City of San José Modeling Shows Mayor’s Push to End Unsheltered Homelessness is 95% Less Expensive than the Status Quo Approach
For the first time, City has put a price tag on what it would cost to end the era of encampments
FOR IMMEDIATE RELEASE
February 11, 2025
Media Contact:
Tasha Dean, Chief Communications Officer, Office of Mayor Matt Mahan; tasha.dean@sanjoseca.gov
SAN JOSÉ, CA - Currently, City staff is presenting the Mayor and City Council with a detailed update on recent efforts to end unsheltered homelessness, which includes the first comprehensive, mathematical model for ending unsheltered homelessness in San José over time. The discussion can be viewed here.
This is relevant information for the Council as they enter the annual budget process and face important prioritization decisions. While the City and County have developed plans to address specific populations, such as veterans or youth, and have embraced high-level policies for addressing homelessness, this is the first time the City has mapped out a comprehensive set of strategies, including detailed mathematical modeling, that would enable San José to end unsheltered homelessness over the coming years, if funded. The plan envisions adding thousands of managed spaces to the City’s housing continuum, including a mix of interim housing communities, congregate shelters, hotel leases, and designated safe parking and sleeping sites.
“Pronouncements about ending homelessness don’t mean much if they don’t show the math to back them up,” said San José Mayor Matt Mahan. “We’ve proven, for maybe the first time, that there is a set of strategies that would put an end in sight to unsheltered homelessness – and San José is moving full steam ahead. As we continue to prioritize this approach, I’ll also be asking our City Manager and Council to fund several items related to enforcing city rules in encampments and accountability for accepting shelter when it is provided.”
To chart a path to end unsheltered homelessness, San José first developed a model for understanding the overall size of the homeless population and a full continuum of tools, ranging from prevention strategies to interim and permanent housing options. To estimate the total need, which shifts over time based on a variety of factors, city staff incorporated data from the biannual Point in Time Count, the countywide Homeless Management Information System (HMIS), the rate of individuals flowing into and out of homelessness, and the City’s recent Waterways Surge census, which once complete will count every person living along 12 focused miles of the Guadalupe River. Using these various data sources, the City estimates a current need for approximately 5,477 placements to offer an alternative to the streets for every individual living in unsheltered, unmanaged conditions.
Together, the City and County of Santa Clara currently operate 2,968 units across a variety of shelter options and are building 1,723 more within San José, the vast majority of which are being built by the City of San José. With an estimate of over 5,000 unsheltered residents living in San José, there are still not enough shelter placements, even with factoring in those in development, to meet the need.
“San José’s approach to reducing unsheltered homelessness has evolved significantly as the pandemic brought a need for rapid adaptation and innovation, prompting changes in service delivery and the production of shelter systems,” said City Manager Jennifer Maguire. “The study session demonstrates the evolution of our approach to this complex issue by grounding our strategic review of our existing and future work in a comprehensive, data-driven analysis that provides a clearer target on the magnitude of the challenge and options for solutions."
Attempting to end unsheltered homelessness in San José with a narrow interpretation of “Housing First” that relies solely on building new, permanent affordable housing – the Council’s previous policy – would require over $5 billion in public subsidies given that recent affordable projects in San José have cost greater than $1 million per unit to build.
Since taking office, Mayor Mahan has pushed the City Council to act with greater urgency in addressing homelessness. This has led to a major expansion in the City’s shelter system, innovative new tools like Safe Parking and Safe Sleeping sites and a focus on holding homeless residents accountable for coming indoors. Using this approach, the Housing Department, led by Erik L. Soliván, has found that the one-time capital cost to build out adequate shelter and interim housing supply in the housing continuum is approximately $255 million – or 5% of the cost of the traditional, status quo approach. This modeling includes an assumption of funding for homelessness prevention as well as rapid rehousing to help slow the inflow to homelessness.
“While ending unsheltered homelessness may feel like a daunting challenge, we now have a clearer target and definition of what it will take to move past mitigation efforts and toward solutions,” said Erik L. Soliván, Director of the San José Housing Department. “At each point on the housing continuum, we are able to quantify the investments needed, including the importance of prevention and unit preservation programs that have the most impact in reducing the number of newly unhoused individuals.”
Achieving “functional” zero unsheltered homelessness by expanding San José’s shelter capacity would require $234 million in annual operating costs with the current assumptions around annual costs per person served. City staff is indicating that multiple opportunities for reducing the per person annual cost of shelter exist, including better leveraging CalAIM reimbursements, cost-sharing with the County, and optimizing property management, security and food expenditures across all sites in the system. Moreover, as additional affordable housing comes online and residents graduate out of homelessness, a standing shelter system would cost approximately $90 million in annual operating costs. While the scale of the statewide homelessness crisis has forced cities to develop scalable solutions, leveraging the County’s expertise in housing and human services while standardizing interim housing and shelter operations can help to bring down operating costs. Cities alone cannot solve the homelessness crisis and all levels of government must lean in.
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About the City of San José
With nearly one million residents, San José is the largest city in the Bay Area and one of the nation's most diverse and creative. San José’s transformation into a global innovation center in the heart of Silicon Valley has resulted in the world's greatest concentration of technology talent and development.