Our communities and our economy depend on affordable housing, and the ability for every resident to have access to a safe, stable home they can afford. Will San Jose’s leaders rise to the challenge?
Our communities and our economy depend on affordable housing. Without enough homes people of all incomes can afford, we will continue to see increasing rates of homelessness and continued displacement. One of the greatest barriers to creating a more affordable and healthy San Jose is the lack of adequate and consistent funding for affordable housing. Budgets are a statement of values, and San Jose’s residents have consistently identified addressing homelessness and housing affordability as top priorities in recent years. Over that same period, City leaders have shifted most of the largest source of dedicated affordable housing funding (known as Measure E) to homelessness response. Now more than ever, it will be critical for leaders at every level of government to work together to identify, create, and support sources of funding dedicated to affordable housing and homelessness prevention.
On Friday, February 28th, the City of San Jose will release the City Manager’s Budget Request & Five Year Forecast along with revenue projections. The City began its budget process on February 11th, with a mid-year budget review and a study session to discuss budget priorities. View the staff presentation here.
The preliminary forecast for the General Fund (the City’s largest source of discretionary funding) shows a shortfall of about $60 million in 2025-2026 followed by another $30 million in 2026-2027. Staff attribute this to declining sales tax revenues and continued cost increases in utilities and services as well as the increasing cost of operating interim shelter sites (sometimes called emergency interim housing (EIH) or tiny homes, although they do not meet habitability standards for housing).
Affordable Housing
A renter earning minimum wage would need to work nearly four full-time jobs to afford average rent in the county. In San Jose, nearly 23% of households pay more than half their income for rent, and another 24% pay between 30% and 50% of their income for rent. The market is not providing homes our neighbors can afford, and that is where affordable housing for people with lower incomes becomes so critical. Affordable housing is an asset that sustains and strengthens our communities by ensuring we all have a safe, stable home. It is also quite cost effective for local investment: every dollar of local funding spent on affordable housing brings in $4 – $5 of state and federal investment, creating affordable homes, more jobs, and more stable communities. Without a source of local funding, those state and federal dollars will likely flow to another community that has prioritized funding for affordable housing.
Affordable housing for lower income residents is a vital part of the solution to our community’s housing affordability priority- not just “nice to have.” Without it, we will continue to face a declining population, losing our families and our workers, and risking the vibrancy we are working so hard to build.
Image: Quetzal Gardens, Resources for Community Development
Emergency Interim Shelter
Image: Mabury Bridge Housing Project, San Jose Housing Department
Interim shelter units provide people experiencing homelessness an opportunity to get out of the elements and stabilize their lives as they transition into permanent homes. They offer more privacy, safety, and stability than unsheltered homelessness or a traditional congregate shelter for a limited term, typically less than a year. Interim shelter sites generally offer critical services, such as job placement, mental health counseling, life skills training, and assistance applying for permanent housing, which support residents as they work toward a move to a permanent, stable home they can afford. To build and operate these temporary sites requires the investment of significant resources: the City estimates that sheltering San Jose’s unhoused population in EIH would require a one-time investment of $255 million above the millions the City has already invested, and an additional $234 million every year to operate the system. There are currently no ongoing State or Federal sources of funding for EIH operations, leaving the City’s general fund as the primary source of operating funds.
Image: City of San Jose City Council 2025-2026 Budget Priorities Study Session Presentation
Most importantly, EIH only works as a solution to homelessness if people are able to leave shelter to a home they can afford – and that requires an adequate supply of affordable housing.
Homelessness Prevention
San Jose has more than 140,000 households with low, very low, or extremely low incomes. These are community members who are often just one unexpected expense away from homelessness. Homelessness prevention is a highly cost-effective way of protecting vulnerable tenants from falling into homelessness by providing temporary financial assistance to low income households at risk of losing their housing. Relatively small amounts of money can help families and individuals weather emergencies and temporary setbacks, such as an unexpected medical expense or car repair. In Santa Clara County, more than 30,000 people have received homelessness prevention assistance since 2020. Almost all have been able to stay stably housed, even a full year later.
30,868 People Received Homelessness Prevention Assistance
96% of families remained stably housed while receiving services
Only 6% of households became homeless one year later
Source: Destination:Home
What’s next?
We need our leaders to pull together with other local governments and partners to identify the resources required to move each of these solutions forward at the scale our communities need. These are challenging times, but San Jose is up to the task. San Jose is known for innovation – when we are faced with a challenge we don’t shrug our shoulders and walk away, we find solutions. City leaders can apply San Jose’s knowledge, talent, and leadership to making sure every San Jose resident has a safe, stable, and affordable place to live.
Curious about where San Jose’s budget goes? The image below summarizes how the General Fund is allocated.
Timeline for San Jose’s Budget Process
SV@Home and our partners will continue to be engaged throughout the budget process to advocate for a budget that reflects community priorities. Our communities and our economy depend on affordable housing, and the ability for every resident to have access to a safe, stable home they can afford.
