SJMC Chapter 18.27 requires residential developers of 20 or more units to make 15% of units affordable or pay an in-lieu fee. SJMC Chapter 18.31 imposes a Commercial Linkage Fee on new office, R&D, and warehouse projects to fund affordable housing.
San Jose has two parallel housing impact programs. The Inclusionary Housing Ordinance, codified at SJMC Chapter 18.27, applies to for-sale and rental residential projects of 20 or more units. Developers must dedicate 15% of units as affordable to moderate or lower-income households, build offsite, dedicate land, or pay an in-lieu fee set annually by Council resolution. The Commercial Linkage Fee, SJMC Chapter 18.31, charges new office, R&D, hotel, and warehouse construction a per-square-foot fee tied to documented job-housing nexus studies. Both fee streams flow into the Affordable Housing Trust Fund, which loans to nonprofit and mixed-income developers building deed-restricted housing across San Jose. State density bonus law layers on top, allowing additional units in exchange for deeper affordability.
Failure to record affordability covenants or pay in-lieu fees blocks building permits and certificates of occupancy under SJMC 18.27 and 18.31. Misrepresenting unit counts or buyer income can void covenants and trigger Housing Department enforcement.
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