SAN JOSE (KPIX) – A highly charged housing issue is taking shape at San Jose City Hall Tuesday night.

At issue is whether the city should continue to give subsidies to high-rise residential developers.

San Jose Mayor Sam Liccardo says the subsidies are needed to make the projects profitable enough for developers to get construction loans.

“There’s no high rise residential that has broken ground in two years because the costs are too high. So the city needs to reduce fees if we’re going to see the housing get built,” mayor Liccardo said.

But the council is split on whether to renew subsidies that were enacted in 2007 that gave residential high-rise developers a break by sharply cutting fees that help pay for parks and low income housing.

Nine projects that would qualify for the subsidies are in limbo which would bring over 3,000 housing units to the city.

“I realize that if we don’t get any projects built, we get zero fees,” said Council Member Raul Peralez.

But Peralez says the city should explore whether some projects would be profitable even without the city’s help.

“Should we not be giving away these incentives and not really getting anything back in return?” asked Peralez.

One man who says his mother and coworkers can hardly afford to live in San Jose came to City Hall to speak against giving developers too much.

“They’re giving them all these tax breaks and they’re not giving back to the community,” said Robert Serna.

The issue is still under discussion at San Jose City Hall, but appears headed for a close vote.

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