California Homelessness Funds Come With a Catch: Cities Must Follow Housing Laws

Gov. Gavin Newsom on Friday dangled a new carrot in front of cities looking to clean up homeless encampments: money in exchange for compliance with state housing laws.

Newsom said the $131 million in new Encampment Resolution Funding Program dollars would be available to 18 cities and counties across the state, including seven in the Bay Area, representing a nearly $50 million investment in the region.

But the money comes with new conditions, including that local governments maintain a compliant housing element — a state-mandated document detailing where cities propose to permit new housing — and follow all state housing laws. If they fail to do so, the state could revoke the grants.

“We want to provide carrots, not just sticks,” Newsom said. But, he warned, “We will claw back funds. … If you’re out of compliance, we’re no longer interested in funding failure.”

The announcement comes after Newsom on Thursday said the city of Norwalk, southeast of Los Angeles, was far behind on its housing element and violated state law by imposing a shelter moratorium, making it ineligible for state housing and homelessness funds.

The governor has increased pressure on cities to clear encampments following a Supreme Court decision in June that gave them the green light to enforce camping bans by citing and arresting people, whether or not there are shelter beds available. In a July executive order, he directed state agencies to dismantle camps on their land and urged cities to follow suit.

Since then, at least 18 jurisdictions around the state have enacted anti-camping laws, according to a tally maintained by the National Homelessness Law Center.

Meanwhile, Newsom said that since the beginning of July, California has cleared 991 encampments and 18,771 cubic yards of debris on state-owned land, while 12,200 camps have been removed since 2021.

President and CEO Jim Wunderman of Bay Area Council, a business-backed advocacy organization, said he was encouraged to see the governor maintain a focus on clearing encampments and provide “real money to cities to make that possible.”

He said there’s been tremendous frustration in the business community in recent years over the lack of progress on homelessness. “Now,” he said, “we’re seeing that happen,” thanks to the opening provided by the Supreme Court. “It really enables cities now to take control of their destiny.”

The governor also announced a new effort to streamline encampment sweeps by allowing local communities to get reimbursed by the state for clearing encampments on state-owned land in their jurisdictions.

Alex Visotzky, senior California policy fellow for the National Alliance to End Homelessness, welcomed that emphasis on shared responsibility.

“Communities can only address homelessness when all levels of government are working together and leveraging each other’s resources,” he said.

This marked a change in tone for the governor, who’s struck a more combative note in the recent past, blaming cities for making excuses and not doing enough to address the crisis. “He talked about sharing responsibility with cities, which felt important,” Visotzky said. “He was stepping away from some of the finger-pointing.”

Since Newsom took office in 2019, the state has funneled more than $27 billion toward the homelessness crisis. Despite that, the number of homeless Californians has risen nearly 20% in that time, surpassing 180,000 at last count — with nearly 70% of those unsheltered.

While the state’s investment is unprecedented, researchers at the policy nonprofit All Home said it doesn’t come close to what’s needed. The organization estimates that slashing homelessness in the Bay Area alone would require an additional $9.5 billion on top of current spending.

The state has disbursed $737 million through the Encampment Resolution Funding Program since 2021, according to Newsom’s office.

Here’s a list of the latest Encampment Resolution Fund recipients:

• City of Antioch: $6,812,686
• City of Berkeley: $5,395,637
• City of Carlsbad: $2,994,225
• City of Los Angeles: $11,351,281
• City of Palm Springs: $5,106,731
• City of Petaluma: $8,098,978
• City of Redlands: $5,341,800
• City of Richmond: $9,336,746
• City of Sacramento: $18,199,661
• City of San José: $4,821,083
• City of Victorville: $6,365,070
• City of Visalia: $3,000,000
• County of Contra Costa: $5,708,516
• County of Riverside: $12,612,779
• County of San Bernardino: $11,000,000
• City and County of San Francisco: $7,975,486
• Humboldt County — Continuum of Care: $3,784,294
• Pasadena — Continuum of Care: $2,772,801