(BCN) -- Plans for a San Jose urban village have shifted, after developers agreed to pay millions to offset their decision to build more affordable homes. The San Jose Planning Commission unanimously approved a downscaled plan for hundreds of apartments at the El Paseo de Saratoga shopping center Nov. 20 after developers agreed to pay $13.9 million in fees to offset building more affordable homes. Steve Lynch, planning director for developer Sand Hill Property Company, said the decision to cut more than 100 affordable homes from the proposed 772-apartment complex keeps the project financially feasible. It leaves 38 affordable apartments available for people earning the area median income, or $184,300 for a family of four. The proposed development includes a 12-story building with 398 homes and 14,139 square feet of commercial space, along with a 10-story building with 374 homes and 17,447 square feet of commercial space. Lynch said the finalized version of the El Paseo project will address the city's housing needs and includes a 263-bed residential care and memory care facility, along with a Whole Foods grocery store to anchor the pedestrian-friendly, walkable retail space. Boise State withdraws from Mountain West volleyball tournament rather than play San Jose State "The project still meets all of the requirements of the urban village guidelines, and the key features of the project that were most important to the community are unchanged," Lynch told San Jose Spotlight. "This includes the main street paseo, the new retail and restaurant spaces, Whole Foods and the public plaza open space. These are the most important aspects for the greater community." San Jose requires all residential developers to make 15% of homes in a project affordable under its inclusionary housing policy. Developers who want to avoid this, as Sand Hill opted to do, must pay an "in-lieu" fee per home under the 15% minimum requirement. Jeff Scott, spokesperson for the city housing department, said the collected in-lieu fees will be invested in future affordable housing projects. "This is a key component of the city's strategy to foster an abundant housing stock," he told San Jose Spotlight. "This strategy includes funding more affordable units to help transition individuals from interim housing to permanent housing and end unsheltered homelessness in the city." Sand Hill officials told San Jose Spotlight the pivot to scaling back its projects in the West Valley is because of factors outside their control, including rapidly rising interest rates, costs of materials and project delays. Planning Commissioner Dilpreet Singh described the proposed design as futuristic with a modern look, and said housing is the best use of the land in a moment where the city is in a housing crisis. "This project was previously approved, but with the economic uncertainties it never took flight. I believe that specific piece of land is currently underutilized," Singh told San Jose Spotlight. "This project makes for a better use of the land." Alex Shoor, executive director of housing advocacy organization Catalyze SV, said his group supports the project moving forward. Ultimately, a multi-story mixed-use development is great for West San Jose, he said. While the project shaved off dozens of affordable homes, Shoor said the ones left are still a net benefit. He hopes to see more developments pursuing ambitious designs. "I still think San Jose suffers from a need for much more iconic, beautiful and enticing projects now," Shoor told San Jose Spotlight. "The creativity we have in the tech sector doesn't always transfer to the land use sector." Copyright © 2024 Bay City News, Inc.