California’s Ineffective $24 Billion Homelessness Spending Revealed in Audit

Clear Facts

• Over the past five years, California has spent $24 billion on homelessness, yet the effectiveness of this spending has not been systematically tracked, as revealed by a state audit.
• Despite the billions spent, the state is yet to provide an explanation as to why homelessness has not improved in some areas, and has even worsened in cities such as San Francisco, Los Angeles, and Sacramento.
• The state audit suggests that the legislature should mandate the state’s key homelessness agency to publicly report the costs and outcomes of taxpayer-funded homelessness programs.

Despite an expenditure of $24 billion directed toward addressing homelessness in California over the past five years, the state has not consistently monitored the effectiveness of this spending, according to a recent state audit.

The audit, published on Tuesday, revealed that California “lacks current information on the ongoing costs and outcomes of its homelessness programs.”

The audit noted that “the state agency that is responsible for this issue ‘has not consistently tracked and evaluated the State’s efforts to prevent and end homelessness.’”

Given that about 30% of the nation’s homeless population resides in California, the state has seen a rise in the number of homeless individuals.

Data from the audit indicates that the homeless count in California rose to 181,399 in 2023, a significant jump from the 151,278 reported in 2019 and a shocking 53% increase from the 118,552 homeless individuals in 2013.

From 2018 to 2023, more than $24 billion of taxpayer funds were allocated to over 30 homeless and housing programs. However, the state has not managed to provide a reason for the escalating homelessness in certain cities like San Francisco, Los Angeles, and Sacramento.

Despite significant funding, areas such as downtown San Francisco have witnessed an increase in visible homelessness, with drug addicts openly using on the streets, and tents covering the sidewalk.

In September, Sacramento’s top prosecutor filed a lawsuit against the city regarding the growing homeless encampments, accusing city officials of enabling the homeless population to become a public nuisance.

“The state must do more to assess the cost-effectiveness of its homelessness programs,” State Auditor Grant Parks concluded. His letter was addressed to Democratic Governor Gavin Newsom and state lawmakers.

The audit examined the cost-effectiveness of five state homeless programs, finding that two housing-related programs were likely cost-effective. However, due to insufficient data, the audit was unable to assess the other three programs.

The audit strongly recommended that the California Interagency Council on Homelessness, the state’s primary homelessness agency, should compile and publicly report the costs and outcomes of taxpayer-funded homelessness programs.

In response to the audit, the Council agreed with the recommendations overall and pledged to implement “appropriate measures where possible.”

Following the release of the audit, Republican lawmakers in California criticized the state’s Democratic leadership. Assembly Republican Leader James Gallagher stated, “This is typical of Gavin Newsom – make a flashy announcement, waste taxpayer money, and completely fail to deliver. Californians are fed up with the homeless crisis, and even more so with Gavin’s excuses. We need results – period, full stop.”

Republican state Senator Roger Niello described the audit as “troubling”, criticizing it for focusing largely on shelter, stating, “The one issue I had with the audit was that the focus was mostly on housing and shelter issues, which is certainly important, but very little about actual results, getting people out of homelessness, not just into shelter. That’s half the job, maybe not even quite half. And, so that was a little bit of a disappointment.”

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