Newsom backs out of delivering 200 tiny homes to San Jose

In March 2023, Gov. Gavin Newsom promised to deliver 200 prefabricated tiny homes to San Jose to provide interim housing for the homeless — ready for occupancy, and at no extra cost to city taxpayers.

The announcement, it turns out, was too good to be true.

Now, the administrating is pulling back on its promise, sending the city a check for $12.7 million to build the homes itself. San Jose officials say the funds aren’t enough to cover the costs, and that they’ll have to scrape together another $5 million to $10 million to complete the project.

The 200 units are slated for a six-acre empty parcel next to the Santa Clara Valley Transportation Authority’s Cerone work yard in North San Jose, at the southeast corner of Highway 237 and Zanker Road.

San Jose Mayor Matt Mahan, who is up for reelection in March, has set ambitious goals for reducing the city’s unsheltered population, which is currently estimated at 4,411, an 11% decline from the year before.

Work is underway to construct 1,439 interim housing beds across three other sites in the city, providing temporary stays for people for a few months as they transition from the streets to permanent housing.

Those staying at the units don’t pay rent and benefit from on-site social services. The city currently spends about $26,000 per interim housing unit each year — a total of $26.7 million for its existing network of 1,028 interim housing units. Once the additional units go in, the ongoing expense of the program could cost the city upward of $60 million by 2030.