Cal Cities and allies call on state leaders to restore homelessness funding

Cal Cities and a coalition of local government, affordable housing providers, and homeless advocates also urged leaders to improve the effectiveness of state homelessness funding

By Caroline Grinder, legislative advocate (community services), Kayla Sherwood, senior communications and media manager, and Brian Hendershot, Cal Cities Advocate managing editor

Cal Cities and a group of local government officials, homeless advocates, and affordable housing providers are warning state leaders that Gov. Gavin Newsom's budget proposal could have a detrimental impact on homelessness.

The budget blueprint, announced in early January, would follow through on significant cuts to the state's flagship homelessness program outlined in last year's budget agreement. State leaders slashed funding for the program to $500 million - half of its historic funding levels. Cities will need to meet new accountability measures - to be negotiated later this year - to receive the funding.

"The state has a moral responsibility to ensure Californians have a roof over their heads and are connected to the services they deserve," said Gabe Quinto, Cal Cities president and El Cerrito mayor. "Cities fully expect to be held accountable for the public money we spend to get Californians off the streets and housed, but the state must be a strong funding partner to stem the tide on homelessness."

In a letter sent on Tuesday, the group called on Gov. Gavin Newsom and legislative leaders to restore the Homeless Housing, Assistance and Prevention (HHAP) grant program to its previous funding levels of $1 billion and commit to annual investments that match the scale of the crisis.

"Local governments can't solve homelessness alone," said Susan Ellenberg, California State Association of Counties president and Santa Clara County supervisor. "We need the state to partner with us. Unless the state fully funds this successful program, we all risk eroding much of the progress that has been made in counties across the state."

Cutting funding for the HHAP program would significantly reduce shelter capacity, eliminate rental assistance, and halt the development of supportive housing - right as communities throughout the state are showing sustained progress. California's increases in homelessness have slowed, and HHAP funding has helped place over 90,000 people into permanent housing since 2023. Recent data suggests a 9% reduction in unsheltered homelessness statewide.

"HHAP funding has been critical in the state's recent success reducing homelessness," said Patricia Lock Dawson, California Big City Mayors coalition chair and Riverside mayor. "However, the proposed $500M reduction of Round 7 of HHAP in the Governor's January budget threatens that success."

According to the National Alliance to End Homelessness, over 41,000 people are at extreme risk of falling back into homelessness due to funding cuts, policy changes, and uncertainty at the federal level.

"We need California to lead now more than ever before, when the federal government is trying to pull the rug out from the thousands of Californians who have made it off the streets," said Alex Visotzky, a senior policy fellow with the alliance and policy co-chair of the Bring California Home Coalition. "State investment in homeless programs has yielded progress and gotten more people housed, but California must stay the course or lose that progress.''

In addition to urging lawmakers to provide ongoing funding, the group called on state leaders to promote accountability while also reducing the already lengthy HHAP application process.

A bill passed last year outlines priorities for the next round of the program that will be ironed out this year. This includes new requirements to access the funding, such as obtaining a " prohousing designation" - an near infeasible task for the many jurisdictions that have not yet achieved the distinction.

The coalition outlined several key principles to ensure the program's success as legislators develop legislation to implement the next round of the program:

1. Ensure HHAP funding is distributed quickly to avoid gaps and program disruptions.
2. Encourage the state to provide flexibility in HHAP applications to promote efficiency and reduce delays.
3. Allow jurisdictions to demonstrate substantial progress toward new requirements without delaying access to funds.
4. Ensure that compliance issues are addressed collaboratively and are not used as a basis to withhold or redirect funding away from individuals in need within a region.

To learn how you can make your voice heard, contact your regional public affairs manager.