Authorities began dismantling a notorious homeless camp Thursday known as "The Jungle" in the heart of California's affluent Silicon Valley, where skyrocketing rents have forced hundreds onto the streets.

Municipal workers in white overalls and face masks moved into the camp along a creek in San Jose where some 300 people live in tents and other makeshift lodging.

"It is a disgrace," said housing advocate Sandy Perry, adding: "It's an example of the total failure of our city's housing policy as well as our state and our nation."

"It's like a big family," Yolanda Gutierrez, a former resident, told AFP. "We all looked out for each other, especially the females that are single. We all had our own little group that we would check up on each other.

"But unfortunately what they just did to us today it's like they split the family apart."

The encampment, only a few minutes away from San Jose's downtown district, is home to people forced out of an overheating rental market as lucrative tech companies moved in in recent years.

"We have been rehousing for the last 18 months," San Jose city spokesman David Vossbrink told AFP, saying they had found places for some 140 people in shelters, with some in hotels and motels.

About 60 others had received offers of rent subsidies but have not yet found somewhere to live, he added.

- 'Run-away people' -

The operation to close down the camp will last two or three weeks and will include putting up a reinforced fence to prevent anyone coming back and settling in again.

But the spokesman admitted that those forced to leave the "Jungle" could not all expect to be housed by the city, which has budgeted nearly $10 million over three years for the homeless.

San Jose is partly counting on a refuge set to open for the winter to house 200 of Santa Clara County's estimated 5,000-7,000 homeless, he said.

The city, with its population of around one million, has one of America's highest proportions of homeless people.

The spokesman attributed the problem to various factors including the 2008 global financial crisis, exorbitant rents fueled by the tech boom and the scarcity of unskilled jobs.

Vossbrink said the "Jungle" had to be cleared because it posed security, public health and pollution problems, and because of looming winter temperatures. "It's becoming urgent," he said.

But some activists are protesting the operation.

Scott Wagers, a pastor who heads a homeless support association, said the camp developed over the last two years after the clearance of another slum in San Jose.

"The people are just going to move to another place that will become another jungle," he said.

Andrew Costa, who used to live in the "Jungle," said becoming homeless could happen to anyone.

"They are part of the society that are discarded. They're your son who doesn't get a job, they're your daughter that takes too much drugs and is not understood, they're the ones that didn't want to go to school," he said.

"They're run-away people."