Over the last two decades, San Francisco has spent an unprecedented amount in the effort to address homelessness in the city. Dating back to 20 years ago, the city spent $60 million a year on homeless programs. In 2015 the city was spending $165 million annually on homeless programs. In 2020, the Department of Homelessness and Supportive Housing budget was about $285 million. As we’ve mentioned a number of times, At The Crossroads strongly believes that the resources are out there to end chronic homelessness. In our last #BuildingBridges post, we talked about some of the barriers that challenge our efforts to solve chronic homelessness. What we consistently find is it’s not a lack of money that’s prohibiting progress, rather an inefficiency of how and where that money is used. So in this post, we want to dive into a question that we often hear: “Where is all this money going?” and bring a little bit of transparency to the complexities behind these systems at play.
How Money Is Budgeted For Homelessness in the Bay Area
There’s a good reason why this question comes up so frequently in conversations around the topic. We’re talking about money in multiples of millions and billions of dollars and it’s often not clear where that money ends up, or if progress is actually being made. Spending on homelessness in the Bay Area is complicated because of a lack of consistency and transparency between local, state, and federal jurisdictions.
Funding for services for people experiencing homelessness comes through a number of sources. Starting at the federal level, the United States Department of Housing and Urban Development (HUD) administers a number of homelessness programs, the largest of which include the Emergency Solutions Grant Program (ESG) and the Continuum of Care Program. The ESG provides grants to states, metropolitan cities, urban counties and US territories to support homelessness prevention, emergency shelter and related services. The Continuum of Care Program (CoC) is designed to create better coordination amongst homeless service providers within specific regions to properly assess where funding and resources need to go. There are more than 400 CoCs in the US today.
A layer of complexity happens at the State level, as California funds homelessness programs through at least seven different state agencies, departments, and executive offices. Some of these programs receive support from voter approved general obligation bonds like the No Place Like Home Act ($2B) and Veterans & Affordable Housing Bond Act ($1.5B) as well as through funding from the Emergency Solutions Grant Program (ESG) mentioned above. But within those seven state agencies there are 28 separate programs administered that all have slightly different target populations – being individuals with mental illness, families, youth, elderly etc.. making tracking and accounting increasingly difficult.
Each Continuum of Care (CoC) is generally composed of nonprofit service providers and local government agencies, such as departments of health and human services and public housing agencies. When broken down at this level, we can start to see how this funding is broken down. What we see is that most of the direct spending is actually spent on housing and housing subsidies.
In addition to the surprising finding that most of the funding is not directly spent on supporting individuals experiencing homelessness, we can also start to see the discrepancies in how cities and counties use different terminologies, which further leads to inconsistent reporting.
Switching perspectives from the macro lens. Let’s take a look at a couple of different funding initiatives at the city level. Due to efforts from local lobbyists and San Francisco County voters, Proposition C, a gross receipts tax initiative placed on the 2018 ballot, was passed by 61% of San Francisco County voters. The impetus of Proposition C asks the city’s largest corporations (those whose incomes are above $50 million per year) to pay additional taxes to assist San Francisco’s effort to fund housing and homelessness services. After some initial feuding from opposition, last September California Supreme Court rulings affirmed its passing. The proposition has already accumulated nearly $500 million since its passing, and is expected to raise an additional $250 – $300 million per year, with funding planned to be allocated as follows:
- At least 50 percent to permanent housing through the Mayor’s Office of Housing and Community Development (MOHCD)
- At least 25 percent to mental health services for homeless individuals through the Department of Public Health
- Up to 15 percent to homelessness prevention through MOHCD or the Department of Homelessness and Supportive Housing (HSH)
- Up to 10 percent to short-term shelters through HSH
Mayor Breed’s $1 Billion Plan
If you’ve been reading and watching the news lately, you’ve likely heard about Mayor London Breed’s $1billion initiative in new funding to address homelessness over the next two years. Much of this $1 billion proposed investment comes from the aforementioned Proposition C. The remaining will come from local sources like the city’s general funds, bonds, and some federal assistance. This is in addition to the $300 million or so already spent on homelessness.
Under this proposal, Breed wants to put this money towards initiatives that would cap all permanent supportive housing rent at 30% of a resident’s income, fund new recreational vehicle parking sites, and create more emergency shelter beds for families. In addition to this, the mayor also wants to create 10,000 additional housing placements by 2023. This includes new permanent supportive housing units, more housing vouchers, and support to prevent potential homelessness and eviction for over 7,000 households. While we see a similar trend in the bulk of spending going towards housing, it’s important to note that the proposal is also pushing to support individuals currently experiencing homelessness. Breed has proposed $300 million in additional funding for mental health and drug treatment services as the number of deaths by overdose have rapidly risen.
As the humanitarian crisis of chronic homelessness increasingly magnifies, spending on homelessness has significantly increased. The Department of Homelessness and Supportive Housing’s budget has increased by 80% since it was created in 2016, to $364 million in the most recent fiscal year. We need to continue to push for agencies at the city, state, and federal levels to come even closer together to make sure that this funding is spent efficiently and is used to help those individuals who need it most.
If you missed it, make sure to check out the replay of our Building Bridges: Honest Discussions on Real Solutions to Homelessness panel event. The panel breaks down some of these complex issues and opens up different perspectives on possible solutions.