San Jose’s mayor wants to up the ante and divert millions more from Measure E funds toward homeless solutions.

The City Council — at the direction of Mayor Matt Mahan — is considering whether to upend its original plans for Measure E spending. Last year, council voted to spend 75% of Measure E dollars on affordable housing development. In the 2023-24 fiscal year, Mahan doesn’t want to spend any new Measure E revenue on affordable housing development. Instead, he wants to use an anticipated $50 million in funding plus $38 million from prior Measure E for a total of $88 million for homeless supportive services and new short-time housing construction. This would be a one-time change for the upcoming fiscal year.

“I want to be clear that this proposal does not in any way say that the city is not committed to affordable housing,” Mahan said at a Monday press conference. “The bottom line is if we want change, if we want to reduce unsheltered homelessness, we’re gonna have to be willing to try new things.”

Measure E is a property transfer tax approved by voters in 2020 that applies to property transfers of $2 million or more. The millions received by the city are used to address the housing and homeless crisis. To change the Measure E allocation, the council is required to have two hearings and approve the change by 2/3 vote. The first hearing is on Tuesday. The second hearing will be June 12 and the vote the following day.

San Jose is estimated to have $156 million in Measure E funds in the next two years– $106 million from the past three years and $50 million from this upcoming fiscal year. Of $106 million, $15 million will go into a rainy day fund and $53 million will fund affordable housing development, while the balance will fund homeless services.

With the projected $50 million that will come in this upcoming fiscal year, 80% will fund homeless support programs including shelter construction and operations. The remainder will be used for homeless prevention, gender-based violence programs, legal services, administration and rental assistance.

The upcoming discussion on how to spend the Measure E funds is likely to be controversial. When the mayor released his March budget message, councilmembers and residents contested his proposal to reallocate funding, arguing it should be applied toward affordable housing.

Last week, the Housing and Community Development Commission, which consists of 11 members who advise the housing director and council on housing related matters, unanimously voted no on the proposed changes. And some councilmembers like Peter Ortiz are joining housing and homelessness advocates and nonprofit leaders tomorrow to protest the proposed changes ahead of the city council meeting.

Still, Mahan and his allies argue this one-time allocation is needed to address street homelessness. San Jose has more than 6,600 people experiencing homelessness — the highest number the city has seen in the last 13 years. Mahan has repeatedly touted short-term housing as a cheaper and faster alternative to building affordable homes. It gets people off the streets and on a pathway toward long-term housing.

But nonprofit leaders say it’s misleading to compare the short-term housing costs to affordable housing because the former is a quick-build structure that offers temporary shelter to unhoused residents. While short-time housing has a bed and some privacy, it does not have a kitchen and is not a proper home.

“The proposed budget cuts funding for new affordable housing initiatives, and makes it impossible for the city to invest in any new affordable housing developments in the near future,” said Zeenab Aneez, spokesperson for nonprofit Working Partnerships USA.

The City Council will discuss the proposal at their Tuesday meeting. Learn how to watch and participate at

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