The City of Gilroy issued only 37 residential building permits in 2025, but sizable new housing projects proposed or “in the pipeline” over the next few years will help the city move closer to its long-term state-mandated numbers.
That was one message delivered by city staff to the Gilroy City Council at a recent meeting. Every year, the city is required to submit an annual “progress report” and update on its General Plan and Housing Element to two state agencies.
Staff presented the update to the council at the March 16 meeting, where most of the discussion centered around the Housing Element and the challenges to promoting more affordable housing in Gilroy.
The update included a review of Gilroy’s responsibilities under the state’s Regional Housing Needs Allocation process. That process is outlined in the Housing Element, also a requirement under state law.
The current Housing Element for Gilroy covers the city’s RHNA plan for 2023-31, with a target of 1,773 new homes. From 2023-25, the city has issued permits for 433 housing units. That leaves 1,340 more units to be approved in Gilroy to meet its RHNA goals by 2031, according to city staff.
The allocation includes specific numbers of units to be built in each of four categories of affordability: very low income, low income, moderate income and above moderate. The vast majority of the units permitted in Gilroy since 2023—330 homes—are in the above moderate category.
City staff is currently reviewing plans for some “very large multifamily projects” that will likely bring a “significant increase” in building permits this year.
“So we anticipate an increase this year and next,” Community Development Director Sharon Goei said.
Council members wondered how the city could encourage developers to build more homes in the lower income categories—a seemingly perpetual challenge throughout California, and especially in the Bay Area.
Goei noted that some of the projects in the pipeline of the city’s application and planning processes include units in the lower income categories.
Council member Zach Hilton noted that a “success” in the city’s housing plan is the permitting of 29 accessory dwelling units in 2025—including 18 in the very low and low income categories. The total also exceeds the city’s goal of 25 ADUs per year.
“What we can do up here is be good story tellers,” Hilton added, “and talk about all the different ways we have supported projects” such as waiving the city’s usual impact fees for “deeply affordable” housing developments.
During a staff presentation, Housing and Community Services Manager Christie Thomas detailed the RHNA numbers as well as some examples of partnerships and programs that have contributed to the city’s affordable housing efforts.
“Staff will continue advancing these efforts in partnership with other divisions within (the city), Santa Clara County housing providers and community organizations to increase housing opportunities and ensure residents are aware of the resources available to them,” Thomas said.
The Housing Element is one of nine aspects of the Gilroy General Plan. Other elements, also covering the period 2023-31, are land use, mobility, economic prosperity, public facilities and services, parks and recreation, natural and cultural resources, potential hazards and environmental justice.
Planning Manager Michael Fossati gave a staff presentation on the city’s progress in each of the General Plan elements.
The city is required to send annual updates on the General Plan and Housing Element to the California Department of Housing and Community Development and the Governor’s Office of Land Use and Climate Innovation.
The council voted unanimously to submit the update to both state offices.
