Newsom announces $800 million in available Prop. 1 funding amid debates over state homeless spending

Applications for the final round of Prop. 1 funding are due by Oct. 28

By Caroline Grinder, legislative advocate

Last week, Gov. Gavin Newsom announced that applications for the last $800 million in Proposition 1 funding are due by Oct. 28. This final round of funding focuses on unmet needs, particularly in rural or remote areas that lack sufficient behavioral health infrastructure.

The announcement comes amid renewed debate over whether the state should direct more funding to local efforts that prevent and reduce homelessness.

How did the state spend Prop. 1?

Prop. 1 funding supports behavioral health housing and services for people experiencing homelessness. State officials expect to award all $6.4 billion in funding from the Cal Cities-supported bond by 2026.

The California Department of Health Care Services is distributing $4.4 billion for the Behavioral Health Continuum Infrastructure Program (BHCIP). These funds are awarded through competitive grants to cities, counties, nonprofits, and for-profit organizations to expand behavioral health infrastructure across the state.

BHCIP awarded its first round of funding from Prop. 1 in May, with $3.3 billion allocated to create over 5,000 treatment beds and more than 21,000 outpatient treatment slots. The cities of Bakersfield, Lancaster, Los Angeles, and Santa Cruz received direct allocations, along with 37 counties. The final $800 million in funding announced last week falls under BHCIP's jurisdiction.

The Department of Housing and Community Development is issuing the other $2 billion through the Homekey+. The new program seeks to build permanent supportive housing for veterans and individuals who are homeless or at risk of homelessness and experiencing a behavioral health condition. Awards announcements are expected this summer.

How does this fit into the larger housing and services funding debate?

Newsom continues to point to Prop. 1 as a key reason why there is no new funding for homelessness programs in his proposed budget: "There's nothing compassionate about letting people die on the streets," he said recently. "Local leaders asked for resources - we delivered the largest state investment in history … The time for inaction is over. There are no more excuses."

While Prop. 1 funding will have a transformative impact on California's behavioral health infrastructure, it does not supplant programs such as the Homeless Housing Assistance and Prevention Grant program, which provides direct and flexible funding to local governments for a range of homelessness services and programs. Cal Cities is calling on the Governor and the Legislature to invest ongoing funding to help cities address homelessness in their communities.