Report 2023-102.2
April 9, 2024

Homelessness in California
San José and San Diego Must Do More to Plan and Evaluate Their Efforts to Reduce Homelessness

April 9, 2024

The Governor of California
President pro Tempore of the Senate
Speaker of the Assembly
State Capitol
Sacramento, California 95814

Dear Governor and Legislative Leaders:

The Joint Legislative Audit Committee requested an audit of the State’s homelessness funding, including an evaluation of the efforts undertaken by the State and two cities to monitor the cost‑effectiveness of such spending. We published a separate report (2023‑102.1) that details our findings related to the State’s activities. This report (2023‑102.2) focuses primarily on the activities of the two cities we reviewed, San José and San Diego, and it concludes that the cities must do more to better evaluate their efforts to reduce homelessness.

San José and San Diego identified hundreds of millions of dollars in spending of federal, state, and local funding in recent years to respond to the homelessness crisis. However, neither city could definitively identify all its revenues and expenditures related to its homelessness efforts because neither has an established mechanism, such as a spending plan, to track and report its spending. The absence of such a mechanism limits the transparency and accountability of the cities’ uses of funding to address homelessness.

Although both cities provide tens of millions of dollars for homelessness programs and services through agreements with external service providers, such as nonprofits, neither city evaluated the effectiveness of its agreements. San Diego has generally established clear performance measures, such as specifying the number of people the service provider will assist, to enable it to assess whether the providers’ efforts are an effective use of funds. However, San José has not consistently done so. Furthermore, neither city has evaluated the effectiveness of the programs it provides to address the profound health and safety risks associated with unsheltered homelessness.

Both cities use interim housing as a way to provide shelter for people experiencing homelessness, but they both need to develop additional permanent housing. Data consistently show that placements into permanent housing results in significantly better outcomes than placements into interim housing. The cities have each made efforts to develop additional interim and permanent housing; however, neither has a clear, long‑term plan to ensure that they have the housing necessary.

We recommend that San José and San Diego each publicly report on all of their homelessness funding, assess the effectiveness of their spending, and better plan to meet their permanent housing needs.

Respectfully submitted,

California State Auditor