San José Has an Idea to Bring Street Homelessness to ‘Functional Zero.’ Can It Work?

San José leaders want to reduce the number of unhoused people living in tents, cars and RVs to “functional zero,” largely through a push for more short-term shelters, but some advocates are concerned that the plan leaves people without a long-term solution to homelessness.

Under a preliminary plan laid out during Tuesday’s City Council meeting, San José officials said functional zero means the city would have enough shelter capacity to offer a bed to everyone who needs one, including people who have long been homeless and those who have recently lost their housing. The goal is for more people to be exiting homelessness than entering it every month.

Mayor Matt Mahan, who has consistently championed an aggressive shift toward prioritizing interim shelters over permanent affordable housing, is bullish on the new plan that he has put forth, though he acknowledges a timeline isn’t clear.

The plan does, however, put an estimate for the first time on how much money it will cost to reduce San José’s unsheltered homelessness to functional zero: $255 million in one-time spending from a mix of city, state and philanthropic sources to build or buy the shelter capacity, and $234 million in annual spending to operate those spaces.

“I think we ought to have a safe and dignified place for every person on our street,” Mahan said. “We know we don’t have the resources today to completely end homelessness in our community. What this is is our best mathematical model for a line of sight to that outcome without being able to quite put an exact timeline on it.”

However, some advocates for people who are unsheltered are concerned that too much focus on temporary places to live will eventually leave people using those shelters in the lurch.

“The first problem is that when people’s temporary stay is over, they have no place to go,” said Sandy Perry, the vice president of the South Bay Community Land Trust, a nonprofit that advocates for affordable housing. “And so what happens is people become unhoused all over again.”

“We need both temporary housing and permanent housing,” Perry said. “We need a balanced approach.”

City staff estimate 5,477 unsheltered people are living in San José, and the city’s 2,968 shelter spots, run by both the city and Santa Clara County, are already largely full.

The city and county expect 1,700 more shelter spots to come online in San José across several other projects over the coming months, but an estimated 3,000 more would be needed to close the gap in the coming five years.

The kinds of shelter in the city’s functional zero plan could be mixed, including types the city already offers, such as congregate shelter with bunk beds in one large room, individual tiny homes or cabins, motel rooms, or safe parking sites where people can sleep in their vehicle in a secured lot.

“Unsheltered homelessness is very solvable; it is four walls and a roof. Everything else is a lot harder,” said Elizabeth Funk, the CEO of DignityMoves, a nonprofit that is developing and runs short-term shelters and tiny homes for San José. “But getting people into at least a safe place is very doable. It’s a question of policy priorities.”

The council discussed the potential plan and heard from members of the public during a wide-ranging study session about the city’s coming budget, which overall is projected to be $60 million in the red.

Mahan said he feels the city has long clung to “an overly strict” reading of the Housing First approach to addressing homelessness, relying too heavily on building new affordable housing, which can cost nearly $1 million per unit in some cases and takes much longer to stand up.

After the city reaches a functional zero goal, Mahan said some of the temporary shelters could be converted into permanent affordable housing for people who are working or receiving federal benefits, cutting down on the time needed for new builds.

Some council members expressed skepticism at the mechanics of the plan and how its cost might affect other city functions.

City staff reports also noted that about $575 million would be needed to create enough permanent supportive housing for some of those who use the shelters to help shrink the shelter system over time.

Housing officials said the funding for both portions of the plan could come from pools of local money, state funds and reimbursements through programs like Medi-Cal, ballot measures to approve bonds, and private philanthropy or support from faith-based organizations.

Some residents supported the plan because of its urgency, including Sam Ho, the vice president of the Thousand Oaks Neighborhood Association.

“When homelessness is not taken care of right away, it affects our environment, our health, our safety and our fire risk,” Ho told the council. “Therefore, I would put all my money into addressing homelessness right away.”

However, Alison Cingolani, director of policy at affordable housing advocacy nonprofit SV@Home, said that while preventing more chronic homelessness is valuable, so is building and maintaining a supply of housing affordable to people at all levels of income.

“Our community and our economy depend on it,” Cingolani said. “Without it, we’ll continue to face a declining population, losing our families and risking the vibrancy that we have worked so hard to build in our city.”

City officials said residents have consistently ranked homelessness as both San José’s most pressing issue and the one they feel the city has performed the worst in addressing.

Mahan said difficult trade-offs would have to be made to see such a plan through but added that residents would likely “throw a parade” if the city were to achieve even a 50% reduction in street homelessness.

“Is it more important to incrementally add to the affordable housing stock?” he said. “Is it more important to interrupt the cycle of chronic homelessness and get people into a safe environment earlier before they get to a point where it becomes very difficult to help them turn their lives around?”