The current 2023-2024 Proposed Budget is a real threat to affordable housing. Measure E, the city’s primary source of funding for permanent housing, is under attack. The City is considering a proposal to use the funding for interim shelter instead of permanent affordable housing. Interim shelters are important, but we need sustained commitment to real, long-term solutions. We need the City Council to protect Measure E for affordable housing. 

Homelessness is a direct result of our housing shortage

The homelessness crisis that our communities are experiencing is a symptom of an overwhelming shortage of homes that people can afford. Interim shelters cannot solve that. Years of failing to invest in affordable housing while adding thousands of high-wage jobs in San Jose has driven up rents and pushed more and more people into homelessness. People who already face discrimination in housing, employment, education, or the criminal justice system are more likely to be displaced or forced into homelessness.

• More than 170,000 people in San Jose live in households that pay more than half of their income on housing, just one emergency away from losing their homes.
• Roughly 1 in 4 households who are displaced become functionally homeless: living in their cars, on the street, in places not fit for habitability, or doubling or tripling up in unstable and severely overcrowded conditions. 
• Housing instability and displacement disproportionately impact Black, Indigenous, and Latinx families and communities, just as these groups are overrepresented among the 4,500 people experiencing homelessness in San Jose.

Taking Measure E funds fails the City’s commitment to affordable housing

Overdependence on interim shelters undermines the City’s commitments to create affordable homes throughout the city, and could severely limit affordable development in San Jose for the next 6-8 years. The City has spent years creating affordable housing strategies with extensive community input. These commitments include building affordable housing equitably across the city, ensuring that new affordable homes will be stabilizing assets to underinvested communities , planning the Diridon Station Area so it will include housing that everyone can afford, and planning for North San Jose to integrate affordable homes rather than develop as a neighborhood accessible only to the economically privileged. San Jose cannot meet these commitments without resources to fund affordable housing. 

After meeting basic commitments to 4 existing developments, the currently proposed spending plan ZEROES OUT funding for any new affordable housing- walking away from more than 3,500 units across more than a dozen developments already in San Jose’s pipeline! 

Interim shelter requires permanent affordable housing to work as intended 

Interim housing is an innovative but temporary shelter solution. Temporary shelter only works if there’s somewhere for people to go when they leave. Without permanent affordable housing, families are at risk of going back out on the streets when their time in interim shelter is up. Permanent affordable housing helps meet the need for long-term housing solutions, and allows interim shelter to function successfully. Expanding interim shelter will only be effective if we continue to expand permanent affordable housing at the same time.

According to the City’s 2022 Year-End Community Plan Progress Report, San Jose’s existing interim sites served 912 people. 63% of those people left for somewhere else. Of those that left, HALF went on to permanent housing and the rest went to other short term shelters, or back to instability. The vast majority (86%) of the people moving from interim shelter into permanent housing did so with the assistance of a subsidized housing program or unit – which would be defunded under the current proposal.

We will not be able to solve our homelessness crisis without continuing to build more affordable housing options to ensure folks have paths to a permanent home. We support investing in more interim shelters, but doing so at the expense of permanent housing programs will not work. We must find a way to balance our investments across homelessness prevention, interim shelter, and permanent affordable housing, and raise additional funding so that we can fund all of these interventions at a scale that meets the need in our community.

The City already has the money to pay for its interim shelter commitments

The City already has the money to fulfill its current interim housing commitments- without touching Measure E affordable housing funds. An updated analysis from the City shows that the City already has more than $55 million in carryover funds- enough to meet all of the City’s current commitments to interim temporary shelter construction without diverting any money away from permanent affordable housing.

Interim shelter has enormous ongoing operating costs

The numbers we’re hearing about costs of constructing interim units dramatically understate the real investment they require by leaving out the ongoing operating cost. Interim temporary shelter units do have a much lower construction cost (~$150K/unit, per Mayor’s Office). Interim units have HUGE ongoing operating costs that the City is entirely responsible for. According to the City, operating 1,000 interim shelter units will cost more than $50 million annually, on top of construction costs! The City bears NO ongoing costs for affordable housing units. Measure E was designed to act as a one-time fund for permanent housing. It wasn’t designed to fund interim shelter, which has additional yearly operating and programming costs that wouldn’t accompany a permanent housing development.

Permanent affordable housing is more cost effective than interim shelter

Right now, every dollar of Measure E funds effectively leverages three to four dollars in additional state, federal, and private investment to build permanent affordable housing- with no ongoing cost to the city. Funding affordable housing is a less expensive and more efficient investment, and provides a long term asset able to serve future generations with no ongoing cost to the City. In addition, the City’s investments into affordable housing are made as a loan, which is paid back (and can be reinvested) over time. An interim focused solution is an irresponsible use of public resources.

Without local money to close the funding gap between outside investment and the cost of affordable development, we lose access to those outside dollars in San Jose- and the affordable housing they would bring. 

• The city’s current 6 interim shelter sites, with 384 bedrooms, cost $17.9 mil to operate this year. That is $46,669 per bedroom per year. 
• The four affordable housing projects recently supported by the city also received state funding, and cost the city $116,435 per unit, or $65,689 per bedroom.  

It costs the city more for two years of operations for an interim shelter bedroom than it does to support an affordable one for 55 years.