SAN JOSE — An affordable housing project could sprout atop a surface parking lot in downtown San Jose, a proposal that could help spur efforts to create a lively and vibrant urban core for the Bay Area’s largest city.
The 173-unit housing development would appear on a 1.3-acre parcel between South Second Street and South Third Street near the Paseo de San Antonio and adjacent to the Hammer Theatre Center.
Bird’s-eye view of a 1.3-acre surface parking lot in downtown San Jose between South Second Street and South Third Street near the Paseo de San Antonio, as shown within the outline. The Hammer Theatre Center is visible in the lower right of the image. (Google Maps)
The project at 143 South Third St. would produce 171 affordable apartments and two market-rate units for on-site managers, a preliminary proposal on file at San Jose City Hall shows.
The Sobrato Organization, one of the Bay Area’s top-notch and most successful development firms, is teaming up with a unit of The Pacific Companies, a major developer of apartment projects in the United States.
The affordable housing proposal could spur activity in downtown San Jose, some real estate experts say.
“We need more people downtown, and projects like this help,” said David Taxin, a partner with Meacham Oppenheimer, a San Jose-based commercial real estate firm. “Over time, you start to build a real downtown.”
The development could bring hundreds more residents into San Jose’s urban core once all the apartments are filled.
“It’s great to see a project that will increase the daytime and nighttime population of downtown San Jose,” said Bob Staedler, principal executive with Silicon Valley Synergy, a land-use consultancy.
The project will be 100% affordable, according to the filing by Pacific West Communities and the Sobrato firm.
The Sobrato firm has owned the surface parking lot since around 2010. The site has operated as a surface parking lot for many years.
“The goal was always to develop housing at this site,” Staedler said. “This was always meant to be high-density housing.”
The units will be rented to people in three income levels, according to the proposal.
The plans show 17 units will be rented to people in extremely low-income brackets, 17 will be rented to people at very low-income levels, and 137 apartments will be rented to people with low incomes.
In Santa Clara County, an extremely low median income would be $42,200 for one person and $60,250 for a household of four people. A very low median income would be $70,350 for one person and $100,450 for a four-person household. A low median income would be $111,700 for one person and $159,550 for a household of four. The figures are based on a report the state Housing and Community Development Department produced in 2025.
The proposal is in its preliminary stages and could be altered as the San Jose review process proceeds.
Sobrato and Pacific West Communities stated in the proposal for the downtown San Jose project that they intend to use provisions of SB 330, a state law that was crafted to streamline local planning reviews, especially for affordable housing.
“It does take some time to get these projects off the ground, but we are starting to see more people in downtown San Jose,” Taxin said.