Cal Cities and others urge state leaders to protect homelessness programs from recent budget cuts

By Caroline Grinder, legislative advocate (community services)

Cal Cities and a coalition of local governments and homeless and housing service providers are calling on lawmakers to pass legislation ensuring unhoused Californians are not impacted by recent state budget cuts to homelessness funding.

Cal Cities has long urged state leaders to invest a minimum of $1 billion in ongoing funding for the Homeless Housing, Assistance, and Prevention (HHAP) Grant Program. But in June, lawmakers and Gov. Gavin Newsom zeroed out HHAP grants — the main source of homelessness funding for many communities — for the current fiscal year. For FY 2026-27, lawmakers set aside $500 million — half the level of previous years.

Legislators committed to figuring out implementation and accountability for this next round of funding through a budget trailer bill, which will be introduced and voted on before the end of session.

In the letter, Cal Cities, the California State Association of Counties, the Bring California Home Coalition, and the Big City Mayors urged state leaders to pass trailer bill language to quickly and effectively distribute HHAP funding to avoid service interruptions.

"We appreciate the Legislature and Governor for advancing Round 7 of the Homeless Housing, Assistance, and Prevention program and their continued leadership in addressing homelessness,” Riverside Mayor Patricia Lock Dawson, chair of Big City Mayors, told Cal Cities. “While long-term, ongoing funding is critical to sustaining progress, our priority now is ensuring this round of funding is distributed quickly, efficiently, and with accountability so communities can continue providing rental assistance, shelter, and housing services without disruption."

What is Cal Cities asking for?

The coalition is urging lawmakers to incorporate several provisions into a budget trailer bill that implements the program to minimize the cut’s impact. These include:

1. Ensure a timely and full funding distribution: To avoid any gaps in funding, the Housing and Community Development Department should distribute funding quickly and provide all allocated funding at once to avoid major funding reductions that could lead to service disruptions.
2. Simplify the application process: The department needs to expedite the application process, which currently takes over six months. Jurisdictions will have completed the application for the previous round of funding less than a year ago. The department should allow applicants to update those applications rather than start all over again. Jurisdictions should also be able to secure funding while working to follow the new requirements to avoid delays in getting funding out the door.
3. Keep funding in the region: If a jurisdiction is unable to comply with the program requirements, it is critical that the state does not withhold or direct funding away from the region so that those experiencing homelessness do not lose access to vital programs and services.

If the trailer bill includes these key principles, jurisdictions would be able to avoid major service cuts. Failure to do so could be devastating, with California’s largest cities projecting the loss of 3,250 shelter beds, reduced outreach services for over 12,500 individuals, and stalled development for over 2,250 housing units as a direct consequence.

“HHAP has contributed to over 80,000 housing placements since 2023 and that's why homelessness rose eight times faster outside of California than within California between 2023 and 2024,” said Alex Visotsky, a senior California policy fellow at the National Alliance to End Homelessness on behalf of the Bring California Home Coalition. “If we're not thoughtful about how and when HHAP funds roll out, we risk giving back that progress as critical services are interrupted.”

HHAP investments have shown promising results. Just this week, the Governor issued a press release highlighting that cities throughout California are reporting reductions in unsheltered homelessness, pointing to investments made by his administration as key to this progress.

“The decline in homelessness we are seeing in communities throughout California underscores what cities have been saying for years: local efforts and state investments are working," said Cal Cities Executive Director and CEO Carolyn Coleman. “Despite this progress, the newly approved state budget zeroes out funding for the state’s flagship homelessness program for the current fiscal year. While we continue to call on the state to restore funding, we also urge them to distribute the funds that are available quickly so cities can continue to support their unhoused residents without disruption."