San José — In a parallel analysis presented Dec. 8, CSG Advisors reviewed nearly 200 tax‑credit applications across California and concluded San José’s per‑unit development costs for affordable housing generally align with regional norms, though unit mix and financing timing create distinct cost pressures.

Nicole Graham of CSG Advisors said the study used about 194 proposed affordable projects — many filing TCAC applications — and that roughly 20% of those units were in Santa Clara County. She cautioned the dataset reflects application‑stage costs, which are not final construction costs and do not include land acquisition. "These are application‑stage numbers; the only thing we know with 100% certainty is that the final budget will differ," Graham said. (Nicole Graham, SEG 767–816)

Major drivers and examples: San José proposals skew toward larger projects (average ~173 units) and a higher share of studios and one‑bedrooms (~66%), which raises $/sqft while often lowering $/unit. Hard costs were described as about 65–70% of development cost; labor is approximately 30–35% of hard costs. Panelists from Eden Housing and Mid Penn described a representative project (East Santa Clara campus) where city support accounted for roughly $7.8 million and comprised about 14% of total capital, with county funds and tax credits providing other major shares.

Financing timing: Nevada Merriman of Mid Penn and Andrea Aswood of Eden Housing told the council that misalignment between local financing decisions and state tax‑credit application cycles can force projects to budget for escalation or rely on bridge financing, increasing costs. Merriman urged better city coordination to improve competitiveness in state rounds and reduce escalation risk.

Policy linkages: staff emphasized the opportunity created by recent federal tax‑credit expansions and urged the city to align local subsidy timing with state competitions to capture increased funding availability. The study’s authors and nonprofit developers recommended continued refinement of the city’s capital timing to reduce escalation and close financing gaps.

Next steps: staff said details from this affordable analysis will inform updates to the inclusionary housing ordinance and city incentive programs on the Jan. 27 policy calendar.