On June 11th, San Jose City Council adopted the operating budget for fiscal year 2025-26. Find out what happened inside.
On June 11th, San Jose City Council adopted the operating budget for fiscal year 2025-26. This was the culmination of an intensive process that runs throughout the first half of the year, with hundreds of hours of time invested by City and Council staff, councilmembers, and advocates. The Council must consider community needs ranging from funding protections for our immigrant community ($1-1.5m) to addressing housing affordability and homelessness.
We know that building more affordable housing and helping people stay housed is critical to the health of our communities, and building more affordable housing has consistently ranked as a top priority for San Jose residents. San Jose has more than a dozen affordable projects all over the city, ready and waiting for funding – over 1,500 new permanently affordable homes. At the same time, more than 35,000 San Jose families pay more than half their income for rent, struggling to stay afloat and just one emergency away from losing their housing. We are deeply disappointed that the adopted budget dedicates less money than last year to homelessness prevention, and despite the leadership of several councilmembers, does not move forward any long-term investment plan to address the housing needs of nearly half of the city’s residents.
San Jose’s Measure E Diverted from Affordable Housing
Measure E, a real estate transfer tax to “fund services including affordable housing for seniors, veterans, disabled, and low-income families, and helping homeless residents move into shelters/permanent housing,” was intended to be the City’s largest single source of funding for affordable housing development. It was passed by voters in 2020 with an adopted expenditure plan that restricted 90% of the funds for building affordable homes. SV@Home sponsored the campaign for Measure E and remains committed to preserving this resource and defending the voter’s intent to address this housing affordability crisis impacting us all through investment in homes for people most impacted by our high-cost housing market.
For the 2025-26 and 2026-27 fiscal years, the Council voted to reallocate Measure E funds as follows: 5% to administrative costs and of the remaining amount – 10% to homelessness prevention and up to 90% to interim shelter construction, shelter operations, and homelessness outreach with funds remaining, if any, to go toward affordable housing. Although it has been clear for some time that a majority of the current Council supported allocating Measure E funds to interim shelter rather than affordable housing, SV@Home has continued to hold constructive conversations with councilmembers and their staffs regarding the need for investment in affordable housing and homelessness prevention in addition to interim shelter.
The amount of funding allocated to homelessness prevention is $7.6m, a reduction of more than $2m from last year’s investment, which included funds outside Measure E, despite expected impacts on low income households from reductions in the federal budget. The motion adopted included a commitment to review any additional available funding in the Annual Budget Review, expected to be released in September and heard by Council in October. (At that point, final reconciliation of accounts from fiscal year 2024-25 will be complete.)
SV@Home appreciates the leadership of Councilmembers Campos, Salas, and Doan in their memo requesting a greater percentage of funds towards homelessness prevention, gender-based violence programs, legal services, and rental assistance. Councilmembers Cohen, Ortiz, and Candelas also supported increasing funding to homelessness prevention, but a ⅔ majority (8 votes) was necessary to pass the memo.
San Jose Releases a $50m Notice of Funding Availability for Affordable Housing
Separately from the budget process, on June 9th the City’s Housing Department released a Notice of Funding Availability (NOFA) for $50m. Half of the funding is from Measure E, a portion of which is available from the current fiscal year approved by the council in last year’s budget. The City will allocate this funding using a new scoring system as part of a 12-month rolling Request for Proposals.