Mayor Matt Mahan wants to rebid service contracts, utilize CalAIM reimbursements<\/a> for case management, standardize shelter operations and get Santa Clara County to pay for more services. The city estimates it could reduce operating costs at tiny home villages by about 15%<\/a> by standardizing security, food and property management across multiple sites.<\/p>\n \u201cThanks to our investments in interim housing and prevention, San Jose is on track to reach a milestone where half of our unhoused neighbors are indoors for the first time in recent history,\u201d Mahan told San Jos\u00e9 Spotlight. \u201cThe next phase is making that progress last by lowering operating costs, including exploring whether modest fees for participants could help the system serve more people for years to come.\u201d<\/p>\n The mayor is also exploring a rarely-practiced approach to ask homeless people for a shelter fee, a model pioneered by Sacramento<\/a>.<\/p>\n Last year, Sacramento city leaders approved charging up to 30% of a person\u2019s income \u2014 which can also come from disability or Social Security checks \u2014 for new temporary housing sites called \u201cmirco-communities.\u201d These micro-communities are tiny homes with shared bathrooms, showers, laundry and kitchens. The first one is set to open later this year. Homeless residents in these micro-communities would also have certain tenant rights, such as no time limit on stays.<\/p>\n Elizabeth Funk, founder of nonprofit DignityMoves which builds tiny homes statewide, said it\u2019s smart for Mahan to consider creative ways to offset costs. Funk used to oppose charging a fee for homeless people to stay in shelters, but has since shifted her position. She hasn\u2019t encountered a resident who didn\u2019t want to pay rent, and said it encourages them to take ownership of their lives.<\/p>\n \u201cThey would love to feel like they were participating in their well-being,\u201d Funk told San Jos\u00e9 Spotlight.\u00a0\u201cThe city should not just wildly get everybody indoors without a responsible path and vision for how to offset those costs.\u201d<\/p>\n CalAIM reimbursements\u00a0 \u2014 California\u2019s expansion of Medi-Cal services<\/a> \u2014 could also have a significant impact on cost reductions, Funk said. Providers need to bill for their services, but the process can be complicated and there is a long lag time for payments.<\/p>\n \u201cWhen I look at our operating budgets, at least half, if not more, of those operating budgets should be reimbursed by CalAIM. And nobody\u2019s doing it right,\u201d she said. \u201cI do think it\u2019s possible to get San Jose\u2019s sites up and running on CalAIM.\u201d<\/p>\n Mahan has also been calling on Santa Clara County to shoulder more of its share of homeless services, despite the county already spending some $470 million<\/a> a year on solutions. Last year, the city and county announced a partnership<\/a> to bring behavioral health and medical services to two tiny home sites, expanding to more locations this year. The city is looking into which temporary housing sites it can push off on the county.<\/p>\n San Jose Housing Commissioner Daniel Finn said it\u2019s not that simple, with the county in a financial bind due to all the federal and state cuts. The county is facing a $470 million budget shortfall<\/a> for fiscal year 2026-27.<\/p>\n \u201c(Mahan) has to realize that the county is in just as bad a shape as the city is,\u201d Finn told San Jos\u00e9 Spotlight.<\/p>\n Finn said homeless solutions can only get San Jose so far without addressing the major causes of homelessness, which is the lack of affordable housing and rising cost of building homes.<\/p>\n Since 2023, San Jose\u2019s homeless population increased by 237 people to more than 6,500<\/a>, according to the latest homeless census conducted last year. The census, conducted before the new temporary housing sites came online, estimated about 60% of the city\u2019s homeless people are unsheltered in a region where renters pay the second-highest rent<\/a> in the U.S. San Jose was also ranked No. 1 for the least affordable city<\/a> in the world for first-time homebuyers in a global study, underscoring how far housing costs have outpaced wages in the heart of Silicon Valley.<\/p>\n \u201cAs a state, we\u2019ve thrown billions of dollars at the homeless problem,\u201d Finn said. \u201cBut it hasn\u2019t decreased homelessness at all, because it\u2019s not affecting the root cause of homelessness.\u201d<\/p>\n![\"\"](\"https:\/\/www.newsbeep.com\/us-ca\/wp-content\/uploads\/2026\/04\/IMG_1965-1024x768.jpg\")
The Guadalupe tiny home village is one of several sites in San Jose that provides temporary housing to homeless residents. Photo by Joyce Chu.<\/p>\n![\"In-line](\"https:\/\/www.newsbeep.com\/us-ca\/wp-content\/uploads\/2026\/03\/interactive-321838904008.png\")
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