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SCG Analysis: Governor Newsom’s Proposed State Budget Seeks to Tackle Homelessness 

Monday, January 27, 2020

by Karla Mercado

On January 10, Governor Newsom released his proposed 2020-21 budget. The budget addresses some of the most pressing issues for the state, such as economic security, access to affordable healthcare and housing, education, and childcare infrastructure, to name a few. Among the most pressing issues to the state, more than $1 billion is proposed to address homelessness. 

California’s homelessness crisis has received both national coverage and scrutiny. With more than 25 percent of the nation’s homeless population here in California, the proposed budget focuses much of the allocation on addressing “street-based homelessness” and access to behavioral health and other services. New to the budget is the spending of $750 million one-time General Fund to jump-start the creation of the California Access to Housing and Services Fund, based on the work that SCG members have led in Los Angeles County. In addition, the Governor issued an Executive Order to take immediate actions to provide additional support to local governments to address homelessness.

The following sections provide an overview of the immediate actions, the Fund and, other efforts proposed to address homelessness. 

Immediate Actions

The state will provide additional aid to local governments, deploy multi-agency teams to assist cities and counties in moving individuals from encampments into shelters and connect them to services. The Administration is also partnering with local researchers to conduct a study to better understand the root causes of homelessness. The state has partnered with philanthropy to augment local shelter capacity. These immediate actions build on the goals of the 100-Day Challenge Newsom issued to local governments in December 2019 that set to create and sustain scalable, long-term strategies to reduce homelessness. The Administration is encouraging cities and counties to join the 100-Day Challenge. Participating entities will receive additional technical support to assist with their efforts. 

The Governor is partnering with Caltrans and the cities of Los Angeles, San Jose, and San Francisco to identify highway adjacent properties and other state roads for temporary homeless housing. Lastly, the Governor has directed the Department of General Services to identify state-owned land that may be used for affordable housing, temporary shelters, or permanent supportive housing. 

About the Fund

While infrastructure is being built to address affordable housing, there is still a severe shortage, and at times, an arduous process to gain access to programs that will provide safe shelter and other services. The Fund aims to provide additional rental subsidies and develop new, affordable housing units, and stabilize board and care homes. This new approach seeks to move individuals and families into stable housing and to increase the number of units available as a stable housing option. 

More about the Fund

  • Administered by the Department of Social Services, funds will be distributed through performance-based contracts between the state and regional administrators, and subject to a 10 percent cap.
  • Aims to augment local governments’ efforts to shelter the many people living on the streets.
  • The regional administrators will need to provide short and long-term rental subsidies and give contributions to encourage the development of new units.
  • Ensures tenants are enrolled in eligible public assistance programs.
  • The Fund will also be used to secure units and negotiate individual client leases.
  • Funds will go directly to service providers.
  • Like several jurisdictions, including Los Angeles, the Fund will enable regional partners to pool federal, state, local, and private funds to stabilize housing for their most vulnerable populations. 


Other Efforts to Reduce Homelessness


A significant effort to address healthcare for people experiencing homelessness and/or substance abuse is the Medi-Cal Healthier California for All program. Formally known as CalAIM, Medi-Cal is designed to be more consistent, seamless, and identify member risks and needs through the whole person care approach. The system proposed is set-up to better connect individuals to services they need, with a focus on improving care to individuals experiencing or at-risk of homelessness. The budget also includes funding to support counties implementing the changes necessary for the transformation of the county-run behavioral health and substance use disorder system. 

Mental Health Services Act

The Administration aims to improve the State’s Behavioral Health System by reforming the Mental Health Services Act (Proposition 63). The reform will be expanding to focus on people with mental illness who are also experiencing homelessness, in the criminal justice system, and early intervention of children. The Administration will do so by establishing a Behavioral Health Task Force that will bring together relevant state departments, counties, advocates, health plans, providers, and other stakeholders to review the existing policies and programs. 

Community Care Collaborative Pilot

The budget proposes to allocate $24.6 million in 2020-21 and $364.2 million over six years to the Department of State Hospital to implement the Collaborative in three counties. The goal of the Collaborative is to place individuals with mental health needs, who are designated incompetent, to stand trial into stable community placements instead of hospitals or other institutions. This strategy aims to reduce the rate of arrests, rearrests, and cycling in and out of institutions for individuals experiencing homelessness. The Collaborative will also focus on treatment programs to improve outcomes and transitions for individuals leaving State Hospital systems. 


To learn more about the entire budget, visit the California Budget & Policy Center's Report on the Governor's Budget


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