Study: California Must Spend $97B to End Homelessness

To provide shelter for its homeless residents, California would have to build more than 112,500 apartments at a cost of $5.7B annually for a dozen years.

Study: California Must Spend $97B to End Homelessness

California Governor Gavin Newsom (Getty)

To provide shelter for its homeless residents, California would need to build more than 112,500 affordable apartments at a cost of $5.7 billion a year for a dozen years, according to a new study.

That's on top of another $2.4 billion a year spent on subsidies for people who can't afford rent, supportive housing for people with disabilities and homeless shelters and interim housing, the San Jose Mercury News reported, citing the study.

The report by the Corporation for Supportive Housing and the California Housing Partnership concludes it would cost the state $8.1 billion a year until 2035 to wipe out homelessness.

The total cost of the 12-year plan would be $96.9 billion.

The state and federal governments now spend an average of $1.2 billion a year to address homelessness in California — leaving an annual hole of $6.9 billion to solve the problem, according to the study estimate. The deficit amounts to 2.5 percent of the state budget.

Stretched out over a dozen years, the state and Feds will spend $14.4 billion — leaving a fix-it gap of $82.5 billion.

'The key takeaway from this report is that homelessness is solvable,' said Debbie Thiele, managing director of the western region of the Corporation for Supportive Housing, a nationwide nonprofit based in Los Angeles that supports homeless housing.

A record amount of money has gone toward helping get Californians off the street, including a flood of state and federal dollars during the pandemic, mostly in one-time grants.

Despite the investment, legislators who set state homelessness policy don't have a clear understanding of where that money is going or how much more is needed, Thiele said. The state lacks a comprehensive plan to eliminate the crisis.

She hopes the new report will serve as a guide.

There are an estimated 30,000 people living on the streets and in shelters in the five-county Bay Area, and local leaders have struggled to find housing for people in need and to manage the large encampments of cars, RVs, tents and make-shift shacks that sprawl across city streets, sidewalks and open spaces.

In Los Angeles County, more than 69,000 residents are homeless, a 4.1 percent increase from 2020.

The report comes as the Biden administration on Monday set an ambitious goal to reduce homelessness by 25 percent over the next two years.

Nearly a third of all homeless U.S. residents, and half of those living on the street instead of in a shelter, live in California, according to the U.S. Department of Housing and Urban Development. There were 171,521 unhoused people counted in California this year — up more than 6 percent from two years ago.

But the scope of the crisis likely is much larger. More than 223,378 people accessed the state's homeless services in the first half of this year alone.

If the state executes the plan and ends homelessness by 2035, ongoing costs to maintain the housing and keep people off the streets would drop to $4.7 billion per year, according to the report.

Gov. Gavin Newsom has allocated $15 billion over the past two years for various homelessness and behavioral health programs, including his Homekey initiative that helps cities and counties buy hotels and other buildings and turn them into homeless housing.

But those are one-time grants and not the ongoing funding experts say is needed to put a big dent in the crisis. Last month, Newsom told California cities that until they 'do better' to address homelessness, he'll hold back $1 billion in state funds.

Aside from Los Angeles County, the Bay Area would bear the brunt of the demand for new housing. The northern California region would need nearly 27,500 new affordable units, plus 15,800 new units of permanent supportive housing, according to the report.

— Dana Bartholomew