\u201cWe hope to stabilize that asset and get people actually living in these vacant units<\/a>, bringing some more foot traffic and some more density to the southern part of our downtown,\u201d District 3 Councilmember Anthony Tordillos<\/a>, who represents the area, told San Jos\u00e9 Spotlight.<\/p>\n The voucher program targets middle-income tenants earning between 80% and 110% of the area median income, which is roughly $111,000 to $150,000<\/a> in annual earnings. The program includes a preference for city workers, who will be bumped to the front of the line in the applicant pool.<\/p>\n The pilot voucher program employs a novel approach to affordable housing in San Jose. Under the plan, the city will become a master tenant at the property, entering an agreement with ASJ Development, a subsidiary of Canadian-based real estate company WestBank.<\/p>\n WestBank representatives did not respond to a request for comment. The company has several projects in downtown San Jose, including a proposed data center and hundreds of homes<\/a> at 300 S. First St.<\/p>\n As master tenant, the city will work out rental terms for the 197 apartments covered by the program. Qualifying tenants will pay lower monthly rents, depending on their income levels, and the city will cover\u00a0the difference.<\/p>\n Unlike other affordable housing programs, this one won\u2019t produce permanently rent-reduced homes.\u00a0Over time, the rents will gradually increase in the covered apartments, returning to market levels after 10 years.<\/p>\n A two-bedroom apartment for a family making 80% of the area\u2019s median income would cost $3,590 in rent each month, according to affordable housing formulas for San Jose set by the U.S. Department of Housing and Urban Development.<\/p>\n Brian Kurtz, CEO of the San Jose Downtown Association, said drawing more middle-income workers, including city employees, into the heart of downtown would provide the area with an economic win.<\/p>\n \u201cHaving employees live where they work is a tremendous value add,\u201d he said at the meeting. \u201cIt strengthens connections. It shortens commutes, supports local businesses and reinforces a sense of shared investment in place.\u201d<\/p>\n Officials with the San Jose Housing Department said the subsidy will grant the city an ownership stake in The Fay, allowing it to recoup the city\u2019s full $11.2 million investment with interest over the course of the program. Money for the vouchers will come from a fund created by Measure E, which was passed by San Jose voters in 2020 to fund affordable housing through a property transfer tax.<\/p>\n Public documents<\/a> outlining the program did not include a detailed explanation of the planned financing mechanism. Housing officials did not respond to a request for additional\u00a0information.<\/p>\n \u201cWe think there is a strong demand side for this program that could hopefully lease up the building in order to create stabilization,\u201d Housing Director Erik Soliv\u00e1n said at the meeting.<\/p>\n The Fay opened to great fanfare in 2024. Marketed as a luxury apartment building, city leaders touted the property as a business win for downtown. Prices at opening ranged from $2,750 a month for a studio up to $4,330 for a two-bedroom apartment.<\/p>\n \u201cGet the investment, get the housing, the residents, all that vibrancy and then in the long run, know that by growing the pie and having more economic activity, we\u2019ll have the revenue to fund services,\u201d Mayor Matt Mahan said at the building\u2019s opening celebration just over a year ago.<\/p>\n![\"Outward](\"https:\/\/www.newsbeep.com\/us-ca\/wp-content\/uploads\/2026\/02\/IMG_5085-1024x768.jpg\")
The Fay has struggled to find tenants to fill its 336 apartments, and now faces a vacancy rate of 60%, according to a city memo. Photo by Keith Menconi.<\/p>\n
![\"Keep](\"https:\/\/www.newsbeep.com\/us-ca\/wp-content\/uploads\/2026\/01\/1769027829_854_interactive-184632509590.png\")
<\/a><\/p>\n