Legislation would tie homelessness funding to local results, a Newsom priority

Updated Feb. 15, 12:15 p.m.

A new bill is attempting to bridge disagreements between local elected officials and Governor Gavin Newsom over public spending on homelessness and an apparent lack of progress.

Despite more than $15 billion in state spending on homelessness over the past two years, the number of unsheltered people has risen considerably. An annual point-in-time count in 2022 found more than 170,000 people in the state experiencing homelessness.

A new bill by Assembly member Luz Rivas (D–San Fernando Valley) follows months of tension between local officials and Newsom over the growing homelessness crisis, despite billions in state spending.

The governor has pushed for stronger results from local governments, going so far as rejecting every application for homelessness funding grants last October before  eventually approving the funding.

But city and county leaders have called for an ongoing funding source, saying inconsistent appropriations make it difficult to plan for long-term solutions.

“Funding alone will not solve homelessness,” Rivas said Tuesday. “The lack of accountability and inconsistent funding has caused a public policy feedback loop.”

That loop is “resulting in homelessness response systems that are unable to meet the challenges of rising housing costs and insufficient affordable housing availability.”

Rivas said her AB 799 would tie grants from the state’s Homeless Housing, Assistance and Prevention (HHAP) program to “successful programs that have tangible results.” It seeks to make grant funding ongoing, though there is not a specific dollar amount requested in the bill yet and the state is facing a budget deficit of up to $24 billion.

Mari Castaldi with Housing California, an advocacy group supporting the legislation, said they are asking for $3 billion in annual funds.

The bill would also require the state to take on a greater role in setting goals and coordinating between jurisdictions to reduce homelessness.

In an interview Tuesday, San Diego Mayor Todd Gloria said getting ongoing funding from the state would help his city plan years ahead and lower costs for shelter options, such as leasing hotel rooms.

“The price point that I get would be different if I could make not a one-year lease, but a three-year lease or a five-year lease” or even acquiring a building, he said.

Gloria said while the HHAP funding has helped in San Diego, the city cannot keep up with the rate of people falling into homelessness. For every 10 people the city was able to help off the streets last year, 13 more became homeless, the mayor said.

“While the state's investment is transformational and truly helpful, we have to actually size it to the crisis that we're currently experiencing,” he said.

Rivas and other lawmakers acknowledged the intractable nature of the problem and lack of visible results despite billions spent in recent years.

“It's very frustrating for the general public when they hear that in the state, we're spending billions – and that's billions with a B – of dollars on homelessness and housing. And yet they don't feel that they're seeing enough of an impact in their communities,” said Assembly member Laura Friedman (D-Burbank).

While many communities and local leaders are “incredibly dedicated,” Friedman said, “there is often a lack of communication and a lack of coordination that's very visible to the public.”

Graham Knaus, CEO of the California State Association of Counties, said while he had not yet read the bill in detail, he is “supportive of the efforts to seek more accountability and transparency for homelessness at all levels of government.”

Knaus added that the state should begin treating homelessness the way it treats other social programs.

“When you look at child welfare, transportation, criminal justice, health care, education, it’s clear who’s supposed to do what and how it’s funded,” he said. “Not with homelessness.”

Newsom’s office declined to weigh in on the proposal, but the governor has increasingly called for greater accountability and transparency regarding HHAP funds.

When asked recently about local officials’ demands for ongoing funding, Newsom grew visibly frustrated and said he was “exhausted” by “these stale arguments I've been hearing my entire life.”

The governor is proposing another $1 billion for HHAP funding grants, which would match funds from each of the previous two years. Though he warned grants would be prioritized for local plans that would reduce unsheltered homelessness.

“We're not just going to hand out another billion dollars of brand new discretionary money unless it aligns with our goals and we see real progress,” he said when he unveiled his budget proposal in January.

Correction: A previous version of this story misspelled Assembly member Laura Friedman’s name. It has since been corrected.