The San Jose9 City Council on Dec. 16 approved a group memorandum that extends a set of grant agreements for interim-housing programs and directs staff to accelerate efforts to reduce operating costs and improve transparency.

Council members said the changes respond to both budget pressures and the need to measure outcomes. The memorandum extends grant agreements through June 30, 2026, and asks staff to create a public-facing dashboard showing bed utilization and client exit outcomes, "so that the Council knows when people leave our system and what those results are," a councilmember said during debate.

Eric Sullivan, director of housing, told the council the administration had launched multiple procurement processes to centralize security, food services and property management and expected cost reductions of roughly 20 percent from those changes. Sullivan said the city had completed an initial RFP for security and expected phased implementation beginning in January, with food procurement negotiations starting in January and centralized property-management procurement posted imminently.

Councilmember Campos's substitute motion removed a prior request for an MBA-style analysis and instead instructed the city manager to return with an evaluation of encampment exclusion zones and engagement programs in the third quarter of fiscal year 2526, including any budget component "as necessary to ensure programs are maintained and expanded where identified." The substitute was accepted and the motion passed unanimously.

Why it matters: The council framed the action as a move from rapid expansion toward system optimization and accountability. Members emphasized the need for measurable outcomes, lived-experience input and public transparency to ensure limited public dollars produce durable exits from homelessness.

What happens next: Staff will implement the procurement steps described in the presentation, assemble the requested dashboard metrics, and bring the requested evaluation to Council in Q3 FY2526. The memorandum passed in a unanimous vote.