On the heels of a new state audit that found California has failed to consistently track and assess the effectiveness of its billions of dollars in homelessness spending, Gov. Gavin Newsom on Thursday announced a plan to ensure cities and counties are doing their part to solve the crisis.
The announcement is the latest example of Newsom, under growing public pressure to move people off the street, calling for more accountability from local governments as California’s unhoused population has ballooned to an estimated 181,000 people despite more than $24 billion in state funds spent over the past five years to combat homelessness.
“I’m not interested in funding failure any longer,” Newsom said during a virtual news conference on Thursday.
Newsom’s plan calls for stricter benchmarks for jurisdictions receiving state homelessness grants and threatens tougher penalties, including potentially withholding funding, if the goals aren’t met. It will expand the authority of the state’s Housing Accountability Unit — formed in 2021 to crack down on local officials who fail to plan for new housing — to oversee local homeless programs and assure cities and counties work toward adding more affordable housing for homeless people and residents with extremely low incomes.
On Thursday, the governor also announced $192 million in state grants to help 17 communities across the state clear encampments and move displaced homeless people into shelters or housing. The money comes from a $750 million “encampment resolution” program the state launched in 2021.
In the Bay Area, Oakland won $7.2 million and San Mateo County received $14.1 million in the latest round of awards.
“This grant here that we received today is expected to serve hundreds of our most complex unsheltered individuals living across 26 encampments,” said San Mateo County Executive Mike Callagy.
The announcement followed a much-anticipated report by the California State Auditor early this month that found the state cannot account for all of its billions of dollars in homelessness spending, and has no concrete way to measure the success of programs receiving the money.
Without reliable data on its spending, “the state will continue to lack complete and timely information about the ongoing costs and associated outcomes of its homelessness programs,” the audit contends.
An accompanying audit by the state of homelessness programs in San Jose and San Diego highlighted similar findings.
Newsom, who is widely thought to have political ambitions beyond the governor’s office, pointed to the results as evidence of the need for more accountability and oversight of local homelessness programs.
San Jose Mayor Matt Mahan, for his part, welcomed a “statewide outcomes-focused framework” for solving the crisis, adding that “the audit was very clear that all levels of government, including the state and the cities, need to be clearer about how we measure success.”
In 2022, Newsom briefly held more than $1 billion in state homelessness funding hostage until local governments submitted “homeless action plans” that satisfied state regulators. The plans are supposed to detail how local officials plan to spend state funds, reduce the number of people living on the street, and boost permanent housing. Now, state officials said they will more rigorously examine specific metrics related to those goals, including the number of homeless people who are housed or receiving services.
Newsom suggested he would again push to withhold state dollars if cities and counties fail to follow through on their homelessness commitments.
“They sure as hell shouldn’t get another penny if they don’t use the money wisely,” Newsom said.
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State regulators will also require local officials to plan for homes for extremely low-income residents as part of their every-eight-year housing plans. The new requirements won’t kick in until the next planning cycle, which in the Bay Area starts in 2031. Local governments that fail to meet the state’s planning expectations could be the target of fines and lawsuits.
A new homelessness team within California’s Housing Accountability Unit will be tasked with much of the new oversight and enforcing state laws meant to combat homelessness. Last year, the unit worked with the state attorney general to sue Huntington Beach for failing to develop a housing plan. In March, a judge stripped the city of some of its authority to block new housing.