$24 Billion Spent and Even More Unhoused People

On April 9, California released an audit of the State’s homelessness funding, including an evaluation of the efforts undertaken by the State to monitor the cost-effectiveness of such spending. The report focuses primarily on the State’s activities, in particular, the California Interagency Council on Homelessness (Cal ICH).

In general, the report concludes that the State must do more to assess the cost-effectiveness of its homelessness programs. Some say it’s a scathing indictment of failed oversight of a self-perpetuating “homelessness industrial complex.”

It also exposes the lack of respect for taxpayers and the unhoused alike. It is typical of the government—give huge public dollars away to the unaccountable private sector and never hold the private sector accountable.

The report says that “the State lacks current information on the ongoing costs and outcomes of its homelessness programs, because Cal ICH has not consistently tracked and evaluated the State’s efforts to prevent and end homelessness.

“Although Cal ICH reported in 2023 financial information covering fiscal years 2018–19 through 2020–21 related to all State-funded homelessness programs, it has not continued to track and report this data since that time, despite the significant amount of additional funding the State awarded to these efforts in the past two years.”

The report continues, “Cal ICH has also not aligned its action plan to end homelessness with its statutory goals to collect financial information and ensure accountability and results. Thus, it lacks assurance that the actions it takes will effectively enable it to achieve those goals.

“Another significant gap in the State’s ability to assess programs’ effectiveness is that it does not have a consistent method for gathering information on the costs and outcomes.”

California has spent $24 billion trying to combat homelessness from 2017 to the present, and the results of the audit indicate that only two programs out of 30, Project Homekey and the CalWORKS Housing Support Program, were cost-effective.

There is a lack of transparency and accountability for the counties, cities, contractors, and nonprofit and for-profit service providers receiving these public funds. With homelessness worsening, there are now 171,000 unhoused people in California.

The system should be examined and some light shed on the longstanding, self-perpetuating, deeply entrenched “homelessness industry.” There’s little oversight and accountability for these state funds and how this money is spent.

All the agencies in California’s current system to address homelessness, including those governed by the 45 Continuums of Care (CoC), are participants in a system that, some say, perpetuates homelessness. Some advocates call it a nonprofit (with some for-profits) bureaucracy that exists to expand funding for needed but mostly temporary services.

Locally, the Fresno Madera Continuum of Care (FMCoC) has 51 members, including the City of Fresno, the County of Fresno and many service providers such as Turning Point of Central California.

The CEO of Turning Point makes $381,270 annually and the CFO makes $289,030 annually, an example of how some public dollars for homeless initiatives are going to nonprofit executive salaries. Turning Point is a major recipient of public dollars and one of only two shelter providers in Fresno.

This network of service providers and contractors, many of which are recipients of state and federal funds, hold a lot of political influence. Dollars that could be spent directly to build public housing are being wasted on overhead, administration, executive salaries and developer fees because of the political influence of special interests.

Another example of public funding going to developers is the funding received by RH Community Builders and UPholdings, for-profit agencies. Their joint venture initially received $15.3 million in state funds to convert Smugglers Inn on Blackstone Avenue to temporary shelter housing and then to permanent affordable housing, as reported by Fresnoland in November 2023.

The article states, “Since 2020, the project received nearly $60 million in [more] funding through local programs including the California Housing Accelerator, No Place Like Home, Housing for a Healthy California and Fresno County.”

RH Community Builders/UPholdings own the former inn, now known as Crossroads Village. Some would call this “corporate welfare” or “socialism for the rich.”

Although it is reductive math, $24 billion divided by the current number of unhoused individuals in California (171,000) works out to $140,350 per person. Certainly, a lot of permanent housing with services could have been implemented with these public dollars.

Any future spending should focus on permanent public housing built and operated by public agencies. No more handouts to developers and service providers.

It is a failed system. It is a system that lends itself to waste and corruption.