Why is San Jose getting a $7 million tiny home grant meant for San Diego?

San Diego’s loss is San Jose’s gain as Gov. Gavin Newsom has decided to rescind a $10 million grant to the Southern California county for new tiny home shelters, instead giving most of the money to the Bay Area’s largest city.

In a letter this week to San Diego County, the state said local officials voided the grant agreement by declining to approve the site selected for the new tiny homes for homeless residents. On Wednesday, San Jose officials said they were set to receive an additional...