When the San Jose City Council passed the $5.3 billion budget for 2024-25 on Tuesday night, greater than $23 million previously earmarked for the development of everlasting, reasonably priced housing was converted right into a tranche to support the town's homeless population and fund the development and operation of emergency shelters.
The dispute over how one can use funds from Measure E – an actual estate transfer tax on properties over $2 million – resurfaced on this yr's budget process. The tax, which was passed by voters in 2020 and is predicted to lift $50 million next yr, had originally set spending priorities that earmarked much of the cash for everlasting reasonably priced housing. But last yr, Mayor Matt Mahan proposed spending more on interim solutions in an effort to curb homelessness.
Despite opposition from housing activists, the council last June diverted $12.3 million from reasonably priced housing to support initiatives similar to secure parking and tiny homes. Mahan had originally proposed a $38 million diversion.
On Tuesday night, the council unanimously approved the budget and the reallocation of Measure E funds, which can divert $13.17 million from extremely low-income housing, $9 million from public housing and $1.37 million from moderate-income housing to programs that assist the homeless.
“I think we've done a really good job of balancing a lot of different community needs, including some significant new commitments under our stormwater permit, but also maintaining our commitment to affordable housing, other strategic investments in key focus areas like public safety, cleaning up our city and attracting investment in jobs and housing more broadly,” Mahan said on the meeting.
The mayor says a number of the diversion of funds – $15 million, to be exact – is required to fulfill a state mandate from the San Francisco Bay Regional Water Quality Control Board to wash up San Jose's waterways by June 2025. If the town doesn’t make plans to relocate the roughly 500 homeless people living along the creeks, it risks tens of hundreds of dollars in every day fines, in keeping with San Jose officials.
The diversion of funds previously earmarked for everlasting reasonably priced housing has raised concerns amongst many housing activists and nonprofits, including Destination: Home, for the second yr in a row.
“When the measure was passed in 2020, the unique spending plan called for 90%
of funds to construct more cost-effective housing,” said Jennifer Loving, CEO of Destination: Home, in a letter to the mayor and city council. “Now, just 4 short years later, and after multiple reallocations of those funds to other uses, only 25% of the funds remain for reasonably priced housing construction.”
Although the vote to reallocate funds was unanimous, several council members, including Councilman Peter Ortiz, wanted to ensure no precedent was set. Ortiz said the need to comply with state mandates for the city's waterways “put pressure on us and compelled us to allocate funds to implement this plan.”
“I would like to be clear that the present strategy of prioritizing EIHs over reasonably priced housing doesn’t end the homeless crisis, it just covers it up,” Ortiz said. “Let's call it what it’s: It's a bridge to nowhere.”
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