Low-income housing gets boost in San Jose plan to spend Measure E tax

Strained to alleviate both pandemic-induced evictions and homelessness, San Jose leaders struggled with how to spend $30 million in new tax dollars before unanimously settling on prioritizing low-income housing over rental assistance.

The City Council approved a plan Nov. 10 to allocate money from Measure E, a property transfer tax increase that was approved by voters in March, to fund affordable housing and homelessness prevention.

Forty-five percent of the money is dedicated to providing permanent supportive housing for extremely low-income families. Thirty-five percent will make low-income rentals available and 10 percent will support middle-income housing. The last 10 percent is for homelessness prevention programs.

“There’s not nearly enough money in Measure E or any other funding source to satisfy the depth of need — even a significant fraction of the depth of need — in our community,” said Mayor Sam Liccardo.

Liccardo advocated for a portion of homelessness prevention dollars to go to SJ Bridge Employment, a transitional jobs program, while Councilmember Sylvia Arenas asked for the money to be used in partnership with nonprofits that help survivors of domestic violence and sexual assault.

The Housing and Community Development Commission, which oversees the spending of Measure E dollars, proposed taking $6 million away from affordable housing projects to create rental assistance programs for those facing eviction. It also wanted to scrap a part of the plan that would help create accessory dwelling units for middle-income residents.

Councilmembers Dev Davis and Maya Esparza pushed for the 45 percent allocation for extremely low-income housing for the long term. Davis said she wanted to keep those funds intact, but understood the need to possibly reallocate money to rent relief programs.

“What I do worry about is having a large amount of people added to the ranks of our homeless population because we didn’t make an allocation change in time to forestall the wave of evictions that I hope is not coming, but that I fear is coming,” Davis said.

When a tenant cannot pay, landlords must bear the burden of unpaid rent and could also be at risk of losing their property. Councilmember Pam Foley said rent relief programs can help keep residents from being evicted while allowing landlords to keep their homes. Supporting low-income housing can also help people buy and keep homes.

“Owning real estate is one way to build wealth from generation to generation,” Foley said. “We need to help preserve homeownership for those that are in their homes for as long as possible.”

Deputy Housing Director Rachel VanderVeen said the city has put $25 million toward rent relief since the onslaught of COVID-19.

According to VanderVeen, the city’s affordable housing investment plan, which includes Measure E funds, will bring $220 million in affordable housing dollars for 2022-2023. This includes funding for 3,560 affordable apartments.

The council will likely come back in December to discuss any plans for shifting funds.

“The voters approved a spending plan or a philosophy for how we are going to use these funds,” Foley said. “I don’t want to lose the voters’ trust.”

Matthew Reed with Silicon Valley at Home noted voters were concerned early on that Measure E funds wouldn’t be used appropriately because they sit in the city’s general fund. He said the city will need to tread carefully with any changes, but for now, he is pleased with its approach.

“It is heartening to see this coming to fruition,” Reed said, adding he wanted to recognize the “tremendous value” the Measure E plan will bring to San Jose, especially in the realm of affordable housing.

“This is a critical long-term resource for the city,” Reed said.

Contact Carly Wipf at [email protected] or follow @CarlyChristineW on Twitter.