San José’s new housing program provides reduced-rent residences at The Fay downtown high-rise for lecturers, cops, firefighters and different middle-income public workers fighting excessive Bay Space housing prices.
A bed room inside The Fay, a downtown San José high-rise the place the town has launched a first-of-its-kind program to supply decreased rents to public workers, on Tuesday, Could 26, 2026. (Courtesy of Metropolis and County of San José )
Mayor Matt Mahan mentioned Tuesday this system is supposed to help lecturers, firefighters, cops and different public servants who battle to afford dwelling in one of many nation’s most costly cities.
“This was a chance to put money into models which can be out there right now,” Mahan mentioned. “Shopping for affordability in current buildings is an instantaneous method to get folks into restricted reasonably priced models sooner and extra cost-effectively — and since we’re taking an fairness place within the constructing, we truly receives a commission again.”
This system comes as San José grapples with one of the crucial costly rental markets within the nation.
The median lease for a one-bedroom residence usually exceeds $2,800, making it more and more troublesome for public sector employees to afford to reside close to the place they work. Mahan mentioned some metropolis workers at the moment commute from so far as the Central Valley.
Eligibility relies on incomes between 80 and 120 p.c of the world median earnings and isn’t meant to focus on low-income residents.
Fairly than developing new reasonably priced housing — which Mahan mentioned may value taxpayers $150 to $200 million for a comparable variety of models — the town is investing $11.2 million to purchase down rents in a portion of The Fay. The funding is structured as an fairness place, which means the town expects to be repaid with curiosity over a 15-year interval.
This system offers public workers desire however doesn’t prohibit models completely to them. If models go unfilled, they are going to be opened to most people.
Councilmember Anthony Tordillos, who represents the district, mentioned the construction displays the town’s must be artistic with restricted assets.
“Investing in reasonably priced housing doesn’t all the time imply new development,” Tordillos mentioned. “On this case, it means shopping for down the affordability of a just lately accomplished and actually world-class constructing, guaranteeing each stability and affordability. We’re doing it whereas guaranteeing that the town not solely recoups each public greenback invested, but in addition features curiosity that may then be reinvested into extra reasonably priced housing tasks sooner or later.”
The Fay, positioned at 10 E. Reed St. close to galleries, cafes and music venues within the SoFA District, is steps from VTA Mild Rail and a couple of mile from Caltrain. The constructing contains a rooftop pool with panoramic views, a health heart, yoga studio and coworking areas.
Regardless of its facilities, it has confronted emptiness challenges since a earlier possession group bumped into monetary bother unrelated to the property itself, in keeping with improvement companion Andrew Jacobson of West Financial institution.
“It has nice bones to it, nice facilities,” Jacobson mentioned. “Not solely will we be capable of carry metropolis workers and repair members into the constructing, we can be investing extra into it, enhancing it, rebranding sooner or later, and activating the bottom flooring. To us, that is the beginning gate.”
Greater than two dozen folks had already signed up by means of an curiosity type earlier than Tuesday’s public announcement, in keeping with Sarah Fields, deputy director of the town’s Housing Division. Purposes are actually open by means of the town’s housing division web site.
“This pilot doesn’t resolve our housing disaster by itself; no single program can,” Mahan mentioned. “But it surely’s another artistic and daring try to create room for extra folks.”
