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Newsom Wants $12 Billion to House California's Homeless Residents, Calling Situation 'Unacceptable'

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California Gov. Gavin Newsom speaks during a press conference at The Unity Council on May 10, 2021 in Oakland.  (Justin Sullivan/Getty Images)

Gov. Gavin Newsom on Tuesday proposed $12 billion in new funding to get more people experiencing homelessness in the state into housing and to “functionally end family homelessness” within five years.

"We’ve got to drive this agenda with the urgency it requires. I’m not interested in six-year plans, 60-year plans. I see a change now. I get that. What’s happening on our sidewalks is unacceptable,” he said at a former San Diego hotel that’s been converted into housing for homeless people.

More on State Homeless Efforts

Newsom’s proposal includes $7 billion to expand Homekey, the statewide program created during the pandemic that converts hotels and motels and other properties into housing for people in need. Roughly half of that money would go toward creating housing where mental health and other behavioral services are provided on-site to people living there. An additional $1.75 billion would go exclusively toward building affordable housing.

That investment would create 46,000 new units of housing.


The nation’s most populous state has an estimated 161,000 people experiencing homelessness, which is more than any other state.

Beyond the money for converting hotels, Newsom proposed spending $3.5 billion on new housing and rental support payments for families.

If Newsom’s plan wins support from the state Legislature, its implementation would depend heavily on the willingness of local governments to go along. Local leaders showed support for the plan during the pandemic by converting 94 hotels, motels and other properties across the state into housing for people experiencing homelessness, said Jason Elliott, a Newsom adviser who works on housing and homelessness.

San Jose Mayor Sam Liccardo, chair of the Big City Mayors coalition, released a statement on behalf of the coalition praising Newsom's move to fund homelessness efforts.

"We appreciate Governor Newsom's longstanding commitment to address homelessness, and today's bold announcement. We are also grateful for the bold budget proposals of our Senate and Assembly leadership," Liccardo wrote. "Together, they've offered the essential elements that can produce transformative outcomes for tens of thousands of unhoused Californians. We look forward to the upcoming budget negotiations when we can build on these strong foundations with investment that can enable California's largest cities to nimbly respond with proven solutions to our homelessness crisis."

Still, San Diego County Supervisor Nathan Fletcher, a fellow Democrat, acknowledged that tackling the issue is challenging and urged Californians to step up efforts to solve the politically difficult problem.

“Every community group that you go to demands that you solve the problem of homelessness, and then in the exact same meeting they’ll demand you don’t solve it anywhere near them,” Fletcher said.

Matt Schwartz, president and CEO of the California Housing Partnership, which advocates for the building of affordable housing, welcomed the announcement but also called on the governor and Legislature to establish a permanent funding source that would go beyond the next few years.

“The only way to achieve lasting results and lasting progress is to know that the investment is going to be sustainable on something like this scale,” said Schwartz, who is also part of an effort called Roadmap Home 2030, which urges the state to come up with a long-term plan for addressing homelessness.

“It is great that the state of California is embracing their role in funding solutions to homelessness,” said Jennifer Loving, CEO of Destination Home, which works to reduce homelessness in Santa Clara County.

Loving also said she hoped the state would continue to provide local governments with flexible funding as they have in recent years, through programs like the Homeless Housing, Assistance and Prevention (HHAP) Grant Program.

“We know what the challenges are, we know where the pain points are, and we have funding needs that might not fit into a predetermined box," she said. "Direct allocations to the city and county allow us to do our best work, preventing homelessness on the ground.”

Though the governor’s announcement didn’t hint at plans for future funding, Elliott acknowledged it’s an important question.
“But the more urgent question is how do we make sure that this 12 billion is deployed equitably, quickly and efficiently. Let’s figure out what’s working and let’s do more of that. Let’s see what’s not working well and disinvest from those solutions.”

The new pending proposal came as part of a $100 billion pandemic recovery plan Newsom is rolling out this week. The massive amount comes from an astounding $76 billion estimated state budget surplus and $27 billion in new funding from the federal government’s latest coronavirus spending bill.

Focusing on homelessness, a vexing issue for California, could prove politically helpful for Newsom as he faces an expected recall election later this year.

Some state lawmakers are already rallying around Newsom's effort, like Assemblymember Buffy Wicks, D-Oakland, in the above tweet. 

A new state database shows that nearly 250,000 people sought housing services from local housing officials in 2020. Of that number, 117,000 people are still waiting for help while nearly 92,000 people found housing.

Newsom — a former mayor of San Francisco, where homelessness is very visible — seized on the twin crises of homelessness and affordable housing even before the pandemic started last year.

He launched efforts called Roomkey and Homekey, using federal funding to house homeless residents in hotels and motels during the pandemic, and helped cities, counties and other local entities buy and convert motels and other buildings into housing.

Newsom officials said $800 million spent on the program last year created 6,000 more housing units from motels, houses, dorms and other repurposed buildings, providing shelter for 8,200 people.

The average cost to convert a unit into housing for people experiencing homelessness was nearly $150,000, Newsom administration officials said at a recent briefing. They said that is much cheaper than building housing from scratch.

Roomkey's Impact Scrutinized

Local leaders have welcomed Newsom’s focus on the problem. Big city California mayors are seeking $20 billion from the state over five years to address housing and homelessness.

Advocates for the homeless say there’s simply not enough affordable housing to help people who slip into homelessness, which is why tent camps and sleeping bags still clutter highway ramps and city sidewalks.

A February audit criticized the state for its fragmented approach to addressing homelessness, and urged the state to track spending and set statewide policy.

It identified at least nine state agencies that spent $13 billion on 41 programs to address homelessness without evidence to show what was effective.


KQED's Erika Kelly contributed to this report. Associated Press writers Kathleen Ronayne and Janie Har also contributed. 

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