What if I told you San Jose has the opportunity to preserve and create workforce housing using no new taxes or taxpayer dollars? No, it’s not too good to be true. It’s a relatively new concept called the California Community Housing Agency, or CalCHA, and all the City Council needs to do is to authorize it to operate within San Jose. It would allow private investment to flow into San Jose to preserve and develop housing for the “missing middle” — workforce housing — and creates a win for taxpayers, a win for workers and a win for the city. This idea came about from a discussion I had with Ahmad Thomas at the Silicon Valley Leadership Group. Soon after, Councilman Lan Diep and I introduced the concept at the Oct. 28 meeting of the San Jose City Council’s Rules Committee.

By all measures, San Jose is falling short in the production of workforce housing affordable to individuals earning in the 80%-120% of median household income. While the pace of construction on extremely low, very low, and low-income housing has picked up with an influx of taxpayer dollars from tax-funded bonds, such as Santa Clara County’s Measure A, fees, the residential impact fee, inclusive housing in-lieu fee and the commercial impact fee, and from taxes like the Measure E property transfer tax, and market rate units continue to outpace moderate and low income production, housing for the “missing middle” has been missing from the equation. The city’s Housing Element Annual Report from 2019 showed zero units of deed-restricted, moderate-income housing completed or in the pipeline for the 2015-2023 time horizon. We have an opportunity to begin to quickly change this with zero taxpayer dollars and zero financial risk to the city by becoming a CalCHA member.

CalCHA was formed in 2019 by Kings County and the Kings County Housing Agency in cooperation with Catalyst Housing specifically for buying or developing deed-restricted, workforce housing. The agency issues tax-exempt revenue bonds that Catalyst uses to purchase market-rate developments that they then convert to deed-restricted, affordable housing. After the bonds are paid off (typically, over 15-30 years) the property reverts to the city or a designated agent of the city. The city then has a housing asset, and the deed restrictions continue to keep the units affordable. Another benefit is that no one is displaced as the property shifts from market rate to workforce housing.

This plan also reduces risk for the city because robust analysis has been completed by other cities, including Hayward, Livermore, and Mountain View, where CalCHA enjoyed unanimous support. And, because we will not control or manage the JPA ourselves, we have zero liability, and there is no recourse to the city if any particular investment fails.

CALCHA benefits include:

• Prevents displacement.

• Expands housing affordability.

• Requires no new taxes or fees.

• Immediate availability.

• No property management responsibilities for the life of the bonds.

• City gains assets once bonds are paid off.

• Excess proceeds go back to the city for housing the unhoused or other priorities.

Membership in CalCHA is a win-win-win situation. A win for our workforce, who will gain access to affordable housing units; a win for taxpayers who won’t be burdened with yet another tax or fee; and a win for the city that can focus our limited housing dollars on helping the most vulnerable. The program also enhances the whole housing ecosystem, since the property owners who sell to a CalCHA-funded project will have funds to re-invest and create new housing supply.

Please join me, other cities, and the Silicon Valley Leadership Group, Eden Housing, SV@Home, The Bay Area Council, Stronger Foundations, Santa Clara County Association of Realtors, California Apartment Association and others in supporting this win-win-win idea at the next Rules Committee meeting Wednesday by sending your messages of support to the City Clerk at city.clerk@sanjoseca.gov (reference item G.4).

Johnny Khamis represents District 10 on the San Jose City Council.