San Jose officials reluctantly agree to fund major housing operator

A San Jose housing operator is receiving millions in funding to address homelessness, despite growing concerns by city officials about the nonprofit’s performance and racial profiling allegations.

The San Jose City Council on Tuesday unanimously voted to allocate $6.2 million to HomeFirst to continue operating four interim housing sites through next June. Several councilmembers shared frustrations over the nonprofit’s latest woes, but ultimately admitted they lacked alternative solutions that would allow them to end that relationship without major consequences.

The momentum stems from a memo submitted by Councilmember Omar Torres ahead of council that asks the city to “closely” monitor HomeFirst’s performance in all city contracts moving forward, including its treatment of staff members.

Torres said his original recommendation was to cut off HomeFirst entirely from city funding, but the housing department advised him against it. HomeFirst also operates the 90-room Arena Hotel, which opened last month, and the SureStay Motel as of this month, which offers temporary housing and services to homeless seniors.

“We cannot upend our unsheltered communities that are there in transition already,” Torres said during Tuesday’s meeting. “There’s too many lives at stake … I’m extremely upset about how HomeFirst has treated their Black employees … I hope in January we get a service provider that’s willing to step up.”

Kelly Vazquez, chief program officer with HomeFirst, said the service provider and housing operator last year helped 865 people secure permanent housing – about 40% of HomeFirst’s program participants.

“We are committed to serving our neighbors experiencing homelessness with dignity and respect,” Vazquez said during Tuesday’s meeting. “It’s not just lip service for us … we hope that you take the time to get to know us better.”

Torres’ memo follows public outcry over the firing of a Black employee now facing homelessness amid accusations of HomeFirst racially profiling its employees. HomeFirst previously released a statement on Oct. 4 saying the nonprofit could not speak about specific cases for legal and privacy reasons. Vazquez did not address the racial profiling allegations on Tuesday.

HomeFirst Chief Operating Officer René Ramirez told San José Spotlight the racial profiling allegations are unfounded.“We would encourage our city councilmembers to do their due diligence when examining allegations against HomeFirst,” Ramirez said. “This has a severe impact, not just on the organization and the services we provide, but the people we employ here.”

Additionally, the nonprofit recently reported an 8% success rate in its outreach efforts to move homeless people into supportive housing, which also triggered concerns among councilmembers.

Ramirez said the outreach figure does not represent HomeFirst’s work as a whole. HomeFirst has a 97% retention rate in its permanent supportive housing and preventative programs, he said.

“Overall, the agency performed significantly better than that program,” Ramirez told San José Spotlight. “It’s important to look at the performance of the organization as a whole and not base comments and decision making for future funding on what was reported on one particular program with one particular priority.”

Vice Mayor Rosemary Kamei and Councilmember Peter Ortiz said they did not want to continue funding HomeFirst using taxpayer money, but did not readily have any other options.

Both Kamei and Ortiz ultimately voted in favor of the funding.

“If HomeFirst is listening, please listen: treat your people well,” Kamei said. “I don’t want to give this much money to an organization that has these problems … it bothers me tremendously. I know you’re going to have (competitive bidding) next year, and I’m looking forward to new people.”

HomeFirst’s funding is a part of a $10 million package split between three temporary housing site operators that include policy overhauls and cost-cutting measures. LifeMoves received $1.8 million for the Guadalupe interim housing site and People Assisting the Homeless, or PATH, received $1.9 million for the Evans Lane housing community.

The policy changes include a standard 12-month length of stay limitation, creating a community council of residents and improving access to health care. The suggestions stem from a report by Homebase, a San Francisco-based public policy nonprofit, that focuses on the financial stability of San Jose’s interim housing program.

Among the changes being reviewed are options to charge “nominal” rent at temporary housing sites on a case-by-case basis. The change would be a cost-cutting measure to qualify for local, state and federal rental assistance to subsidize the housing sites.

Another cost-cutting change is to eliminate private security during the daytime, despite people surveyed at the sites saying security is a top priority. The city will evaluate the security change on a case-by-case basis.

The city’s security plan for 200 temporary homes at VTA’s Cerone site will remain unchanged. 24/7 private security will also remain at PATH’s Evan’s Lane site.

Contact Ben at [email protected] or follow @B1rwin on X, formerly known as Twitter.