In Pricey Silicon Valley, a Plan to Preempt Homelessness

Homes in San Jose, California, in 2022. Sky-high housing prices and a lack of affordable apartments have turned the Silicon Valley region into a laboratory of homelessness prevention experimentation. Photographer: David Paul Morris/Bloomberg

Fernando Cortes understands the importance of being heard by your local government, especially in times of need or stress. He works as an interpreter in San Jose, California, helping Spanish-speaking residents navigate government offices and applications.

He’s also a single father with shared custody of his 10-year-old son, and during the pandemic, when demand for in-person interpretation work collapsed, he fell behind on rent payments for his small studio apartment, which were just over $2,000 a month. San Jose and surrounding Santa Clara County, the heart of the pricey Silicon Valley region, have long had one of the nation’s most expensive housing markets.

“I was going long nights without sleep,” said Cortes, 45. “I was sharing my space with my son, so I couldn’t lose it. It was double stress.”

That’s when friends directed him to Santa Clara County’s Homeless Prevention System, or HPS, a program administered by a network of local nonprofits that provides financial assistance to tenants at risk of eviction. In 2022, he applied and was able to secure enough funds to cover his rent for three months. “It was like a blessing,” he said.

Researchers at the University of Notre Dame in South Bend, Indiana, who studied HPS found that 81% of those who enrolled were less likely to experience homelessness within six months. The no-strings-attached assistance, which averages $6,000 to $7,000 per household over four months, also has a wider community impact: For every $1 spent, the community saw $2.47 in benefits, the 2023 study concluded. Approximately 95% of families that used the service remained in stable homes.

A New Paradigm

HPS is part of a proliferating family of interventions predicated on the notion that the cheapest way to address homelessness is by keeping struggling tenants from being turned out on the streets in the first place. A massive 2023 study of homelessness in California by the UCSF Benioff Homelessness and Housing Initiative found that most unhoused people believe that a subsidy of $300–$500 a month would have kept them sheltered. The effectiveness of providing direct aid was borne out by the high-profile success of federal housing relief programs deployed during the Covid-19 crisis. Prevention-focused programs have emerged in Connecticut and Birmingham, Alabama, while roughly 150 sites have “basic income” experiments and pilots that provide direct cash payments to households in poverty.

Informally, direct housing support had been happening in Santa Clara County for years — small handouts from agencies that helped families pay for medical bills or rent. And more than 90% of US cities have assistance programs aimed at preventing homelessness, according to economics professor David Phillips, one of the Notre Dame researchers who studied Santa Clara County’s system. But most simply identified those at high risk and “kicked the can down the road,” he said.

HPS was different, providing assistance without a pre-set time limit for people who were still housed but on the brink. “Early on, we learned that all these families were calling the family shelter, and saying, ‘Hey, I think I’m going to be homeless in a couple of months, I’m not sure how I’m going to make it,’” Bojorquez said. “And they were told to come back when they were homeless. We realized, these next few months are when we can make a big difference.”

Launched in 2017, the program was devised to be more flexible than others, forgoing spending caps and tracking data and performance to understand where the money was going and what it accomplished. It coalesced around two efforts: Housing 1,000, a program to better coordinate homeless services among the dozens of agencies and nonprofits in the county, and a 2017 report showcasing the enormous cost of homelessness in the region.

“We found three people were falling into homelessness for every person that we were housing,” said Bojorquez. “We call that inflow, as an industry term. People were just falling into homelessness on a regular basis.”

Two local organizations run the system, with lead organizer Sacred Heart Community Service, an anti-poverty nonprofit, joined by Destination: Home, a county-wide public-private group. The first two-year pilot of HPS distributed $3.3 million to roughly 330 households. Most of the funds go out in direct payment to landlords, but it can also be used for gas and car payments or to pay for other bills. Currently, the effort has 19 participating organizations, a centralized contact system and dedicated phone line; the current fiscal year, which ends in June, will see approximately $29 million distributed to about 1,700 households. The program continues to be expanded — the county will take over full operation this summer.

When Cortes was getting assistance, he was nervous about making sure the payments arrived on time and often called program administrators for updates. But he said they were open and helpful, explaining how the system worked, how his landlord was going to get paid, and when he could expect help. HPS organized to pay back rent directly with his landlord, eliminating the stress of constantly communicating about a late payment. Today, he’s still in the same studio apartment.

“One of the most important things is they made me feel that I deserved the help,” Cortes said. “They weren’t just giving me the service because they had to; they made me feel that I was worth it.”

As in so many cities and counties, it was the pandemic that pushed Santa Clara County to try a new approach to rental assistance. The county had received American Rescue Plan funding and set up an eviction help center to connect tenants and landlords with federal support, said Emily Hislop, a manager at the City of San Jose Department of Housing. At that time, in late 2021, different parts of the housing and legal system collaborated extensively to find ways to protect tenants. As the pandemic receded, those officials saw a chance to expand that work.

“We were in an eviction crisis before the pandemic that’s only exacerbated,” said Hislop. “Cities and counties and organizations had already come together to respond to the pandemic. What grew out of that moment was a sense of, ‘How can we address this going forward?’ The coordination among all of these agencies has been transformative.”

As Bojorquez said, a lot of perspectives shifted when the county distributed $85 million in direct financial aid in a matter of months — a totally new paradigm for social service — and “the world didn’t explode.”

Plugging a Gap

Part of the reason Phillips was so eager to study Santa Clara County’s program was to see how this kind of assistance played out long term in an area of such wide wealth inequality. Home to Alphabet Inc. and Apple Inc., Santa Clara County is a place of income extremes, and it has long ranked high on the US Department of Housing and Urban Development’s annual estimates of US counties with the highest number of homeless residents. The gap reflects the county’s location and history, an area that was farmland just a few decades ago and boomed during the ascension of Silicon Valley, bringing an influx of workers during a period of extraordinarily low housing construction in California.

That entrenched affordable housing crunch — median monthly rent in San Jose is just over $2,900 and the median single-family home price in 2023 was almost $1.8 million — has given rise to a host of homelessness initiatives. San Jose has also experimented with quick-build “tiny homes” as a means of temporarily sheltering the area’s unhoused residents, a group that numbers close to 10,000, according to the county’s most recent point-in-time count.