If you believe there has been a zoning violation and/or non-permitted work performed you can contact San Jose's Planning, Building & Code Enforcement department:
Before doing so, you can also check for the existence of permits by searching this site:
Home values in general should be at a trough. There will potentially be a slight downward trend due in part to both shadow inventory and eventual higher interest rates. Currently there is somewhat of a dearth in available inventory so that will help stave off any meaningful decline due to bank foreclosures, etc., and once rates do eventually increase it will be because the overall economy is doing better and there are more jobs/money in the system. Therefore, I think we will be in a relatively stable market for the next 3-5 years before beginning a moderate sustainable upward trend.
Hope that helps. Don't hesitate to reach out directly with any questions or requests.