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Gavin Newsom Chickens Out On Homeless Accountability
California spends more and more on homelessness, without results
When Gavin Newsom became Governor of California in 2019, the state budget had $500 million allocated to emergency homeless funds — that’s in addition to local funds raised from property and local sales taxes, as well as federal money. Substantial, right? Well, this month, amid California’s catastrophic $22 billion budget deficit and the start of his second term, Gov. Newsom proposed his 2023 number: $3.4 billion.
That massive number might have been a surprise to those who heard Gov. Newsom talking tough about homelessness failures in November. As I wrote in the WSJ, Newsom said he would withhold about $1 billion in state grants to city governments until they improved plans. For a brief, very brief moment, it sounded like he was actually serious about holding cities and homelessness NGOs accountable. Two weeks later, he caved and released the money.
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Now, with his new blowout budget for these same cities and groups, Gov. Newsom is turning the money spigot back on — at full pressure. If there’s one ironclad law of public spending in California these days, it would be this: more money for the least accountable bureaucrats and activists. And nobody — nobody — is less accountable in California than the bureaucrats and activists who administer homeless services.
Gov. Newsom says that he wants billions of dollars in state grants to local governments to be contingent on those governments committing to more aggressive goals of reducing homelessness.
That demand is hilariously weak. Committing to goals? How about committing to results? How about we only fund results?
Newsom hasn’t proposed anything concrete to hold the Homeless-Industrial Complex accountable, and the reason is simple: he relies on them for political support. Real accountability would require more than empty threats about future funding, as evidenced by his quick reversal in November; it would require reductions in current funding to failed, corrupt groups. But Newsom the Presidential contender can’t afford to lose the backing of California’s activist left and their powerful, government-funded political machines — and he knows it.
It’s not the first time Newsom has tried to play hero on homelessness and then failed to follow through with accountability. After all, this is a man who famously launched a “ten year plan” to eliminate chronic homelessness while he was the Mayor of San Francisco. Just don’t ask him about the results of that plan; and if you’re a San Francisco taxpayer, don’t check your pocket book to see how much it cost.
Let’s take a look at how San Francisco is spending homeless dollars today — and what California is now encouraging with state money.
San Francisco “Permanent Supportive Housing” — a very expensive, very lethal program
San Francisco spends $160 million annually on “Permanent Supportive Housing.” PSH is a part of the “Housing First” movement in homelessness services favored by the federal Department of Housing and Urban Development. Housing First holds that the best way to fight homelessness is to get the homeless into housing (not shelters). In effect, HF gives the most destitute homeless an apartment or house with no questions asked.
It might sound like a good idea to simply give the homeless houses for free — but Housing First ignores that there are other factors at play. And economically, it just doesn’t work. One economic analysis found that it requires between 8 and 25 PSH beds to remove one homeless person from the street in the long term — “one additional PSH bed was associated with a 0.04 to 0.12 long-run decline in homeless counts.”
For California, where a single new PSH unit could cost anywhere from $500,000 to $1,000,000 to construct, that is not a realistic solution.
Unlike a lot of California programs, San Francisco tracked the results of its PSH program, so we have numbers. The numbers are incredibly damning, as are the details of the conditions in the PSH units that SF paid tens of millions of dollars to “charities” to run.
…of the 515 tenants tracked by the government after they left permanent supportive housing in 2020, a quarter died while in the program — exiting by passing away, city data shows. An additional 21% returned to homelessness, and 27% left for an “unknown destination.” Only about a quarter found stable homes, mostly by moving in with friends or family or into another taxpayer-subsidized building.
So, if you’re in a San Francisco “Permanent Supportive Housing,” you’re about as likely to die as you are to transition into independent housing.
The rhetoric of “Housing First” is one thing; the reality is quite another. Permanent Supportive Housing is neither permanent nor supportive; in most cases it’s barely housing — San Francisco, for example, rented a whole lot of run-down hotels. PSH in practice is often a cruel, destructive boondoggle that has the primary effect of enriching corrupt NGOs and the owners of fleabag hotels.
I encourage you to read the entire Chronicle investigation to learn more about just how failed these programs are. One SF volunteer with Meals on Wheels, which delivers meals to elderly Americans who would otherwise be alone, reported a “tremendous number of cockroaches” in an elderly, disabled man’s room.
That the City allows mentally-ill homeless to occupy these PSH units without treatment is also putting others in danger. The Chronicle reports:
Residents have threatened to kill staff members, chased them with metal pipes and lit fires inside rooms, incident reports show. At the Henry Hotel on Sixth Street, a tenant was hospitalized after a neighbor, for a second time, streamed bug spray into their eyes, public records show.
If you give mentally-ill homeless people with serial drug and alcohol problems free housing without treatment, the result will be homeless people dying in free houses. In 2020, 166 people overdosed in PSH units.
What we need are real shelters. We need treatment — including involuntary treatment if need be, as an alternative to the other options of death by overdose, prison, or defecating on the street for the hundredth time. We need to ban street camping, a phenomenon that powerful NGOs often perpetuate in order to use as a sick form of advertising to pressure the public into sending them more and more taxpayer dollars to “fix” the problem.
And critically, we need to shut off the siphon of unlimited money to unaccountable homeless NGOs that are failing in profound ways.
In 2016, San Francisco spent about $200 million on homelessness programs. That was the year the City created its Homelessness and Supportive Housing department. That seems like ages ago. I was still living in the Bay Area at the time, though I’ve since moved to Texas. Today, the number for homelessness programs in SF is over $1 billion — just in the city budget.
In the intervening years, the annual homeless population (i.e. the number of individuals homeless at some point in the year) in the city went from 12,000 to over 20,000, an increase of over 56%. The number of point-in-time homeless (i.e. the number of homeless counted in a single night by the city) went from about 7,000 to about 7,500.
If that isn’t a failure that demands a change of course, what is?
Take the case of a group called United Council of Human Services (UCHS) whose CEO gave housing units that were supposed to go to the homeless to twenty of her close friends and family. Incredibly, the CEO also had a history of stealing money from San Francisco going back to the 1990s.
The San Francisco Standard reports:
Seven years ago, [Westbrook] was found to be using the UCHS to run an illicit bingo hall in Richmond that operated without that city’s knowledge. Westbrook also has a prior conviction for grand theft and misappropriation of public funds. In 1997, she pleaded guilty to stealing thousands of dollars in parking lot collections from the Port of San Francisco.
Westbrook is known as a prominent figure in the Bayview, and she has formed close ties with some of the city’s top elected officials, including Mayor London Breed and District 10 Supervisor Shamann Walton. Westbrook has made political contributions to both over the years but disputed that her relationship with the mayor and the president of the Board of Supervisors had any effect on her organization receiving millions of dollars in city contracts.
Only in 2022 did the City finally catch wind of all this — only after tens of millions had already been given to UCHS. Unfortunately, San Francisco is doubling down on the current, failed path. Just recently, the Standard reported that the City has over $300 million earmarked for non-profits that have been suspended by the State of California. Homeless non-profits lead the way, with $90 million allocated for delinquent groups.
It doesn’t have to be this way
It’s time for real reform. It’s time for accountability: accountability for city governments; accountability for homeless NGOs that worsen the problem and vacuum up cash; accountability for activists; and accountability for municipal bureaucrats running the corrupt scam.
As it happens, the public policy group I founded, The Cicero Institute, has crafted the nation’s most aggressive legislative package yet for states to address the problem — not just of homelessness itself, but of the unaccountable, corrupt, and dysfunctional ecosystem of homeless services.
Our model legislation has four key elements:
Statewide street camping ban in unauthorized public areas.
Tent encampments like in San Francisco and Los Angeles are threats to the public, to our public spaces, and most of all to the homeless themselves. No city should tolerate them, and our legislation bans them statewide.
Penalties for municipalities that don’t enforce the camping ban
Our legislation allows the State AG to assess funding penalties to municipal governments that allow dangerous tent encampments to continue. When cities aren’t held accountable, they are bullied by corrupt NGOs to allow deadly encampments to grow.
Moratorium on state money for “permanent supportive housing”
As we see in San Francisco — and many other cities — Housing First is a failure. And PSH is a deadly failure. Our legislation directs state money to interventions that work: treatment, minimal shelter, and rehabilitation.
Pay-for-performance funding for homeless service providers
Our legislation pays for performance; i.e. NGOs and service providers have to compete for money, both against themselves and others. If they fail to deliver results, funding gets reduced.
Our legislation is a non-partisan reform to actually help the homeless instead of pouring tens of billions into activist nonsense. And unlike the unaccountable homelessness NGOs we’re fighting against, Cicero Action has results to show. Missouri legislators adopted our reform in full — and as of Jan 1st it’s the law in the Show-Me State.
You can read more about the law here. We were attacked relentlessly by homeless NGOs and activists; politicians in St. Louis and Kansas City aren’t happy with the reform either — because they know that Missouri leaders are ready to hold them accountable.
Cicero Action is a 501(c)(4) political action group, and we’re fighting coast to coast to get these reforms adopted in more states. Missouri was first but it won’t be the last. It would take a political earthquake to change California, but we aren’t waiting for that.
To my friends in California, especially in tech and venture capital who I know care about this issue and about making the Golden State a livable place for colleagues and family: I challenge you to support Cicero Action’s fight to fix homeless policy at the state level.
To that end, I will match donations to our efforts at Cicero Action up to $1,000,000.