Newsom Calls for Record $12 Billion to Combat Homelessness in California

Promising a more aggressive approach, Newsom said the massive sum will create nearly 50,000 new homes and permanently keep families off California streets.

Speaking to reporters at a renovated hotel in San Diego that now houses dozens of formerly homeless people, California Gov. Gavin Newsom announced a plan to spend $12 billion to solve the Golden State’s homeless crisis.

(CN) — With budget negotiations heating up, California Governor Gavin Newsom on Tuesday proposed pulling $12 billion from the state’s burgeoning surplus to create nearly 50,000 new homes for people living on the street.

From a renovated San Diego hotel now occupied by dozens of formerly unhoused people, Newsom acknowledged homelessness remains one of California’s biggest problems and daringly claimed the money would “end family homelessness” over the next five years.

The massive sum is the next major piece of Newsom’s self-proclaimed “California Comeback Plan,” a $100 billion spending plan he’s pitching in piecemeal fashion this week to lawmakers and taxpayers. If approved, the $12 billion would be the largest single investment to end homelessness in state history.

“What’s happening on our streets and sidewalks is unacceptable; no one should be pleased with that,” Newsom said in a press conference. “The status quo needs to change and we’re going to change our approach.”     

Under the plan, to be included in the governor’s overreaching revised budget proposal due on Friday, California would spend $8.75 billion to “unlock” 46,000 housing units. The money essentially builds on two projects implemented during the Covid-19 pandemic in which the state reimburses local agencies for securing temporary motel rooms or converting vacant property into affordable housing.

Coined Project Roomkey and Homekey, Newsom’s office says the emergency plans provided shelter to 36,000 Californians and created 6,000 permanent housing units during the pandemic.  

“Within a year, these two programs did more to address the homelessness and affordable housing crisis than anything that’s been done in decades, and has since become a national model,” his office claimed Monday in a note to reporters.  

Despite bold assertions made by the press office of a politician fighting to keep his job, homelessness has in fact gotten worse in California since Newsom took office.

According to the U.S. Department of Housing and Urban Development, between 2019 and 2020 homelessness in California increased 6.8%. Even worse, California now accounts for over half of all unsheltered people in the U.S. with an estimated 113,000 unhoused residents.

The National Law Center on Homelessness and Poverty says the main causes of homelessness include lack of affordable housing, unemployment, mental illness, poverty and drug addiction.

Tents, shelters and belongings line a street near downtown Los Angeles. (Courthouse News photo / Nathan Solis)

In addition to the glaring statistics, Newsom and the Legislature’s homeless strategy has caught flack from a suspicious state regulator and lawmakers from both sides of the aisle.

Earlier this year, State Auditor Elaine Howle ripped the approach for being “disjointed” and said Newsom’s Homeless Coordinating and Financing Council was a failure.

Newsom campaigned heavily on fighting homelessness and fixing the state’s housing shortage, but both continue to plague the Golden State. On Tuesday, he made it clear he believes the answer to getting and keeping people off the streets is spending record amounts of taxpayer dollars.  

Broken down broadly among California’s estimated unhoused population of 161,000, the package amounts to over $74,000 per homeless resident. Newsom said the $12 billion would be spent over two years and could eventually provide over 300,000 people with either shelter or rent stability.

Unlike past approaches, Newsom says his new proposal will be laden with benchmarks and metrics for cities to meet. He promised a more aggressive approach going forward in terms of building housing and combatting homelessness.

“As governor, I actually want to get something done. I don’t want to talk about this for a decade,” Newsom continued.

Tuesday’s proposal also places a focus on getting ahead of the problem, committing $3.7 billion toward homelessness prevention and rental support. The final piece is $1.5 billion to clean up roadways and convert public spaces.

The $12 billion is likely an eye-opening amount to most Californians, but it does fall short of recent requests made by local and state Democratic officials.

The so-called “Big City Mayors Coalition” consisting of the heads of the state’s largest cities has asked for $20 billion over five years to end homelessness, while the leader of the state Senate has introduced a similar $20 billion plan.

Appearing with Newsom Tuesday, San Diego Mayor Todd Gloria applauded Newsom’s budget proposal.

“They heard us,” said the newly elected Democratic mayor. “Help is on the way and we can in fact address this urgent crisis.”  

But Assembly member Miguel Santiago, a Los Angeles Democrat, and chair of the Select Committee on Los Angeles County Homelessness, said he and other lawmakers will keep pushing for the $20 billion over five years.

“The governor heard our call for urgent action. Ending homelessness demands radical change in our approaches, a sense of emergency and iron clad accountability. $12 billion over two years is a big step in the right direction but we need a long-term investment to end homelessness,” Santiago said in a statement following Newsom’s announcement.

Newsom’s budget maneuvering comes as he is actively campaigning against a likely recall election slated for the fall.  

While the proponents of the recall have officially submitted enough signatures to trigger a to-be-determined statewide election, new polling predicts Newsom will retain his post.

According to a poll released Tuesday by the University of California, Berkeley, just 36% of likely voters say they support recalling the first-term governor. It also found lukewarm support for Republicans actively running in the recall, such as Olympic gold medalist Caitlyn Jenner (6%), former San Diego Mayor Kevin Faulconer (22%) and businessman John Cox (22%).  

As with Monday’s proposal to send $600 stimulus checks to nearly 80% of all California taxpayers, Newsom says the state’s newly acquired $75 billion surplus will fund the homelessness strategy. Both proposals and the entirety of his $100 billion comeback plan require majority approval in the Legislature, which must pass a final budget by June 15.

“There’s no greater manifestation of our failure as a society broadly, or as a state more specifically, than homelessness, and that’s what brought to bear a strategy to do something radically different,” Newsom said.  

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