Citing Transparency Issues, San Jose May Part Ways with Santa Clara County Housing Authority

San Jose wants to wrest control of its subsidized rent programs from the Santa Clara County Housing Authority, which has long frustrated city officials with an alleged lack of transparency and timeliness.

Come Tuesday, the City Council will consider a recommendation from San Jose Housing Department Director Jacky Morales-Ferrand to end or renegotiate its contract with the agency, which is a standalone entity not under county oversight.

The housing authority has managed the city’s rent vouchers—commonly called Section 8—since 1976, and the contract hasn’t been revised since 1996. Under the current terms, San Jose has little say over day-to-day operations and budget decisions, board appointments and other developments.

Katherine Harasz, who heads the housing authority, defended her agency and said dividing the Section 8 program into multiple bureaucracies would likely cost more taxpayer money and complicate things for tenants.

“Both the county and the city’s interest in the housing authority, its operation and its funding is understandable given the affordable housing crisis in our community,” she said. “But the bottom line is that there are many more people in need than we have funds to respond to, so it’s important that we work together to address that.”

The city and housing authority have butt heads many times over the years, according to a memo by Morales-Ferrand. In 2007, San Jose asked the authority to increase the number of vouchers for the chronically homeless from 500, which fell far short of the need. It wasn’t until four years later that the housing authority designated an additional 200 vouchers and created a direct referral program with the county.

San Jose tried to renegotiate its contract with the authority back in 2011. In a letter to the housing agency, the city outlined a list of concerns: a lack of transparency, incomplete data, delays and unanswered questions about funding. The city’s push prompted the county to consider forming a joint powers structure to address those frustrations—but the plan never materialized.

Last fall, however, the county Board of Supervisors revisited that discussion and directed staff to drum up ideas about how to improve the housing authority’s governance structure. Supervisors voted against a joint powers arrangement, which would have given the city more of a voice.

Instead, the board of supes is considering whether to maintain the status quo or assume direct oversight of the housing authority. If supervisors opt for the latter option in a vote expected sometime this month, they would also create an advisory board that includes a representative from the city.

But San Jose wants to play more than just an advisory role.

According to Morales-Ferrand, the housing authority has burned San Jose in the past by making major decisions on pensions, land buys and public housing closures without the city’s consent. San Jose has also been kept out of the loop on financial reporting, even when the housing agency uses city money to pay for the authority’s other programs.

The housing authority has also entered into agreements in San Jose’s name without asking the city for its express approval, city officials said. All the while, per the city memo, the housing authority has fallen far short of San Jose’s transparency standards.

“While the [authority] has improved public noticing, it does not follow the city’s strong sunshine requirements, making it difficult for both the public and the [city] to have sufficient time to review and provide meaningful input,” Morales-Ferrand wrote in her memo. “Given that no progress has been made on addressing these concerns, it is time to renegotiate a new agreement.”

If the council agrees to end the housing authority’s contract, the city would have a year to either renegotiate the terms of its relationship or to find a new partner altogether.

More from the San Jose City Council agenda for March 13, 2018:

  • Skyrocketing real estate prices have made the land beneath San Jose’s mobile home parks a gold mine for property owners, which puts 35,000 residents at risk of displacement. To prevent the loss of vital affordable housing stock, the city tried to come up with a way to incentivize mobile home park owners who stay in business instead of selling their land. But two years of deliberations have led to an impasse, and now the council will have to decide whether it’s worth continuing the discussion or dropping the idea.
  • In a related item, the city will consider other ways to prevent mobile home park closures, such as through zoning. The city suggests bringing the ideas back for discussion at the next council priority-setting session. In a joint memo, however, council members Don Rocha, Raul Peralez and Sergio Jimenez said the city must act quickly. “We adamantly oppose the notion of this item being brought back for a third time to priority setting,” they wrote. “Further delays will only exacerbate our housing crisis and create uncertainty for residents.”
  • San Jose has teamed up with the East Side Union High School District to provide free WiFi to students. The project has already had a huge impact, according to staff reports, and the school district plans to kick in another $2 million in bond funding.

WHAT: City Council meets
WHEN: 1:30pm Tuesday
WHERE: City Hall, 200 E. Santa Clara St., San Jose
INFO: City Clerk, 408.535.1260

This article has been updated to include comments from Katherine Harasz.

Jennifer Wadsworth is the News Editor for San Jose Inside and Metro Newspaper. Email tips to [email protected] or follow her on Twitter at @jennwadsworth.


  1. The county housing authority is not part of Santa Clara County, rather a stand alone governmental entity much like the county board of education.

    • You’re right, and I just added a line in there to clarify that. The name makes it confusing. Thanks for pointing that out!

  2. > The housing authority has managed the city’s rent vouchers since 1976, and the contract hasn’t been revised since 1996.

    This is absurd!

    Whose crazy idea was a standalone rogue housing authority in the first place?

    I’ll bet that when the facts come out we will realize that the “board” that oversees the “housing authority” is just nothing but a gang of political cronies who get to spend public money and are NOT accountable to any voters.

    This is just another consequence of California’s “one-party democracy”.

    Even the clueless and mentally handicapped Thomas Friedman recognizes that “one-party democracy” is an awful form of government:

    “There is only one thing worse than one-party autocracy, and that is one-party democracy, which is what we have in America today.”

    • San Jose Bubble,

      You are on to something. Do some research on Alex Sanchez, a retiree of both the SJ HD and SCCHA (i.e. a very nice pension & lifetime healthcare benefits). Mr. Sanchez is the “Director” of a multi-level non-profit scheme, which buys & renovates older apartment buildings using funds from public bonds to be turned into low income housing. We’re talking 10’s of millions of dollars here! No doubt those funds are used to hire his cronies for the renovation work.

      Oh, almost forgot to mention, that Mr. Sanchez’s NPO pays him $250k per year in salary. Seriously, how is that Non-Profit? That’s pure profit!!!! I know few rental owners who make that per year & that’s after investing their life savings, working their behinds off and taking on a ton of risk.

      Perhaps the latter has it all wrong, apparently non-profits are more profitable. Odd (and corrupt).

      • > Oh, almost forgot to mention, that Mr. Sanchez’s NPO pays him $250k per year in salary. Seriously, how is that Non-Profit?

        Dear Mr. CITIZEN:

        I had mostly recovered and you just made me mad all over again!

        “Non-profits” have always been a scam. The vacant, glassy-eyed social justice do-gooders think that “non-profit” means “big-hearted”. The reality is that there is very little or no limits on how much the ‘non-profit’ officials can pay themselves. And they MASSIVELY OVERVALUE their worth to society.

        The most obscene example of a greedy, ‘non-profit’ grifter is Morris Dees of the so-called “Southern Poverty Law Center”. The only poverty they fight is their own. The SPLC is sitting on a stash of hundreds of millions of dollars, all raised by writing heart-tugging fund-raising letters to guilty white liberals.

  3. several years ago there was an uproar about the pensions (fat ones) at the Housing authority, never heard how that was resolved – but people were irate that great sums were being diverted from housing needs.
    Also there has been mismanagement at some of the housing complexes – empty housing units when the complex is “full”
    Perhaps Jen can do another follow up – Part II to this story after reviewing the financials over the past many years. A shame we have a homeless population such as we do and this flim flummery goes on.
    But this is the kind of stuff we see in a one party town (and state) where the insiders make out – – just fine.

  4. For whatever reason it must be that it is in the best interests of San Jose’s public employees to “part ways” with the Santa Clara County Housing Authority . Whatever is best for the “homeless”, the “poor”, or for we taxpayers is irrelevant.
    Cynical me.

  5. Well, if the SCC Housing Board is such a big bad wolf, it would appear the level of apathy and inaction from SJC indicates, they suffer from the same slowness, lack of transparency or urgency. It is almost like they helped measure out the wolf’s sheep clothing, killed the sheep and took them to the wolf, and then want to cry “wolf”, hoping no one would notice their own complicity.

  6. “According to Morales-Ferrand, the housing authority has burned San Jose in the past by making major decisions on pensions”

    Let me translate this for you: The Housing Authority insisted on paying the full cost of the pensions they promise to employees and not simply rack up debt like the city and the county.

    While San Jose is paying over 70% of payroll for Morales-Ferrand’s pension, the Housing Authority pays just 7.6% of payroll. Who do you want spending your tax dollars????

    While the city and county have billions of dollars in pension debt – and rising – the Housing Authority is over 100% funded. They are one of the only public agencies in the state that pay their full bill and don’t mortgage our children and grandchildren’s future.

  7. The City of San Jose running public housing? These are the same people that couldn’t run a flood control ditch without drowning homeless people and flooding a bunch of taxpayers out of downtown only a year ago. Government should only run the government, like the founding father told us 242 years ago!

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