San José to Invest $205 Million from Measure E in Affordable Housing and Addressing Homelessness

FOR IMMEDIATE RELEASE

May 17, 2022

Media Contact:

Rachel Davis, Chief Communications Officer, Office of Mayor Sam Liccardo, [email protected]

SAN JOSÉ, CA - Today, San José City Council approved a $205 million spending plan for Measure E focused on affordable housing development, homelessness prevention, and quick-build solutions to homelessness. Approved by 54% of San José voters in 2020, Measure E generated $140 million, with another $65 million expected in the next fiscal year, to address the housing and homelessness crises.

In total, Measure E will provide $145 million for extremely-low and low-income affordable housing development, acquisition, and hotel conversions over three years - enough to provide local funding for at least 1,200 affordable and supportive units-with the remaining dollars dedicated towards homelessness prevention programs, quick-build apartment communities for the unhoused, and more.

"Voters understood the urgent need to build affordable housing when they approved Measure E; now, two years on, we're in a much stronger position to house more families and move San Joséans back from the brink," said San José Mayor Sam Liccardo. "As we work to deliver on the promise of Measure E, we will continue to leverage state and federal funding as we work towards our goal of building thousands of new units of housing."

The Measure E plan approved today delivers on the City of San José's commitment to voters for affordable housing and keeping residents in their homes.

Highlights of the $205 million spending plan include:

• $89 million for the development of new affordable housing for extremely-low income (up to 30% of area median income) and low-income (up to 80% AMI) households;
• $25 million for the acquisition and conversion of existing market-rate units to affordable housing;
• $22 million towards quick-build apartment construction and operations;
• $21 million for hotel acquisition and conversion to permanent housing;
• $20 million towards homelessness prevention.

Measure E levies a real estate transfer tax on property sales and transfers valued at over $2 million. Last year, between July and December, ten high-value commercial property sales alone generated $32.9 million for affordable housing solutions. When presented to voters, Measure E promised to provide funding for homelessness prevention, affordable housing for seniors, veterans, disabled, and low-income families, and to help move people off of the streets and into interim shelter or permanent housing.

The significant increase in available funding allows the City to scale quick-build interim housing solutions that, so far, have housed a total of 677 unhoused individuals and families across three interim housing communities at Evans Lane, Rue Ferrari, and Bernal/Monterey, and two bridge housingsites at Maybury Road and Felipe Avenue. Thanks to the generosity of philanthropic partners who have contributed more than $13 million towards development, these quick-build apartment communities deploy prefabricated, modular housing built in a matter of months and at a fraction of the cost of traditional apartments.

In addition to stable, dignified shelter with private bedrooms, ensuite bathrooms, and shared laundry and kitchen amenities, quick-build apartment sites provide residents with assistance in accessing public benefit programs, healthcare, and employment preparation. Local nonprofits like HomeFirst, PATH, and Abode Services are contracted by the City to operate services at these communities.

Currently, 473 individuals call San José's quick-build apartment and bridge housing communities home and, since the opening of these sites, 212 families and individuals have moved on to either transitional or permanent housing. Additionally, Guadalupe Lot E, a 76 unit quick-build community site, is currently under-development, the city has applied for Homekey funding for the 204-unit quick-build community at Monterey/Branham, and the Council will approve additional locations for new quick-build community sites at the June 21, 2022 Council meeting.

Additional Measure E revenue will fund both ongoing operational costs to keep existing sites open and make sizable progress towards Mayor Liccardo's goal to have 1,000 units of interim housing planned, under construction, or completed by the end of 2022.

$20 million will be invested in the homelessness prevention system run in partnership with Destination: Home, of which a significant proportion has already been allocated to help hundreds of families remain housed. Over three years, an expected total of nearly 2,00 at-risk households will be served through the homelessness prevention system using Measure E funding. In December 2021, Measure E revenue comprised nearly half of the City of San José's $150 million Notice of Funding Availability, which will help produce 1,288 units of affordable housing across 11 projects. Several other projects were waitlisted for City funding, with a total excess of $40 million requested by housing developers - underscoring the high demand for financing.

In 2016, San José pioneered a program to buy underutilized and unused motels to serve as transitional housing for unhoused residents - a model that has since been scaled statewide through Governor Newsom's Homekey program. Initial properties acquired by the City include the Plaza Hotel in Downtown San José, with 46 units, and the Casa de Novo, with 56 units, in 2017 on the Alameda. Following the introduction of the statewide Homekey program, San José received $12 million for the purchase of the SureStay Hotel in North San José to provide 76 units for unhoused residents and, in the latest round of funding, San José received $25.2 million to purchase the 90-unit Arena Hotel also on the Alameda. Two additional hotels have applied for Homekey funding and the City is awaiting an award decision. Measure E funds will support additional hotel acquisitions and ongoing operations at San José's hotels and motels in addition to delivering on the promise made to voters for building more affordable housing and keeping residents in their homes.

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About the City of San José

With more than one million residents, San José comprises the 10^th largest city in the United States, and one of its most diverse cities. San José's transformation into a global innovation center in the heart of Silicon Valley has resulted in the world's greatest concentration of technology talent and development.

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