State orders San Jose to halt implementing hotel rent

San Jose’s Housing Department violated a state agreement by setting monthly rents too high for formerly unhoused residents living at the SureStay Hotel. Now the city needs to recalculate.

In April 2020, homeless residents vulnerable to COVID-19 received free emergency shelter in hotels across Santa Clara County through Project Homekey—the state program subsidizing emergency housing run by local governments and nonprofits.

After the city purchased the North San Jose hotel, it converted the program from permanent supportive housing to permanent affordable housing. Older residents riding out the pandemic rent-free panicked after the city announced it would charge $627 a month in rent starting in October.

“I only get $1,000 a month. So if I pay $627, now I need to take care of my dog and I’m only looking at $300 for the rest of the month,” said Philip Jimenez, a resident of the hotel since the program’s inception. “I gotta pay for (gas in) my car, then I have nothing for the end of the month.”

Dozens of hotel residents share Jimenez’s story of having enough fixed income to make rent, though not much left for other living expenses. About a quarter of the hotel’s 73 residents can afford the proposed rent.

One resident wishing to only be identified as Ernesto said he was ready to sell the low-rider truck he’s held onto despite living on and off the streets over the years.

“It’s the only thing I have left. I was hoping to pass it on to my daughter if anything happens to me,” he told San José Spotlight.

The state steps in

When advocates rallied local politicians in the past week to squash the newly-imposed rent requirements, California’s Department of Housing and Community Development stepped in. Representatives of the state housing department met with their San Jose counterparts Wednesday at the behest of local Assemblymember Alex Lee.

“Within the legislative role we have all these direct contacts and oversight of departments, so we coordinate all the time,” Lee told San José Spotlight. “I met with a lot of the residents. They told me they were on the verge of eviction again because of the unjust, very strange flat rent increase.”

According to Lee’s office, state housing officials told the city that rent under Project Homekey funds can’t exceed 30% of a resident’s monthly income, and the city needs to recalculate its rent rates.

A city spokesperson said the rent rate was made to be affordable for residents earning up to 30% of San Jose’s average income per resident. The median income per person in San Jose is $46,599, according to the U.S. Census Bureau.

What happens now

In an email reviewed by San José Spotlight, Rachel VanderVeen, deputy director of the city housing department, said the city received almost $12 million on Sept. 16, 2020 to run the 76-unit hotel for at least two years as affordable housing.

Councilmembers approved the city’s purchase of the SureStay Hotel after funds arrived from Project Homekey.

“The building was determined to be in a safe and healthy condition and reviewed and approved by the state of California Housing and Community Development to receive grant funding,” VanderVeen said in the email.

The housing department might claim the hotel is in healthy condition, but longtime residents showed San José Spotlight large holes in ceilings under the staircases.

“About two and a half months ago, these guys came up early in the morning and made the holes,” said hotel resident Laura Lafore. “Nobody really asked why because it was so early. We were mad because they woke us up.”

Residents said they suspect the holes are to offset termite damage. San José Spotlight did not receive a response from the city regarding the damage.

Helping lead the charge to slash the proposed rent is advocate Shaunn Cartwright, who organized a few residents to protest outside City Hall on Sept. 24. Among the organizers was Brian Hargrave, a SureStay resident who could afford the initial rent increase.

“I just kept telling the (residents), ‘You need to get up, get out there and fight if you want to continue living here,’” Hargrave told San José Spotlight. “Not all of them did—in fact, some chose not to come out and protest or talk to the media, but what’s important is we got some people to speak out.”

Once residents from Project Homekey found out on Wednesday the city had to lower rent rates, they began to relax.

As Ernesto caressed his chihuahua outside the hotel, he had hope knowing his truck wasn’t going anywhere and his future looked brighter.

“It gave me all the faith in the world,” Ernesto said. “It feels like I’m not alone here.”

Contact Vicente Vera at [email protected] or follow him @vicentejvera on Twitter.