As the budgets of San Jose and Santa Clara County get tighter, the Salvation Army is trying to do its part to address the homelessness crisis by transforming a grassy lot just north of St. James Park into a new sober-living interim housing site.

The renowned international faith-based organization, flanked by city and county dignitaries, broke ground Monday on the new modular Hope Community at 359 N. 4th St. that will add more than 74 beds for men and women.

The $6 million project will use funds from Santa Clara County, the city of San Jose, and philanthropist John Sobrato to facilitate development. The Salvation Army is privately raising money to cover operational expenses, which Maj. Daniel Freeman said amounts to $14 million to $15 million over 10 years.

“This isn’t just a shining example for the South Bay,” Freeman said. “This is a shining example across the United States of what we can accomplish when we choose to work together. We see the value in changing lives. We see the suffering that’s on the streets and now’s the time to do something about it.”

The project continues the momentum in San Jose, which has seen a one-third reduction in unsheltered homelessness as a result of the city’s policy shift to build more interim housing. This year, the city is expanding its shelter system by more than 1,000 placements through hotel and motel conversions, safe parking and safe sleeping sites and tiny home communities.

By the end of the year, the city hopes to make even more progress and have at least 50% of its homeless population indoors.

Officials pose for a photograph during The Salvation Army Silicon Valley groundbreaking ceremony for their HOPE Community Safe and Sober Overnight and Transitional Housing program in San Jose, Calif., on Monday, Nov. 3, 2025. (Nhat V. Meyer/Bay Area News Group)

“Our streets can’t be the waiting room, and San Jose has been at the tip of the spear, shifting policies under the mayor’s leadership to get people indoors today,” said DignityMoves CEO Elizabeth Funk, whose organization is partnering on the Hope Community development – its third project in the city. “Then, we can take the time to build the permanent housing that we so need.”

District 2 Supervisor Betty Duong said the county’s involvement began about 5 years ago, when Freeman met with then-Supervisor Cindy Chavez, who committed $4 million to the project. Both Sobrato and the city are committing an additional $1 million.

The project expects to open its doors next year.

But while the city has committed to building more dignified options to living on the streets, financial constraints at the local and state levels could curtail the progress made without help from nonprofits and philanthropists.

For example, the Salvation Army already has expanded its Transition and Overnight Program to add more beds for unhoused women in addition to the Hope Community Project.

Freeman added that 77% of Salvation Army program graduates have stayed housed.

Meanwhile, Sobrato has committed millions to multiple San Jose projects, includingproviding the land for the 150-unit Via Del Oro tiny home community that opened in April.

“We all know we have a homeless crisis across the San Francisco area,” Sobrato said. “It will take many such public-private partnerships to solve this crisis, making sure that our homeless neighbors have safe, dignified housing … There is no single solution to the homeless crisis, but if we all work together and pull every lever, we will make a difference.”

San Jose Mayor Matt Mahan also highlighted that the Salvation Army project would help add another recovery-based program, which already faces hurdles due to rules that prevent the use of state funds.

An illustration at The Salvation Army Silicon Valley groundbreaking ceremony for their HOPE Community Safe and Sober Overnight and Transitional Housing program in San Jose, Calif., on Monday, Nov. 3, 2025. (Nhat V. Meyer/Bay Area News Group)

Mahan was among those critical of Gov. Gavin Newsom’s veto of Assemblymember Matt Haney’s bill that would have allowed local governments to use up to 10% of state funding for recovery housing.

“For too long, we have had policymakers and funding streams that have actually said that somehow that is not something that we should be prioritizing,” Mahan said. “Yes, we want to give people choices, but if somebody wants to get sober, wants to go on that journey, we should do everything we can to invest in the partners and the places that will help them on that journey and optimize an environment for that outcome.”