Men and women sitting on a dais at a government meeting
The San Jose City Council unanimously approved shifting affordable housing funds from Measure E toward more immediate solutions to addressing homelessness along city waterways. Photo by Vicente Vera.

San Jose leaders have dealt a blow to affordable housing advocates after diverting affordable housing funds to temporarily shelter homeless residents living along city waterways.

The San Jose City Council voted unanimously Tuesday to redirect affordable housing funds from Measure E. They also unanimously approved Mayor Matt Mahan’s June budget message, which includes proposals for funding projects to enhance community spaces and mental health crisis response. The council held a hearing on the topic Monday night, during which dozens of residents spoke out against the shift in affordable housing funds.

“We’ve done a really good job of balancing a lot of community needs, including some significant new commitments under our stormwater permit, but also maintaining a commitment to affordable housing,” Mahan said.

Some residents held up tombstone-shaped signs during the San Jose City Council meeting on June 10, 2024 related to reallocating affordable housing dollars for short-term homeless solutions. Photo by Vicente Vera.

Mahan led the proposal to shift about $25 million after he said San Jose faces pollution fines if the city doesn’t reduce trash along the waterways by June 20, 2025. A similar proposal by Mahan last year was met with fierce opposition, and the council settled on a spending plan that favored affordable housing development, as opposed to temporary homeless housing. Measure E is a property transfer tax approved by voters in 2020 that applies to property transfers of $2 million or more.

City officials plan to temporarily house homeless residents to keep the waterways clean, and successfully renew the stormwater permit set to expire in 2027. This leaves about $11 million for affordable housing funds under Measure E as opposed to about $35 million under the original allocation plan.

“The current strategy of prioritizing (emergency temporary housing) over affordable housing isn’t ending the crisis of homelessness, it’s hiding it,” Ortiz said at the meeting. “It is a bridge to nowhere.”

But in response to residents raising concerns over this year’s use of Measure E funds, Vice Mayor Rosemary Kamei and Councilmembers Domingo Candelas, Sergio Jimenez and Ortiz requested the city manager search for ways to restore the funding. They also requested the city reset its Measure E allocation plan next year back to 75% for affordable housing.

“We acknowledge that difficult decisions must be made during a tight budget landscape. However, we are deeply concerned about the devastating cuts to affordable housing,” the councilmembers wrote.

They said they understand having to divert funding to meet Bay Area Regional Water Quality Control Board requirements, but the focus of addressing the unhoused crisis should be creating permanent homes that are affordable.

Additional funding the city manager identifies down the road would go toward the 13 affordable housing projects on the waitlist for city funding to kickstart development.

Councilmembers Bien Doan and Arjun Batra added a memo to the June budget message, directing the city auditor to audit San Jose’s homeless spending.

Latina Coalition of Silicon Valley Executive Director Gabriela Chavez-Lopez said at the meeting she appreciated Mahan’s June budget message including $11 million for affordable housing projects, but urged city officials to secure more funding and restore the original 75% affordable housing allocation for Measure E.

She said she was also supportive of Kamei’s budget document directing the city manager to report on Santa Clara County’s efforts to inform fast food workers of their rights.

“Investing in affordable housing and worker empowerment are key to creating safe, stable communities,” Chavez-Lopez said.

Kamei, Candelas, Jimenez and Ortiz directed the city manager to reduce more than $780,000 in BeautifySJ funds and defer some general fund expenditures to fund a Trusted Response Urgent Support Team (TRUST) for two years to respond to calls from people experiencing mental health crisis.

TRUST would deescalate situations and provide residents with appropriate support and resources, including unhoused residents according to the councilmembers.

City officials ultimately voted to reduce the BeautifySJ budget instead by about $230,000, and only fund TRUST for a single year.

Contact Vicente Vera at [email protected] or follow @VicenteJVera on X, formerly known as Twitter.

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