San Jose Shifts Focus to Improving Shelter Efficiency as Expansion Ends

City opens final interim housing site, aims to reduce costs and connect more unhoused to permanent solutions.

Feb. 5, 2026 at 7:07pm

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San Jose will open its latest emergency interim housing site at the Santa Clara Valley Transportation Authority's Cerone Yard, marking the end of the city's shelter expansion efforts for now. With costs prohibiting further expansion, the city is focusing on making the shelter system more efficient by targeting a 95% utilization rate, reviewing contracts to reduce costs, and working to move more interim housing residents into permanent solutions.

Why it matters

San Jose has added over 1,200 new shelter beds in the past year, bringing its total to more than 2,000. However, the city can no longer afford to expand the system further, so it must find ways to maximize the impact of its existing resources and connect more unhoused individuals to permanent housing and services.

The details

The new Cerone interim housing site will provide 162 units and serve up to 200 residents. It is the last project in the city's interim housing pipeline. To reduce costs, San Jose plans to renegotiate contracts for food, case management, property management, and security without reducing service quality. The city also aims to move more interim housing residents into permanent solutions by connecting them with job training, drug treatment, and other support services.

  • The Cerone interim housing site will open later this month.
  • Construction crews broke ground on the Cerone site in May 2025.

The players

Matt Mahan

The mayor of San Jose who expects overall shelter costs to drop by about 20% through contract renegotiations and by connecting more unhoused residents to permanent solutions.

Rene Ramirez

The CEO of HomeFirst, the organization that will operate the Cerone interim housing site, who says the goal is to ensure residents' time there is "purposeful and as brief as possible."

Jennifer Maguire

The San Jose city manager who noted the Cerone site is the second emergency interim housing site on VTA land.

Carolyn Gonot

The VTA general manager who said the Cerone site corresponds with the agency's program to create opportunities for affordable and rapid rehousing throughout the county.

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What they’re saying

“We will continue to advocate to other levels of government for what we need: an expansion of mental health beds, a restoration of (Homeless Housing, Assistance, and Prevention) dollars, a pathway to treatment for the many people struggling with addiction (and) a fair share approach that holds every city and every county accountable for doing their part to end this crisis of homelessness.”

— Matt Mahan, San Jose Mayor (eastbaytimes.com)

“Our goal is to ensure that participants' time here is purposeful and as brief as possible. HomeFirst staff will not only keep people safe, but they will also provide on-site services like case management, housing navigation, employment search and connections to health services. Everyone here will be supported with housing plans because, as critical as shelter is, this is not the final destination.”

— Rene Ramirez, HomeFirst CEO (eastbaytimes.com)

“Although this is a temporary place for these residents, it corresponds with the program VTA has been driving for several years now to create opportunities for affordable and rapid rehousing throughout the county.”

— Carolyn Gonot, VTA General Manager (eastbaytimes.com)

What’s next

The city plans to continue advocating to state and federal governments for increased funding and resources to address homelessness, including an expansion of mental health beds and addiction treatment services.

The takeaway

With San Jose unable to further expand its shelter system due to cost constraints, the city is shifting its focus to improving the efficiency and effectiveness of its existing resources. By renegotiating contracts, increasing utilization rates, and better connecting unhoused individuals to permanent housing and support services, San Jose aims to make progress on homelessness without relying on continued expansion of its shelter capacity.