$24 billion. That's what California spent on homelessness from 2018 to 2023, and homelessness still rose 24% from 2019 to 2024.
A court-ordered audit found Los Angeles couldn't say how much it spent or what services were delivered. The county controller found LAHSA never recovered most cash advances to contractors. Federal prosecutors charged developers with diverting Homekey money. Meanwhile Houston cut homelessness 61% with one coordinated system and cheap rentals.
PRO: Housing First can work when coordinated (Houston).
CON / COST: Poor measurement, slow construction and fraud exposure in CA.
SOCIETY: Bad value so far; fix is coordination, accountability and zoning reform.
Full analysis
Homelessness in California: Policy Assessment
California’s spending since 2019, Housing First, Prop 1 and Grants Pass, compared with Houston. As of Nov 4, 2026.
Content as of Nov 4, 2026, 8:31 PM ET. Source Page: PolicyBombs canvas
Long-form deep analysis. Companion to the 10-minute quick reference (03-homelessness-summary.docx).
10-Minute Voter Guide
Who’s for / against: For encampment enforcement and treatment-first: President Trump (July 2025 EO), Gov. Newsom (D) and SF mayors after Grants Pass, Texas Gov. Abbott. For Housing First: the Biden administration’s federal plan and homeless-advocacy groups.
California spent at least $24B on homelessness from 2018 to 2023, and homelessness still rose 24% from 2019 to 2024. A court-ordered audit found Los Angeles could not say how much it spent or what services were delivered. The county controller found LAHSA never recovered most cash advances to contractors. Federal prosecutors have charged developers with diverting state Homekey money. Houston cut homelessness 61% with one coordinated system and cheap rentals.
Pros of CA’s current approach | Cons |
+ Homekey motel conversions cost about $144K per unit, against $380K–$570K for new builds (State Auditor) + The 2025 count dipped 2.8% + Housing First keeps most placed people housed | – No outcome tracking for $24B (State Auditor) – LA contracts too vague to verify services were delivered (Alvarez & Marsal) – Federal fraud charges over Homekey grants; $6M lost to vacancies at one SF nonprofit (SF Controller) |
Bottom line: Support measures that tie money to audited outcomes and claw back unspent advances. Be skeptical of new money for agencies that can’t account for the last round.
Contents
- 10-Minute Voter Guide
- Key facts
- 1. What is the policy
- 2. Why it exists
- 3. Realized effects
- Fraud, waste and abuse findings
- 4. Good or bad for society
- Who supports / who opposes
- References
Bottom line: California spent tens of billions and homelessness still rose until a small dip in 2025, and the state didn’t measure what worked. Houston shows that Housing First can work when it runs as one coordinated system that moves people quickly into existing cheap rentals. California’s problem is less the philosophy than housing costs, scattered governance, and expensive new construction. |
Key facts
Item | Figure | Source |
|---|---|---|
CA homeless count (HUD PIT), 2019 | 151,278 | HUD AHAR |
CA homeless count, 2024 | 187,084 | HUD AHAR |
CA homeless count, 2025 | 181,934 (down 2.8%); unsheltered 115,583 | HUD AHAR 2025 |
State spending, FY2018-19 to FY2022-23, 30 programs | $24B | CA State Auditor 2023-102.1 (Apr 2024) |
Auditor finding | State did not consistently track outcomes; only 2 programs had cost-effectiveness evidence | CA State Auditor |
Prop 1 (Mar 2024): $6.38B bond plus MHSA overhaul | Passed 50.2% | CA SOS |
City of Grants Pass v. Johnson | June 28, 2024, 6–3: camping bans are not cruel and unusual | US Supreme Court |
Houston region count, 2011 to 2025 | 8,538 to 3,325 (61% drop) | Coalition for the Homeless PIT counts |
1. What is the policy
Item | Detail |
|---|---|
State funding streams | HHAP block grants to cities and counties, Project Homekey (motel and hotel conversions), Encampment Resolution Funds, CalAIM housing supports, and No Place Like Home. Newsom-era state homelessness spending is commonly put at more than $24B (2019–2024). |
Housing First (SB 1380, 2016) | State law requires state-funded programs to provide housing without preconditions such as sobriety or treatment. |
Prop 1 (March 2024) | A $6.38B bond for treatment beds and supportive housing. It also redirects about 30% of Mental Health Services Act county funds to housing. Passed with 50.2%. |
CARE Court (SB 1338, 2022) and SB 43 (2023) | Civil court-ordered treatment plans, and a broader definition of grave disability that allows conservatorship. |
After Grants Pass | Newsom’s July 2024 executive order urged cities to clear encampments. In 2025 he tied HHAP funding to anti-camping ordinances and offered a model ordinance. Many cities, including SF and LA County areas, increased sweeps. |
2. Why it exists
Stated reasons | Underlying drivers |
+ Visible crisis: about 1 in 4 US homeless people live in CA + Housing First had strong evidence for keeping people housed + Humane response; addiction is easier to treat once housed + Prop 1: decades of underbuilt psychiatric capacity | – Spending shows action fast; outcome tracking does not – A nonprofit provider sector grew around the grants, and the auditor and LA cases found weak oversight – Prevailing wage, local permitting, and a single-project focus pushed costs per unit to $500K–$600K+ (LA Controller on HHH; verify current) – Local NIMBY politics blocks the cheap housing that would cut demand |
3. Realized effects
Chart data (shown as a chart on the Page)
Series | 2019 | 2024 | 2025 |
|---|---|---|---|
California | 151,278 | 187,084 | 181,934 |
Item | Detail | Assessment |
|---|---|---|
CA outcomes | Homelessness rose about 24% from 2019 to 2024, with the 2022 count disrupted by COVID. The auditor (Apr 2024) found the Interagency Council had not tracked outcomes since 2021. LA’s homelessness agency, LAHSA, was criticized in a court-ordered audit (2025), and LA County is moving functions out of it. | Worse |
Housing First evidence | RCTs (Pathways to Housing; Canada’s At Home/Chez Soi) show 70–85% housing retention against much lower rates with treatment-first. They find little effect on addiction, mental health, or employment. It works for keeping people housed, not for recovery. | Mixed |
Houston | The Way Home coalition coordinates about 100 agencies with a single entry system. It places people quickly into existing apartments, using cheap Texas housing and a permissive building system. The count fell from 8,538 (2011) to 3,325 (2025), a 61% drop. It ticked up 1.4% in 2025 and unsheltered rose 15.8%. | Better |
Grants Pass | Sweeps rose after the ruling. There’s no solid evidence yet that they cut overall homelessness, rather than moving people around. | Too early |
Research consistently ties regional homelessness rates mainly to rents and vacancy rates, more than to drugs or mental illness (Colburn and Aldern, 2022). That points to housing supply as the root.
Fraud, waste and abuse findings
Anomaly | What investigators or courts concluded | Source |
|---|---|---|
LA city programs (Roadmap, Alliance, Inside Safe), 2020–24 | The city could not track exactly how much it spent, did not reconcile spending with services, and wrote vague contracts that left the system vulnerable to waste and fraud. This is a finding of weak controls, not proven fraud. | Alvarez & Marsal, court-ordered (Judge Carter), Mar 2025 |
LAHSA cash advances | Recovered only $2.5M of $50.8M in 2017–18 Measure H advances; $8M still outstanding (2016–23); no accurate list of contracts. | LA County Auditor-Controller, Nov 2024 |
Inside Safe hotel costs | $281 per bed per day at one site (FY23-24); service portion $181, against $55–$85 for other shelter types. Hotels billed damage repairs, some proven only by notes that a vendor was paid in cash. | Alvarez & Marsal |
Project Roomkey rates | $94.23 per room per night average, about $120 downtown, plus about $100 per client per day for services; FEMA reimbursed occupied rooms only. | LA City Legislative Analyst, Sept 2020 |
Shangri-La Industries / Homekey | CFO Cody Holmes indicted (mail and loan fraud): allegedly faked balance sheets to get $25.9M for a Thousand Oaks project that was never completed; more than $2M allegedly went to his American Express bills. The case is pending, and the AG also sued civilly in 2024. | US v. Holmes indictment (C.D. Cal., Oct 2025) |
Weingart / Cheviot Hills | A developer is charged with buying a property for $11.2M using allegedly fake documents and selling it to the nonprofit Weingart for $27.3M. Weingart put its CEO on leave and hired a law firm to review its property valuations. Allegations only so far. | DOJ complaint; LA Times, Nov 2025 |
HomeRise (SF) | Gross mismanagement: raises of 20% or more and $200K in bonuses while units sat vacant; more than $6M lost to vacancies, with some buildings 26–35% empty. | SF Controller / Sjoberg Evashenk audit, Apr 2024 |
What changed: the verdict now treats governance failure as the central problem, because weak controls invite and enable fraud. The State Auditor also found Homekey likely cost-effective. So the evidence supports buying existing buildings, not building new projects, provided grant recipients are verified.
4. Good or bad for society
Verdict: Revised: California’s approach has been bad value and is exposed to fraud: high spending, poor measurement, slow construction, and rising counts until 2025. The fix isn’t abandoning Housing First. It’s Houston-style coordination, cheap fast placements, accountability tied to outcomes, and large-scale zoning reform, plus enforcement only where real shelter is offered. |
Strongest case for CA’s approach | Strongest case against |
+ Homekey added units quickly at below new-build cost + The 2025 dip suggests recent shelter growth is working + Many people are housed who otherwise would not be | – $24B with no outcome tracking is a failure of governance – Unsheltered share stays the highest in the nation – Cost per unit is so high that scale is impossible |
Who supports / who opposes
For = encampment enforcement and treatment-first. Against = Housing First without enforcement. Each row cites a numbered source below. Checked Nov 4, 2026.
Who | Party / level | Position | Evidence | Ref |
President Donald Trump | Republican | For | EO 14321 "Ending Crime and Disorder on America’s Streets" (Jul 24, 2025): ends federal support for Housing First, backs civil commitment and anti-camping enforcement | [1] |
Gov. Gavin Newsom (D-CA) | Democrat | For | Executive order (Jul 25, 2024) directing state agencies to clear encampments after Grants Pass v. Johnson | [2] |
Gov. Greg Abbott (R-TX) | Republican | For | Signed HB 1925 (2021), a statewide ban on public camping | [3] |
City of Grants Pass, OR (with amicus support from Newsom and SF) | Local | For | Won Supreme Court ruling (Jun 28, 2024) allowing camping bans | [4] |
Biden administration (USICH) | Democrat | Against | "All In" federal strategic plan built on Housing First | [5] |
NAACP Legal Defense Fund | Advocacy | Against | Oppose the 2025 EO as criminalizing homelessness | [6] |
Cross-party defectors: Newsom, a Democrat, aligned with Republicans on encampment sweeps and filed a brief backing Grants Pass. Homeless advocates sued or criticized him.
How positions shifted: Housing First had bipartisan federal backing under George W. Bush and Obama. The federal government reversed it in 2025, and California Democrats moved toward enforcement in 2024.
Not included or not fully verified: Could not source a roll-call vote in Congress on Housing First; none found.
Sources for this section:
- [1] White House: Ending Crime and Disorder on America’s Streets (whitehouse.gov) https://www.whitehouse.gov/presidential-actions/2025/07/ending-crime-and-disorder-on-americas-streets/
- [2] Gov. Newsom: order to address encampments (Jul 25, 2024) (gov.ca.gov) https://www.gov.ca.gov/2024/07/25/governor-newsom-orders-state-agencies-to-address-encampments/
- [3] Texas Legislature: HB 1925 (87R) history (capitol.texas.gov) https://capitol.texas.gov/BillLookup/History.aspx?LegSess=87R&Bill=HB1925
- [4] Supreme Court: City of Grants Pass v. Johnson (2024) (supremecourt.gov) https://www.supremecourt.gov/opinions/23pdf/23-175_19m2.pdf
- [5] USICH: All In federal strategic plan (usich.gov) https://www.usich.gov/sites/default/files/document/All_In.pdf
- [6] NAACP LDF: Trump EO on unhoused people explained (naacpldf.org) https://www.naacpldf.org/case-issue/trump-executive-order-criminalizing-unhoused-people-explained/
References
[1] CA State Auditor 2023-102.1: Homelessness in California. auditor.ca.gov. https://www.auditor.ca.gov/reports/2023-102.1/index.html
[2] Alvarez & Marsal court-ordered assessment (Dkt 905). cacd.uscourts.gov. https://www.cacd.uscourts.gov/sites/default/files/Dkt%20905%20FINAL%20AM%20REPORT.pdf
[3] LA Times: County audit finds lax accounting at LAHSA. latimes.com. https://www.latimes.com/california/story/2024-11-20/county-audit-finds-lax-accounting-at-l-a-homeless-authority
[4] US v. Cody Holmes indictment. documentcloud.org. https://s3.documentcloud.org/documents/28097013/holmes-indictment.pdf
[5] LAist: Federal charges over Homekey funds. laist.com. https://laist.com/news/housing-homelessness/bill-essayli-federal-charges-homelessness-homekey
[6] SF Standard: HomeRise audit. sfstandard.com. https://sfstandard.com/2024/04/02/san-francisco-homeless-nonprofit-homerise-report/
[7] LA CLA: Project Roomkey report (2020). lacity.org. https://cityclerk.lacity.org/onlinedocs/2020/20-0478_rpt_CLA_09-03-2020.pdf
[8] CalMatters: two-year Homekey investigation. calmatters.org. https://calmatters.org/newsletter/homekey-investigation/
[9] HUD 2025 AHAR Part 1. huduser.gov. https://www.huduser.gov/portal/datasets/ahar/2025-ahar-part-1-pit-estimates-of-homelessness-in-the-us.html
[10] Houston 2025 PIT results. cfthhouston.org. https://www.cfthhouston.org/2025-pit-results
[11] City of Grants Pass v. Johnson opinion. supremecourt.gov. https://www.supremecourt.gov/opinions/23pdf/23-175_19m2.pdf
[12] Prop 1 (2024) overview. lao.ca.gov. https://lao.ca.gov/BallotAnalysis/Proposition?number=1&year=2024
[13] At Home/Chez Soi final report. mentalhealthcommission.ca. https://www.mentalhealthcommission.ca/English/document/24376/national-homechez-soi-final-report
[14] Colburn & Aldern, Homelessness Is a Housing Problem. homelessnesshousingproblem.com. https://homelessnesshousingproblem.com/
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