Local governments will temporarily lose $1 billion in homeless funding from the state following a Thursday announcement from the Governor. 

Expressing frustration with California’s intractable homeless crisis, Gov. Gavin Newsom announced a pause on the third round of Homelessness Housing, Assistance and Prevention (HHAP) grants. These grants benefit every county, Continuum of Care, and the 13 largest cities in the state, provided they submit an approved plan to reduce unsheltered homelessness and expand housing. The plans local governments have submitted are inadequate, said Newsom. And until something better is proposed, he’s holding on to the cash.

“Californians demand accountability and results, not settling for the status quo,” he said. “As a state, we are failing to meet the urgency of this moment. Collectively, these plans set a goal to reduce street homelessness 2% statewide by 2024. At this pace, it would take decades to significantly curb homelessness in California – this approach is simply unacceptable. Everyone has to do better – cities, counties, and the state included. We are all in this together.”

“While some plans show local leaders taking aggressive action to combat homelessness, others are less ambitious – some plans even reflect double-digit increases in homelessness over four years,” according to a press release. “The Governor is calling all local jurisdictions together for a meeting in mid-November to coordinate on an approach that will deliver more substantial results. This meeting will be an opportunity to learn from one another about what works, as well as to identify barriers that inhibit the progress we all want to make and strategies to remove them.”

In an interview with the Los Angeles Times, he told local governments to “deliver damn results."

Local leaders reacted to the news with a mix of disappointment and incredulity.

Oakland Mayor Libby Schaaf said she was "perplexed” by the decision.  

"Oakland followed the state’s process exactly as instructed, so we hope this pause will incorporate our front-line wisdom and improve upon last year’s process," she added.

"To reject all local plans and to hold up $1 billion worth of funding which was the next round that was coming to local funding I think that's a mistake,” said Monterey County Supervisor Luis Alejo, who chairs the Monterey and San Benito County Continuum of Care.  

The League of California Cities (Cal Cities) and the California State Association of Counties (CSAC) also condemned the move.

“Now is not the time to play politics when people’s lives are at stake,” said Cal Cities CEO Carolyn Coleman. “Failing to release state funding will not put roofs over the heads of Californians or deliver desperately needed supportive services…if anything, it will lengthen the time it takes for unhoused residents to access the services and housing they deserve.”  

CSAC Executive Director Graham Knaus noted his group has been trying to get a permanent stream of state funding for homelessness to no avail. And Republican lawmakers pointed out that Democratic state leaders rejected their calls for a special legislative session on homelessness last month.