California Gov. Newsom plans to release $1 billion for homelessness

SACRAMENTO, Calif. — California Gov. Gavin Newsom agreed to release $1 billion in state homeless funding that he irritably paused earlier this month, but only if local governments agree to the aggressiveness of their plans to reduce the number of homeless people reinforce people in the state.

The Democratic governor said his Friday afternoon meeting of about 100 mayors and local officials was productive in person and in practice, as leaders are on the same page about what needs to be done and poised to achieve their goals.

“It was nice to hear their progress. And it was nice to hear their recognition that we need to reach another level,” he told reporters after the more than two-hour meeting. “What I want to see is what everyone wants to see: California streets cleaned up. We want camps cleaned up, we want people housed.”

Newsom, who is driving for re-election this month, is on the hook in his second term to show a reduction in the growing number of homeless people, some of whom are camping on city sidewalks and under freeway underpasses, which has left even the most politically liberal voters in the city United States upset the country’s most populous state.

He stunned the state when it announced two weeks ago that it would hold back $1 billion in spending until cities and counties submitted more robust plans, calling the submitted plans “simply unacceptable” for protecting the state’s homeless people would reduce overall by just 2% over the next four years.

Mayors and county officials — many of whom are Democrats — as well as low-income housing advocates, have opposed his efforts to withhold funding, saying it is counterproductive to withhold money for emergency shelters, outreach workers and other services for homeless people. They asked the governor for more direction — as well as guaranteed, ongoing funding to develop more ambitious plans.

On Friday, he reiterated the record amount his government has spent on housing and homelessness, including a recent state legislature pledge to spend $15.3 billion over the next three years. The money has provided housing for tens of thousands of people, he said, but he acknowledged that people on the streets were not seeing any results.

Newsom said he has no plans to turn his back on local government, but “to find new earmarked money when we get into a headwind recession, you have to be sober – just like they’re sober about their budgets.”

Sacramento Mayor Darrell Steinberg defended Newsom and said after the meeting he understood the governor’s need to provoke local governments into action. He commended Newsom for his leadership in this area – from converting motels into homes to creating new mental health courts to treat homeless people with schizophrenia and other serious mental illnesses.

But not everyone understood the point of Friday’s meeting.

San Jose Mayor Sam Liccardo, who joined virtually, said there were too many people and little space for “open, constructive dialogue.” He and other mayors were told a few days ago that Newsom plans to release the money if they come up with new plans.

By and large, the governor appeared to be on a different side to the state housing department, which was working with San Jose and other cities on their original plans, said Liccardo, also a Democrat.

“There seem to be conflicting ideas about what is required,” he said.

The California State Association of Counties has been outspoken in its criticism.

“We cannot fix an ongoing crisis with one-off commitments. Progress requires clear state, county, and city roles aligned with sustainable, equitable funding. We need to avoid each other and work together,” said Graham Knaus, executive director of the association, which represents the state’s 58 counties.

Tackling homelessness was left to local governments in California for decades, but Newsom took office in 2019 and pledged to champion an issue he raised as a former San Francisco mayor, where tent camps crowd sidewalks and people in clear mental health crises are very well understand a common sight.

California had an estimated 161,000 homeless people in 2020, with the number expected to be higher this year due to the state’s high housing costs and the historic substructure of homes. Advocates for the homeless say they can’t keep up and that while some are finding shelter, many more are losing their homes.

That possibility of a separate funding stream for homelessness weakened this week after state officials announced on Wednesday that California is likely to run a $25 billion budget deficit next year after a series of historic surpluses.

The state’s 13 largest cities, 58 counties and 44 homeless service provider groups submitted 75 applications detailing their plans to spend $1 billion in the third round of payouts.

Another billion dollars is on the table, but Newsom won’t release that money unless those governments promise to be “more aggressive across the board,” said Erin Mellon, spokeswoman for the governor’s office. The plans are due in two weeks.

Applicants must also agree to implement as many best practices as possible, including more efficient ways of getting people into housing and streamlining the construction of more housing for poor and extremely poor households.

The Newsom administration is also cracking down on California cities and counties that are reluctant to build more housing, including affordable housing, with many saying they don’t want the congestion and neighborhood changes that come with more people.