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'Nothing Compassionate About Someone Dying in the Streets': Newsom Proposes $2 Billion to Address Homelessness

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Tarp-covered tents line a city sidewalk.
Tents line the curb in the Rampart Village neighborhood of Los Angeles on Nov. 17, 2021.  (Miguel Gutierrez Jr./CalMatters)

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In his January budget proposal to the state Legislature, Gov. Gavin Newsom delivered a clear message: California needs to move people off the streets.

“I don’t want to see any more people die in the streets and call that compassion,” Newsom said Monday, detailing his $286.4 billion blueprint. “There is nothing compassionate about someone dying in the streets or stepping over someone on the streets or sidewalks.”

Newsom proposed $2 billion to address California's homelessness crisis — including $1.5 billion to buy and set up “tiny homes” and other temporary shelter options, which often fall far short of need and which he conceded would only be a “bridge” to permanent housing with services.

While substantial, the governor’s request pales in comparison to the funding he and the Legislature approved last year — $12 billion to create supportive housing facilities and help fund green-lit affordable housing projects.

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“What we’re offering this year is additional money to find a bridge to the permanent supportive housing, and that’s tiny homes, that’s procuring treatment, that’s house slots and shelter slots in the interim,” Newsom said.

The governor projected that the funding would yield another 11,000 beds for unhoused people, in addition to the estimated 44,000 that will be created with money earmarked from last year’s budget.

The remaining $500 million would go toward grants, to be distributed next summer, to local governments to help relocate people living in encampments — a 10-fold increase from the grant funding available in 2021.

Demand for such grants has, to date, far outpaced supply, according to the agency in charge of reviewing grant applications: The state’s Business, Consumer Services and Housing Agency (BCSH) reported it had received an "overwhelming" number of grant applications on Dec. 31 — from 26 cities and 10 counties — requesting a total of $120 million, which was $72 million more than it had to give.

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But despite the proposed increase in grant funding, Christopher Martin, policy director for Housing California, lamented the lack of funds to quickly move unhoused people into existing housing.

“There’s not a dime in here that is going towards rental assistance or permanent housing,” he said. “Building shelter and treatment beds, that takes time. That’s going to take years. These people are dealing with the elements today.”

Rental assistance for people with housing but who are at risk of being evicted also is running out. The state has so far received relief application requests totaling more than $6.8 billion, according to BCSH's dashboard. That's well over the $5.2 billion it has gotten from the federal government, about half of which is administered by local jurisdictions.

The agency previously expressed confidence that the need would be filled by another round of federal funding, but in response to California’s recent $1.9 billion request to the U.S. Treasury Department, the state only received $62 million on Friday, Newsom said.

“And so for the purposes of this budget, we are looking to continue to engage directly with Treasury, the Biden administration, as we have been, and directly with legislative leaders,” he added.

Newsom’s blueprint to tackle California’s housing crisis totals another $2 billion and prioritizes the state’s climate goals.

“I just want to reinforce, to some extent … moving away from investments in housing that don’t focus on climate, health, integrating downtown schools, jobs, parks and restaurants,” Newsom said.

That includes about $800 million in grants to develop housing units and the infrastructure around them in mostly downtown areas, “in that space away from the sprawl,” he said. The idea is to avoid building in areas prone to wildfires, and to prevent the greenhouse gas emissions that result from long commutes.

Of that money, Newsom wants to set aside $100 million to help offset the high costs that can make it prohibitively expensive to convert old offices and other buildings into apartments — a practice that UC Berkeley’s Terner Center for Housing Innovation found is most common in Los Angeles.

Besides prioritizing housing in downtown areas, the grant also would help meet the state’s climate goals by slashing the main culprit of construction waste: demolition. The remaining $100 million would go toward affordable housing on vacant state-owned land.

The other $1 billion in Newsom’s housing budget is focused largely on creating more affordable housing for the state's lowest earners, with $500 million going toward the Low-Income Housing Tax Credit, the largest funding source for building subsidized housing. The other $500 million would be used to preserve deteriorating affordable housing in downtown areas and rehabilitate mobile home parks, among other initiatives.

Matt Schwartz, president and CEO of the nonprofit California Housing Partnership, said while he applauds the new “short-term investments,” the money won’t come close to building the 1.2 million homes his group estimates the state needs by 2030.

“It’s time for the governor and state leaders to go beyond proposing another year of short-term assistance and instead commit to a long-term plan with sustained investments at the scale needed to solve the homeless and housing affordability crises and address climate change,” he said.

The League of California Cities, however, responded more positively to Newsom’s blueprint.

“The proposal makes good on last year’s promises by the state to continue investing in housing production, as well as housing coupled with mental health services for those experiencing homelessness,” Carolyn Coleman, the league’s CEO, said in a statement. “These proposed investments are a critical down payment by the state on the long-term funding needed to solve a decades-in-the-making crisis.”

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