P.O. Box 5374
San Jose, CA 95150
May 8, 2025
To: Mayor Mahan, Vice Mayor Foley and Councilmembers Kamei, Campos, Salas, Cohen, Ortiz, Mulcahy, Doan, Candelas and Casey
cc: City Clerk
RE: Agenda Item 3.3 – Public Hearing on the 2025-2026 Proposed Operating and Capital Budgets and the 2025-2026 Proposed Fees & Charges for the City of San Jose including a Revision of the Percentage Allocations of Measure E Real Property Transfer Tax Revenues
The League of Women Voters of San Jose/Santa Clara wrote previously to oppose the recommendation in the Mayor’s March Budget to reallocate Measure E Real Property Transfer Tax revenues. The League now urges you to VOTE NO on the Administration’s proposed change in Council Policy 1-18, Section 22 allowing most of Measure E revenues to be spent on temporary homelessness sheltering and support. The League asks you to direct the City Manager to conduct a full cost-benefit analysis where the long-term taxpayer costs are shown.
Impact on Housing Element
In a letter dated June 18, 2023, the League supported forwarding the Housing Element to HCD for compliance review. San Jose, after multiple revisions, now has a state-certified, 8-year housing plan to build some 60,000 homes. The Housing Element requires building at all levels of affordability. However, the Administration recommends removing specific percentage allocations for the development of new affordable housing by area median income.
The League is concerned that the use of all Real Property Transfer Tax revenue for only temporary, interim housing could lead to de-certification and subject the City to potential liability. The following seem most in jeopardy: P-2, P-3, P-18, P-21, R-2, R-13 and N-5. R-13, Soft Story Retrofit had a grant plus matching funds from Measure E. With 1.7 individuals becoming homeless for everyone (1) that is housed, a Preservation NOFA seems badly needed along with P-2 which would provide Permanent Supportive Housing for our most vulnerable.
Fiscal Responsibility
The manipulation of funds in Measure E in the current budget, and the suggested policy changes do not appear to have the basis of a full analysis including the long-term costs and benefits of the requested changes for taxpayers. There is no data on whether the shift of Measure E funds over the last couple of years has yielded the purported benefits in the short term. The Budget Office notes that in a few years the impact on the Operating Budget will reach $92 million. Reaching functional zero results in annual operating costs of $234 million
by the Housing Department’s own estimate. There appears to be no long-term plan to sustain the fiscal impacts of a shelter-first approach rather than investing in more aspects in the continuum of care. There is no discussion of the lost opportunity costs of shovel ready projects that leverage the City’s contribution. While it may cost close to $1 million per door to construct affordable housing, the impact on the Operating Budget funding city services is far less. Currently it is $200,000 plus.
Criminalization of Homelessness
The League of Women Voters California has a Homelessness Action Policy that prohibits policies, practices, regulations and laws that criminalize, penalize, or permit the harassment of people experiencing homelessness. The League expresses extreme concern regarding policies currently under consideration that may lead to costly, ineffective incarceration of individuals experiencing homelessness.
Good Governance
The League worked very hard to pass Measure E in 2020. We were fully aware of the meaning of a General Purpose tax. It was stated clearly in the ballot measure which also listed a number of uses for any revenues generated.
Guardrails were created well before the vote by the creation of Council Policy 1-18, Section
22. Such an extreme change in adopted council policy should not be relegated to the budget appropriation process. Lack of faith and confidence in governmental institutions has reached a crisis level. To keep faith with those that voted on Measure E, the League recommends that you postpone a permanent decision on Section 22 until a robust community engagement process can be conducted where stakeholders and the general public are granted more than one or two minutes to comment.
Respectfully,
Diane McNutt, President
League of Women Voters of San Jose/Santa Clara
[email protected]