Rising costs could slow down housing construction in San Jose

A new study suggests that rising construction costs related to a labor shortage and President Trump’s tariff plan may hinder high-density housing development in San Jose, the San Jose Inside reported.

The report, prepared by consultants at Keyser-Marston Associates, predicts that rents would have to ascend even higher to make residential tower construction profitable for investors.

Findings show that the average tenant would need to bear another 25 percent rent hike to make it economically feasible to build new high-rises. According to a 38-page conceptual analysis by Keyser-Marston, estimated minimum profit targets for developers range from 10 to 15 percent of project costs.

In response to these findings, Mayor Sam Liccardo told the Mercury News that the city might need to slash developer fees to counteract market forces.