The $30 million luxury apartment tower with a parking problem

A 60% vacancy rate has plagued The Fay apartment tower in downtown San Jose, with city officials pointing to insufficient parking as a key reason.

The tower, which opened in 2024 with fewer than one parking spot for every three apartments, has plunged into foreclosure and changed hands, with the city now leasing its empty units as discounted housing for public employees.

However, many of those workers may have to leave their cars at City Hall, seven blocks away, as the building offers zero onsite parking.

According to Gary Dillabough of Urban Community in San Jose, a partner in both The Fay and the landmark Bank of Italy building conversion project, walking a few blocks is healthy and connects you to the city and community.

But for residents like Candy Sandoval, a custodian and single mother of four who lives at Quetzal Gardens low-income housing in East San Jose, the lack of parking is a major issue.

Sandoval has 20 parking violations and her car was vandalized because of parking on the street, and her fellow tenants are so exasperated without enough parking that some of them park in silent protest directly in front of the building, smack in the middle of a designated bus stop.

An echo of Sydney's 2024 institutional buy-up

The parking reforms in San Jose are part of a broader trend in California and other US cities, where housing, environment and transportation advocates have been cheerleaders for the parking reforms as a way to ease the housing crisis by lowering developers' construction costs.

However, those policies are colliding with California's deep-rooted car culture, and in pockets around the Bay Area,the signs of pushback are starting to show.

Government officials sometimes think that they can reduce driving by not providing parking spaces, and therefore people won't be able to have cars, but it just doesn't work, said Paul Zeger, president of Polaris Pacific real estate company with projects around the Bay Area.

He noted that it's difficult to legislate personal behavior, especially things that are important to people like having a car in California.

What auditors flagged in the May filing

The situation at The Fay apartment tower provides an early test of a 2022 statewide law that erased parking requirements on housing developments within a half mile of a major public transit stop .

Some Bay Area cities went a step further: throguhout the city regardless of transit stops.

Oakland and Berkeley are easing their rules, too, as are numerous other cities across the U.S., including Austin, Minneapolis and Kansas City.

Who is the unnamed buyer?

The Fay's parking problems provide an early test of a 2022 statewide law that erased parking requirements on housing developments within a half mile of a major public transit stop.

Some Bay Area cities went a step further: throughout the city regardless of transit stops.

Oakland and Berkeley are easing their rules, too, as are numerous other cities across the U.S., including Austin, Minneapolis and Kansas City.