San Jose’s mayor is touting a plan to end unsheltered homelessness through temporary housing solutions, claiming it’s 95% cheaper than building permanent affordable housing. But he’s leaving out a crucial detail.
Mayor Matt Mahan wants to achieve “functional zero” — when the number of people exiting homelessness is greater than the number of people becoming homeless — through short-term, temporary solutions such as tiny homes, safe parking and sleeping sites and shelters. In a Feb. 11 statement, Mahan’s office said the city could get roughly 5,500 homeless people off the streets into temporary housing at an initial cost of $255 million. He claimed temporary housing solutions would be substantially cheaper — without taking into account roughly $234 million in annual operating costs to run the shelters at peak capacity, according to a housing department analysis.
“Pronouncements about ending homelessness don’t mean much if they don’t show the math to back them up,” Mahan said in the statement. “We’ve proven, for maybe the first time, that there is a set of strategies that would put an end in sight to unsheltered homelessness — and San Jose is moving full steam ahead.”
The mayor’s office said the construction of permanent affordable housing would cost more than $5 billion, based on $1 million per apartment for those estimated 5,500 unsheltered homeless people. Temporary solutions would only be 5% of the cost of permanent housing.
But the affordable housing calculations made by Mahan’s team don’t take into consideration various funding streams shown in the housing department’s analysis, including tax credits and federal and state grants developers receive to build affordable housing. The city usually invests 20% into affordable projects, or $200,000 per apartment. This would drop the city’s cost from $5 billion to about $575 million for permanent housing to end unsheltered homelessness, according to the housing department analysis.
Advocates said running temporary housing sites may be costlier for San Jose taxpayers over time since the city has to pay for operations annually. This includes food, supportive services, infrastructure maintenance and security.
“(Temporary housing) is not cheaper, this is just an outrageous statement. It shows no concern for ending homelessness. All it shows is concern for putting people out of sight,” Sandy Perry, board vice president of the South Bay Community Land Trust, told San José Spotlight. “The interim housing needs to be rebuilt every 10 or 15 years. So that cost needs to be done all over again.”
On Feb. 11, Housing Director Erik Soliván presented various avenues for the San Jose City Council to achieve its goal through permanent and temporary solutions. Based on his department’s analysis, the city has about 1,871 shelter slots available or in the pipeline. The city would need an additional 3,064 beds or spaces to close the gap in unsheltered homelessness.
Tasha Dean, Mahan’s spokesperson, said costs to operate temporary housing sites would go down as some sites could be converted into permanent supportive housing.
“We will also be asking other levels of government, especially the county as the primary entity responsible for health and human services, to chip in as we build out this system, just as they contribute to supportive housing efforts,” Dean told San José Spotlight. “Meaning the (city’s) costs could diminish greatly, just as it does for affordable housing when different levels of government chip in.”
The city is talking about permanently shifting dollars from Measure E, a property transfer tax voters approved in 2020 to build affordable housing. The city council adopted an allocation plan prioritizing 75% of funds for affordable housing development and 25% for temporary housing and homeless services. The council has shifted those funds in recent years to focus more on temporary housing, and could further change that allocation in the upcoming 2025-26 fiscal year budget.
“When you’re building affordable housing, typically it’s a one-time capital contribution, and then the residents go on and move into the building and it just becomes like any other housing development,” Ray Bramson, chief operating officer of Destination: Home and a San José Spotlight columnist, told San José Spotlight. “With shelter, it is this ongoing, continuing commitment to pay for all aspects of the operations.”
Proponents for building more temporary housing say it’s a way to take the pressure off the system and prevent chronic homelessness by ensuring anyone who becomes homeless won’t land on the streets — ultimately saving money on costly interventions such as hospitalizations.
“The real beauty of a functional zero model is to have the luxury of having places for people who haven’t yet been super traumatized by the streets,” Elizabeth Funk, CEO of nonprofit DignityMoves and site developer for the Cherry Avenue tiny homes, told San José Spotlight. “If you’ve got a limited supply of beds for people who need them, then you have to get them to prioritize the people who have been on the streets the longest.”
Contact Joyce Chu at [email protected] or @joyce_speaks on X.
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