San Jose Mayor Matt Mahan opened up the floor to critics of his initiatives to address homelessness Tuesday for the first time since the 2025-26 proposed budget included a reduction of funds prioritized for affordable housing.
The property transfer tax known as Measure E was passed by San Jose voters in 2020 to fund permanent affordable housing, with only 15% of funds reserved for temporary shelter for homeless people according to city policy — but Mahan in his March budget message proposed an increase to 90%. That’s set off alarms among housing advocates, who want more affordable, permanent housing. They rallied in front of City Hall and voiced their dissent during the City Council meeting.
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San Jose housing advocates opposed to Mayor Matt Mahan’s plan to arrest or hospitalize homeless people for refusing offers of shelter protested outside City Hall on Tuesday. Learn more at SanJoseSpotlight.com. #sanjose #homelessness #housing #siliconvalley #protest #bayarea #localnews
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“Today was just a public hearing for us to hear from the community. I know some of you were with us last night for our budget study session,” Mahan said at the meeting. “We will continue our budget town halls and study sessions along the way, with more opportunities to clarify some of these proposals and continue to hear from the public.”
If approved during the upcoming June budget discussions, Measure E funding for temporary shelter over permanent housing will increase from $7.8 million to $47 million for the 2025-26 fiscal year. Mahan’s plan was included in the proposed 2025-26 operating budget released earlier this month.
“San Jose’s largest source of ongoing funding for affordable housing is being used for shelters and homelessness response,” Carmen Torres, SIREN community organizer, said. “The smarter solution is affordable housing.”
City officials are also recommending increasing funding for temporary shelter over permanent housing from $8.5 million to $51.3 million for the 2026-27 fiscal year.
Mahan and city budget officials described the reprioritization of Measure E funds as not only a benefit for quick homeless housing, but also as a “budget balancing strategy.”
“Last year, the council and city manager worked together to resolve a projected $53 million service level shortfall without layoffs through the elimination of long vacant roles, strategic cost and service level reductions — and using our Measure E funds flexibly,” according to the proposed 2025-26 operating budget.
Total estimated Measure E revenue for 2025-26 is $55 million, and $60 million is projected for 2026-27.
Housing Department officials said they plan to fund upcoming affordable housing through $60 million of leftover Measure E money and other housing funds. Affordable housing projects set to be funded include about 250 homes on San Jose’s Notice of Funding Availability waitlist.
San Jose is inviting housing providers to apply for this funding through March 3, 2026.
SV@Home Policy Director Alison Cingolani said the group is pleased the proposed 2025-26 operating budget could remove barriers to housing development broadly. But she said members are disappointed the proposed budget fails to bring any real plan to address the housing needs of the nearly half of San Jose’s residents with incomes below 80% of the area median income.
“Affordable housing also ensures people who move into shelters can ultimately move into permanent homes they can afford,” Cingolani said. “Our lack of housing affordability is the reason schools are closing for lack of enrollment, small businesses are struggling with a consistent customer base (and) commercial vacancy is at an all time high.”
Housing advocates with organizations such as Sacred Heart, Agape Silicon Valley and others rallied outside City Hall Monday and Tuesday to criticize not only the elimination of affordable housing funds, but also Mahan’s proposal aimed at arresting homeless residents for refusing offers of shelter.
On Monday, Mahan revealed details of his plan to assign at least six police officers to enforce the detainment of homeless residents who frequently turn down housing offers from city outreach workers.
“Our mayor wants to criminalize and control us while promoting and protecting expensive, unaffordable, unattainable housing meant only for the rich,” Unhoused Response Group representative Debra Townley said.
Contact Vicente Vera at [email protected] or follow @VicenteJVera on X.
