A Familiar Fight for Affordable Housing Funds in San Jose

On May 4th, the City of San Jose released its proposed budget for the 2024-2025 fiscal year. And within it, the City has proposed deep cuts to desperately-needed affordable housing that are short-sided and deeply troubling.

If this sounds familiar, it’s because it is. A very similar scenario played out last year calling for us all to rally around the preservation of the few local dollars dedicated to this critical community need.

This year’s Proposed Budget would slash the ENTIRE $35 million Measure E allocation for affordable housing unless additional and highly speculative external grant funding is secured.

To be sure, the City of San Jose is facing a constrained budget and we understood that it would likely require some budget cuts in the upcoming fiscal year. However, it’s particularly concerning to see affordable housing take such a disproportionately large cut when Measure E represents just 3% of the General Fund, noting there are much smaller budget reductions in the other, much larger parts of the City budget.

Even when accounting for other housing funds, the City would only be able to count on about $21 million for affordable housing production next year, leaving just enough funding to advance two new affordable housing developments.

Due to lack of funding, more than a dozen new affordable housing developments in San Jose (representing 1,500 affordable homes) were waitlisted in the City’s last Notice of Funding Availability (NOFA). With the proposed budget envisioning deep cuts to affordable housing the following year as well, we risk seeing the rest of our pipeline of affordable housing projects not only delayed, but potentially killed altogether.

Surveys consistently show that affordable housing is one of our community’s most urgent priorities, and it would be a shame to leave these projects on the chopping block at a time when tens-of-thousands of San Jose families remain severely rent burdened.

Furthermore, our collective efforts to end homelessness will not succeed unless we continue to invest in affordable housing.

The research is clear: our homelessness crisis is being driven by the lack of affordable housing options in our community, and connecting people to safe and affordable housing is proven to both help people exit homelessness and prevent at-risk individuals from falling into homelessness in the first place. Yet, with this budget, the City proposes to spend more on encampment abatements ($30 million) than affordable housing ($21 million), and almost 3x more on shelter and safe sleeping sites ($58 million).

Data published by the Santa Clara County Continuum of Care found that only 25% of those who accessed shelter last year successfully transitioned into a permanent housing location; and roughly 3/4 of those who were successful, did so with the help of an affordable housing subsidy or unit. Without more affordable housing options, we risk seeing people stuck languishing in shelter settings for years with nowhere to go (or even worse, returning to homelessness). And it will become simply impossible for our shelters to keep up with the number of new people being pushed into homelessness every day, leading to more people living on our streets, in the creeks and other parts of our community.

Shelters are also very expensive to operate and – unlike affordable housing – can create serious long-term financial obligations to the jurisdictions where they’re located. In fact, the City of San Jose’s plans to vastly expand shelter will soon require $70 million in annual funding to support ongoing operations.

This is why we must preserve desperately-needed affordable housing funding in San Jose and urge the City Council to take two key actions:

  1. Adopt alternative budget proposals that preserve more dollars for affordable housing while still allowing the City to address other urgent needs. While the City is facing a challenging budget, there are other options worth seriously considering – including forgoing or delaying some new budget proposals and/or considering alternative cost reductions.
  2. Direct staff to explore new revenue measures that will allow the City to meet all of its most urgent needs. Our housing and homelessness crisis is the result of decades of bad policy choices and historic disinvestment at all levels of government, so solving it will require us to find new resources – particularly given the significant ongoing operating costs projected for the City’s shelter strategies (reaching $70 million annually in just a few years). Instead of continuing to sacrifice one important need for another, let’s work to raise the revenue necessary to build more affordable housing, expand shelter and other homelessness initiatives, protect our waterways and meet the many other community needs.

The decisions the Mayor and Councilmembers make around affordable housing in the next few weeks will truly have large, long-term implications for our collective efforts to solve our housing and homelessness crisis. 

There are ways to keep more affordable housing projects moving forward while addressing other urgent needs in our community, and we must fight for a budget that will let us do that.

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