Cities are losing state funding and facing bigger reporting burdens on the homeless front

By Caroline Grinder, legislative advocate (community services)

Last week, the Legislature and Governor sent a troubling message to cities working to address homelessness: do more, with less.

Legislative Actions

In the Legislature, the Assembly Appropriations Committee held Cal Cities-sponsored AB 1708 (Solache), which would have expanded access to state homelessness funding for cities with populations under 300,000. The bill failed to advance despite support from more than 80 cities, and without receiving a single no vote in the policy committees it cleared.

That same day, the Legislature passed SB 866 (Blakespear), which targets the same cities that lack access to state homelessness funding by imposing extensive new reporting requirements in their housing elements. Even with strong local efforts, many cities may not be able to collect the required data. Under SB 866, that inability could result in a non-compliant housing element.

SB 866 is eligible for consideration on the Senate floor at any time before May 29. Cal Cities is urging cities to contact their senator and urge them to vote no on SB 866.

May Budget Revision

To make matters worse, the Governor’s May Revision does not include any new funding for the state’s flagship homelessness grant program, despite revenues coming in more than $16 billion above the January estimate. Instead, the proposed budget cuts the next round of the Homeless Housing, Assistance, and Prevention (HHAP) program in half, reducing it to $500 million.

“At the same time, the Governor touted the state’s progress on reducing unsheltered homelessness, he proposes cutting round 7 of the Homeless Housing, Assistance and Prevention grant program — the backbone of the state’s local homelessness response system,” said Cal Cities Executive Director and CEO Carolyn Coleman in a statement. “This will slow hard-won progress by forcing cities to close shelter beds and reduce homelessness prevention programs. Cities need an ongoing funding commitment to reduce the homelessness crisis, not a decrease in funding.”

The May Revision also adds several new accountability provisions tied to HHAP funding. These include requiring direct recipients to obtain a pro-housing designation, provide yet-to-be-determined local match funding, and obligate 75% of the previous rounds funding before accessing new funds.

While framed as accountability measures, these provisions do little to improve outcomes for getting people off the streets and into housing. If anything, they risk creating additional delays and barriers to accessing already limited funds.

Cal Cities and its partners are urging the Legislature to restore HHAP funding to $1 billion and make the program ongoing. They are also calling on lawmakers to reconsider the proposed local match funding requirement and prioritize getting resources into communities as quickly as possible.

What’s Next?

Legislative Budget Subcommittees will meet this week to review the Governor’s May Revision and its proposed changes. From there, the Legislature and the Governor must negotiate a final budget agreement and pass the finalized state budget by June 15.

At the same time, key legislative deadlines are approaching. May 29 is the house of origin deadline, meaning all bills must pass out of their respective houses of introduction before they can move to the other house for consideration.