Mayor Matt Mahan is calling it one of the most important votes of the year.
"The most significant and strategic investment in addressing unsheltered homelessness in the history of our city," Mahan said.
Roughly six months ago, the city was told to clear homeless encampments near its waterways or face hefty fines from the Regional Water Quality Control Board.
MORE: Proposed ordinance would make living alongside waterways illegal in Santa Clara Co.
As part of Tuesday night's vote, the council also approved flexibility with Measure E funds.
Funds from the property transfer tax that were slated to be for affordable housing. Some will now go to more immediate solutions.
"We have a pathway now to be in compliance our storm water permit and the clean water act, but to do that we have to follow through on the investments we've outlined in this budget," Mahan said.
Over the next year, it's estimated 1,200 people will be moved off the streets and into alternative sleeping sites; 600 into temporary shelter, 500 to new safe sleeping sites and 100 to new safe parking spots.
"Managed locations with sanitation, security, some basic case management," Mahan said.
MORE: San Jose passes stricter RV, homeless encampment policies around schools
Out of the $5.3 billion budget, $120 million is earmarked for homeless solutions.
Homeless advocates tell us they're not a fan of congregate shelters, but would like to see more transitional housing options.
Todd Langton is the executive director of the nonprofit Agape Silicon Valley.
This is video of their most recent distribution event with the United Effort Organization and several other organizations.
"A lot of my colleagues and peers that do advocacy work don't agree with me on this. They want the money earmarked solely for permanent housing. And my philosophy is - if we don't get people off the streets and out of the fields immediately they're not going to be alive long enough to get the permanent housing if and when it does come," Langton said.
MORE: SJ's new public dashboard details progress, problems addressing homelessness
Langton hopes the city and the nonprofit community can organize better to address the homeless need.
"I encourage people to look at the model in Houston, they have huge reduction in homelessness because they have one silo and everybody reports to one organization that manages the whole thing. We're wasting so much money in Santa Clara County," Langton said.
Langton estimates they have been able to place 20 people into housing this year.
They're working with a family of four who are currently living in their car in Roosevelt Park.
"I am a firm believer you don't really understand the unhoused situation until you go out there and meet with the people on a regular basis," Langton said.