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Homelessness in California The State’s Uncoordinated Approach to Addressing Homelessness Has Hampered the Effectiveness of Its Efforts Report Number: 2020-112

Introduction

Background

The U.S. Department of Housing and Urban Development (HUD) determined that in 2019 more than half a million people in the United States experienced homelessness on a given night. The McKinney‑Vento Homeless Assistance Act (McKinney‑Vento Act) broadly defines homeless individual as a person who is lacking a fixed, regular, and adequate nighttime residence. Its definition includes individuals who are sheltered and unsheltered, as Figure 1 shows. According to the Boston University School of Public Health, people experiencing homelessness have higher premature mortality rates than those who are not experiencing homelessness, in large part because of injuries, unintentional drug overdoses, and extreme weather events. Those experiencing homelessness also have poor quality of life, characterized by chronic pain associated with poor sleeping conditions and limited access to medications and other critical resources.

Figure 1

Number of People Experiencing Homelessness in California and the United States, 2019

Source: Federal law and the HUD Exchange website.

Homelessness affects a large cross section of populations in the nation. According to the National Alliance to End Homelessness, most people who experience homelessness are single adults, especially young adults, veterans, and individuals who are physically and mentally ill; however, the organization points out that homelessness also has a significant effect on youth. ²  The National Alliance to End Homelessness is a nonpartisan, nonprofit organization whose sole purpose is to end homelessness in the United States.

It noted that veterans’ military service puts them at higher risk of experiencing traumatic brain injury and post‑traumatic stress disorder, which research has found to be among the most substantial risk factors for homelessness.

Homelessness Is Increasing in California

According to the latest available data, California is home to the largest number of people experiencing homelessness in the United States, and the problem has gotten worse in recent years. According to HUD, more than 131,000 individuals experienced homelessness in California in January 2017, representing about 24 percent of the total homeless population in the nation. By January 2019, that number had grown to more than 151,000, an increase of 15 percent. Of Californians experiencing homelessness in 2019, more than 100,000 were unsheltered, meaning that they were living on the streets, or such places as parks or cars. These individuals represented more than half of all unsheltered people in the nation at that time.

According to the National Coalition for the Homeless, the primary risk factor for an individual becoming homeless is poverty and an inability to pay for housing, although mental health problems, addiction, domestic violence, and a lack of affordable health care all play significant roles. ³  The National Coalition for the Homeless is a national network of people who are currently experiencing or have experienced homelessness: activists, advocates, community‑based and faith‑based service providers, and others committed to ending and preventing homelessness while ensuring that the immediate needs of those experiencing homelessness are met and that their civil rights are respected and protected. Further, the Boston University School of Public Health found that homelessness overwhelmingly corresponds with poverty and with poor behavioral health related to mental illness or substance abuse. According to the California Housing Partnership, about 1.3 million of California’s lowest‑income households do not have access to affordable housing. As a result, these individuals are at higher risk of becoming homeless. As we describe later, the current COVID‑19 pandemic (pandemic) will only exacerbate this situation. 

HUD Established the Continuum of Care Program to Address Homelessness 

In 1993 HUD established the Continuum of Care (CoC) system, which Congress codified into law by amending the McKinney‑Vento Act in 2009. Among other things, the CoC system promotes the goal of ending homelessness, in part by providing funding for efforts by nonprofit providers, states, and local governments to quickly rehouse individuals and families experiencing homelessness. As the text box shows, a CoC is a group of organizations—such as homeless service providers, cities, and counties—and individuals organized to carry out the goal of ending homelessness within a specified geographic area. HUD envisioned that CoCs would function as local networks that plan and coordinate funding for services and housing. California has 44 CoCs that cover its 58 counties.

As Figure 2 shows, federal law identifies the overall structure a CoC must establish and the roles of each entity within that structure. For example, a CoC must designate a board, made up of members who are representative of the relevant organizations, to act on its behalf. Additionally, the CoC must designate an organization as its collaborative applicant to apply for funding from HUD for the CoC, as well as an organization to lead the CoC’s data collection efforts using its Homeless Management Information System (HMIS), as federal regulations require. If the CoC chooses, it can designate the same organization as the collaborative applicant and HMIS lead. The five CoCs we reviewed each designated a local government agency as their collaborative applicant and as their HMIS lead.

Figure 2

General Structure of a CoC

As Figure 3 shows, under federal law, each CoC has four primary responsibilities: conducting a Point‑in‑Time (PIT) count, maintaining its HMIS, assessing and prioritizing the needs of those experiencing homelessness, and reviewing and ranking applications for CoC Program funding. Appendix B describes the requirements, methodology, and benefits associated with each of these responsibilities. In Chapter 2, we discuss our assessment of five CoCs’ performance related to these responsibilities.

Figure 3

A CoC’s Responsibilities Include Four Primary Areas

A Single Federal Program Is the Primary Source of Funding for the State’s CoCs

Although HUD oversees multiple programs that
provide homeless assistance, only one of these—the CoC Program—provides funds to entities that administer homeless service projects. ⁴  HUD provides funding to states, cities, counties, and territories either competitively or using a formula through other programs, such as the Emergency Solutions Grants Program and the Housing Opportunities for Persons With AIDS Program. As Appendix B shows, CoCs’ collaborative applicants submit their ranked lists of project applications annually for funding to HUD, which then awards funds for projects primarily for the four program categories described in the text box. In addition, in some cases, a service provider may receive CoC Program funds for homelessness prevention. A CoC can also apply to receive a grant from HUD for its own planning purposes, which include administrative activities—in fact, in 2019 HUD reported that it awarded most California CoCs from $3,000 to nearly $1.3 million for planning, based on the CoC’s determination of its funding needs in its area. Similarly, service providers may use up to 10 percent of the CoC Program funds they receive for administrative purposes, including for paying staff salaries, preparing project budgets, and monitoring compliance activities.

In 2019 HUD awarded a total of more than $441 million to California’s 44 CoCs. As Figure 4 shows, the five CoCs we reviewed received varied amounts of federal funding. We present similar information for all 44 CoCs on our website. ⁵  To view these statistics for all 44 CoCs in California, visit our interactive map in the online version of this report at www.auditor.ca.gov.

Figure 4

2019 Federal Funding for the Five CoCs We Reviewed

The State Has Increased Funding to Combat Homelessness

In recent years, the State has allocated new and increased funds to programs that address homelessness. For example, the Homeless Emergency Aid Program provided $500 million in early 2019 for localities to use for a variety of purposes, including criminal justice diversion programs for individuals who are experiencing homelessness and have mental health needs. In fiscal year 2019–20, the State approved $650 million through a new program—the Homeless Housing, Assistance, and Prevention Program—which supports regional coordination to expand or develop local capacity to address immediate homelessness challenges by moving individuals and families into permanent housing. The fiscal year 2020–21 State Budget increased this amount by $300 million. Appendix A presents a list of state-administered programs we identified that provided funding to address homelessness during fiscal years 2018–19 through 2020–21.

Moreover, over the past year and a half, the State has taken a number of actions to address the homelessness crisis, in part by assisting city and county governments through the removal of regulatory barriers. In September 2019, the Governor signed a package of 13 bills addressing homelessness, including Senate Bill 211, which authorizes the California Department of Transportation to lease certain property to local governments for temporary emergency shelters or feeding programs, and Senate Bill 450, which exempts certain hotels converted to supportive or transitional housing from the requirements of the California Environmental Quality Act until January 1, 2025. In January 2020, the Governor signed an executive order that focuses on preventing homelessness, providing shelter and services to people experiencing homelessness, and creating new temporary housing to reduce unsheltered homelessness. This executive order calls for, among other things, a multiagency state strike team to provide technical assistance and direct support to counties, cities, and public transit agencies seeking to bring people experiencing homelessness indoors and connect them with appropriate health, human, and social services.

The Pandemic Is Likely to Worsen California’s Homelessness Crisis

The pandemic’s economic impact is likely to increase the number of Californians experiencing homelessness. According to the State’s Employment Development Department, the unemployment rate in California was 9 percent as of December 2020—more than twice the unemployment rate in February 2020. Statewide and regional public health orders directed many individuals to stay home, curtailing and shutting down business operations throughout the state. The Legislature declared in the fiscal year 2020–21 State Budget that the pandemic has affected every sector of California’s economy and has caused record‑high unemployment. Similarly, the U.S. Government Accountability Office indicated that loss of jobs and income may cause individuals to fall behind on rent, ultimately leading to evictions and possibly homelessness. Although federal and state law have temporarily halted eviction filings for some tenants due to the pandemic, the federal order appears likely to be extended until March 31, 2021, while California’s moratorium has been extended through June 30, 2021. Once these measures expire, many renters may be unable to stay in their homes, especially given that the current economic crisis may make obtaining and retaining employment more difficult. 

The federal government and the State have allocated increased funding to address the impact of the pandemic on populations that are experiencing homelessness. For example, in March 2020, the Governor allocated $150 million of emergency funding from the amended Budget Act for local emergency homelessness actions, such as supporting shelters and leasing hotel and motel rooms for emergency housing. In addition, California allocated $500 million in funds it received under the federal Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to cities for various purposes, including to address homelessness. Further, the CARES Act provided nearly $300 million in additional grant funding to allocate to eligible California CoCs’ service areas through the federal Emergency Solutions Grants Program to prevent, prepare for, and respond to the effects of the pandemic on individuals and families who are experiencing homelessness or are receiving homelessness assistance. Finally, according to the California Department of Housing and Community Development, the CARES Act also made $139.5 million available to eligible local jurisdictions within California through HUD’s Community Development Block Grant Program for COVID‑19 response and recovery, which includes facility improvements related to COVID‑19 health care and housing needs.

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