Newsom’s $1.4 Billion Homelessness Plan Lacks Clear Strategy, California Legislative Analyst’s Office Says

Gov. Gavin Newsom’s proposed budget includes $1.4 billion in spending on homelessness, but the nonpartisan Legislative Analyst’s Office says it lacks a clear strategy.

The Takeaway

An estimate from the federal government puts California’s homeless population in 2019 at over 150,000 — up 16 percent increase from the previous year.

Newsom’s proposed budget would commit substantial money toward addressing the problem. About $750 million would be used to create a new fund for building affordable housing and offering rental assistance to families in need. Another $695 million would go toward reforming Medi-Cal to help serve people with mental health needs.

The proposal would beef up the state’s role in addressing homelessness, while still working in conjunction with local governments. But the LAO says Newsom’s plan needs to be more clearly articulated. Without well-defined goals, the LAO warns, the substantial spending on homelessness could be squandered. 

The LAO lays out suggestions for Newsom and the Legislature as they hammer out a finalized budget, such as clearly identifying state and local responsibilities under the plan. Without a clear strategy in place, the LAO cautions against creating new bureaucracy, including the proposed $750 million housing fund. 

The governor’s office says it disagrees with the LAO’s conclusions and argues its plan offers new approaches to tackling California’s intractable homelessness problem. 

What the LAO is saying 

“Individually, the components in the governor’s homelessness plan merit consideration. Our comment is more about how these components work collaboratively to make sure we’re addressing homelessness statewide.” 

— Lourdes Morales, LAO analyst 

What the governor’s office is saying 

“As the Governor said when he unveiled this proposal, if you keep doing what you’ve done, you’ll get the same result. We strongly disagree with the assertion that emergency funding to fight homelessness should be spread thinly, with less accountability and in keeping with business as usual … It's in keeping with the Governor's aggressive and far-reaching approach to homelessness and housing since taking office — deploying more state resources to cities and counties than ever before and enacting new laws to speed housing construction.”

— Jesse Melgar, press secretary for Gov. Gavin Newsom