☆ Twenty years of failure: Why SJ Housing Dept's 2003 Homelessness plan flopped
In 2003, San Jose released a Homeless Strategy plan, which promised it would “eliminate homelessness in ten years.” Whoops. It’s been 20 years, billions spent, and homelessness only rises in our fair burgh. Scott Beyer of the Market Urbanism Report untangles the flawed thinking that contributed to our ongoing housing catastrophe. An Opp Now exclusive.
Politicians come up with grand plans to solve problems. Do they ever follow through?
The 2003 SJ Homeless Strategy plan, rediscovered recently by an Opportunity Now reader on the city’s web archives, was created when George W. Bush asked the country’s 100 largest cities to draft 10-year plans to end chronic homelessness. The Bush administration pushed the “Housing First” model, which prioritizes giving permanent housing to the homeless. Participants are not required to go through substance abuse or mental health treatment to earn housing. The belief is that basic needs must be met before the homeless person can address their issues.
The Bush administration awarded over $1 billion in grants to cities so they could build housing, convert buildings into homeless shelters, and fund services like job training, health care, mental health counseling, substance abuse treatment and child care.
San Jose’s 2003 plan is in four parts. The first is preventing homelessness by “funding programs to increase knowledge of personal finances, life skills, and landlord-tenant relations.” They also want to give resources, including “food and clothing, transportation, assistance in paying utilities, rental assistance, and job referrals” to people at risk of becoming homeless.
The second part is “rapid rehousing” — i.e., “Housing First." Basically, build more affordable housing. The plan boasts that 4,805 units have already been completed, and that 6,431 units are in development.
The third part is wraparound services. The plan suggests that nonprofits should take over the administration of services from the city, creating a central location where people can get information about homeless services and access funding for more counseling, health care, and child care services even after they “graduate out of homelessness.”
The last section is proactive efforts. The city will count the number of homeless people and work with the state and federal government to get more funding.
The 2003 report was right to cite lack of affordable housing as one of the reasons for homelessness. But the average home price has more than tripled since the early 2000s. In 2000, the average home price in San Jose was $437,148; now, it’s $1,578,375. San Jose is also one of the most expensive places to rent. Since 2005, the average rent increased from $1,568 to $2,304 in 2019. Now, the average rent for a 1 bedroom apartment in San Jose goes for $2,669.
The main reason for the price increase is that demand far exceeds supply. The Silicon Valley Business Journal found “from 2010 to 2020, Santa Clara County added 45,385 new homes to its housing stock. But from 2010 to 2019, the number of jobs in the county grew by 277,058 — more than six times the number of housing units added.” A study from Angi listed San Jose as the city facing the worst housing shortage, and noted that it had “nearly 20% less homes listed this year than than the last.”
It’s hard to truly determine how much money San Jose has spent on homelessness, since funding comes from multiple government levels. A report from Destination: Home and the County of Santa Clara found that Santa Clara County spent $520 million a year in homeless services between 2007 and 2012. In 2016, county voters passed a $950 million affordable housing bond also designed in part to prevent homelessness. The state of California has allocated tens of millions to San Jose during the COVID pandemic via its $3 billion Project Roomkey and Homekey programs. San Jose is set to receive $3 million this year in homeless prevention funds from the federal omnibus spending bill. And the city, of course, has its own multi-million-dollar programs.
Despite all that was spent, the homeless population keeps growing. San Jose followed through with one part of its plan and began a homeless census. They found 4,910 in 2004 (page 10) and 6,739 in 2022. That’s a 37% increase.
So it doesn’t seem that everything went to plan. Santa Clara County released its own 10-year plan in 2005. In 2015, when homelessness had not ended, they joined forces and released the Community Plan to End Homelessness in 2015–2020. Jennifer Loving, CEO of Destination: Home, called the plan “revolutionary” because it brought together every city in the county. By 2020, the county’s homeless count had only increased, so they updated the plan for 2020-2025.
They lowered their expectations since the first report. Now, they only promise to “achieve a 30% reduction in annual inflow of people becoming homeless.”
They also realized that government was part of the problem. Instead of merely building affordable housing, they now say they will “change local land use and housing policy to allow for development of more affordable housing.” 94% of San Jose is zoned for single family housing, so repealing that law would be a place to start.
Throwing money at the problem has not helped. Mayor Matt Mahan says that permanent housing for the homeless costs over $850,000 per unit to build. Instead, he supports building tiny homes for as low as $85,000 per unit and placing them on government-owned land.
Mahan also outlined ideas to fix Santa Clara County’s mental health system. He notes that 40% of the homeless population suffer from mental health care challenges, and 35% self-report substance abuse. He wants to increase psychiatric inpatient beds and mental health services. Santa Clara County adopted Laura’s Law in 2021, which requires treatment for people who are a danger to themselves and others. Mahan says his plan “can reduce crime, homelessness and save taxpayers millions while saving lives.”
The mayor’s ideas could be a good alternative to the expensive Housing First status quo — but he shouldn’t promise too much. Since the 2003 plan, taxpayers have spent hundreds of millions to end homelessness, only to find that these 10-year plans become 20-year failures. Many of the structural problems that drive homelessness — housing shortages, high land costs, flawed behavioral incentives — were not addressed, and were arguably worsened, by all the spending.
At very least, this 2003 plan, which has since disappeared from the city’s website, is a call to humility from officials; a reminder that government programs aren’t guaranteed to solve problems just because they’re well-intentioned and well-funded.
This article featured additional reporting from Market Urbanism Report staffer Rebecca Lau.
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Image by Javi Velazquez