The tech boom has brought incredible wealth to Silicon Valley, but the region also struggles with extreme poverty. The Department of Housing and Urban Development reported that Santa Clara County ranks seventh in the nation for the size of its homeless population, with a count of 7,567 in 2014. The area ranks behind only Los Angeles and New York City in its total number of chronically homeless people, with 2,513 in 2014. Three-quarters of Santa Clara’s homeless population lives on the streets, in abandoned buildings, in vehicles, or in parks, making the county’s rate of unsheltered homelessness the highest in the country. But the Valley’s unique housing market means the homelessness problem cannot be addressed with Section 8 vouchers, necessitating innovative policy solutions.
The influx of high-salaried tech workers to Silicon Valley drove the average apartment rent within ten miles of San Jose to $2,633 in September 2014, up from $1,761 in 2012. In such a competitive housing market, people with Section 8 vouchers struggle to find apartments and often end up in shelters or on the streets. With high demand for housing, landlords can easily choose more desirable tenants who apply with good credit and known addresses. Waiting lists for affordable housing can be as long as two to five years.
Since Silicon Valley’s supply problem has rendered vouchers ineffective, the county has taken on the role of creating housing. Recently, county supervisors approved a $13 million plan to renovate run-down motels into temporary or permanent housing units. The county also invested $14 million in an affordable apartment complex of 450-square-foot units meant for working middle and lower-class families who are unable to find affordable housing. The board approved another $3.8 million to expand existing homeless shelters. These initiatives will increase the available beds in the county fivefold and comprise a strategy for addressing unsheltered homelessness in anticipation of a winter expected to be especially wet due to El Niño. County supervisors also approved some small experimental programs such as legal campgrounds, safe parking lots for people living in their cars, and research into creating “microhouses on wheels.”
These housing-centric approaches to reducing homelessness in Santa Clara follow the “Housing First” policy model popularized by Dr. Sam Tsemberis. His research found that the simplest and most effective solution to chronic homelessness is simply to give people homes, then to offer elective services. Instead of the standard required counseling or rehabilitation before home placement, Tsemberis’s model prioritizes getting people off the streets and into high-quality housing, then allowing them to take an active role in planning their participation in programs for employment, education, substance abuse, and mental health issues.
Dr. Tsemberis first tested the policy in New York City in 1992, and programs implemented in Colorado, Washington, Utah, and Massachusetts since that time have shown strong outcomes. Unlike a traditional homeless housing project, the Housing First program allows participants to stay in their homes even if they continue to use drugs or alcohol, but the vast majority of participants choose to participate in rehabilitation and other programs when given the opportunity. The Housing First model successfully keeps participants housed and enrolled in various programs at much higher rates than models that prioritize program participation before housing placement. Also, simply getting chronically unsheltered people indoors greatly reduces exposure-related medical issues that call for costly emergency room visits.
San Jose and its surrounding area present a rare housing policy challenge, since tech wealth strongly distorts the housing market. Stark inequality and a housing supply shortage have rendered traditional Section 8 vouchers ineffective. In such a unique market, the county’s housing-creation policies based on the Housing First model are an unusual but necessary solution.
 Tsemberis, Sam, Leyla Gulcur, and Maria Nakae. “Housing First, Consumer Choice, and Harm Reduction for Homeless Individuals With a Dual Diagnosis.” American Journal of Public Health 94, no. 4 (2004): 651-56.