California homelessness: Where are the state's billions going? Here's the new, best answer (2024)

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In Sacramento, there’s a word that keeps popping up during discussions about the state’s homelessness crisis: “accountability.”

Gov. Gavin Newsom has scolded cities and counties for failing to get more people off the street, hundreds of millions in state spending notwithstanding. “Californians demand accountability and results, not settling for the status quo,” the governor said last November.

Republicans in the Legislature have called for an audit of the state’s homelessness spending. Democrats are still absorbing the last one from 2021, but many want to see the state’s money come with strings attached. This week, Assemblymember Luz Rivas, an Arleta Democrat, introduced a bill that would demand “tangible results” from local governments before they receive homelessness grants — mirroring an idea from the governor’s own budget proposal.

The increasingly bipartisan chorus points to two stark, seemingly contradictory trends: The state keeps spending more to address the crisis, and the crisis keeps getting worse. So where, they ask, is all the money going?

On Wednesday, California lawmakers got something that resembles an answer.

The state’s Interagency Council on Homelessness, a state body tasked with overseeing the state’s homelessness strategy and divvying up funding to local governments, issued a report detailing just how much the state has spent on the crisis between 2018 and 2021 — and what it’s gotten in return.

The answer to those questions, according to the report: The state has spent nearly $10 billion and provided services to more than 571,000 people, each year helping more people than the last.

And despite all that, at the end of year three, the majority of those more than half a million Californians still didn’t end up with a roof over their heads. The number of unsheltered Californians continues to swell.

Presented at a three-hour joint committee hearing in the Assembly, the report has sent housing policy experts across the state into a twitter. Services for the homeless are so disjointed — split among nine state agencies, hundreds of county and municipal governments, nonprofits and charitable organizations — the 253-page document may be the first statistical birds-eye view of the state’s many-tentacled efforts.

But it also shows just how intractable the problem is.

“One of the largest challenges facing the state is the inflow of new people into homelessness, even as efforts to help people experiencing homelessness expand,” the report reads.

What the report did not address is how the state can spend its money more effectively. Nor was it asked to. The report comes at the request of the Legislature, which included an ask in its 2021 budget for a “comprehensive view of the homelessness response system,” not an audit nor a list of recommendations.

But it may provide lawmakers, service providers and advocates with some helpful hints about what’s working, what isn’t and for whom.

“We’ve sent people to the moon,” said Oakland Assemblymember Buffy Wicks, a Democrat who chairs the Assembly’s housing committee. “We can solve homelessness in California.”

Here are four takeaways from the homelessness assessment:

1. California has been spending a lot to remedy homelessness — mostly on housing

Between 2018 and 2021, the state spent $9.6 billion trying to move the needle on homelessness.

Many Californians will be able to relate: The bulk of the spending, $5.5 billion in this case, went to the cost of housing.

That includes everything from building new units to preserving old ones, converting unused hotel rooms during the pandemic into temporary housing, building shelters, and setting up permanent supportive housing facilities that provide a long-term subsidized place to stay along with other on-site social services.

According to the report, the state produced or kept online 58,714 affordable housing units in the three year period, and added 17,000 new shelter beds.

Some of that spending has been more likely to lead people out of homelessness than others. Of the more than 75,000 people placed into permanent supportive housing of some kind, for example, only 8% wound up back on the street within six months.

Conversely, for those who left a state funded program to live with a family member or a friend, the rate of those who were homeless again within six months doubled. And for those who left for a rental with only a temporary subsidy, that rate of return to homelessness was 23%.

For some legislators and advocates, the figures underscored the importance of building more housing above all other interventions.

“Shelters are very expensive to build; they’re very expensive to operate,” said Emily Halcon, the director of Sacramento County’s Department of Homeless Services and Housing. “What we know is a real solution is housing.”

But building more housing — particularly with subsidized rents or other wrap-around services — is expensive. That’s in part why some homelessness and housing advocates say the 10-figure sum that the state has spread across the three years of the assessment isn’t even close to enough. A report from the Corporation for Supportive Housing and the California Housing Partnership at the end of last year put the price tag of “solving” homelessness in California at $8.1 billion every year for more than a decade.

2. A lot of people have been housed — but most have not

The report tracked more than half a million Californians who, over the three year period, made use of at least one of the services that the state funds, as recorded in a new state database.

The good news: More than 40% ended up in housing — supportive, subsidized or otherwise.

The bad news: The majority didn’t, or the state lost track of their whereabouts.

Nearly 17% were, at the end of the period, still in a shelter or temporary housing of some other kind or had exited whatever program they were enrolled in “into homelessness.” Another quarter fell out of the system entirely, their “destination” unknown.

Assemblymember Corey Jackson, a Democrat from Perris who chairs the Assembly Human Services committee, asked about the 17% who return to homelessness, which he called a “red flag” in the data.

“We need to remember that this is the emergency response system, if you will,” responded Dhakshike Wickrema, the deputy secretary of California’s Business, Consumer Services and Housing Agency. “What more can we be doing which is outside the homeless system? It’s like when you go to the emergency room —what could the primary care physician have done to prevent the acute diabetes?”

3. The burden of homelessness is not equally distributed

Drawing on the most recent “point-in-time” survey, which provides a blurry snapshot of how many people are living outside on a given night, the report emphasizes the stark racial and ethnic disparities that exist across the state’s unsheltered population. Black people made up roughly 30% of the people counted on the street, more than five times their share of the state population. Indigenous Californians likewise were overrepresented five-fold.

And though Latino Californians were underrepresented, between 2015 and 2020, their numbers in surveys of the unsheltered increased by 65%, the fastest growing ethnic or racial group.

4. Not all homelessness looks the same

When politicians or talking heads use the word “homelessness,” it’s often meant to evoke a particular person experiencing a particular set of problems: someone asleep on the sidewalk, unbathed, suffering from acute mental illness, addiction, physical disability or some combination of the three.

That’s the most visible version of the state’s homelessness crisis, but as the new figures show, it isn’t the most common one.

According to the report, 1 in 5 people who enrolled in state-funded homelessness programs were considered “chronically homeless” — unsheltered for at least a year while living with a complicating health issue.

But more than three times as many – two-thirds of all who sought state-funded services for homelessness — were people who hadn’t popped up in the system for at least two years, if ever.

These might be families evicted and temporarily residing in a car, someone couch surfing while gathering the money for a rental deposit, or people who got their own apartment only to get slammed with an unexpected car payment and find themselves back in a shelter.

Acknowledging that continuum matters —not just for the sake of accuracy, said Assemblymember Wendy Carillo, a Los Angeles Democrat, but because different paths into homelessness might be best met with different pathways out.

“Whether it’s someone living in their vehicle, being evicted from their home, someone experiencing chronic homelessness for decades, living on the streets of Skid Row for many, many years, all of these things are different,” she said. “They need to have different solutions.”