San Jose green-lights big zoning overhaul, plus two new BIDs

San Jose
City Council Meeting
February 3, 2026

TL;DR

• A sweeping zoning ordinance covering SB 9 lot splits, ADUs, density bonuses, downtown alcohol, and heat pump setbacks (Ordinance No. 31298) was signed into law.
• The Alum Rock Santa Clara Street Business Improvement District was established, with assessments levied for the remainder of FY 2025-2026.
• Story Road BID cleared its first vote. A public meeting is set for February 24 and a public hearing for April 7.
• Cardroom rules eased: betting squares per table doubled from 10 to 20, the four-tournament-per-year cap is gone, and cardrooms can now comp food and discount happy hour drinks.
• A $3,050,252 one-year contract with Allied Universal for citywide security guard services was approved, with options to extend through February 2033.

What happened

1. Citywide zoning overhaul signed into law
   1. Council gave final approval to Ordinance No. 31298, a single ordinance amending Title 19 (Subdivision) and Title 20 (Zoning) of the Municipal Code. It revises San José's SB 9 lot-split standards and adds new streamlined paths for two-unit developments in R-1 and R-2 zones. It updates ADU and ADU condominium rules to match state law and rewrites the ministerial approvals chapter to incorporate SB 684 and SB 1123. It folds SB 1418 and AB 2632 into commercial, industrial, mixed-use, and downtown zoning. It also allows alcoholic beverages within the previously established downtown Entertainment Zone boundary and updates setback rules so heat pumps can sit closer to property lines.
   2. What this means for you: If you own a single-family or two-family lot, the rules for splitting it or adding a second unit just changed. ADU owners and people considering an ADU condo have new state-aligned provisions to work with. Downtown businesses inside the Entertainment Zone can serve alcohol under the new boundary rules. The heat pump setback fix makes electrification retrofits easier on tight lots.
2. Alum Rock Santa Clara Street BID established
   1. After a public hearing where four corridor business owners and advocates spoke in support and the City Clerk confirmed no written protests had been filed, Council passed Ordinance No. 31307 establishing the district. It also adopted resolutions approving the management plan, levying assessments for the remainder of FY 2025-2026, and authorizing an administration agreement with the Alum Rock Santa Clara Street Business Association.
   2. What this means for you: Businesses along the Alum Rock and Santa Clara Street corridor in Districts 3 and 5 will be assessed starting this fiscal year, with the money going to clean and safe services, beautification, lighting, and marketing controlled by the business association.
3. Story Road BID cleared its first vote
   1. Council declared its intention to create the Story Road Business Improvement District in Council District 7, covering Little Saigon and the Story Road corridor from Happy Hollow Park and Zoo to Highway 101. The district would include 434 businesses, most paying a $350 base fee, with 18 retailers over 25,000 square feet paying a proportional share based on footprint. Projected annual revenue is $129,185, with 40% earmarked for safety and beautification, 40% for marketing and activation, and 20% for administration and contingency. A public meeting is set for February 24 at 1:30 p.m. and a public hearing for April 7 at 1:30 p.m. Story Rd. Business Association, Inc. was appointed as the Advisory Board.
   2. What this means for you: If the BID clears its final hearing on April 7, assessments would begin July 2026. Story Road business owners should watch for the February 24 public meeting and the mailed notice.
4. Cardroom rules eased
   1. Ordinance No. 31306, an amendment to Title 16 (Gaming Control), advanced on a first vote. The change loosens the crime-reporting clock at cardroom premises (immediate reporting still required when feasible, otherwise promptly after a reasonable-suspicion determination), doubles the allowable betting layout from 10 to 20 squares per player-position per card table, repeals Section 16.18.075's limits on continuous presence at cardrooms, removes the four-tournament-per-year cap, and lets cardrooms offer complimentary or discounted food and non-alcoholic beverages plus discounted alcoholic beverages during happy hours, as long as none of it is tied to gambling participation.
   2. What this means for you: San José's cardrooms get more flexibility on table layouts, tournaments, and food and drink promotions. The amendment builds on earlier direction in the FY26 budget cycle, which cut the annual cardroom regulation fee from $1,077,000 to $857,000 per cardroom and reduced the Division of Gaming Control from six full-time positions to four.
5. Citywide security guard contract with Allied Universal approved
   1. As part of the consent calendar, Council adopted Resolution No. RES2026-26 authorizing a one-year agreement with Universal Protection Services, LP, dba Allied Universal, with a maximum compensation of $3,050,252, a $300,000 contingency, and up to six one-year extensions running through February 28, 2033.
   2. What this means for you: This is the contract behind the uniformed security at city facilities. The initial term begins on or about March 1, 2026.

What residents brought up

• Item 8.2 (Alum Rock BID). A longtime advisor to the Alum Rock Santa Clara Street Business Association, who said she has supported the board since its founding in 2014, urged a yes vote and called the association uniquely qualified to administer the district. A corridor business owner described safety, cleanliness, and visibility challenges that small businesses cannot address alone, and said the BID would provide a structured, accountable way to invest in clean and safe services, lighting, beautification, and coordinated marketing. A business association representative contrasted the corridor's condition with Los Gatos, Willow Glen, Cupertino, and Mountain View, and asked why a similar investment hasn't been made along Santa Clara Street. A Dulcería Mi Carnaval owner with 34 years on the corridor said many businesses have waited a generation for this moment and described the BID as long overdue.
• Open Forum, downtown police shooting. A speaker representing a community organization described a January 21, 2026 downtown San José incident in which a fleeing man was shot, struck by a police SUV, and then shot multiple additional times by officers. The speaker said he agreed the man needed to be stopped but argued he no longer posed a threat once he was fleeing, after he was hit, and after he was on the ground. The speaker referenced prior local cases including Antonio Guzman Lopez, Jacob Dominguez, and Philip Watkins.
• Open Forum, motorhome parking and 311. An Akron Way resident said motorhomes are parked in the street's emergency lanes on a road only 34 feet wide, and that 311 has not produced a response. The resident described a prior practice of San José Police stickering, then ticketing, then towing motorhomes that didn't move, and asked for that practice to resume because fire trucks and ambulances need the full two emergency lanes.

Also happened

• Taxiway Victor Phase 3A at Mineta San José International Airport approved (Resolution No. RES2026-27), with a construction contract not to exceed $15,215,000 plus a 10% contingency, awarded to the lowest responsive, responsible bidder.
• The Alameda Business Improvement District vote (Item 8.3) deferred to February 24, 2026 on a motion by Councilmember Mulcahy.
• Super Bowl Weekend events at City Hall approved: Free Use and a fee waiver for the Kehlani SJ City Hall Block Party Concert and the Dom Dolla San José Street Party on the Rotunda and East, West, and South Plazas, February 6 and 7, with setup and takedown running February 4 through 9 (Resolution No. RES2026-25).
• Travel approved for Councilmember Mulcahy to attend Reimagining the City Commons in Paris, France, April 14 through 17, funded by the Guadalupe River Park Conservancy, with excused absences from the April 14 Council meeting and the April 16 Public Safety, Finance, and Strategic Support Committee.
• Proclamation: February 4, 2026 recognized as National Girls and Women in Sports Day, presented to the Bay Area Women's Sports Initiative and the Love of the Game fastpitch softball team.
• Commendations presented to Alan "Gumby" Marques for his service as Interim CEO of the San José Downtown Association, and to Officer Michael Jaycox of the San José Police Department for an off-duty investigation that led to a felony arrest and the recovery of a handgun and two unregistered assault rifles.

For any updates or corrections, please email steven@polisdesk.com