For years, San Jose has taken a hard stance against using commercial land for housing — despite the region’s excruciating housing shortage — to bolster economic activity in a city desperately seeking to shed its image as a “bedroom community.”

But in a East San Jose neighborhood whose streets are lined with minority-owned businesses, those rules seem to fly out the window. As part of the Alum Rock Avenue Urban Village project, a developer — one of a handful eyeing the Alum Rock corridor — has proposed razing more than 30 small businesses inside 11 buildings to develop a whopping 800 units of housing with some retail underneath. It’s unclear how many of those apartments will be affordable.

And there’s not much, if any, public scrutiny. The plan is perfectly legal, and the City Council won’t vote on it, either.

That’s because Alum Rock is the only place in San Jose that operates under form-based code planning, which allow developers to expedite projects based on the appearance of the building, not land use.

In form-based planning zones, development applications can simply be approved by the city’s planning commission.

Unlike conventional zoning, under form-based coding laws a developer doesn’t need to apply for a re-zoning permit, go through community meetings, or have their application and permits voted on at City Council meetings. The city’s planning commission approves the project as long as it meets building code standards, regardless of whether it’s used for residential or commercial use.

The areas affected run down Alum Rock Avenue between King Road to Interstate 680.

Now there are at least five major developments planned for the historic corridor, and residents, small business owners and local advocates are starting to worry.

“The developers aren’t doing anything wrong, that’s the code. But the thing is the community didn’t know why it was happening so quickly,” said Fred Buzo, associate state director for AARP. “These are businesses that are just going to be gone, demolished. It’s like this domino effect — displacement is a huge, huge concern.”

The zoning law in Alum Rock means developers don’t have to change the land use designation in order to build housing in a space that was formerly intended for commercial use, Buzo said. In other parts of the city, developers would have to file a re-zoning application before moving into a new space intended for a different purpose.

While certain factors such as the tech boom and the arrival of the new Berryessa BART station have influenced development, Buzo said it’s mainly the zoning laws that incentivize developers to come into the neighborhood.

Among the five proposals for the Alum Rock corridor is a project called “Sunset @ Alum Rock” from developer SiliconSage Builders, which is considered to be the largest. It proposes a 5-story mixed-use building with 738 apartments, 26,500 square feet of retail on the ground floor and a tandem parking arrangement.

Attempts to reach the developer were unsuccessful.

Fears of displacement

At a recent community meeting at the Mexican Heritage Plaza, concerned neighbors, city officials, advocates and planners discussed the project’s intended changes — and how it should reflect the interests of the neighborhood.

Camille Llanes-Fontanilla, executive director of SOMOS Mayfair, jots down concerns from East San Jose residents during a community meeting. Photo by Kyle Martin.

“What kinds of businesses will have access to these new commercial spaces?” said Camille Llanes-Fontanilla, executive director of local nonprofit Somos Mayfair. “What are the rents going to be looking like because right now we have a lot of family owned businesses– not big-box retail. There’s a difference in character and that’s what’s causing the fear and anxiety.”

According to Llanes-Fontanilla, displacement is the biggest fear among residents and business owners.

“If the people are displaced, then truthfully there goes all of our businesses as well,” added Llanes-Fontanilla. “But what we have built in the East Side is the social support where people genuinely care about each other. We still give our people rides, and watch each other’s children–we’re all actually connected.”

Local business owner Jose V. Rios, 60, has operated his small, family-owned tax business — Ins Tax– on the corridor with his son for the past 12 years — on the same lot where SiliconSage has proposed its massive development. If the project is approved, the family will be forced to leave. Rios said he’ll have to borrow another loan from the bank and delay his retirement.

“Is it good for the business or is it good for us?” said Rios, referring to the development project. “I feel like whatever they do it’s about business. Every business person has their agenda — for them they’re thinking about their money and that’s it.”

Rios moved to the United States from Mexico when he was 17 and settled in San Jose. He worked as a dishwasher before he could afford an education and starting his own business in Alum Rock.

Jose V. Rios has operated Ins Tax for the past 12 years. If SiliconSage’s project is approved, he’ll be displaced, forced to borrow another bank loan and delay his retirement. Photo by Nadia Lopez.

He said the developer has made no effort to reach out to him or other businesses at risk of being displaced, rather he was informed by a friend who said that the project could affect him. Some business owners on his block aren’t even aware that there is a proposed development project, he said.

“Most of the people have been doing this as a family and cannot build their business again,” said Rios, adding that leaving the area will mean losing a large portion of his clients.

Historical significance

Llanes-Fontanilla said that residents are also concerned about preserving the historical architecture and cultural landmarks in their neighborhood.

Within the proposed development sits the home of Cesar Chavez, where he lived for 14 years — a historic San Jose landmark. On the corner of King Road lies the Mexican Heritage Plaza, a testament to the neighborhood’s roots in spurring social justice movements, suitably situated between two of the barrio’s most beloved Latino joints — El Chalateco and Mariscos La Costa. While El Chalateco is outside of the Urban Village boundaries, Mariscos La Costa is within the boundaries and could eventually be displaced.

“We need to do what we have to at all costs to preserve the nature and the character of Alum Rock,” East Side Councilmember Magdalena Carrasco told San José Spotlight. “We have not had a development on the East Side in the last 20 years, and right now we can’t keep developers away from the East Side because they’ve discovered the magic and potential on the corridor.”

Carrasco said Alum Rock is the “oldest corridor” in San Jose and one of the most important corridors for the entire city.

While Carrasco is “still on the fence” about the use of form-based code planning, she said she supports transforming the corridor into an urban village as long as it doesn’t compromise the character of the neighborhood or displace residents.

Carrasco recently introduced a $100,000 budget proposal to help businesses in the Alum Rock corridor that are at a higher risk of being displaced.

“The permits are coming through — they’ll most likely get approved, but we want to make sure the community feels that their input was part of the process,” Carrasco said about the SiliconSage’s development and others like it. “We need more housing and investment, but we need to make sure that they’re going to be responsible to the residents and coming in as good actors, partners and neighbors.”

Only Alum Rock has this zoning law

San Jose officials first discussed form-based code planning in 2009, but there was a lot of pushback. At the time, city officials considered applying the zoning law in three areas, including the affluent Willow Glen neighborhood.

But when the idea came back in 2013, there was less opposition and it passed — but only in Alum Rock. According to Carrasco, now the entire city could be subject to changing to form-based code planning.

Angela Wang, project manager for the SiliconSage development that could displace 32 businesses, said the project is being “redesigned.” The developer has to change the project’s layout to abide by the planning commission’s guidelines. Community meetings will be held after the new plans are received, said Wang.

But not everyone is convinced that the concept keeps the interests of the community in mind.

According to Buzo, the zoning process for other urban village plans in San Jose have allowed for extensive community outreach through meetings and City Council votes — but not in Alum Rock. In order to make the project in Alum Rock a true “urban village,” Buzo says the city needs to modify the form-based code process to allow for community input.

“They designated an urban village without much community input at all,” said Buzo. “In many ways it’s an urban village in name only — if they’re going to continue to call this an urban village, then they need to go through the planning process they would normally go through to call it an urban village.”

In additional soliciting community input, Rios, the business owner, said the city and developers need to help businesses relocate.

“The small businesses are the ones who have made this area what it is and now they’re the ones who are going to suffer,” Rios said. “I came here to do better, to build my business and now it’s almost like you work for something and someone comes in and kicks you out of your own house.”

Alum Rock community leaders are planning a second community event on Saturday — a neighborhood walk — to create more awareness about the project’s progress and encourage residents to voice their concerns. The walk will start at 10:00 a.m. at the Mexican Heritage Plaza and will include several stops along the way.

Contact Nadia Lopez at [email protected] or follow @n_llopez on Twitter.