School district eyes hundreds of San Jose homes intended for its workers

SAN JOSE — A South Bay school district intends to develop hundreds of San Jose apartments and offer them at rental rates that district employees can afford.

The San Jose Unified School District has proposed the development of a 288-unit apartment project at 760 Hillsdale Ave. in San Jose, according to a preliminary proposal on file with city planners.

The project would produce housing for the district’s rank-and-file workers, according to documents posted on the school district’s website.

“Workplace housing is a pressing issue for us,” said Seth Reddy, the district’s chief business officer. “We cannot pay our staff sufficient wages to live in comfort and dignity in this area.”

The district plans to put the housing development on an undeveloped site alongside Hillsdale Avenue next to Highway 87 in San Jose.

Other efforts are underway to attempt to address the “missing middle” of workers who make too much money to qualify for numerous affordable housing projects but don’t make enough to rent or buy market-rate residences.

San Jose State University is eyeing a plan to replace the aging Alquist State Building in downtown San Jose with at least 1,000 residences consisting of multiple housing towers.

At the 760 Hillsdale site in San Jose, the proposed workforce housing apartments would rise adjacent to the district’s seven-building Silicon Valley Education Campus.

“When you look at the median income needed to afford housing in San Jose, that expense is beyond what even our highest-paid employees can afford,” Reddy said.

Reddy recalls that when he started with San Jose Unified School District in 2017, the district’s board of education believed action was needed to solve the crisis for affordable workplace housing.

“We wanted this project to be akin to market-rate housing in terms of the quality of what we want to build,” Reddy said.

Voters in the school district’s boundaries approved in November 2024 a general obligation bond measure with potential proceeds of $1.15 billion.

Within that overall total, the budget to develop the 288-unit apartment complex on Hillsdale is expected to be $282.5 million, according to Erik Schoennauer, a land-use consultant who is advising the district on the project.

The proposal arrives at a time when San Jose is struggling to meet its state-mandated benchmarks for annual housing production in the Bay Area’s largest city.

“Under the city’s housing element as required by the state, San Jose should be producing an average of 7,775 units per year over the eight-year period that started two years ago,” Schonnauer said. “The city is coming nowhere close to the target amount.”

In the face of these pressures, San Jose officials should intensify the city’s efforts to approve housing projects, in Schoennauer’s view.

“The city needs to start looking at underutilized properties throughout San Jose that make sense for housing,” Schoennauer said. “The 760 Hillsdale site is completely vacant and has been vacant for a number of years.”

The development site is near a light rail transit line and is within a designated San Jose urban village, according to Schoennauer.

“We are comfortable that we would have sufficient demand and sufficient availability for our workforce,” Reddy said. “We could conceivably see income restrictions on some of the units based on the entitlement process we go through.”

The district emphasized that it wants to ensure that the new housing is open to all of its employees.

“The people we put in front of our students are very important,” Reddy said. “We want to get the best and the brightest to work here.”