Newsom signs $12 billion funding package to support housing for homeless residents

One of the tents from the homeless encampment under the Guadalupe Freeway, adjacent to a newly constructed building near San Jose Diridon Station, in San Jose, Calif., on May 25, 2021. (Harika Maddala/Bay City News)

Gov. Gavin Newsom signed a $12 billion funding package for housing and homelessness Monday, the largest such investment in sheltering and supporting homeless residents in the state’s history.

The funding, which will be used over the next two years, will support efforts across the state to spur housing construction and the expansion of mental health services at the local level.

The state will use $5.8 billion of the funding to convert more than 42,000 hotel and motel rooms into housing units specifically for homeless residents and people struggling with severe mental health conditions.

The state launched the hotel room conversion program, known as Homekey, last year in a partnership with the federal government that enabled the state to reimburse the costs of acquiring hotel and motel properties.

Speaking at a Homekey site in Sebastopol, Newsom acknowledged that the state’s strategies in recent years to help homeless residents get off the streets have been failures.

“The state of California, with all due respect, has been nowhere to be found on the issue of homelessness for far too long,” he said.

Sonoma County Supervisor James Gore said state and local governments have played “whack-a-mole” with homelessness over the last three decades with little to show for it.

Project Homekey recipient @WEAVEInc will create new, safe affordable cottage homes in Sacramento for victims of domestic violence (Image courtesy of California Department of Housing and Community Development / Twitter)

“We have never encountered such an issue as homelessness, where everybody wants it fixed but nobody wants to be inconvenienced by the solution,” he said.

In addition to the $12 billion funding package for homelessness, the state also plans to spend $10.3 billion on developing affordable housing units.

Newsom argued that the state plans to be more proactive in tying funding to whether local governments are actively housing homeless residents rather than simply throwing money at the problem.

“There’s six metrics that counties have to meet, and if you meet them we’re actually attaching bonuses, an 18-percent bonus opportunity, for actually delivering on the plan,” he said. “No plan, no money.”

Roughly $2 billion of the funding package will be paid to local governments through Homeless Housing, Assistance and Prevention grants, which have specific accountability measures that grant recipients must meet.

Since being elected in 2018, Newsom has frequently reiterated his intent to spur more housing development and, in turn, help homeless residents get off the streets.

Last year, just a month before the state shut down in March due to the pandemic, Newsom even went so far as to devote his entire State of the State address to issues of housing and homelessness.

In that time, however, the state’s revenue used to tackle issues like homelessness has fluctuated wildly, from a projected $54.3 billion deficit last spring to a surplus of nearly $80 billion earlier this year.

But while the funding package Newsom approved Monday is only a one-time expenditure, the governor said he plans to forge ahead with spending on housing and homelessness in future years.

“So long as I’m governor of California, that’s not going to be an issue,” he said.

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