responsibility. Waite urges nay votes. Instead, he says, the city should stick to its existing policy and only improve the city's processes at the margins.
Improving the city's processes is indeed an important task and an impediment to more reasonable housing costs in San Jose. But the status quo needs more than marginal process changes. The poor status quo in San Jose does not befit "The Capital of Silicon Valley". Among our issues: poor street quality that ranked 2nd worst in the US, closing schools, worst-in-the-nation housing costs, and frequent budget shortfalls leading to cuts in services. We residents have had enough of these problems; it is time to address them as the major problems that they are. The by-right "missing middle" housing policy in question would help address all of these, more than nibbling at the margins ever could.
The road quality issues we face here come from the obvious cause: building and maintaining roads is expensive. The city simply does not have the money to keep the roads in good condition across its approximately 180 square miles of land area. Compare with Chicago, with its 230 square miles of land, in the same general ballpark at 1.25x the size. Yet Chicago ranks a whopping 34 cities lower on the road maintenance quality list, at number 36. 28% of Chicago's roads got a "poor" rating. Remember, San Jose ranks second place, with 64% of its roads rating "poor".
How can Chicago fare so much better? San Jose enjoys a major climate advantage over Chicago, so we should fare better than they do. We don't deal with no freeze-thaw cycles, salt treatments, and other winter-weather drivers of road damage. A big reason for us falling behind is Chicago's much larger tax base: Chicago has 2.5x as many residents as San Jose, at 2.75 million compared to San Jose's 1 million. With over twice as many residents per square mile, Chicago enjoys twice as many people paying the taxes that fund a given area of the city. That's money for roads, yes, but also the other services any city must provide: emergency services, sewer systems, parks, and so on.
The very high cost of housing and school closures here are, essentially, the same issue: families with children increasingly cannot afford to live here. Buying a house costs over $1 million, putting a 30 year mortgage out of reach for most. Even the apartment rental market provides little relief, when a lower end 3-bedroom apartment rents for upwards of $3500 in much of the city.
San Jose's rental vacancy rate of only 3.5% (in 2025) indicates too few apartments in the market. The same article tells us that balanced markets bottom out at a rate of 5%. As we can see, our city's restrictive housing policies are artificially limiting the number of apartments. As we saw in the previously linked SF Gate piece about the city's budget shortfalls, the city relies on sales tax and property tax to fund its operations. We do not want our policies to prevent families from living here, keeping our schools open, and paying the taxes that let our city provide the services we need.
Our problems are bigger than just process issues around the edges. Better processes will not avoid school closures. Marginal improvements will not address housing costs beyond the reach of families. We need more housing in San Jose. A lot more. The pro-"missing middle" policy before the council will be a big step in addressing major problems we face as a city.