Once fully implemented across all shelters, the city could see savings of about $7 million to $9 million a year, according to city housing officials.<\/p>\n \u201cThat (could) go toward libraries, prevention programs, police officers, fire fighters \u2014 you name it,\u201d District 8 Councilmember Domingo Candelas said at the meeting.<\/p>\n San Jose is projecting its homeless shelters will rack up\u00a0$94 million<\/a>\u00a0in maintenance and operating costs in the upcoming fiscal year, while it tackles a\u00a0$56 million budget shortfall<\/a>. City officials are trying to rein in spending on 23 temporary housing sites in its portfolio \u2014 10\u00a0tiny home<\/a>\u00a0villages, two\u00a0safe parking<\/a>\u00a0sites, a\u00a0safe sleeping<\/a>\u00a0site and 10\u00a0motels converted to shelters<\/a>.<\/p>\n Mahan has suggested ways to\u00a0cut shelter costs<\/a>, including rebidding service contracts and standardizing shelter operations. He also wants to explore asking homeless residents to pay a fee to stay in the city\u2019s shelters.<\/p>\n \u201cWe\u2019ve helped thousands of people leave encampments and come indoors, and we can help thousands more when every level of government leans in,\u201d Mahan told San Jos\u00e9 Spotlight. \u201cCalAIM reimbursements will allow us to expand supportive services and help more homeless neighbors come indoors without putting additional pressure on our city budget.\u201d<\/p>\n California expanded Medi-Cal services in 2022\u00a0to prevent vulnerable people \u2014 particularly homeless people \u2014 from falling through the cracks.\u00a0CalAIM<\/a>\u00a0was meant to establish more coordinated, holistic care and\u00a0allows\u00a0providers<\/a>\u00a0to bill Medi-Cal for services that aren\u2019t considered traditional medical care. Providers have been slow to utilize it due to technical difficulties and the long lag time for payments, Elizabeth Funk, CEO of DignityMoves which builds tiny homes across the state, said.<\/p>\n Once the homeless service providers managing\u00a0the three pilot shelter sites \u2014 HomeFirst and People Assisting the Homeless (PATH) \u2014 become registered CalAIM providers, they can\u00a0bill Medi-Cal for case management, medical care and housing navigation services \u2014 offsetting shelter costs\u00a0the city is paying for.<\/p>\n Representatives for HomeFirst and PATH declined to comment.<\/p>\n Funk said allowing service providers to bill Medi-Cal will let the city eventually expand its shelter capacity.<\/p>\n San Jose doesn\u2019t have enough beds for people who need them. The city has\u00a06,503 homeless residents<\/a>, up 237 people from 2023. About 60% of that population \u2014 3,959 people \u2014 is unsheltered, and 2,544 are sheltered. Since the 2025 point-in-time count, the city has added\u00a0more than 1,000 beds<\/a>\u00a0across a dozen new or expanded temporary housing sites, and manages more than 2,000 beds.<\/p>\n \u201cThe single biggest barrier to San Jose expanding its interim housing dramatically is the cost of operating,\u201d Funk told San Jos\u00e9 Spotlight. \u201cThis CalAIM reimbursement is an order of magnitude. Rather than reducing the quality and reducing the services so that we can squeeze a few extra inches off of our belt, I would rather see us doing the full robust services and offsetting those costs by reimbursement.\u201d<\/p>\n Last year, Santa Clara County started implementing CalAIM at some shelters in partnership with San Jose, and is covering the administrative costs. The county\u2019s CalAIM implementation across all shelter sites could take two years. District 1 Supervisor Sylvia Arenas\u00a0wrote in a memo<\/a>\u00a0the city\u2019s efforts may duplicate what the county is doing. As CalAIM is getting off the ground, the county projects it could save up to $5 million in administrative costs and help San Jose save up to $2 million in annual shelter expenses.<\/p>\n Representatives for the San Jose Housing Department did not answer questions about why CalAIM reimbursements weren\u2019t implemented sooner.<\/p>\n With emergency visits on the rise among homeless people, CalAIM also works to avoid costly hospital visits by allowing a wider range of holistic and preventative services to be billed.<\/p>\n In 2011, there were about\u00a0141 visits per 100 homeless people<\/a>, according to the U.S. Centers for Disease Control and Prevention. That number has more than doubled to 310 visits a decade later. Conversely, rates among people not experiencing homelessness has held steady at about\u00a040 visits per 100 people a year over the past decade.<\/p>\n The National Alliance to End Homelessness estimates it costs a taxpayer an average of\u00a0$35,500 per year<\/a>\u00a0to pay for hospital visits, jail time and other emergency services for a\u00a0chronically homeless<\/a>\u00a0person.<\/p>\n \u201c(The funding) ought to be coming from our medical system, because our medical system is what\u2019s bearing the brunt of not solving the problem,\u201d Funk said.<\/p>\n Contact Joyce Chu at\u00a0joyce@sanjosespotlight.com\u00a0or @joyce_speaks on X.<\/p>\n![\"\"](\"https:\/\/www.newsbeep.com\/us-ca\/wp-content\/uploads\/2026\/04\/1776983831_759_LNM-20250616-SJSPOTLIGHTLOGO-01.jpg\")
<\/a><\/p>\n