SAN FRANCISCO (CN) – A key component of California Governor Gavin Newsom’s $1.4 billion plan to tackle the state’s urgent homeless crisis got a chilly reception from state lawmakers and local leaders Thursday.
The governor has proposed a one-time infusion of $750 million to help fund emergency rental assistance and other programs, coupled with a $695 million upgrade to the state’s health care system to expand treatment for people suffering from addiction and mental health problems.
During a legislative budget hearing in San Francisco on Thursday, a Newsom administration official struggled to explain what metrics will be used to ensure the money is spent wisely. Jennifer Troia, chief deputy director of the state’s Department of Social Services, told lawmakers that specific performance objectives for $750 million in one-time aid had not yet been established.
“There’s a dramatic lack of specificity in the proposal right now,” Assemblyman Richard Bloom, D-Santa Monica, said. “If I understand it correctly, we’re being asked to appropriate the money now with the understanding that we’ll figure out later what the specificity is.”
Troia also had a hard time explaining why the governor wants $750 million to go through regional administrators, private companies or nonprofits that will be hired through a contracting process, instead of sending the aid directly to cities and counties.
“Why create a bureaucracy with regional administrators,” Assemblyman David Chiu, D-San Francisco, asked. “Why not ask the mayors if they’re using the money well instead of creating regional administrators?”
Troia could not say how many regions will be created or how their boundaries will be established. However, she identified some of the factors that will be used to decide how much money goes to each region. Those factors include the homeless population in each region based on point-in-time surveys, a regional housing needs assessment and the cost of rent in each area.
When asked what data or model was used to justify breaking the program down into regions, the deputy director had no details to offer.
“I don’t know that we have specific data to point to other than anecdotally,” Troia said.
This week, the nonpartisan Legislative Analyst’s Office blasted the governor’s proposal as failing to articulate a “clear strategy” for curbing homelessness in the state.
The plan to funnel money through regional administrators received an equally chilly reception from local leaders including Oakland Mayor Libby Schaaf, who testified at the budget hearing Thursday.
“I agree we need more regional collaboration and coordination,” Schaaf said. “I do not believe a regional administrator would accomplish that, not in the way it is currently proposed.”
Schaaf also advocated for more flexibility in how local governments can spend the emergency funds, including being able to use the money to build and maintain shelters. Additionally, the mayor objected to the short-term nature of the emergency aid package.
“One-time funding for homelessness will not work,” Schaaf said. “We need an ongoing dedicated funding source.”
This month, Schaaf announced Oakland added 22,000 new units to the city’s housing stock in recent years, exceeding its goal of creating 17,000 new housing units by 2024. The mayor insists the boom in real estate development has helped stabilize previously skyrocketing rent prices in the city, but Oakland’s homeless population grew 47% from 2017 to 2019.
Also testifying Thursday was San Jose Mayor Sam Liccardo, who argued that performance metrics imposed on local governments by the state should be tied to outcomes, such as measuring how many people are living on the street before and after funds are spent.
Schaaf cautioned that the metrics should be more nuanced, or it might incentivize “bad behavior,” such as sending homeless residents from one community to another.
Turning to a separate proposal to create a legally enforceable mandate to end homelessness, Liccardo said he would support such an initiative but wants to make sure cities and counties are protected from vexatious litigation.
Schaaf, one of 13 members on a committee that recommended the measure, said the mandate would not create a private right of action. Cities and counties could only be sued by a state inspector general seeking injunctive relief, not monetary damages, she said. The proposed state constitutional amendment would require approval by the Legislature and voters.
Earlier in the hearing, San Francisco Mayor London Breed said she supports the objectives of that proposal but could not get behind it unless the state was required to provide adequate resources to local governments.
Responding to that criticism, Schaaf reiterated why it is so important that the state create a dedicated funding source for cities and counties to combat homelessness.
“We are not intending to give cities or counties unfunded mandates without new funding sources,” Schaaf said.
Aside from the proposed $1.4 billion to address homelessness in next fiscal year’s budget, Newsom in January deployed 100 former FEMA trailers across the state and made $650 million in emergency grants available to cities and counties.
Last year, the governor introduced a “Marshall Plan” aimed at tackling the state’s 3.5 million-unit housing shortage. The plan included making $500 million in grants available to cities and counties that meet certain housing production goals.
Despite the push to build more housing, an industry group reported a decrease in new home construction in the state last year. According to the Construction Industry Research Board, 110,218 permits for new housing units were issued in California last year, a 7% drop from the 117,892 new housing permits issued in 2018.
Last month, lawmakers also rejected legislation aimed at tackling the state’s housing shortage for a third year in the row. The housing bill championed by state Sen. Scott Wiener, D-San Francisco, faced fierce opposition from some cities that oppose forfeiting local control over housing-development decisions to the state. Wiener introduced changes to the bill that would give local governments more flexibility in creating their own plans for building more four-to-five-story apartment buildings near public transit stops. Despite those changes, the bill died in committee on Jan. 29.
California’s homeless population spiked to an estimated 151,000 in 2019, a 16.4% increase from the previous year. According to federal data, 27% of the country’s homeless reside in California, even though voters have approved billions in bonds for affordable housing and improved mental health services in recent years.
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