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Affordable units in new housing (inclusionary) in San Jose

San Jose's own rules on affordable units in new housing (inclusionary), with the code text for every value.

Each rule below links to the section of the San Jose Municipal Code it was read from, with the code text one click away (checked October 2026). General information, not legal advice.

What San Jose's code says

San Jose code What San Jose's code adds
Exemptions
  • An affordable housing development with a recorded unsubordinated affordability restriction on all non-manager units may be deemed to comply.
    Applies: Affordable Housing Development.
    § 5.08.400 · code text
    An Affordable Housing Development that has recorded an unsubordinated affordability restriction applicable to all non-manager units may be deemed to have complied with this Section consistent with the procedure in the Regulations
Fee instead of units
  • Charged per square foot, based on the gap between the average attached market-rate sales price and the affordable price.
    Applies: For-sale residential developments that pay a fee instead of building affordable units.
    § 5.08.520 · code text
    The Affordability Gap - For-Sale shall be multiplied by the percentage of Inclusionary Units required by Section 5.08.510 A. and divided by the average square footage of the Market Rate Units reflected in the sales data to determine the per square foot in lieu fee.
  • Per square foot: sum of fees for Moderate, Low and Very Low income, based on market-versus-affordable rent gaps.
    Applies: Rental residential developments that pay a fee instead of building affordable units.
    § 5.08.520 · code text
    The total in lieu fee shall be the sum of the fees for each of the individual income categories.
  • Half of the amount otherwise due.
    Applies: Residential developments with up to 19 dwelling units providing 90% or more of maximum residential density.
    § 5.08.520 · code text
    The in lieu fee for Residential Developments with up to nineteen (19) dwelling units that provide ninety percent (90%) or more of maximum residential density permitted for the site by the San José General Plan shall be half of the amount otherwise due under this Section.
  • Increased each July 1 by the ENR Construction Cost Index (San Francisco area) for the preceding 12 months.
    Applies: Until a new in lieu fee is determined under this section.
    § 5.08.520 · code text
    the in lieu fee shall be increased on July 1 of each year by the Engineering News Record ("ENR") Construction Cost Index for the San Francisco area published by McGraw Hill on January 1 of every year, or its successor publication, for the preceding twelve (12) months until such time that a new in lieu fee is determined pursuant to this Section.
Share of affordable units
  • 15% of homes, for households earning no more than 120% of Area Median Income.
    Applies: For-sale residential developments (on-site units).
    § 5.08.400 · code text
    Fifteen percent (15%) of the total Dwelling Units in the Residential Development shall be made available for purchase at an Affordable Housing Cost to those households earning no more than one hundred twenty percent (120%) of the Area Median Income.
  • 5% of homes at 60% of Area Median Income and 5% at 80% of Area Median Income.
    Applies: Rental developments with a minimum density of 30 dwelling units per acre, option (i).
    § 5.08.400 · code text
    five percent (5%) of the total Dwelling Units in the Rental Residential Development shall be made available for rent at an Affordable Housing Cost to Lower Income Households at 60% of Area Median Income and five percent (5%) of the total Dwelling Units in the Rental Residential Development shall be made available for rent at an Affordable Housing Cost to Lower Income Households at 80% of Area Median Income
  • 7% of homes at 50% of Area Median Income.
    Applies: Rental developments with a minimum density of 30 dwelling units per acre, option (ii).
    § 5.08.400 · code text
    seven percent (7%) of the total Dwelling Units in the Rental Residential Development shall be made available for rent at 50% of Area Median Income
  • 5% of homes at 30% of Area Median Income.
    Applies: Rental developments with a minimum density of 30 dwelling units per acre, option (iii).
    § 5.08.400 · code text
    five percent (5%) at 30% of Area Median Income
  • 10% of homes sold at an Affordable Housing Cost below 120% of Area Median Income.
    Applies: For-sale developments with a minimum density of 30 dwelling units per acre.
    § 5.08.400 · code text
    In a For-Sale Residential Development that proposes a minimum density of thirty (30) dwelling units per acre, ten percent (10%) shall be sold at an Affordable Housing Cost at below 120% of Area Median Income.
  • 5% of total dwelling units.
    Applies: Rental Residential Development; Moderate Income Households.
    § 5.08.400 · code text
    Rental Residential Development: Five percent (5%) of the total Dwelling Units in the Residential Development shall be made available for rent at an Affordable Housing Cost to Moderate Income Households,
  • 5% of total dwelling units.
    Applies: Rental Residential Development; Lower Income Households at 60% of Area Median Income.
    § 5.08.400 · code text
    five percent (5%) of the total Dwelling Units in the Residential Development shall be made available for rent at an Affordable Housing Cost to Lower Income Households at 60% of Area Median Income
  • 5% of total dwelling units.
    Applies: Rental Residential Development; Lower Income Households at 80% of Area Median Income.
    § 5.08.400 · code text
    and five percent (5%) of the total Dwelling Units in the Residential Development shall be made available for rent at an Affordable Housing Cost to Lower Income Households at 80% of Area Median Income.

Who this affects

HomeownersContractorsDesigners

Frequently asked questions

Does San Jose require affordable units in new housing?

San Jose's code: An affordable housing development with a recorded unsubordinated affordability restriction on all non-manager units may be deemed to comply. (Affordable Housing Development.) (§ 5.08.400); Charged per square foot, based on the gap between the average attached market-rate sales price and the affordable price. (For-sale residential developments that pay a fee instead of building affordable units.) (§ 5.08.520).

General information, not legal advice.

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