On his first day of work at City Hall since becoming mayor, Matt Mahan sat down with Metro Silicon Valley executive editor Dan Pulcrano to discuss some of his key themes, public safety and accelerating housing construction to address the homelessness crisis. The mayor also touched on what he called the “decimation” of downtown San Jose’s small business community and his plans to work with county officials to address social issues. The excerpt below is part of a longer interview that appears here.

We hear a lot of talk about 'clean and safe.' But what does that mean? How does that translate into specific actions?

I’d say a few things. There are many options here, but a few that I’m interested in pursuing immediately.  I mean, one is that we will be expanding foot patrols in downtown and some of our other key commercial districts. And I think it’s really important that we have our police force out in the community engaging with small business owners and residents and having that relationship and understanding what’s happening on the ground. I want to see officers get out of their cars and engage with the community as much as possible. And I understand that with our staffing levels, that has been a challenge. They’re often reacting to priority-one calls that are coming in, and cars are speeding around the city to react to violent crime in progress. And so we need to improve staffing levels. That’ll be a priority for me with my first budget message in March.

A program that I have been very supportive of is Mayor Liccardo’s San Jose Bridge, which employs unhoused residents to help clean up the city. That creates entry level jobs, the dignity of work, a contact point so that we can help people get access to housing and other supportive services. But to me, that’s kind of a twofer that allows us to give somebody a job and some income and dignity and also to make our city look better.

A few decades ago, San Jose used to have horse patrols and foot patrols. Officers got to know their beats, and they got to know the merchants, they got to know the street people. Nowadays, it’s mostly reactive policing. So you have a call, you come out. You have to assess the situation and make an immediate decision as to what you’re gonna do, and that’s very tough.

Exactly.

So how are you going to resource and create the methodologies—with the police chief, obviously—to engage in crime prevention and develop neighborhood-appropriate strategies? And get back to the kind of policing where police were part of the community?

That’s a great question. You know, the chief and I are very aligned in the value of community policing. The challenge really has to do with staffing levels. And so I think the best thing we can do over the coming years is focus on fewer priorities, with public safety being at the top of the list, and do a better job of concentrating our resources on those priorities. And when it comes to public safety, first and foremost, the goal needs to be staffing levels.

As we have more capacity, we can be more proactive, we can focus more on those community policing best practices. And we’ll have more of the time and capacity for relationship building.

We’ve been lucky to have a very low vacancy rate in our police department. It’s just under 3%. It’s the lowest vacancy rate of the 15 largest departments in the Bay Area. So our biggest limitation by far has been having the resources, the money in the budget to open up more headcount. We pay well. We have the third highest-paid department of the 15 largest in the Bay Area.

Though we have baked into the budget right now an increase of 15 additional officers each year. I hope to increase that. But the bigger challenge looks to be around recruiting. Over the last couple of years, we’ve seen applications drop off significantly. And that is not at all unique to San Jose, that has been true as a national trend. I think it has a lot to do with perceptions of the desirability of the job and community support for police officers, the risks or liability involved in the work. And so we’re seeing fewer applicants. That’s the area I’m most concerned with.

You’re the first millennial mayor of the city. Do you have a different approach to maybe making this a city that’s more friendly to the new generation?

I think we ought to experiment with going out to our high schools or community colleges or local universities, engaging with students, who are the future, who are creating the culture, and really having conversations with them to understand what about public service appeals to them. And what the barriers may be, you know, real or perceived, that would stop someone. Our officers, on average, make $189,000 a year.

The other department I'm very worried about when it comes to vacancies and recruiting is planning and building. We've inherited a 25% vacancy rate.

You’ve been an employer, you’re one of the few mayors of the city who’s ever been an employer of any scale. You actually ran a company and you understand the challenges of recruiting and employing people and keeping morale high. And we’re also seeing this change in the nature of work brought on by the pandemic and by a new generation that has different priorities and values than their predecessors. And the city is not the only one. All these companies out here are trying to get people back to work too. We’ve seen a big dropoff downtown and throughout Silicon Valley in terms of the number of people showing up to the office. How do we bring people back to engage in social society?

For City Hall, at least, I’m very supportive of the hybrid approach. In running tech companies, I learned that the most important thing you can do is attract and retain talent and be clear about how you measure success, and then give people the tools they need to do good work. And that includes a certain amount of flexibility. That being said, there are certain jobs, whether it’s police and fire or plan check, where I think having someone engaged in person face-to-face is really important. And so I want to work with our city manager. In April, the state’s emergency declaration for COVID will lapse. We’ll no longer be in a state of emergency, technically. And so that’ll mean that our public meetings will be default in person, while we still have a pretty strong hybrid or remote option. And I want to encourage workers at City Hall to come back.

We have a lot of small businesses right here that are suffering because our workforce isn’t downtown. But I just want to reference what you touched on quickly, which is being a private-sector employer. It gives me a different mindset. When I think about attracting talent, we have to be much more proactive and aggressive in recruiting as an employer.

I’m glad you mentioned that small businesses are suffering as a result of employee headcounts at surrounding businesses. The statistics I recently saw said that the number of businesses nationally who are behind on their rent went up from 26% to 40% in the past year. Secondly, small and medium sized businesses are running out of capital. They’re basically payroll to payroll. So it’s a looming crisis. We’ve also seen statistics that were presented to the city’s Community and Economic Development Committee mid last year that showed that while sales tax collections were down citywide by 1%, collections downtown were down by almost 40%.

Sounds right. Our neighborhood, commercial districts have done quite well, because more people are working from home. They’ve been more resilient when it comes to sales tax.

We can’t mandate that private employers require their workers to come into the office. One thing we can do strategically though is prioritize residential density downtown to make our downtown more resilient. If you go back to the days of redevelopment, San Diego and San Jose had very different approaches. San Diego used more of its redevelopment dollars to spur residential development downtown. We were much heavier on prioritizing commercial development. That’s because we have a lack of jobs. It makes sense.

In hindsight 20-20, I’m not sure you could have predicted this, but particularly with the pandemic, San Diego’s downtown is thriving, I think largely because they have that built-in residential base, that consumer base, people walking around. We talk about safe and clean—it’s hard for a downtown to feel safe when you don’t have a lot of people walking around. And a higher percentage of the people you see are the folks who are really struggling with maybe a behavioral health disorder, for example.

So you have that in downtown San Francisco on Market Street. But Market Street feels very different from Santa Clara simply because there are more feet on the street. I think it points to looking at Class B and C commercial real estate and exploring possibilities for conversion to residential. I mean, our job should be to get a flywheel effect going around downtown, where we get some momentum in one area such as having more residents. And that leads to more retail, which may lead to more employers wanting to be here. In the long run, I think one of the things that will absolutely give us that virtuous cycle will be BART coming downtown. But that obviously is quite a few years off.

I think we need to at least explore over the next two, three years making it easier and encouraging Class B and C commercial real estate if they’ve got vacancies to consider conversion to residential so that we get more people downtown.

That’s a faster solution than building new housing. Because what you’re talking about—increasing the housing density downtown—could take years. And as you know, if you go the maximum, you could be the longest serving mayor of the city ever. Even then it might not come into play.

Correct. And actually, historically, if you look at the data, we have entitled roughly 8,000 residential units in our downtown that have not been built. Somebody out there is holding an entitlement to build high-rise residential. And they just can’t. They either don’t want to or can’t get the project financing to move forward.

Are you concerned about concentrated poverty in certain districts?

Yes, I think the city is making some positive steps forward in terms of a distribution policy, I do think there’s a real risk. And we’ve seen this again, historically, in District 3, downtown, District 7, and even some parts of District 6, kind of the center of the city, if you will, as a concentration or as overrepresented in affordable and supportive housing and shelter beds. And so I think distributing that, having more mixed-income neighborhoods, and having more of a distribution is a good thing. And we’ve now put in place policies to promote the distribution of affordable housing. Your project scores higher if it’s in one of the areas we want to incentivize affordable housing to be built in. So we are taking those steps. But there’s always a lag. I mean, to really see a change in that distribution, will probably be a multi-decade process. A lot of the affordable housing downtown was built many, many years ago.

And Measure A hasn’t been terribly successful in solving the problem. It's taking a long time and the cost of the units is very expensive.

As you know, I’ve been fairly critical of the implementation of Measure A. I think there’s a couple of different angles on that. I mean, one is that the cost per unit is astronomical. The last project, I believe, came in at about a million dollars a unit, which just doesn’t scale.

Are we pushing so hard on the extremely low income that we’re, we’re not allowing the market to help actually produce more units? If we were a little less aggressive about the affordability requirements, we might actually allow these projects to get more private financing. Essentially more of a blended model, I think, is the direction we should go in. It seems that having buildings that are 100% affordable, where most of the units are extremely low and very low income, are just projects that require massive amounts of subsidy. The vast, vast majority of our affordable housing was simply market rate housing that was built a very long time ago. I’m not opposed to publicly subsidizing affordable housing. It’s just that we are constrained in how many public dollars are available.

So your idea is to simply expand the supply?

And the barriers. The barriers to supply are basically our regulatory environment and very slow permitting timelines and the incredible layers of bureaucracy and process we can have, you might want to build a multifamily residential development on a surface parking lot in downtown and the environmental review process, especially if you get sued, can take two years, which means that actually we do the worst thing for the environment collectively, which is that developer doesn’t move forward. And we just pave over a couple more acres in Gilroy or the Central Valley.

So back to the small business situation, there are a lot of businesses now that are on the edge. We’ve seen a lot of closures. And then you have BART coming in and knocking out three or four other viable businesses. How many more hits can downtown take? Is there a need for some kind of emergency intervention to stop the attrition of small businesses, particularly in downtown?

I am very concerned about the decimation of our small businesses in downtown. I would say in VTA’s defense that for a public works project of this scale, I believe they’re looking at displacing roughly a dozen or fewer businesses in total. And for a public works project of this magnitude, that’s actually a pretty small number. That doesn’t in any way reduce the impact for those business owners or for the streetscape.

And so one of the things we need to do immediately for those business owners is have our Office of Economic Development, which we’re doing, meet with them and try to identify other locations so that they can transition over. And those transitions are really hard for small businesses. We may lose some of them but want to do everything we can as a city to help them continue in a new location downtown.

How do you plan to work with the county to solve housing and homelessness issues when a number of elected officials there don’t want you to succeed as mayor?

The county’s a big place. There are many departments and department heads. I’ve had good meetings with our district attorney and the new sheriff. I acknowledge that the relationship has been challenging, but we have a chance to reset.

I am not going to compromise on my call to shake up the status quo, and to be more efficient or innovative. I’m doing outreach at the county, with leaders elected and unelected.