By Vanguard Staff
SAN FRANCISCO — Gov. Gavin Newsom on Thursday announced more than $419 million in new homelessness funding for San Francisco, Los Angeles and San Diego, citing a recent 9% statewide reduction in unsheltered homelessness, the first such decline in more than 15 years.
The funding will be distributed through the state’s Homeless Housing, Assistance and Prevention program and comes alongside billions of dollars approved by voters in 2024 through Proposition 1, a mental health and housing bond championed by the governor and state lawmakers.
State officials said the new allocation is intended to expand shelter, housing and supportive services while imposing stronger accountability requirements on local governments receiving the funds.
Newsom’s announcement comes as the Trump administration has sought to cut federal funding for public programs, including homelessness and housing assistance, according to the governor’s office.
“We put Proposition 1 on the ballot because Californians are demanding we do more to confront the mental health crisis and the homelessness emergency head-on,” Newsom said in a statement. “Voters gave us the tools and we are putting them to work, delivering treatment, housing, and real support, and proving that this state can lead the way on a challenge facing the entire nation.”
“Our state investments have launched critical programs for local communities,” Newsom added. “Together, we’re breaking cycles of homelessness that took decades to create — and we’re doing it with urgency, compassion, and accountability.”
The newly-announced funding represents the first awards from the sixth round of the Homeless Housing, Assistance and Prevention program. Nearly $5 billion has been appropriated for the program through current and previous funding rounds, according to the state.
The $419 million allocation covers three regional applications out of 42 submitted statewide. Additional awards from the current funding round are expected in the coming months.
Under the sixth round, the state has tied funding to enhanced accountability measures, including requirements that local governments maintain a compliant housing element, prioritization for jurisdictions designated as “pro-housing,” and mechanisms allowing the state to claw back funds from jurisdictions that fail to demonstrate progress.
The state is also planning a seventh round of Homeless Housing, Assistance and Prevention funding totaling $500 million in the next budget year, contingent on additional performance and accountability standards.
San Francisco Mayor Daniel Lurie said state funding has been essential to local efforts to reduce street homelessness.
“In San Francisco, we are changing our approach to homelessness to get people off the streets and on a path toward stability,” Lurie said. “In December, we reached a record-low number of encampments—down 44% from 2024. But we can’t do this alone.”
“The resources provided by the state are crucial—whether that’s Prop 1, HHAP dollars, or funding to make sure our freeway on-ramps and off-ramps are clean,” Lurie said. “I want to thank Governor Newsom for helping make that progress possible. We have more work to do, but we are now on the right track, and with strong partnerships and continued investment, we will keep moving forward.”
Under the first allocation from the sixth funding round, San Francisco will receive $39.9 million to sustain operations and services at two semi-congregate shelters and three navigation centers through June 2029. State officials said the funding is expected to serve more than 600 adults and 75 youth nightly and includes additional support for the city’s online navigation and entry system.
Los Angeles County, the cities of Los Angeles and Long Beach, and four local continuums of care will receive $328.8 million to fund interim housing operations, services in permanent supportive housing, rapid rehousing and time-limited subsidies, as well as encampment resolution efforts.
San Diego County and the City of San Diego will receive $50.9 million to support existing emergency shelters, expand shelter capacity through hotel and motel vouchers, and invest in permanent housing solutions, including rental subsidies, rapid rehousing and homelessness prevention programs.
The new funding adds to state homelessness investments made since 2019, which include the Homekey program, credited by the state with creating nearly 16,000 housing units across 250 projects and serving more than 172,000 people. Additional investments include $2.25 billion through Homekey+ for people with mental health or substance use challenges and veterans, and $1 billion in encampment resolution funding aimed at helping more than 23,000 people transition from homelessness.
Newsom also highlighted Proposition 1 investments during an event Thursday at Friendship House in San Francisco. State officials estimate that more than 1.2 million adults in California live with serious mental illness and that shortages of behavioral health treatment sites contribute to homelessness and incarceration.
Proposition 1 authorized a $6.4 billion behavioral health bond that state officials estimate will ultimately create 6,800 residential treatment beds and 26,700 outpatient treatment slots.
Friendship House, which serves more than 5,000 people annually and focuses in part on Native American communities, was awarded $31.4 million from Proposition 1 funding to help build a new Village SF Wellness Center at 80 Julian Ave. The project is expected to include residential substance use disorder beds, outpatient mental health services and wellness programs, according to the state.
Beyond homelessness and behavioral health investments, the state this week also announced the upcoming application window for the California Dream for All program, which provides down payment assistance of up to 20% for first-generation homebuyers. Applications are set to open Feb. 24.
Newsom first elevated homelessness as a statewide priority in his 2019 State of the State address. State officials say California’s recent reduction in unsheltered homelessness contrasts with national trends, which continue to show increases.
Since 2021, state officials say Caltrans has removed more than 19,000 encampments from state rights-of-way and collected approximately 354,000 cubic yards of debris. The governor has also pushed legal and policy changes aimed at clearing encampments while connecting people to shelter and services, as well as reforms to conservatorship laws and the creation of CARE courts for people with severe mental illness.
State officials said they view the combination of housing production, behavioral health investment and accountability measures as a model for addressing homelessness nationwide.
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