San Jose shelter is a stop on the way to permanent housing

A homeless shelter in San Jose is set to serve as the launching point for residents to transition to permanent housing.

The Arena Hotel, which the city converted into a shelter in 2023, will serve as a temporary location for people receiving federal housing vouchers. Starting May 1, the hotel will be one of three temporary housing sites for residents who have been identified for placement in permanent affordable housing. It’s unclear if existing Arena Hotel residents will be able to stay, but the city has few, if any, shelter beds available if they are forced to leave to make room for new people coming in.

The San Jose City Council voted unanimously Tuesday to enter an agreement with the Santa Clara County Housing Authority, which will pay the city up to $2.3 million for three years while residents wait for their housing vouchers.

“This is a model that strengthens interim housing and provides a clear path for a permanent home for our most vulnerable residents,” Vice Mayor Pam Foley said at the meeting.

The housing authority manages federal housing vouchers and has received these funds through the U.S. Department of Housing and Urban Development (HUD) Moving to Work program. The program provides flexible funding to design and test innovative housing solutions. Other temporary housing sites utilizing this model include the Willow Street Studios and Pacific Motor Inn in San Jose.

“This is a bridge from homelessness into that permanent housing, and it does prepare people,” Preston Prince, executive director of the housing authority, told San José Spotlight.

Prince points to how residents at Willow Street Studios have developed relationships with each other before they move into a permanent supportive housing development. Many will move in together, and living in “bridge housing” allows them to develop social connections to help transition into permanent housing.

It’s unclear who will move into the Arena Hotel and what the permanent housing selection process will be. Prince deferred to the county for details, and county representatives weren’t immediately available for comment.

The 90-room Arena Hotel located on The Alameda will continue to be operated by nonprofit WeHope. The housing authority’s contribution will offset nearly all of the $2.7 million annual operating expenses, which include food, security and case management. It ties into the city’s plan to cut temporary housing costs while it faces a $56 million deficit.

San Jose manages more than 2,000 beds across 23 temporary housing sites, and projects its shelters will rack up $94 million in maintenance and operating costs in the upcoming fiscal year.

“By leveraging external funding tied to federal housing voucher programs, the city maximizes non‑city revenue sources, mitigates fiscal exposure and strengthens the financial foundation for ongoing service delivery,” Housing Director Erik Soliván wrote in a memo.

Homeless advocate Gail Osmer said while this sounds like a good deal, existing Arena Hotel residents will have no place to go.

“People in (homeless encampments) need housing. To take away more opportunities like at the Arena, where are they going to go?” Osmer told San José Spotlight.

San Jose Housing Department representatives did not respond to questions about what will happen to existing hotel residents. With the city clearing its last large homeless encampment known as “the Jungle” and moving more than 100 residents into the remaining available shelter beds, any others who want housing will be placed on a shelter waitlist.

The city doesn’t have enough shelter beds for those who need it. San Jose has 6,503 homeless residents. About 60% of that population — 3,959 people — is unsheltered, and 2,544 are sheltered, according to a point-in-time count conducted last January. Since the count, the city has added more than 1,000 beds across a dozen new or expanded temporary housing sites.

The conversion of the Arena Hotel into a shelter was a $46-million project funded through Measure E — a property tax approved by San Jose voters in 2020 — and California’s Project Homekey. The long-term plan calls for knocking down the building to construct up to 200 permanent affordable apartments.

Contact Joyce Chu at [email protected] or @joyce_speaks on X.