California questions the effectiveness of its $13 billion expenditure on homelessness

An audit in California found that the state spent $24 billion on homelessness over the past five years, but the state did not accurately track if the funds actually improved the problem.

The state has spent roughly $24 billion on initiatives to address homelessness, and the audit analyzed a combined $13.7 billion that went to five programs across the state from 2018-23. Despite the money being spent on 30 homelessness and housing programs, the audit found that California does not have reliable data to see why the situation did not improve in cities across the state.

“This report concludes that the state must do more to assess the cost-effectiveness of its homelessness programs,” State Auditor Grant Parks wrote in a letter to Gov. Gavin Newsom (D-CA) and lawmakers.

Democratic state Sen. Dave Cortese requested the audit in 2022 after he toured a homeless encampment that had been cleared. He said results from the audit found a “data desert,” which found a continuous cycle with many experiencing homelessness placed in interim housing. Of those people, only 13% found a permanent home and 44% became homeless again.

“There are not clear plans in place even at the local level to establish goals that would eradicate homelessness … on a bed-by-bed, project-by-project level,” Cortese said. “Basically, you have a system where cities are putting money out … but not based on a concrete plan.”

California’s homeless population, estimated to be 171,000 people, accounts for about 30% of the homeless population nationwide. Homelessness increased in the Golden State by 20% since 2019. The audit did not, however, call for funding cuts to homelessness programs.

Of the five programs studied specifically in San Diego and San Jose, the audit said only two were “cost effective.” One of those programs converted hotels and motels into housing, and the other provided assistance to families on the brink of homelessness. The other three programs could not be evaluated because of a lack of data.

“In the absence of this information, the State cannot determine whether these programs represent the best use of its funds,” the audit said.

According to the audit, the California Interagency Council on Homelessness, implemented in 2017, has not tracked whether spending on homelessness programs has been successful since 2021. The audit found errors here, including deleted records and overstated data.

Without accurate data “the state will continue to lack complete and timely information about the ongoing costs and associated outcomes of its homelessness programs,” the audit said.

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Republican state Sen. Roger Niello said the findings from the audit were a “wake-up call.”

“California is facing a concerning paradox: despite an exorbitant amount of dollars spent, the state’s homeless population is not slowing down,” Niello said in a statement. “These audit results are a wake-up call for a shift toward solutions that prioritize self-sufficiency and cost effectiveness.”