After spending a trove of money and seeing mixed results in combatting the homelessness crisis over the past few years, San Jose wants more accountability from its nonprofit homelessness providers.
To make sure the city gets the greatest bang for its buck, the city is now requiring more robust data reporting requirements from the nonprofits.
Earlier this year, Councilmembers Sergio Jimenez, David Cohen and Pam Foley joined San Jose Mayor Matt Mahan in calling for more transparent reporting on performance outcomes like how often homeless residents used interim housing solutions and the rate of moving them into a more stable living situation.
“We essentially want to ensure that the money we are spending, which is now millions of dollars per year, on providing services from housing sites are having as much impact as possible,” Mahan told The Mercury News.
Along with hearing the frustrations from its residents, San Jose has faced criticism from state officials who accused the city of not having clear goals and a plan to build much-needed affordable housing.
A point-in-time count from 2023 found that city had at least 6,340 homeless residents, nearly 70% of which were living on the streets.
A report from the California State Auditor earlier this year found that San Jose lacked the requisite data to track its spending of hundreds of millions of dollars over a multi-year period to alleviate the homelessness crisis.
Although city officials disputed some of the findings of the audit, they agreed that San Jose needs a more data-driven approach to figure out what interim solutions and programs work best as the city attempts to build more affordable housing and add stability to residents’ lives.
San Jose has built several tiny home communities and plans to add hundreds of more units over the next 18 months. It also has dug into other alternatives like motel conversions, safe parking and safe sleeping sites to expand its inventory, which is not sufficient to address the current needs.
“We’re taking this very broad portfolio approach, but the only way that works in the long run is, if we are relentlessly measuring performance, optimizing performance and figuring out the right level of investing in solutions, some of which the answer may be to stop funding them because they’re just not as cost-effective,” Mahan said.
While the city just approved six-month extensions for its three nonprofit homelessness providers to operate interim sites at a cost of over $10 million, Mahan said it was clear that there was more the city could analyze to improve site operations and reduce costs.
Mahan noted that up to 45% of operating costs at emergency interim housing sites could come from security, property management and food services — the types of services nonprofit homeless providers may not specialize in.
If there are variances in costs between the providers for those services at similar sites, Mahan said it would show that one provider could stand to be more efficient.
Mahan and Housing Director Erik Solivan said conducting this analysis and contracting out some of the services would allow homeless providers to focus on their strengths of providing case management and supportive services as the city’s interim housing portfolio doubles or triples over the next year.
“We think there could be cost savings by splitting up the contracts that way … to reduce the operating cost of these sites and allow the nonprofit service providers to focus on case management and delivering the programmatic outcomes that we’re paying them to deliver such as job treatment, connection to other benefits and helping people graduate out to permanent housing,” Mahan said.
Solivan added that the city would publish a dashboard next month that would contain “outcome measures for the practice and performance” of its emergency housing sites.
However, the biggest unresolved question is what the city will do if the current nonprofit operators fail to adequately deliver progress with limited competition in the area.
Mahan said it was incumbent on the city to attract more service providers over time, including reaching out to faith-based groups and even having the city take on more services if they can provide better results.
“It’s not a perfectly competitive marketplace in that we have a limited number of providers right now,” Mahan said. “There are more out there in the state whom I think we can attract. There are other providers like Salvation Army, and I think the faith-based groups can be part of the solution here, and we also may decide that some services should be done in-house.”