Last April, a scathing state audit found San Jose had failed to adequately track the more than $300 million it spent combatting homelessness over the previous three years as the number of unhoused residents grew. Now, the city is almost five months late in adopting auditors’ recommendations to ensure its spending is helping solve the crisis.
So far, San Jose has fully implemented just one of seven recommendations the California State Auditor had asked it to phase in by September of last year.
The recommendations are not legally binding. But some homeless advocates say the slow progress is evidence the city is more focused on a recent push to close encampments than finding lasting solutions for its estimated 6,340 homeless residents.
“There’s not enough emphasis on taking care of the unhoused person and saving our citizens’ taxpayer dollars,” said Todd Langton, executive director of the volunteer-run homeless advocacy group Agape Silicon Valley. “They’re wasting a lot of dollars and lives by the way they’re handling homelessness.”
City officials did not immediately provide a response to questions about the recommendations. As the city has begun clearing more homeless camps, it’s also worked to add hundreds of tiny homes, converted motel room shelters and safe overnight parking spots.
In April, the auditor also released a report finding California had failed to monitor its $24 billion in homelessness spending since 2018, stoking growing public frustration over the state’s homelessness response. The state’s lead homelessness agency has until March 2025 to adopt the auditor’s recommendations.
Additionally, the auditor examined San Diego’s homelessness spending and highlighted similar findings. Like San Jose, the city is behind on its recommendations.
It’s not uncommon for cities and public agencies to miss their recommendation deadlines, the auditor’s office said. Auditees must report their progress after 60 days, six months and one year from the release of the report. San Jose has told the auditor’s office it aims to satisfy all of the recommendations by the end of August.
Spending plan and annual goals
In its report, the auditor’s office said it “worked extensively” with San Jose to identify its homelessness spending, concluding the city lacked “the information necessary to easily assess the effectiveness” of those expenditures.
The auditor recommended developing a spending plan, and San Jose included a breakdown of its homelessness funding in this year’s budget. However, the auditor concluded the city had only “partially implemented” the recommendation because the budget does not specify how much money is coming from local, state and federal sources.
For the current fiscal year, the city has earmarked $216 million for homelessness, roughly 4% of its $5.3 billion budget. That includes $124 million for building and operating “interim housing,” which comprises homeless shelters with private rooms, safe overnight parking lots, and sanctioned encampments. Another $32 million is set aside for clearing homeless camps, $30 million for street outreach and supportive services, $26 million for rental assistance programs and $3.5 million for administrative costs.
The auditor also asked the city to finalize its annual homelessness goals, which the city completed last year, fulfilling one of the seven recommendations. The goals include developing five new interim housing sites and conceiving a new strategy for prioritizing closing dangerous encampments.
Oversight of nonprofit service providers
The auditor’s office also asked San Jose to more closely scrutinize the performance of its nonprofit providers, which receive millions of dollars annually to operate supportive housing sites, homeless shelters and street outreach programs.
In its report, the auditor found one South Bay nonprofit, Destination: Home, vastly over-reported the number of households that received financial assistance through an $8 million homelessness prevention contract. The nonprofit said it reported the number accurately to the city.
For each new contract with a service provider, the city was supposed to have established “clearly defined performance measures” and assess the effectiveness of each provider at least annually. San Jose officials did not immediately respond to a question about what the performance measures could look like once adopted.
Tracking health outcomes and demographic data
The city is also behind in evaluating the impact of encampment closures, street outreach services and other public health and safety efforts on the health and well-being of homeless residents. The auditor determined city officials had developed some evaluation metrics, but not enough to satisfy the recommendation.
San Jose has also yet to work with Santa Clara County officials to determine which demographic groups are overrepresented in the local homeless population and make efforts to address any disparities.
Building more housing and homeless shelters
According to the auditor, San Jose still must develop goals for helping build permanent housing for homeless people and formally adopt a policy for approving locations for interim housing.
Additionally, the city was supposed to immediately begin monitoring how many people are using its interim housing facilities. The auditor’s report noted that between July 2019 and March 2023, the city reported that half of the 984 homeless people who moved out of its private-room shelters found housing.