California Struggles to Address Homelessness Crisis Despite Billions in Spending

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California has poured nearly $37 billion into programs aimed at helping people get off the streets since 2019, but three independent audits have found the state lacks data on the outcomes and ongoing costs of these efforts. The state's 'housing first' approach has failed to curb homelessness, which remains high despite the massive spending. Experts say the state needs to shift towards a 'housing readiness' model that addresses addiction and mental health issues as a path to stable housing.

Why it matters

California's homelessness crisis has persisted despite significant state funding, raising questions about the efficacy of the state's approach and the lack of transparency around how the money is being spent. The issue has become a major political and social concern, with the state's handling of the problem drawing criticism from both sides of the aisle.

The details

California has about 12% of the U.S. population but accounts for around 45% of the country's unsheltered homeless population, at about 116,000 individuals as of 2024. The total number of homeless people, including those in shelters, was over 187,000 statewide. Three independent audits have found that the state lacks current information on the ongoing costs and outcomes of its homelessness programs, and that the California Housing and Community Development department 'was not adequately prepared to prevent, detect, and respond to fraud risks.' The state's 'housing first' approach, which focuses on placing people in supportive housing without requiring treatment for addiction or mental health issues, has been criticized as ineffective, with a 2022 investigation finding that participants in San Francisco's permanent supportive housing program were twice as likely to return to the streets or die than to find a lasting escape from homelessness.

• In 2019, Gavin Newsom took office as governor of California.
• As of 2024, the total number of homeless people in California, including those in shelters, was over 187,000 statewide.
• In 2022, a San Francisco Chronicle investigation found that participants in the city's permanent supportive housing program were twice as likely to return to the streets or die than to find a lasting escape from homelessness.

What’s next

The state is ending its largest 'housing first' grant program, acknowledging the failure of that approach. Experts say California needs to shift towards a 'housing readiness' model that addresses addiction and mental health issues as a path to stable housing, and make it easier for courts to compel treatment for the mentally ill and addicted.