Getting your
Trinity Audioplayer ready...Walk through SoFA on the first Friday night of the month, and you’ll hear music spilling from venues like The Ritz, see galleries like MACLA and the Museum of Quilts and Textiles with doors thrown open and be surrounded by people grabbing a bite and enjoying the nightlife scene.
I’ve represented downtown for 10 months, and it still has all the elements that made me decide to call it home: the walkability, the arts scene, the mix of people you don’t get anywhere else in Silicon Valley.
But walk those same streets for lunch on a weekday or on a Tuesday night, as I often do after City Council meetings, and it’s a completely different place.
That energy – the people – are nowhere to be seen. A neighborhood that runs on one-off events rather than on residents is inherently fragile. Our arts and cultural organizations — festivals, theaters, museums, live music — generate nearly $300 million in economic activity each year and draw nearly a quarter of their audiences from outside the county.
But that audience arrives for events and leaves. With a population of only 23,000 residents and a 31% office vacancy rate, downtown San Jose has everything a great urban neighborhood needs except the one thing that makes it resilient: enough people actually living in it.
It’s not for lack of trying.
Over the years the city has pursued multiple strategies to add housing downtown. And yet, downtown’s high-rise residential incentive program, enacted in 2007, has produced just three towers in the past decade. In contrast, similar reforms were passed for mid-rise apartments in 2024, and led to 1,444 new homes breaking ground in 2025 alone.
So why is downtown stuck?
The city’s own feasibility study explains why: high-rises are the most expensive projects to build, making them the highest-risk for lenders and requiring builders to plan for higher rents in order to break even.
When projects do come forward, financing issues often cause them to stall out long before we ever see cranes rise. One developer approached 28 lenders about a recent high-rise proposal and received only one response.
Wasted potential
The result: vacant lots and underutilized buildings that could support hundreds of new homes sit blighted and empty. While local incentive programs help on the margins, ultimately what downtown needs to build the dense housing that people can actually afford is access to better financing.
San Jose cannot solve this problem alone, and luckily, we don’t have to.
Assembly Bill 2074, authored by Assemblymember Matt Haney (D – San Francisco), would streamline the approval process for downtown housing projects, making it faster and cheaper to build new homes close to jobs and transit. And critically, it would also establish a $500 million state revolving loan fund to provide financing to high-rise projects at favorable rates.
To understand the impact of this investment, we must first understand how downtown housing projects are traditionally financed. In order to manage risk, banks will lend only a portion of the construction costs for a new project, so homebuilders must raise the remaining money from private investors who expect double-digit returns on their investment. Those expectations increase project costs, driving up rents for future tenants or preventing new housing from being built at all.
Public capital at lower interest rates breaks that cycle, lowering overall costs and providing the funds necessary to unlock stalled projects. Once the buildings are complete, the homebuilder repays the loan with interest, and the state can recycle the funds to support more housing projects without additional public investment. Downtown San Jose has over a dozen towers already approved that have stalled due to high costs and a lack of financing.
Our city would gain immensely from this bill.
Downtown is the one place in this region where workers can lead car-lite lives close to their jobs, like the half of my office who walk to work every day. It’s where Caltrain, VTA and future BART service converge, and where the best bike and pedestrian infrastructure has been built.
With rising gas and insurance prices, the ability to rely more on walking, biking and public transportation puts money directly back in people’s pockets.
And, just as important, it means less time wasted sitting in traffic and better air quality for everyone. More downtown dwellers will also mean more daytime customers for our small businesses, more eyes on the street to support public safety and more people to sustain the bustle of First Fridays throughout the rest of the month.
We should be doing everything we can to make downtown San Jose an affordable place for anyone to call home.
The state stands to benefit, too. New downtown housing means more construction jobs, a growing tax base and a more sustainable way to reduce housing costs than one-time assistance programs. Enabling more Californians to live in our urban centers is also one of our most potent tools for combating climate change.
Broad benefits
And while these projects will be mixed-income, research has repeatedly shown that building new market-rate housing slows and even reverses rent growth while preventing displacement in low-income neighborhoods.
What’s more, the conditions attached to AB 2074 — onsite affordable homes, prevailing wages and workforce development opportunities — ensure that the state’s public investment produces broad benefits for our communities.
This solution has already been proven elsewhere. Montgomery County, Maryland created a revolving loan fund in 2021 that has already financed over one thousand units and is on track to deliver 6,000 mixed-income homes over its first 20 years. Since then, at least seven states have launched their own revolving loan programs.
On a Friday night in SoFA, street food and live music fill the air. Come back Tuesday evening: same block, same buildings, but the streets are quiet and the bartender is wiping down a counter nobody’s sitting at.
The culture is already here, but the people aren’t. Until we build the homes for them to live in, they won’t be.
Anthony Tordillos represents District 3 on the San Jose City Council. He previously served as chair of the San Jose Planning Commission.