After years of waiting, downtown San José’s Gateway Tower is finally edging toward reality, with developers now eyeing a summer start for construction on a fully affordable high-rise at 470 South Market Street. The Core Companies and its partners have overhauled the original market-rate concept into a 15-story, 220-unit apartment tower that is 100% affordable, including a mix of permanent supportive housing and deeply subsidized apartments for very low- and low-income households. If permits and financing remain on track, vertical construction is projected to begin this summer.
City approvals and public financing
To get the deal to pencil out, city housing staff assembled a stack of loans and acquisition agreements designed to keep the project viable, and told the City Council that San José would work to close on construction financing by February 2026. According to City of San José documents, the plan calls for roughly $38.44 million in city construction-permanent funding, including acquisition, plus an $18.17 million city commitment to purchase the land. Altogether, the development budget comes in just under $197 million, with public funds paired with private construction loans and tax-credit equity identified in the staff memo.
Where the project stands now
Developers now say construction is expected to start this summer, after the team locked in key financing pieces and secured approvals for an entirely affordable tower. As reported by The Mercury News, the project sets aside about 55 apartments for permanent supportive housing, with the remaining units aimed at households earning between roughly 30% and 70% of the area median income.
Who qualifies and how affordability is set
Instead of chasing top-dollar rents, Gateway Tower is pegged to steeply discounted income bands, prioritizing very low- and low-income residents, along with some supportive-housing placements. Per the California Department of Housing and Community Development, Santa Clara County’s 100% area median income is $136,650 for a one-person household and $195,200 for a four-person household. That means the tower’s target range of 30% to 70% of AMI works out to about $40,995 to $95,655 for a single person, and $58,560 to $136,640 for a family of four.
Design, neighborhood impacts and services
Architectural renderings show a slim glass tower rising above a lower street-level base, a design intended to fit in with the scale of the SoFA arts district that surrounds it. Project plans and staff memos, along with design materials from the DLR Group and city filings, describe about 3,320 square feet of commercial space on the ground floor, a multi-level parking podium, and a unit mix that reserves dozens of apartments for supportive services and very low-income tenants.
Why the pivot from market rate matters
The decision to flip Gateway Tower from a market-rate high-rise to an all-affordable project highlights how rising construction costs and the need for subsidies are reshaping development strategies in downtown San José. Local reporting in San José Spotlight has also examined the public loans tied to the project and political campaign donations involving its backers, scrutiny that added a layer of politics to City Council votes last year.
The developer has publicly touted the financing milestone. The Core Companies wrote on LinkedIn that the project has secured full financing and is on track to break ground in early 2026. The actual start date will still depend on construction lenders closing their deals, remaining permit approvals, and the usual scheduling and pre-construction work.
Next up on the watch list are any remaining council decisions on potential fee waivers, the formal closing of project financing, and the issuance of building permits. Those steps will determine the precise groundbreaking date and how quickly the tower begins to rise. If the current schedule holds, Gateway Tower will rank among the largest purpose-built affordable high-rises in downtown San José and will serve as an early test of whether heavy public subsidies can jump-start dense, centrally located affordable housing in one of Silicon Valley’s most expensive markets.
