San Jose Affordable Project Tops Out

The Charles, a 99-unit affordable housing project in San Jose, Calif., has topped out, with completion slated for the summer of 2025. The developer is Charities Housing, a nonprofit specializing in creating affordable housing in the hyper-expensive Silicon Valley market.

Located at 551 Keyes St., the development is on a 0.9-acre site. Upon completion, it will offer 30 studios, 18 one-bedroom, 24 two-bedroom and 27 three-bedroom units.

The Charles will be open to households earning between 30 and 50 percent of Area Median Income, with half of the units reserved for Rapid-Rehousing households who will be referred through the County of Santa Clara Office of Supportive Housing office.

Amenities at the seven-story concrete structure will include a shared kitchen, secure bicycle storage and laundry facilities. The ground floor will feature outdoor open space connections to support walking and recreational activities, common areas and more than 50 underground parking spaces. Rapid Rehousing households will receive a number of services, such as temporary rent subsidies, move-in assistance, educational programs and job placement.

The property is subject to a 57-year net ground lease held by the County of Santa Clara that expires in 2083. Financing for the property includes $9.67 million from the City of San Jose Department of Housing, $9.28 million from Santa Clara County, $4.75 million from Housing Trust Silicon Valley and nearly $105 million from U.S. Bank, Matrix data shows.

Charities Housing operates more than 1,500 affordable units in Santa Clara County and has some 2,000 more units in various stages of development or predevelopment set to be delivered in the coming years. The nonprofit tasked the locally based Blach Construction to build The Charles and David Baker Architects to design it.

San Jose’s expensive housing

The AMI in Santa Clara County, Calif., for a family of four, is $184,300 a year, according to Housing Choices. For that size household, a range of 30 to 50 percent would be $55,980 to $93,300 a year. Rents for The Charles haven’t been released, but market-rate rents in the area average $3,065 a month, with studios going for $2,383 a month and three-bedroom units for $4,011 a month, according to Yardi Matrix data.

As evidenced by the need for affordable housing projects for households making as much as $93,300, metro San Jose is a standout for its high cost of rentals in a state notorious for expensive housing. More than half of California renters pay more than 30 percent of their income for housing, according to according to the Harvard Joint Center for Housing Studies.

Supply hasn’t kept up with demand in San Jose, furthering high housing costs. As part of the regional housing needs assessment, San Jose must plan for 62,200 units by 2031, which averages 7,775 units per year, but the city issued permits for only 2,666 units over the most recent fiscal year.

Still, there are affordable projects underway in metro San Jose. The pipeline included more than 2,500 units underway in 18 fully affordable projects, according to Yardi Matrix. That number represents about a third of the total number of multifamily units under construction in the area.

Recently, an affordable community 14 miles northwest of downtown San Jose opened its doors. The Heartwood Apartments is a 49-unit adaptive reuse project of a 66-key hotel. More than 25 percent of the units are reserved for transitional-age youths while the remaining cater to residents earning up to 30 percent of the AMI.