Newsom again threatens to withhold homelessness money from cities failing to move people off street

A state audit last year found California had failed to track $24 billion in homelessness funds

Gov. Gavin Newsom is again threatening to withhold state money to address homelessness from local governments that are failing to make progress in moving people off the street.

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In a virtual news conference on Monday, Newsom announced that cities and counties that do not meet certain benchmarks — such as closing more encampments and finalizing plans to build more housing — could lose out on their share of hundreds of millions of dollars in future homelessness grants.

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Local governments use the grant money to build homeless housing or shelters, fund street outreach teams and clear encampments, among other efforts.

“At the end of the day, people want outcomes, and they want results for their money spent,” Newsom said.

Newsom has repeatedly made similar threats in recent months, including when announcing an executive order last summer directing state agencies to work with cities and counties to ramp up encampment sweeps and move camp residents into shelters. So far, relatively little state homelessness money has been withheld from local governments.

It’s part of a concerted push by the governor — who is widely believed to have ambitions for higher office — to focus responsibility for alleviating California’s homelessness crisis at the feet of local officials.

“That’s where the federal and state vision is ultimately realized, at the local level,” Newsom said.

Some local officials, however, dismissed Monday’s announcement as political “spin” and blasted Newsom for “blaming local governments” for the crisis.

“The governor’s threat to block future funding for local governments puts headlines above solutions,” said Graham Knaus, chief executive of the California State Association of Counties, in a statement. “Progress will remain frustratingly slow until we work together to address the gaps in responsibility at all levels of government – including the state.”

The announcement follows a scathing state audit in April that found California’s lead homelessness agency had failed to track the $24 billion it spent on homelessness between 2018 and 2023, stoking growing public frustration over the state’s struggle to combat homelessness. An accompanying audit of San Jose’s homelessness spending highlighted similar findings.

During those five years, California’s unhoused population ballooned 38% to more than 181,000. Last year, the state’s homeless population grew to more than 187,000. The Bay Area had an estimated 38,800 homeless residents.

Click here to read the full article in the Mercury News