Homelessness and housing affordability have ranked among Californians’ top policy priorities for years, and featured prominently in the first gubernatorial debate two weeks ago, when the candidates were asked to grade Gov. Gavin Newsom’s performance on homelessness. As a new report from the Howard Jarvis Taxpayers Association illustrates, however, policymakers have failed people experiencing homelessness and taxpayers alike.
California makes up less than 12% of the country’s population, yet accounts for more than 24% of its homeless population, 42% of people experiencing chronic homelessness and 45% of the nation’s unsheltered homeless, according to U.S Department of Housing and Urban Development data. Moreover, homelessness increased by 35% in California between 2007 and 2024, even as it declined by 35% in Florida and dropped by 30% in Texas during the same period.
Numerous audit reports have criticized California state and local governments’ implementation of homelessness programs and management of taxpayers’ money, as detailed in the Howard Jarvis Taxpayers Association’s newly-released report, “Broken promises: The failure of homelessness spending in California.” Yet, politicians and bureaucrats have chosen to repeatedly ignore such warnings and punt on needed reforms, resorting instead to merely throwing ever more money at the problem and raising taxes.
The State Auditor’s office issued a shocking report that made national headlines in April 2024 when it revealed that California was unable to track the $24 billion spent on homelessness—spread throughout at least 30 programs in nine state agencies—over a five-year period.
“The state lacks current information on the ongoing costs and outcomes of its homelessness programs, because [the California Interagency Council on Homelessness (Cal ICH)] has not consistently tracked and evaluated the state’s efforts to prevent and end homelessness,” the state auditor wrote. “Because Cal ICH does not analyze the available data to determine program effectiveness, it cannot provide critical information that state policymakers could use when prioritizing funding decisions for the myriad state homelessness programs,” it added.
Local governments such as Los Angeles and San Francisco have not fared much better. Angelenos have approved several ballot measures in recent years to enhance homelessness and affordable housing programs, including $1.2 billion in bonds ($1.9 billion with interest) for Proposition HHH in 2016 and the Proposition ULA “mansion tax” in 2022. In 2017, Los Angeles County voters additionally approved the Measure H 0.25% sales tax, which was raised to 0.5% by Measure A in 2024, and is expected to provide roughly $1 billion a year for housing production and homelessness support services.
As is often the case, however, the city and county have overpromised and under-delivered on their homeless housing promises. Costs are substantially higher than advertised, fewer units have been built and tax revenues have lagged rosy projections. The City Controller’s office issued a series of critical reports on Proposition HHH, chiding the city’s wildly optimistic estimates that it would build “affordable housing” for between $350,000 and $414,000 per unit, when the actual average was nearly $600,000, with some projects exceeding $700,000 or $800,000 per unit.
The Los Angeles Homeless Services Authority, jointly funded by the city and county, has also turned out to be a disaster. Disputes over funding, performance and an egregious lack of accountability in the wake of a series of scathing audits that uncovered serious mismanagement of contracts and taxpayer funds have prompted the county to pull the plug on LAHSA and remove its hundreds of staff and about $300 million in funding.
San Francisco currently spends about $700 million to $800 million per year on homelessness, aided by the passage in 2018 of the Proposition C gross receipts tax on businesses with annual revenue greater than $50 million, but has yet to make a dent in its intractable homelessness problem. Here, too, there seems to be little, if any, accountability. While the city has admirably put forward goals such as reducing chronic homelessness by 50%, ending family homelessness and eliminating long-term encampments within five years, there appear to be no consequences for repeatedly failing to meet these targets.
“When the city misses a homelessness benchmark deadline like those above, which occurs regularly, officials simply extend the target date and throw more money at the problem, with no accountability for failure,” Independent Institute Senior Fellow and Director of the Center on Entrepreneurial Innovation Lawrence McQuillan explained in the book, Beyond Homeless: Good Intentions, Bad Outcomes, Transformative Solutions. “The logical conclusion is that ineffectiveness is the result of design problems, not awareness problems or money problems.”
The people of California deserve better. If the government cannot track its own spending on homelessness programs, then it cannot effectively evaluate programs and service providers, much less use this information to direct funding to where it will do the most good and root out waste, fraud and abuse. This is unfair to the people experiencing homelessness in need of effective services, and unfair to taxpayers who see yet more of their money wasted with little to show for it.
Adam B. Summers is a columnist, economist and public policy analyst. He is the author of the HJTA report, “Broken promises: The failure of homelessness spending in California,” and editor and coauthor of the Independent Institute book, Beyond Homeless: Good Intentions, Bad Outcomes, Transformative Solutions.
Jon Coupal is president of the Howard Jarvis Taxpayers Association.