The Blubber

California spent $24 billion to tackle homelessness over the past five years but didn't consistently track whether the huge outlay of public money actually improved the situation.

With makeshift shelters lining the streets, disrupting businesses in cities and towns across California, homelessness has become a major issue in the state. An estimated 171,000 people are homeless in California, about 30% of the total homeless population in the U.S.

Despite spending billions of dollars on over 30 homeless and housing programs from 2018 to 2023, California lacks reliable data to understand why the problem persists in many cities, according to a state auditor's report.

"This report concludes that the state must do more to assess the cost-effectiveness of its homelessness programs," State Auditor Grant Parks wrote in a letter to Gov. Gavin Newsom and lawmakers.

The audit looked at five programs that received a total of $13.7 billion in funding. It found that only two of them are "likely cost-effective," including one that converts hotel and motel rooms into housing and another that provides housing assistance to prevent families from becoming homeless.

The program converting hotel and motel rooms, which is central to Newsom's homelessness plan and costs $3.6 billion, is at least 2.5 times cheaper on average than building a new home, the audit found. The housing assistance program, which received $760 million over five years, provides an average of $12,000 to $22,000 to help low-income families stay in their homes. This is a fraction of the roughly $50,000 the state spends on a person once they become homeless.

The other three programs, which received a total of $9.4 billion since 2020, could not be evaluated due to a lack of data.

Democratic state Sen. Dave Cortese, who requested the audit after visiting a large homeless encampment in San Jose, said the report shows "a data desert" and a disturbing lack of transparency at all levels.

"Despite (the auditor's office) professionalism and best efforts, they are at this time unable to ... draw conclusions about things like whether or not overhead is appropriate or too high," Cortese said, though he did not call for a halt to future spending on homelessness.

Republican state Sen. Roger Niello said the lack of accountability is concerning.

"California is facing a concerning paradox: despite an exorbitant amount of dollars spent, the state's homeless population is not slowing down," Niello said in a statement. "These audit results are a wake-up call for a shift toward solutions that prioritize self-sufficiency and cost effectiveness."

Newsom has made addressing homelessness a top priority, but the growing crisis could be a challenge if he pursues national office. He has advocated for laws to make it easier to compel people with behavioral health issues into treatment and campaigned for a proposition that imposes strict requirements on counties to spend on housing and drug treatment programs to address homelessness.

The audit also found that the California Interagency Council on Homelessness, which oversees the implementation of homelessness programs, has not tracked spending or program effectiveness since June 2021. The council lacks a consistent method to collect outcome data and does not verify the accuracy of data submitted by municipalities.

In response to the audit, Meghan Marshall, who heads the council, agreed with the findings and promised to implement recommendations "where possible." However, she noted that the council has limited resources for data collection, and lawmakers had only required a one-time assessment.

The council said local governments also need to step up.

"The State Auditor's findings highlight the significant progress made in recent years to address homelessness at the state level, including the completion of a statewide assessment of homelessness programs. But it also underscores a need to continue to hold local governments accountable, who are primarily responsible for implementing these programs and collecting data on outcomes that the state can use to evaluate program effectiveness," the statement reads.