After years of struggling to get apartments built, the San Jose metro just pulled off a stunning reversal: 3,663 multifamily units permitted in the first half of 2026, compared with just 806 during the same period last year.
That is a 355% increase.
What Changed
San Jose has been aggressively trying to make apartment projects financially viable again. Its incentive program cuts construction taxes and certain housing/park fees for qualifying projects. The city says there were zero market-rate housing starts in San Jose in 2024.
Last year, the San Jose metro was making headlines for having one of the largest declines in housing permits among major U.S. metros. Going from 806 to 3,663 in a year is a dramatic turnaround.
As Rob Luecke Jr wrote on r/bayarea (100+ upvotes): "Permits obviously don’t guarantee that every project actually gets built, but going from 806 to 3,663 in a year is a pretty dramatic turnaround. Perhaps a sign some cities are moving in the right direction."
Why This Matters for the South Bay Market
More permits does not mean more homes tomorrow. These are multifamily projects that take 2-4 years to build. But the signal is clear: San Jose is open for business in a way it was not before.
This follows the broader Bay Area trend — SB 79 driving 341 proposals in Palo Alto, the AG enforcing housing laws in Menlo Park, and Prop 37 making down payments easier. California is pushing hard on housing from every angle.
What This Means for San Jose Buyers
If you are buying in San Jose, Sunnyvale, or Santa Clara right now, existing inventory is still your market. These 3,663 permitted units will not deliver for years. But the long-term outlook is improving — more supply is coming, which should moderate price growth over time.
With ShopProp, a South Bay buyer pays a flat fee starting at $1,995 and gets a rebate. On a $1.5M San Jose home, that is a $35,505 rebate at closing. On a $2M Sunnyvale home, that is $48,005 back.
What This Means for Sellers
If you own in San Jose, this is actually positive news for your property value in the short term. More permits signal confidence in the market — developers do not invest in cities they think are declining. And 2-4 years of construction runway means no new competition for existing homeowners right now.
When you sell, ShopProp flat fee of $4,995 (homes under $1M) or $6,995 ($1M-$2M) means you keep tens of thousands more than with a traditional 2.5% commission.
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Source: City of San Jose. As featured in NPR, USA Today, New York Post, and Brookings Institution.