‘Do better’: Newsom pauses $1B in homelessness spending

SACRAMENTO, Calif. - California Gov. Gavin Newsom said Thursday he will delay $1 billion in funding to local governments because he says they are not being aggressive enough to curb homelessness in their communities.

California’s 58 counties, 13 largest cities and groups of public and private service providers were in line to get the money from the state if they submitted plans showing how they would reduce the homeless population in their community while increasing people in permanent housing.

Thursday, Newsom said the plans that have been submitted weren’t good enough. Together, Newsom said the collective plans by local governments would reduce homelessness statewide by just 2% over the next four years. Some plans even showed double-digit increases in the homeless population over that same time period, Newsom said.

"At this pace, it would take decades to significantly curb homelessness in California — this approach is simply unacceptable," Newsom said in a news release. "Everyone has to do better — cities, counties, and the state included. We are all in this together."

In the Bay Area, local leaders had mixed feelings about the governor's move.

"I think I join many mayors in feeling a little perplexed about how delaying funding to address homelessness is going to accelerate progress," Oakland Mayor Libby Schaaf said. "There are not enough resources to meet this crisis."

Schaaf said it comes down to a housing problem that requires cooperation from all levels of government.

San Jose Mayor Sam Liccardo agreed suggesting 10% of the state's surpluses be used to build prefabricated housing and require unhoused resident to take the housing when it's offered or to move off the street.

"Leadership is required to make this happen, but mayors will happily take the lead," he said. "Let's put down the megaphones and pick up the shovels."

In San Francisco, Supervisor Ahsha Safai said Newsom's announcement makes it clear that the state won't keep writing a blank check and is a sign of holding city government accountable.

"San Franciscans know that the government's homelessness response is not working," said Safai. "The first step is to set aggressive goals that make real progress."

State lawmakers committed to spending $15.3 billion over the next three years to combat homelessness, including the grant program Newsom is pausing.

Newsom said he would hold the money until after a meeting with local leaders later this month to "review the state’s collective approach to homelessness and identify new strategies to better address the homelessness crisis."

SEE ALSO: Newsom slams Oakland over handling of Wood Street homeless encampment

California, the most populous state with more than 39 million residents, also has the nation’s largest unsheltered population with an estimated 173,346 people experiencing homelessness in 2021, according to the state’s Homeless Data Integration System.

For decades, California has mostly considered homelessness to be a local issue, with the state government handing out billions of dollars in assistance each year to local communities.

But Newsom has been more aggressive in setting and enforcing a statewide homelessness policy. In 2019, the Newsom administration sued the Southern California city of Huntington Beach, accusing local officials of ignoring the state’s affordable housing requirements.

Earlier this year, the Newsom administration launched a first-of-its-kind investigation of San Francisco’s housing policies aimed at figuring out why it takes officials there so long to approve housing projects. And last month, the Newsom administration and the state attorney general joined a lawsuit against the city of Anaheim alleging officials there violated state housing laws.

KTVU'S Brooks Jarosz contributed to this report.