$8 billion a year for 12 years needed to end California homelessness

California could eliminate homelessness by 2035 — if it’s willing to spend $8.1 billion a year for the next dozen years, according to a first-of-its kind report that highlights the yawning gap between what the state is contributing to the crisis and what it needs.

At the rate they are going now, the state and federal governments are expected to spend an average of $1.2 billion a year — leaving a hole of $6.9 billion, according to the new report by the Corporation for Supportive Housing and the California Housing Partnership.

While that seems like a daunting number, it’s just 2.5% of the state’s annual budget.

“The key takeaway from this report is that homelessness is solvable,” Debbie Thiele, managing director of the western region of the Corporation for Supportive Housing — a nationwide organization that supports homeless housing — said during a media briefing.

The report estimates that California will need to spend billions to create additional housing for 225,053 homeless households over the next dozen years — on top of what already is budgeted. To do that, the state should build new low-income housing, subsidize rents for homeless families in existing private apartments and provide permanent supportive housing where unhoused people with disabilities can access counseling, medical care and other services.

A record amount of money has gone toward helping get Californians off the street in recent years, including a flood of state and federal dollars during the pandemic, but it’s largely been one-time funds that may or may not be continued in the coming years. And despite these historic investments, the legislators who set state homelessness policy don’t have a clear understanding of where that money is going or how much more is needed, and the state lacks a comprehensive plan to eliminate the crisis, Thiele said. She hopes the new report can serve as a guide.

There are an estimated 30,000 people living on the streets and in shelters in the five-county Bay Area, and local leaders have struggled to find housing for people in need and to manage the large encampments of cars, RVs, tents and make-shift shacks that sprawl across city streets, sidewalks and open spaces.

“We have to fund it at the level it deserves,” Assemblymember Buffy Wicks, D-Oakland, said during the briefing. “This has metastasized into a crisis of epic proportion and it deserves funding to address it at the same scale.”

The report comes as the Biden administration on Monday set an ambitious goal to reduce homelessness by 25% over the next two years. Nearly a third of all homeless Americans, and half of those living on the street instead of in a shelter, live in California, according to data released by the U.S. Department of Housing and Urban Development on Monday. There were 171,521 unhoused people counted in California this year — up more than 6% from two years ago.

But the scope of the crisis likely is much larger. More than 223,378 people accessed the state’s homeless services in the first half of this year alone.

To solve homelessness throughout California, the state would need to build 112,527 new affordable apartments — at an average cost of $5.7 billion per year, according to the Corporation for Supportive Housing and the California Housing Partnership report. It would cost another $1.8 billion a year in subsidies for people who can’t afford rent, plus $500 million to offer supportive housing to 62,966 households with disabilities who need extra care.

The plan also calls for the state to spend $488 million per year on interim housing and homeless shelters for 39,388 households awaiting permanent homes.

The total cost of the 12-year plan is $96.9 billion.

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