CA Lawmakers Schedule Audit To Find Out Why Spending Billions Hasn’t Reduced Homelessness

California has spent billions of dollars on homelessness in recent years. So why is the crisis getting worse instead of better?

That’s what a bipartisan group of California legislators led by Santa Clara County’s own Democratic Sen. Dave Cortese is trying to get to the bottom of by calling for a first-of-its kind, large-scale audit of the state’s homelessness spending.

The state has stepped up its involvement and investment in the crisis under Gov. Gavin Newsom’s leadership, allocating $20.6 billion toward housing and homelessness since 2018-19, according to the Legislative Analyst’s Office. But despite the influx of cash, during that time, the number of unhoused people in the state has increased by nearly a third — to more than 170,000 as of last year.

That discrepancy between what’s being spent in Sacramento and what voters see — tent cities in their neighborhoods — has many legislators clamoring for an accounting. They have instructed the state auditor to embark on a sweeping project that will analyze multiple state homelessness programs — as well as focus on homelessness spending in two cities — in an attempt to improve California’s response.

“What we’re doing is not working,” said Assemblymember Josh Hoover, a Republican from Folsom who co-authored the audit request with Cortese. “And I think it’s important to get to the bottom of that and figure out where are we investing that is not getting a return on investment. And we need to stop spending money on the programs that are not working.”

The $743,400 audit will analyze state spending in San Jose and one other city not yet determined. The audit also will scrutinize the cost-effectiveness of as many as five state homelessness programs.

Cortese, a former county supervisor and San Jose council member, was a co-sponsor of the $950 million Measure A approved by Santa Clara County voters in 2016, which has lagged behind its projections of affordable housing construction.

The auditor has yet to reveal which programs, but Project Homekey — one of Newsom’s signature efforts to create homeless housing — likely will be one.

The audit was approved unanimously in the state’s legislative audit committee last month, will take about 5,000 hours of staff time and is likely to be complete by October, State Auditor Grant Parks said during the hearing.

The audit’s analysis of state spending to combat homelessness will focus on questions such as: How many people received services between 2020 and 2023? How much funding have San Jose and the other city received, and how has it been spent? How much of that money went toward administrative costs instead of services?

Newsom’s office wouldn’t weigh in on the pending audit, except to issue a statement: “This process is still in its early stages, and we will continue to closely monitor any future developments.”

Myles White, assistant secretary of legislation for the California Business, Consumer Services and Housing Agency, defended the state’s track record during the legislative hearing. “A lot of the progress we’ve made provides a really solid foundation for us to continue in the days ahead,” he said.

San Jose officials said they have used state funds effectively and efficiently, and have been transparent in their work. Local officials rallied at the state Capitol last week, demanding that the state give them an ongoing $3 billion a year to address homelessness.

Cortese began pushing for the audit after touring a massive homeless encampment on vacant land near San Jose’s airport.

One of the largest in California, the camp was home to more than 400 people during the pandemic. What he saw shocked and appalled him: “Rodents running around your feet. Massive piles of trash. Tons of broken RVs and abandoned cars. Cars turned upside down with people living inside.”

When Cortese brought up the idea of a state audit, he says local officials told him while they had spent local money, they hadn’t used state funding to improve conditions or offer services at that encampment.

“Which to me just really begged the question: ‘What’s going on?’” Cortese said.

That camp has since been cleared; the Federal Aviation Administration had threatened to withhold airport funds from the city because the camp extended into flight paths. But the city couldn’t move everyone into housing or shelter, and some people have moved to another lot just across the street.

Past attempts at accountability

Cortese’s audit isn’t the first time California’s homelessness response has come under scrutiny. Earlier this year, the Interagency Council on Homelessness found the state spent nearly $10 billion on homelessness between 2018 and 2021 and served more than 571,000 people. But despite that effort, most of those people still didn’t get a roof over their heads.

And in 2021, a state audit of five local governments found that they did not always comply with federal regulations or follow best practices when responding to homelessness.

The new audit will be an “entirely different animal,” Cortese said, as it will go deeper into the state’s spending. Legislators hope it also will make specific recommendations as to how ineffective programs could be improved or even cut — something the Interagency Council’s report didn’t do

The heightened scrutiny comes as Newsom has both ramped up spending and rolled out a series of new homelessness programs since the COVID-19 pandemic began. Those include Project Roomkey, which temporarily put elderly and medically compromised unhoused people up in hotels; Homekey, which gives cities and counties money to turn some of those hotels (and other buildings) into longer-term homeless housing; and the Encampment Resolution Grant program, which gives cities and counties money to clear homeless encampments and move occupants into housing and shelters.

It’s no surprise that Republicans would continue their critique of the liberal governor’s spending. But the recent involvement of Cortese and other Democrats signals the politics have shifted.

For example, Assemblymember Luz Rivas, a Democrat from the San Fernando Valley, is pushing her own accountability bill. Assembly Bill 799 would force the state to set specific goals for reducing homelessness, while also allowing funding to be reallocated away from local agencies that fail to meet their goals.

“We get asked by our constituents,” she said. “They ask ‘Where is this funding going to? Is it really being used effectively?’”

Even Newsom himself has advocated for more accountability. He recently began requiring that cities and counties submit “homeless action plans” before receiving state funding, and he briefly held $1 billion hostage after determining the plans they drafted weren’t ambitious enough.

During last month’s hearing, several legislators advocated for the auditor to choose cities in their own districts. Some made pitches for Los Angeles and Sacramento, while others pushed for smaller cities.

Gail Osmer, a San Jose advocate who led Cortese on the encampment tour that inspired the audit, spoke alongside the senator at the hearing. In an interview, she said she hopes the audit’s findings will be a wake-up call for her city.

Osmer has been critical of how the city cleared the airport encampment. Camp residents were promised services, such as free repairs for their cars and RVs, that many people never received, she said.

“People are not held accountable,” Osmer said. “Where’s the money going?”

Marisa Kendall is a reporter with CalMatters.


  1. I can tell you it’s not working because the State, and particularly the Bay Area/LA cities along with other areas who followed CA’s lead (Seattle, Portland, etc.), have went all in on a failed approach. It’s called Housing First.

    This is where you have 8,000 homeless people, over 80% unsheltered and you invest billions in building extremely expensive housing (in San Jose, permanent housing units are now over $1 million per door) that may be done in 20-years, and in the mean-time, you build no shelters and you let mentally ill and substance abusers camp everywhere. Then, when you do build housing, maybe 100 units per year, you de-prioritize the elderly, families – and those that would succeed in the Housing First model, and prioritize the mentally ill and substance abusers, who are NOT a good fit for Housing First. You spend $100+ million for 100-units, then put 100 mentally ill people inside the building – and you create an institution like Villas on the Park or Second Street Studios.

    Housing First addresses NO root causes – and is an intervention that is best suited for those without severe mental illness and substance abuse. It’s that simple. These people need treatment – bot a $1 million apartment and PATH Case Manager. I have worked in this industry for over 10-years now and the plan has failed – and no one will acknowledge it. Literally, groups like Destination Home, the County and SJ Housing Dept are convinced what they are doing is working – and it’s gaslighting at this point. They have failed. On top of that, talking heads like Jennifer Loving or Ray Bramson, who have overseen this failure – they aren’t mental health professionals or anywhere near qualified to solve what is clearly a mental health crisis. Not a housing crisis.

    Say it with me – the state of CA has conflated a mental health and substance abuse crisis with a homelessness issue. There two distinct issues require two separate interventions. Why Jennifer Loving is telling people severely mentally ill people will succeed if we just give them an apartment is mind-boggingly absurd.

    We could’ve solved homelessness for the elderly, certain disabled communities (developmental) and families where affordability is the root cause 5x over by now with the money we have spent. Instead, we have created a raging enablement system that is pure chaos, and anyone who lives in a downtown Bay Area city knows how bad it is.

    It is time for a REAL LEADER to step up – acknowledge the “apartments for all” plan is not anywhere near feasible – and start to propose some real ideas. Build shelters to scale, funnel all outreach/abatement/rapid rehousing funds to treatment efforts – and enforce no camping and drug use laws. I am tired of seeing downtown playgrounds operate as drug use sites and toilets. St James Park is an absolute disgrace.

    Most of the Housing First studies are done by entities that support the model – but one theme is clear, and stated in the study cited below – “there are no improvements in psychological or drug use symptoms.” Move the current leadership aside – as this crisis is solvable, but current “leaders” aren’t capable. Including Cortese who oversaw the steady decline here in SCC, and now seems oblivious to his own failures.

  2. it’s a grift, it manipulates the good-natured and well -meaning residents and feeds the greedy people of letters endless wealth.

    there are no incentives to solve anything, just endless gravy-trains to fill oh so many troughs and insults and calls of racism in response to criticism

    nothing is more evil than turning goodness into bad

    the audits will do nothing, this is theatre, you will continue to spend more and get more homeless – how that is not clear to you is beyond me

  3. Well, if Cortese is involved I’m sure the solution will be to spend more money to fix the problem.
    There really isn’t a homeless problem. Sure, some people are struggling and looking for and receiving help to get back to being housed. The problem is the majority of people that are considered homeless are simply drug-addicted, mentally ill, criminals, or just want to what they want, with a likely combination of the four. Enforce existing laws to weed out these filth mongers, and return our city back to its residents.

  4. Easy Answer: Look at the salaries and enrichment of grifting homeless advocates and activists fleecing taxpayers through business plans supported by the Homeless Industrial Complex.

    Taxpayers are easy targets for funding these poorly cost-managed programs and the annual sustainment costs to maintain these properties, pay utilities, security and upkeep.

    Even the LATimes recently reported on the unsustainable cost of these programs,
    “Affordable Housing in CA Now Routinely Tops $1 Million per Apartment to Build”
    (LA Times, June 21, 2022)

    “More than half a dozen affordable housing projects in CA are costing more than $1 million per apartment to build, a record-breaking sum that makes it harder to house the growing numbers of low-income Californians who need help paying rent…”
    “In comparison with private sector development, low-income housing is often saddled with more stringent environmental (CEQA) and labor standards (unions want their cut).

    All of these over $1 Million dollar so-called “affordable housing” projects are in the Bay Area.

    Roosevelt Park (80 units) in San Jose – over $1,009,707 per apartment.

  5. Lot’s of money in the “homeless” business, I’m sure there are plenty of people who have become very wealthy in that industry. All legally I’m sure.

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