San Carlos faces a hefty requirement to build housing by 2031

In 2025, the city issued 70 building permits compared to 31 in 2023 and 38 in 2024. Of those 70 units, 12 were market rate, 29 designated for moderate income level households, 15 for low income level households and 13 for very low income households. 

Only units issued building permits are counted toward the city’s requirement. Proposed units in the pipeline do suggest a steady increase in units to be approved in the coming years, staff said.

This was the first year affordable units were issued permits. In years prior, all issued permits were for market-rate homes. A key factor in some of the affordable unit numbers in 2025 was due to a new standard to include affordable dwelling units in counts, Associate Planner Kristie Woo said. 

While the city doesn’t have jurisdiction over which project proposals come across staff’s desk, and developers decide what they can charge for their units, San Carlos staff is working to establish a building environment apt for developers through up-zoning and design standards.

“Our job is to ensure we remove as many constraints as possible and we make it a very ripe condition for a developer to want to come in and build in our city,” Planning Manager Lisa Porras said. 

Of the city’s 2,735-unit requirement, 1,133 must be market rate, 436 intended for moderate-income-level households, 425 for low-income households and 739 for very-low-income households. 

About 1.9% progress made in very-low-income units, 3.53% progress in low-income units, 6.6% progress in moderate-income units and 8.38% progress in market-rate units, the report said.  

“That is a long-standing issue, not just for San Carlos … to be able to reach and incentivize and get those low-income units built,” Porras said. “They’re very difficult to do.”

Housing generation has been difficult in the years following the pandemic due to economic constraints and limited funding resources, commission Chair Kristen Clements acknowledged. 

“While staff has an important role to play in planning to accommodate growth, we know that 90% of the effect of whatever deals come forward is whether they are financially feasible because of market conditions, because of resources,” Clements said. “This has been a very difficult time for all housing development.” 

Income thresholds are determined against San Mateo County’s area median income, which is $186,600 for a family of four, Woo said. To qualify for units designated low income level households, a family of four can’t make more than $156,650. 

The last eight-year housing cycle required San Carlos to generate a mere 596 units, meaning there was a more than 300% increase in ask from the state for the years 2023-31, Porras said. 

“We certainly are also recognizing our overall below-market rate number is higher than our market-rate number, so we have a big mountain to climb,” Porras said. 

The Planning Commission took no action on the item, and the presentation will be given to the City Council at its meeting March 23 for approval.