California spent $24 billion over the past five years to combat homelessness without consistently tracking whether the massive expenditure improved the situation, a state audit released Tuesday revealed.
The homelessness crisis in California has become increasingly visible, with makeshift tents lining streets and impacting businesses across cities and towns. Approximately 171,000 people are homeless in California, accounting for about 30% of the nation’s homeless population.
Despite the significant investment in more than 30 homeless and housing programs between the fiscal years 2018 and 2023, the state lacked reliable data to fully comprehend why the problem persisted in many areas, according to the state auditor’s report.
“The state must do more to assess the cost-effectiveness of its homelessness programs,” State Auditor Grant Parks wrote in a letter to Gov. Gavin Newsom and lawmakers.
The audit analyzed five programs that received a combined $13.7 billion in funding. It found that only two programs were “likely cost-effective”: one converting hotel and motel rooms into housing and another providing housing assistance to prevent families from becoming homeless.
Under the $3.6-billion program converting hotel and motel rooms, which is a key element of Newsom’s homelessness plan, the average cost of a room was at least 2.5 times cheaper than building a new home. The housing assistance program, receiving $760 million over five years, provided $12,000 to $22,000 per family, significantly less than the cost of services once a person becomes homeless.
The audit identified three other programs receiving $9.4 billion since 2020 that could not be evaluated due to a lack of data.
Democratic state Sen. Dave Cortese, who requested the audit, described the report as depicting “a data desert” and highlighted an unsettling lack of transparency.
Newsom has made addressing homelessness a top priority, advocating for laws facilitating intervention for individuals with behavioral health issues and supporting a proposition passed by voters imposing strict requirements on counties to invest in housing and drug treatment programs.
The audit also revealed deficiencies in tracking spending and outcomes. The California Interagency Council on Homelessness, tasked with overseeing program implementation, has not effectively tracked spending or program effectiveness since June 2021. The council lacks consistent methods to collect outcome data and verify data accuracy from municipalities.
Meghan Marshall, head of the council, agreed with the audit’s findings and pledged to implement its recommendations. However, she emphasized limited resources and noted that lawmakers had required only a one-time assessment.
Local governments were also called upon to enhance accountability, with the state auditor highlighting deficiencies in spending tracking in major cities like San Jose and San Diego.
