A Little Place Called Home?

On the surface, last week’s get-together was a perfunctory political scene: five California gubernatorial candidates meeting at the site of a pet project for a prominent big-city mayor, whose endorsement each of them would be happy to collect.

But that mayor, San Jose’s Matt Mahan, won’t back a candidate casually. He wants recently cut state funding restored for homeless services, including a “tiny homes” housing program that has helped get more than 1,500 people off the street and into safer spaces over the past five years in the state’s third largest city. Mahan has seen the positive results of that program play out in some of San Jose’s most desolate areas of homelessness even as new waves of people are priced out of their homes, often because of housing costs in and around Silicon Valley. 

And nobody’s getting his endorsement, Mahan says, unless they pledge to bring back the funding, which Gov. Gavin Newsom and the state Legislature zeroed out of last summer’s 2025-26 state budget.
 

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“We’ve built over 2,000 beds of interim housing in San Jose in recent years, which has already enabled us to reduce the number of people living outside [and] helped hundreds of people toward self-sufficiency,” Mahan told Capital & Main. “But we can’t continue to make progress without ongoing partnership [with] the state.”

Mahan hosted former U.S. Rep. Katie Porter, billionaire Tom Steyer, former state Assemblymember Ian Calderon, current Superintendent of Public Instruction Tony Thurmond and former state Controller Betty Yee at the new Cherry Avenue tiny home site, on land where dozens of homeless formerly lived near the Guadalupe River south of downtown. The mayor is set to meet in January with U.S. Rep. Eric Swalwell and former Fox News host Steve Hilton.

All but Hilton are Democrats. All have declared their candidacy to succeed Newsom when he is termed out of office in early 2027.

And all heard or will hear this message from Mahan: Temporary or “fast” housing is the quickest way to place unhoused people in a cleaner, safer space. Moreover, proponents like the mayor argue that it can be accomplished at a fraction of the cost of “permanent” housing, the construction of which has been lagging for decades.

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The tiny homes movement as a way to address homelessness has been gaining traction up and down California over the past several years. A tiny home is not a permanent solution, but its proponents don’t claim it to be. Instead, it is a critical step toward that goal, one link of a chain that includes other types of temporary housing.

Organizations like the San Francisco-based nonprofit DignityMoves lead such developments. DignityMoves taps private money to buy prefabricated living modules, using the same building codes that FEMA uses for temporary shelter during natural disasters. Those codes allow for above-ground utilities, smaller room sizes and no underground permanent foundations (a huge cost saver), among other things. The units are either built on site or transported in, and they can be moved from one area to another, depending upon where there is available land.

Elizabeth Funk, the CEO of DignityMoves, told Capital & Main last year that each unit can be built for roughly $50,000, a fraction of the estimated cost to build a unit of permanent “affordable” housing in California. (In 2022, the Los Angeles Times found that a unit of such permanent housing could cost upward of $1 million.) “It certainly does a lot of things that make it a cost-benefit payoff in spades,” Funk said. “The cost of leaving someone on the street is twice what it is to get them indoors, in [substance or mental health] treatment, and perhaps returning to self-sufficiency.”

City and state money come into the mix to build living quarters and add social services and counseling that residents need as they transition from their unhoused lives. That funding also allows for communities like San Jose to develop other temporary housing, including converted hotels and motels.

San Jose has partnered with DignityMoves to build several tiny-homes villages, including the city’s newest development, which opened in November with room for 136 people to live in small but private modules of their own. It’s the 11th temporary housing site to open in San Jose this year, according to San Jose Spotlight, which has reported extensively on Mahan’s efforts to drive down the number of unhoused people in the city.

Much of the funding the city has contributed to such developments over the past five years came from California’s Homelessness Housing, Assistance and Prevention Grant program, the state’s primary funding mechanism for combating homelessness. San Jose received nearly $30 million from the state in 2024, but the program’s $1 billion in annual funding was one of the casualties of a 2025-26 state budget process fraught with cuts to reduce deficits.

Newsom and the Legislature announced plans to restore half the funding in the 2026-27 budget. There are no guarantees that will happen. 

Mahan wants to keep the conversation going, which is one reason why he conducted his get-together with the gubernatorial candidates last week at San Jose’s newest tiny homes development.

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Mahan is just one mayor, and he’s hardly the only person whose endorsement Porter, Swalwell and others are seeking. But San Jose’s experience represents an important point on the timeline of work to reduce homelessness in California cities — and the slow nature of progress there.

Over the past several years, the city has poured hundreds of millions of dollars into efforts to alleviate homelessness. (A state audit found that California spent $24 billion from 2019 to 2024 on the same issue.) 

Along the way, San Jose has been criticized for a lack of transparency related to that spending, and Mahan faced fierce pushback for advocating for the arrest of homeless people if they refuse city services — including shelter — three times.

San Jose Spotlight reported that the city’s number of unsheltered homeless people has dropped by more than 1,000 since 2022, and Mahan’s office says there’s been a 160% increase in the city’s sheltered population of formerly unhoused people since 2019 — a direct result, the mayor contends, of the city’s outsized efforts to get people off the street.

Even so, San Jose’s most recent overall homeless count of 6,503, recorded last January, was a few hundred higher than it had been during the last count in 2023 — a reminder that people become newly homeless every day.

Those numbers all illustrate the magnitude of the challenge. To advocates of temporary housing, they also argue in favor of securing funding to make more safe spaces available to people on the streets who need them.

During last week’s tour of the Cherry Avenue site, Porter said she was aligned with Mahan on using temporary housing like tiny homes to facilitate that goal. Yee said she would restore state funding if she became governor. Those are words, not actions — but they keep the conversation about funding alive. For now, that will do.

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