Who loses in San Jose mayor’s housing plan?

An already contentious debate on where to allocate funds for housing is growing more divisive, as San Jose leaders weigh diverting funding for hundreds of affordable homes.

The San Jose City Council is considering cutting Measure E spending on affordable housing by half and reallocating those dollars to homelessness services and temporary shelters. Housing advocates said this move would prevent three affordable housing projects from receiving needed funds to start building and would also prevent the city from identifying new projects to support. But Mayor Matt Mahan said building shelters and moving people off the streets is a more immediate need, as the city’s homeless rate continues to soar.

Approximately 100 people rallied in front of City Hall ahead of Tuesday’s council meeting to protest the proposed cuts to affordable housing development. Members from housing-focused nonprofits such as Sacred Heart Community Service, Destination: Home, LUNA and others chanted and held posters in support of continuing affordable housing funding. Councilmembers Peter Ortiz and Omar Torres attended and spoke in opposition of reallocating funds.

“Schools are closing due to declining enrollment, underserved neighborhoods are being displaced, and we have a growing population of residents that are unhoused,” Torres said. “As a city we must act swiftly, intentionally and effectively to combat this housing crisis. Building affordable housing is the way.”

Big protest outside of San Jose City Hall ahead of measure E hearing today.

Chris Logan with Sacred Heart gets the crowd going before he and many others like @PeterMOrtiz and @omartorresd3 speak against the proposed changes.

Stay tuned @SJSpotlight pic.twitter.com/IWnYHENYOS

— Jana Kadah (@Jana_Kadah) May 16, 2023

The proposed cuts would allocate $53 million for affordable housing instead of the previously planned $106 million. The funds would still be enough to pay for four previously approved affordable housing projects that have been waiting for city dollars since 2021. However, three other projects—also on the waitlist since 2021—would still be on hold, said Ray Bramson, Destination: Home’s chief operating officer and columnist with San José Spotlight.

“These projects are ready to go, but the city keeps delaying funding, and then the cost increases to build,” Bramson told San José Spotlight. “Affordable housing development is going to be on pause for an indefinite period of time.”

The three projects that might not receive funding—Villa Del Sol, The Gardens at Cathedral of Faith and 2880 Alum Rock—could create 595 affordable homes, with 358 in East San Jose.

If the cuts are approved, Housing Director Jacky Morales-Ferrand said the city won’t have enough money to issue notices that tell affordable housing developers when city money is available. When affordable housing developers apply for that funding, it informs the city about which projects are close to begin construction.

Bramson said without these notices, San Jose can’t plan ahead to pay for affordable housing.

“We’re essentially shutting our eyes,” he said. “We’re also signaling to our affordable housing developers that maybe you should go look somewhere else to build.”

Finding the funding

Mahan said the cuts have to come from somewhere and noted the one-time diversion of funds to shelters and other homelessness services is the more immediate need.

“What’s the alternative? Are we going to shut down some libraries or a couple fire stations or lay off 20 police officers?” Mahan said at a Monday news conference. “I’m not quite sure what the suggestion is when people say they want change and want to accelerate solutions to homelessness and then aren’t willing to change how we spend any of our dollars.”

Alex Stettinski, CEO of the San Jose Downtown Association, said he supports Mahan’s proposed budget reallocation because homelessness is a humanitarian crisis that requires quicker action. San Jose has more than 6,600 homeless residents according to a 2022 count—an 11% increase from 2019.

“One thing we have not seen a (noticeable) improvement is the amount of homeless individuals and people struggling with mental health and addiction problems,” Stettinski said at the council meeting. “Many of whom are seeking shelter but often can’t be referred to any because there aren’t enough places and programs available.”

Housing and social advocates worry building temporary shelters, also known as interim housing, will create a larger commitment of ongoing costs—ultimately diverting even more Measure E dollars from affordable housing in the coming years. Advocates also argue these cuts would violate the trust of voters because Measure E was originally marketed in 2020 as a tax to pay for affordable housing.

“There are at least a dozen projects awaiting permits that could have potentially asked for funding and will get zero investment from the city if this goes through,” Chris Logan, community organizing manager with Sacred Heart, said at the rally. “This is more than immoral, this is demonic.”

The next hearing is scheduled for June 12, with the final vote happening the next day.

Contact Jana Kadah at [email protected] or @Jana_Kadah on Twitter.