SF Supervisors Preserve Millions for Homeless Prevention, Housing in Budget

Mayor Daniel Lurie is backing down — somewhat — from his effort to sweep money set aside for homeless prevention programs and permanent housing to instead fund temporary shelter.

The compromise comes after community groups and experts warned that the mayor’s plan, proposed last month, could inadvertently inflate the need for temporary shelter if more permanent housing is not available for people to move into.

“It’s not perfect, but it’s way better than where we started,” said Christin Evans, co-chair of the city’s Homeless Oversight Commission. “If you put all your investment into shelter, you aren’t ending homelessness. You’re perpetuating homelessness and warehousing people. So we need more housing that people can exit shelter into.”

After more than 14 hours of tense closed-door negotiations, the city’s Budget and Appropriations Committee at 2 a.m. Thursday voted to move the amended $16 billion budget proposal forward to the full Board of Supervisors.

Supervisors also preserved funding for 57 of 100 filled jobs that Lurie had proposed to cut to help balance the city’s nearly $800 million deficit. Lurie had proposed eliminating around 1,400 positions, most of which are currently vacant.

“Passing this budget also required painful decisions that were, unfortunately, necessary to set up our entire city for success,” Lurie said in a statement on Thursday morning. “Leadership means making those tough decisions, and this group of city leaders did that.”

Lurie’s initial plan would have reappropriated nearly $88 million from the Our City, Our Home fund, created after voters passed Proposition C in 2018 to generate revenue for homeless services by taxing the city’s wealthiest businesses.

Currently, about 50% of Proposition C dollars are slated for permanent supportive housing. About 25% is set aside for mental health services, 15% for prevention programs like civil legal aid, and around 10% for shelter and hygiene.

After weeks of negotiations and protests from community advocates, the mayor and supervisors agreed to reallocate $34 million toward shelter.

“There are a lot of services, a lot of restorations that we are used to being able to make possible that won’t be reflective of this budget,” Supervisor Shamann Walton said at the marathon hearing. “But most certainly we did work hard to do everything we could to continue critical services.”

Much of the friction came down to whether Lurie would need a supermajority to make changes to the funding allocations, which were established in the law approved by voters.

Critics of the proposal have asserted that the move could potentially violate the law. San Francisco’s city attorney released a memo warning of legal risks.

“Is this even legal?” Supervisor Jackie Fielder said at the meeting. “It’s absurd that I have to ask that.”

Lurie must still present legislation to the Board of Supervisors in order to shift the funding. The committee ultimately voted to release its power and require only a simple majority in order to reallocate up to $19 million in future revenue from the Our City, Our Home fund.

“It is not unreasonable, especially within a limited period of time, to give this new administration a modest amount of flexibility with unanticipated extra funds that may come in,” said Supervisor Rafael Mandelman, who voted in favor of the amendment.

Other supervisors fired back at the idea, saying the board was caving to the mayor.

“This mayor wants you to give up the last thing we have, which is the will of the voters,” Fielder said. “I’m hearing people say, ‘What’s the big deal?’ The big deal is precedent … The big deal is democracy.”

City officials are unlikely to make substantive changes to the budget after this week’s vote. The entire board will consider the budget on July 15 and must send it to the mayor for his signature before Aug. 1.

“You can be assured that, as someone who has been in and out of that room and walking down this hall, this is not everything that Mayor Lurie wants,” said Supervisor Connie Chan, chair of the budget committee. “A great portion of it is really what the board wants, too, for the people who elected us.”

Lurie made solving street homelessness a central part of his platform while running for mayor last year. Since taking office in January, he’s launched a handful of initiatives aimed at targeting homelessness from different angles, as part of his “Breaking the Cycle” plan. So far, it’s included opening up a drop-in behavioral health site in the Tenderloin, consolidating street crisis response teams and walking back some publicly-funded overdose prevention programs.

This spring, Lurie also launched a public-private fund to raise money for building more temporary shelter beds. Even with private sector support, however, Lurie will not meet a key campaign promise to build 1,500 shelter beds in his first six months in office.

The mayor has said the city needs more shelter beds in order to get more people off the street quicker and connected to other resources.

“I am confident that this budget answers San Francisco’s call for us to build a safer, cleaner and thriving San Francisco,” Lurie said in a press conference on Thursday morning.

About 8,300 people are experiencing homelessness in San Francisco, according to 2024 federal data. More than half are considered unsheltered, meaning they sleep outside in parks, sidewalks or cars, compared with the city’s inventory of 3,228 shelter beds, which are often full.

That’s partly because there is not enough housing for people to move into after they land in a shelter. Just 13% of people staying in San Francisco shelters exited into permanent housing, according to a March 2025 report from the City Controller using data from July 2022 to December 2023.

Advocates feared that stripping money set aside for homeless prevention could cause more people to become homeless, increasing the immediate need for temporary shelters. Without enough permanent supportive housing, advocates said, the city would exacerbate the bottleneck of people entering and exiting the homelessness response system.

“It’s about creating balance between shelter and housing,” Evans said. “That’s where we landed, instead of putting all our investments into one part of the system: building shelter.”

Many community advocates agree that the city could use more shelter beds. But concerns that funding temporary beds at the expense of prevention programs and housing that people can move into after a shelter stay have been a sticking point in budget negotiations this month, which have also addressed Lurie’s proposed cuts to nonprofits and legal services.

“There is a deep sense of anger and sadness as nonprofits will have to close their doors. Many services were not saved,” said Anya Worley-Ziegmann, an organizer with the People’s Budget Coalition, a group of around 150 organizations fighting against the proposed layoffs and cuts to community services. “But we are deeply proud of the services we were able to restore, like general legal aid.”