State Won’t Cut Homelessness Funding—but Demands Results

Despite a massive budget deficit, California won’t cut funding for homelessness programs but sent a clear message to cities like San Francisco: Use it wisely, or else.  

“People are dying in the streets in the name of compassion,” Gov. Gavin Newsom said at a press conference on Tuesday morning, a statement echoed by his Deputy Chief of Staff Jason Elliott later in the afternoon. 

“At some point, the money can no longer be an excuse for inaction,” Elliott said. “We need to muster the political courage to match that investment.”

On Tuesday, the governor came through with his promise to keep funding the Homeless Housing, Assistance and Prevention Program, adding $1 billion to the pot after pausing funding late last year as a warning to cities to get serious about getting more people off the streets and into more permanent housing.

But the state doesn’t currently have the tools to do much more enforcement than that. 

Its housing department, by contrast, has been threatening legal action and to withhold funding from cities out of compliance with state law. Case in point: a warning letter to San Francisco about a proposed Mission District project that was reduced by one story to appease neighbors.

Instead, Elliott said, the state will turn to the Legislature to help define penalties for cities not meeting homelessness goals—whether that be legal action, funding penalties or other remedies. 

“We’ve heard from a number of legislators privately of their willingness to get aggressive in this space,” Elliott said.

Also retained in this year’s budget proposal is $167 million in funding to combat the opioid epidemic and $108 million for CARE Court to compel treatment for people with severe mental illnesses. Dr. Mark Ghaly, secretary for the state’s Department of Health and Human Services, said that could fund treatment for 5,000 to 12,000 people across the state. 

Though homelessness funding will remain intact, the governor announced $350 million in cuts to housing. Those cuts affect three homeownership programs that provide grants and loans to low- and moderate-income first-time homebuyers and support the production of Accessory Dwelling Units. 

Lourdes Castro Ramírez, secretary for the state’s Business, Consumer Services, and Housing Agency, said merging the two budgets so they work in tandem will help get and keep people out of homelessness.

“The state's housing efforts cannot be different than homelessness,” Castro Ramírez said.