Op-Ed: Something is Clearly Off with California’s Homelessness Spending

California put aside $7.2 billion to address homelessness in the 2021-22 state budget. Last year, there were an estimated 172,000 homeless statewide, which equates to spending nearly $42,000 per homeless person.

Spending of this magnitude – which only accounts for state money – is sufficient if it were applied effectively. The worsening crisis indicates that something is off with how the state spends its resources.

This perspective is important in light of a comprehensive homeless survey by UC San Francisco. Many of its findings are enlightening, but too many of its suggestions call for more spending.

It strains credulity to believe that spending $42,000 per person is insufficient, but if bumped up to $45,000, all will be OK. California does not have the worst-in-the-nation homeless crisis because it spends too little.

Continued calls for more government subsidies supporting the state’s ineffective housing-first approach will waste money while failing to alleviate the emergency.

The survey confirms some things we already know, such as most of the homeless in California (78%) are unsheltered. It also provides essential information to help sustainably address homelessness, such as the pivotal role housing unaffordability plays in driving the problem.

Solutions require policymakers to leverage all we have learned to adopt a more innovative structure for addressing the grim conditions.

The UCSF Benioff Homelessness and Housing Initiative does recommend some innovative policies. Gov. Gavin Newsom has also sought to create homelessness courts. While neither a perfect nor sweeping solution, a court system ordering treatment programs for homeless people could make a difference.

If the effort has the necessary scope and force, it can help move homeless people suffering from mental illness and addiction into a setting of care rather than the current invisible asylum of “the street, the jail, and the emergency room.”

Other suggestions merely throw money at the current ineffective government-run programs, a poor strategy bound to fail. Instead, California should fund well-run and fully accountable private sector groups that help homeless people gain control, address any issues and then become self-sufficient. The “California Way” bias has blinded lawmakers from successful initiatives in other states and tailoring them to West Coast needs. Partnerships and nonprofits in Virginia, Tennessee and elsewhere have shown that they can sustainably address homelessness through novel methods, flexibility and personalization.

Another flaw is government’s focus on “controlling the cost of housing” rather than removing disincentives driving the housing shortage. As rising inflation reminds us, you don’t lower the cost of anything by throwing money at people. We need to incentivize more housing supply by lowering costs and construction time through deregulation and avoiding harmful policies like rent control that worsen housing unaffordability.

The richest target for deregulation is also the state’s most firmly entrenched law: the California Environmental Quality Act. While well-intended when enacted in 1970, it has become a destructive force derailing “the possibility of homeownership” among the “hardworking members of Latino, Black and other minority communities,” says Jennifer Hernandez, an environmental and land-use lawyer who has documented CEQA’s long list of litigation abuses.

Both Newsom and before him Gov. Jerry Brown have publicly supported CEQA reform, which is a start. A better plan would be a legislative initiative to repeal and replace.

Concerns that dismantling CEQA would invite environmental mayhem are overblown. Fresh legislation relying on the volumes of knowledge gained in protecting the environment since CEQA became law, and including provisions that would prevent it from becoming another tool for abuse should not be beyond the abilities of lawmakers.

Spending $42,000 a year per homeless person is wheel-spinning on a grand scale. It shows a lack of reflection and a poverty of ideas. The progressive policy framework has made no progress on homelessness. It shouldn’t be too much to ask lawmakers to rethink their premises.

Commentary from CalMatters. Kerry Jackson is a fellow with the Center for California Reform at the Pacific Research Institute. Wayne Winegarden is a senior fellow in business and economics at the Pacific Research Institute.


  1. Title is Capitan Obvious, but wrong focus. CEQA and UGB are a real problem, but they are essentially NIMBYism and not really what is fueling homelessness. The reason CA is wasting money on homelessness is simple, CA has children running the state and designing these solutions.

    How to solve homelessness:

    1) Address the crazy.
    2) Address the drug abuse.
    3) Get people off the street and into some sort of viable shelter or put them in jail if they refuse.

    Offer scalable assistance, most people need a couple $1000s to carry them through a bad spot, some need $300 a month indefinitely, few need 365=day, 100% help. End the war on landlords and developers, and as this article points out, build more units.

    1) Stop designing the entire system to only offer 100% help, building them a $1m SRO that 2) takes 10 years to build is the worst possible way to solve homelessness.
    2) Stop developing and sustaining an industry incentivized to grow the homeless population instead of reducing it.
    3) Stop listening to child-clowns who can’t balance a checkbook, notably Cartwright and Perry, on how to spend billions of dollars a year.

    Reduction of harm is moral relativism, and CA’s insistence on it as the only priority is collective narcissism.

  2. When you stop feeding the bears, they will go back to being bears and feeding themselves.
    Mr. SJ Kulak is 100%, correct but keep feeding the bears I don’t want them in my area.

  3. This article states the obvious – which many have been saying for a long time. What’s obvious? Over the course of a decade, if you spend billions on an issue and it continues to get worse – THE PLAN FAILED! Full stop. Acknowledge it so we can course correct as soon as possible to stop wasting more funds.

    And, when most other states see decreases in homelessness and unsheltered yet CA sees large increases – it comes down to policy. The homeless say it time and time again – they end up in the Bay and LA because it is easy to break lies and get high. CA enables addicts and doesn’t help mentally ill correctly under the Housing First/Harm Reduction model. Others places that use this failed model and apply it to populations it doesn’t work for? Seattle, Portland, Denver. See a trend?

    It comes down to basic math. We have 6,000+ unsheltered in San Jose, with less than 2,000 shelter beds. Federal law doesn’t allow clearing camps permanently until there is enough shelter. Build shelters to scale NOW to help the most severe cases out there (think st james and Columbus park) – and any who refuse, enforce laws.

    Then take all the Housing First money and prioritize the populations who have been deprioritized and who that program will effectively help. Elderly, families – and high functioning disabled without severe mental illness. With all the wasted money – we could’ve solved homelessness for those populations. Study after study show Housing First doesn’t work for severely mentally ill and drug addicted. They need treatment.

    None of this is rocket science. Much of it is common sense.

    So stop listening to the County, Destination Home and San Jose. They had their “apartments for all” experiment with “option services” for people who don’t know they need services because they are out of their minds currently.

    And again, like a lack of shelter beds directly and obviously correlates with massive amounts of unsheltered – you just need to do simple math to debunk Housing First as a reasonable plan.


    Supportive Housing in SCC is about $1 million per door, and it takes at least 20 years to build 6,000 + units in CA. What else?

    6,000 × $1m = $6 billion.

    So we need $6 billion just to build – then ongoing subsides that will be an annual expense of a few hundred million. We don’t have the money – SJ is going to see deficits and the state. The whole plan is nonsensical. All of it. When do you get reasonable and practical leadership to take the wheel here in the Bay? In CA?

  4. Blame voters. The voters who continue to vote for leaders who fail over and over again. Blame voters who continue to support failing policies expecting different results. Blame voters who have no knowledge of who or what their voting for. Blame voters who vote based on feelings.

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