Senate Standing Committee on Housing

We'll call this hearing to order. Good afternoon. Thought it was morning for a second. The Senate continues to welcome the public both in person and by teleconference. And we have a teleconference participation number, which is 877-226-8163 the access code is 4398318. For today's hearing, we will be hearing all of our panel of witnesses before we take public comments. Once we heard all the witnesses, we'll open up for public comment. So I want to welcome everyone today for this Joint Hearing.

I'm thrilled to be partnering with Senator Alvarado-Gil, the Chair of the Senate Human Services Committee on the issue of homelessness and where we are in the State of California. This is an issue that intersects between our social safety net and our housing crisis. And according to the most recent point-in-time count, California had at least 172,000 people experiencing homelessness. That's probably an undercount, but that's the data we have, over two-thirds of whom are unsheltered.

California has 12% of the U.S. population, but 30% of the U.S. homeless population and over 50% of the unsheltered U.S. homeless population here in California. It's disgraceful, honestly. We know that the root cause of homelessness is a lack of housing. Lack of housing that's affordable, that's available. I know that there are people, including, I have sometimes discussions and arguments with people in my own community who say that the core cause of homelessness is mental health and addiction.

And although mental health and addiction certainly are factors in our homelessness crisis, the reality is that the root cause is that there is not enough housing. People cannot afford housing. People are being pushed onto our streets. We know that about one in three. About one in three people who experience homelessness were experiencing a severe mental health issue before they became homeless. So most homeless people do not have a mental health, severe mental health problem.

We also know that about a third, somewhere between 20 and 40% of people who are experiencing homelessness have substance use issues. About a third of those people, so a fairly small percentage had substance use issues before they became homeless. The rest developed those issues after they became homeless. So a minority of people on our streets are experiencing mental health or substance use issues, and an even smaller minority had those issues before they became homeless.

Being homeless is traumatic and can drive mental health and substance use challenges. So although these issues certainly intersect with homelessness, and we absolutely need much greater access to treatment for people with behavioral health disorders, we also need to be clear that most homeless people do not need that help. They simply need a place to live. And that even for people who are experiencing mental health or substance use disorders on our streets, they also need a place to live.

And it will be easier for them to recover if they are housed with all of the supports that we need for people who are having behavioral health issues. We know that we are dramatically short in the number of homes that we need in California. California ranks almost last 49 out of 50 states in homes per capita. That is a huge indictment. And in particular, we need every single kind of housing.

But we also particularly need housing that is subsidized and affordable for our lowest-income residents, for our low-income, very low-income, and extremely low-income residents. Over the last six or seven years, we have worked very hard in the Legislature to enact laws to facilitate the creation of a large number of new homes. We had a hearing last week, the Housing Committee and the Assembly Housing Committee, to talk about the status of housing production in California.

We are starting to see some improvements, but we're still not where we need to be, and that has to be an absolute focus. In the last number of years, we have appropriated significant sums for homelessness around housing and other support services, and we'll be hearing today about some of the strides that we've made and some of the challenges ahead. So I look forward to today's hearing, and now I'll turn it over to my counterpart, the Chair of the Human Services Committee, Senator Alvarado-Gil.

Thank you, Senator Wiener. My name is Marie Alvarado-Gil, and I represent the Senate District Four area of California and serve as the Chair of the Human Services Committee. I'd like to thank everybody for being here today for our Joint Hearing on homelessness.

As the Chair of the Senate Committee on Human Services, I'm honored to sit here with Senator Wiener, who has a lot of experience leading in this area, and we will be discussing important topics of homelessness, what's working, what isn't working, and how that we can work together to solve this crisis. California's vast population and geography means that no one-size-fits-all solution to any problem is going to work for us, and homelessness is not any different.

What works in my rural district may not work in Senator Wiener's district, which is contrasted from major city to an urban or rural area, and vice versa. Vulnerable populations such as transitional age youth, veterans, the aging population, people with disabilities, they may need more specific, tailored solutions. I look forward to the presenters today talking about different approaches and perspectives, as well as the lessons that we can learn from our CalWORKs programs and other human services programs.

To underscore the importance of today's discussion, I just want to reiterate that homelessness touches communities of all sizes across every region. This isn't a San Francisco problem or an L.A. problem or a rural problem. This is a California problem. Some of us bear the brunt more than others. While the unhoused Americans occupy urban areas, many live also within the suburban and rural settings. Since 2020, California's overall homeless population has increased about 6%, compared to 0.4% in the rest of the country.

The current communities that are impacted here in California, of the largely rural areas is approximately 18%. It's about a fifth the state with the largest population of homeless people, California. The state with the most people experiencing homelessness per capita, California. So as we lead the way in many areas of innovation, many areas of technology, we also lead the way in a very serious crisis, that is homelessness. So with that, I'd like to turn back to Senator Wiener.

Thank you, Senator Alvarado-Gil. I think I misspoke. One in three people currently homeless experiences a mental health condition. Not before they became homeless. It's a smaller percentage. And I just also want to note if you look at the data comparing us to other states, California doesn't have more mental health or drug addiction challenges than other states. In fact, with drug addiction, there are some other states that have a worse situation than we have and have lower rates of homelessness.

And so that goes to my point I made earlier about how housing is the root cause. We know that what distinguishes California from other states is not having more mental health or addiction problems, but having a much worse housing situation. So I'd now like to go to our first panel, which is actually one person who's going to give us an overview, and that is Dr. Margot Kushel, who is the Director of the Benioff Homelessness and Housing Initiative at UCSF. So welcome, Doctor.

Thank you for having me. Chair Wiener, Chair Alvarado-Gil, and other Members of the Committee, thank you for inviting me to speak with you today. As Chairwino said, my name is Margot Kushel, and I'm a professor of medicine at UCSF, where I direct the UCSF Center for Vulnerable Populations and the Benioff Homelessness and Housing Initiative. I'm also a practicing physician and an NIH-funded researcher with substantial experience researching homelessness.

As has been mentioned, over 170,000 people experience homelessness nightly in California, many more over the course of the year. And as we said, the state has the highest percentage of people experiencing unsheltered homelessness. So two out of three residents who are homeless experience that outdoors, in vehicles, or other places not meant for human habitation. Our research suggests that over 90% of people experiencing homelessness in California lost their housing in California. Just to be really clear, homeless individuals who are homeless in California are Californians.

And if you look at the other 10%, we have plenty of people who lost their housing in California and went to other states. The risk of experiencing homelessness does not feel equally across populations. While there's a lot of discussion of mental health and substance use, I want to remind you that it is really Black, Indigenous, and Latinx communities that face the highest risk of homelessness. And this is not because of disproportionate mental health or substance use. The homeless population is aging.

We now think that approximately half of single adults experiencing homelessness are 50 and older, and by the time they're 50, their health really mirrors that of people 70 or 80 in the general population. As Senator Wiener said, when we compare communities with high rates of homelessness versus those with low rates of homelessness, we find one thing. Homelessness rates across communities vary with the availability of housing for the lowest-income households.

While having a disabling condition, certainly substance disorders and mental health disorders places one at a higher risk of homelessness. The explanation for California's crisis and the high rates we see is attributable to our dramatic shortage of housing for the lowest-income households. We are the second worst state in the nation on this key measure. We have a shortage of housing for extremely low-income households. Those are households who make less than 30% or fewer of the area median income.

We have a 1 million unit shortage of housing that's affordable and available for that population, and currently, we have only 23 units affordable and available for every 100 extremely low-income household. Low-income families who do manage to obtain housing do so at significant cost. Over three-quarters of our extremely low-income households in California are extremely rent burdened, severely rent burdened, paying more than 50% of their income on housing-related costs.

Our team recently conducted a statewide study of homelessness, interviewing a representative sample of Californians experiencing homelessness throughout the state, and the median monthly income made in the period preceding homelessness was $926 a month for the household. Fewer than half of those who experience homelessness entered directly from a leaseholding situation. The majority were already doubled up trying to hold on to housing before they became homeless.

For those who were leaseholders, their median income was one $375 a month for the household, but their housing expenses were $700 a month. The majority entered homelessness, as I said, from non-leaseholding situations that they had entered in a desperate situation to try to stay housed. The high rent burden leaves these households with little safety net, and once they double up, it's truly just a matter of time before they become homeless.

Homelessness is a housing problem, and I say this as a physician who spends a lot of my time working with people with mental health and substance use disorders. The state cannot resolve the homeless crisis without investments in production, preservation, and protection of housing that is affordable to extremely low-income Californians. We also need to remain steadfast in our commitment to the clear evidence-based means to house people who are homeless through Housing First.

Housing First is a flexible approach to end homelessness that prioritizes people getting housed before it prioritizes the need to address preconditions. Housing First does not mean housing only for those with behavioral health conditions, either those whose behavioral health conditions precipitated their homelessness or was worsened by it.

Housing subsidies must be paired with supportive services, but the key here is that to make those on a voluntary basis, we did research in Santa Clara County where we examined the Housing First effectiveness for the most behaviorally challenging chronically homeless individuals. These were the folks that had the highest rates of use of psychiatric emergency departments, jails, other systems of care. And we found that we were able to house over 90% of them with the most severe behavioral health disorders.

And once they were housed, we followed them for seven years, and they spent over 90% of their nights housed after they became housed. To be clear, not everyone who experiences homelessness requires supportive services. Many simply need access to housing that they can afford. But all who are homeless require housing. The solution to homelessness is housing.

And to end this ongoing humanitarian crisis of homelessness in our state will require a single-minded focus on producing, protecting, and preserving housing for the lowest-income households and a resolve to continue to offer housing on a Housing First basis despite all of the noise around it. I welcome your questions.

Thank you, Doctor. Colleagues, any questions or comments? Or anyone? Senator Seyarto.

You know, we keep talking about how we need to build more housing, and that's the solution. And yet, in our state, the process to build a house to permit projects even low affordable housing is onerous. It's time-consuming, and the delays cost money. The cheapest house we can build here probably exceeds some other state's highest residential housing.

So if we can't get a grip on our process, the cost of materials, and the fact that no matter what kind of housing we build, people still have to have jobs that pay enough, not jobs that are entry-level jobs, that we force them to pay them more to hope that they can afford a house. But we have to attract the jobs in California that allow for that. We're not good at any of that stuff.

And so from a housing person's perspective, how do you pay a developer $400,000 to build a house and tell them to sell it for two and then have a house at the end that somebody who barely gets paid enough to make a payment can still afford?

I mean, I think in California we are seeing the consequences of not doing this. And we're paying the costs, you know, we're paying the costs in costs of unnecessary or preventable hospitalizations. Much of the Bill winds up coming to the state through jail stays that could be avoided. There's really good evidence that when you house people, their use of jails goes way down. Those are all costs that accrue to the state.

So I want to acknowledge it's a very difficult problem, but also acknowledge we are paying the costs indirectly. And so we really do need to get to the bottom of this. I don't think there's any way, there's no secret here. We need to do everything we can on all fronts, but I think we should acknowledge the enormous costs that we're paying by our inaction.

Right? I'm not saying we should have inaction. What I'm saying is that whatever our process that we force people to go through is contributing to the cost of the housing itself and even the solutions that we have come up with, such as the ADUs. I have ADUs popping up all over in our city, and all it's done is increase the value of the properties of the people that can afford to build the ADU. And the rents that they are charging are market-rate rents.

So it's not really fixing the housing affordability issue. Somehow we have to address those other things in conjunction with taking care of the process before we can say, hey, let's just build a bunch of more housing because we can't get the price down. And I think that's one of the problems that we just can't seem to get our arms around.

Thank you. I'll just jump in there, Senator. And there are two things here. First of all, we're short millions of homes. So building 30, 5100 thousand homes, it's a long-term effort. The first tranche of homes that you're building are not going to be the ones that crater housing prices. But I think for our lowest-income residents, for people coming off the streets, it's about subsidies. The market's not going to perform for our lowest-income residents. Senator Wahab.

Thank you. The phrase protect, produce, and preserve housing has been utilized in pretty much all cities' housing element plans. Right.

And the conversation to our Chair's point is that we are behind on development, and that has been the primary focus and to our Senator's point, in regards to the onerous process, the amount of money, the commitment, and just the hoops that everybody has to kind of go through, let alone the cost of material as it continues to rise. Salaries, including those that actually build the housing, salaries don't necessarily grow as much as the cost of material. Right.

Especially when we have supply chain crises and so much more. My concern, and my concern will always be a little bit more around the preserving and protecting, which I don't think that that conversation has had enough at the state level, in particular you mentioned, it's roughly, in some of the reports, it was roughly $40 an hour that an individual has to receive to afford even a rental. Right. In most parts of the state. Now, the concern that I have is when seniors are on fixed incomes. Right.

And we're taking a look at that just as a whole, across the board, even working people, even union people, what have you seen in regards to the growth there, but then also the growth on the cost of rentals, which would be the lowest-income housing? People cannot afford a down payment. They can't compete with the cash offers and so forth. What are your considerations there and any suggestions to think about?

I mean, the fastest rising group of homeless folks in California is actually people over 65, whose numbers are about to triple on their way to tripling in about a 15-year period. One of my interests is homeless adults 50 and older, who now, by our latest data, are going to be just short of half of all single homeless adults. Those are not moms with kids and not homeless youth.

What we know from our research is that half of those individuals 50 and older had never been homeless before the age of 50. These are quite literally working poor adults. These are not individuals who had mental health, substance use histories, long histories of incarceration, or any of the things that sort of the public thinks about. These are generally members of communities of color. They are not homeowners. They are renters who basically come up with a hiccup. It's often one or two things.

They get sick, their spouse or partner gets sick, their marriage breaks up, their spouse or partner dies, or they lose their job, one of those things, or actually their mother dies. We see a lot of folks living with mom and working, Mom passes when she's 75. The 52-year-old son then is out on the streets. These are individuals where when they lose that unit, that unit loses any rent control or any price control that it has, and that unit becomes much more expensive.

I think one of the things that struck us about our statewide data was both that for the renters who went immediately from a leaseholding situation into homelessness, their median household income was 1375 a month. They were paying $700 a month across the state. It varied a little bit from rural to urban, but actually less than you would think it would. On one hand, $700 a month is too much to pay when your income is 1375.

It just doesn't leave enough for your other needs or for a rainy day. On the other hand, once they lose that, where else are they going to enter the housing market at $700 a month or less? So I think we need to do many things at once.

We clearly have a crisis in just numbers of units, but we also need to focus on keeping folks who are in those units, in those units, both because it prevents their onset of homelessness, but it also can keep that unit affordable.

And is it accurate that the poverty rate that is often utilized to say, okay, these people live below the poverty line does not include housing?

Right. The poverty level that is used is really problematic in that it hasn't really accounted for other costs as they've gone up. It hasn't accounted for housing costs and it's not really a good measure, particularly in high-cost states like California. Really, I think the measure we should use is that, ELI, or less than 30% of the area median income.

That also adjusts for the fact that housing costs might be a little less in the rural areas, in the urban areas, but it takes that area's needs and income in mind.

Really. The homeless population almost universally comes from that. Less than 30% of the AMI population, which is 1.3 million households in California, just to give a sense.

Senator Blakespear.

Yes. Thank you. Thank you for your presentation today. It's very interesting and I appreciate you coming. I wanted to comment on my colleague. Senator Seyarto was talking about how expensive it is to build housing, and I think that's a cost that we should always be working to reduce. But we also have to recognize, as was stated in the material that was provided to us, breaking the cycle, California's homelessness crisis and the path forward with effective investments, coordination, and accountability that homelessness costs more than housing.

Yes.

And so the reality of homelessness costing more than housing societally means that it's the justice involved system, it's prisons. It's also substantially the medical costs that people cycling in and out of our medical establishments, as well as encampment cleanups and a lot of very negative, extremely negative situation for everyone involved, the public, the people experiencing homelessness. And the reality, like you said, that 50% of the homeless population is senior and is becoming, and that section is tripling.

So many of those people will not be working, they will not be needing to be reintroduced into the workforce. And so to me, it really begs a question, and I just want to ask directly, what do you think is stopping us from just directly building housing? The entire point of what you were saying was that we have to have a single-minded focus, as you said, that homelessness is a housing problem.

Why is the state not directly building housing instead of funneling it through programs and funneling it through counties and funneling it through cities? And why not just directly address that?

I'm not sure I'm the best person to answer why the state isn't doing that, but I just want to uplift your comments. This is costing us not just in suffering, not just in sort of a humanitarian crisis. This is literally costing us on our bottom line. It's a deterrent to businesses, the business community.

It's not great to the business community to have people experiencing homelessness in their community, but it's literally costing us, like, we're paying money out for things that could be avoided, whether people were housed. And I think that it's easy to get distracted because we do see that people experiencing homelessness, many of them have mental health and substance use problems.

As a physician who takes care of a lot of people with mental health and substance use problems, I can tell you a lot of people have mental health and substance use problems. What is impossible is to try to address those problems when someone is outside or in a 400 person shelter or the like. And so while I'm not sure I'm the best person to answer why the state is doing what they're doing, I will say we are paying for it.

And it's a question of, can we use our money in a better way? That will create the California that I think we all can agree on. We need to see which is a California where everyone has the ability to thrive and be safe.

And I think that would be a great question also for the next panel as well. This is an important question. Thank you. Other questions or comments, Colleagues? Okay. Yes. Senator Alvarado-Gil.

Thank you so much for being the first to address this of our panel Members. My question is around people with disabilities. So, noted in the materials that we received, the percent of Californians experience homelessness who have a disabling condition is roughly between 40 and 50%. So can you speak a little bit about what promising practices you've seen or that you would recommend that we address for that specific population?

Absolutely. Thank you, Senator, for that question. I think the range of disabilities is changing a bit. Certainly, a lot of people have what we would call behavioral health disabilities, substance use, mental health problems. But as the population ages, we're increasingly seeing disabilities associated with aging because this population has premature aging. So they have problems like cognitive impairment, like some early dementias, problems walking, problems, doing activities of daily living.

I guess the good news here is we actually know what to do, and we have really promising models, particularly for those with behavioral health disabilities. There's this model that has been standard of care now for a long time called permanent supportive housing, offered on a Housing First basis. What that is is housing that's subsidized so that people can afford to pay for it with either onsite or closely linked supportive services that support people's needs for independence.

So these can be mental health services, substance use services, medical services, case management, and the like. I should say that these services are now mostly billable through CalAim. So there's a real mechanism to pay for them and a mechanism that, frankly, the Federal Government will bear some of the burden of. And that, I think the thing that trips people up is what the evidence says very clearly, is that you offer these on a voluntary basis, which I know can sound counterintuitive.

Why wouldn't you demand that someone take mental health services or substance use services? It turns out when you demand people take it before they're ready to take it, a few things happen. One is that they might reject the housing that they would otherwise thrive in. And the second is that they don't tend to heal very well. There's so much trust that goes into treating these problems.

Instead, when you offer it and you make it very low barrier so it's not hard to access it, people don't need to make 15 phone calls and wait on waitlists, but the services are there for the taking. People take those services, and what we see is that their mental health problems, their substance use problems diminish and they can thrive in the housing.

For those who are older, we're going to need to expand our models of care, because what I fear is that many people will wind up unnecessarily in nursing homes, which are expensive, people don't want to be, doesn't respect their autonomy. And so what you're seeing is programs like using Medicaid, home and community-based services to get personal care assistance. There are some promising models using an assisted living waiver where you can, in supportive housing, provide some of those personal care things to really keep people in the community.

The second part of my question here, because I'm also thinking about protecting those who are at risk of becoming homeless, people with disabilities or the aging community that have some type of mobility issues or chronic disease, but they want to remain in their own home, and there's that risk of being put in a facility or having to live with another relative to be cared for. And we have a promising program, the in-home support services model. Right.

And so how do we replicate those models so that we can build dignity and Independence in our aging population and with our people with disabilities so that we can prevent them from moving into the homeless?

Absolutely. So in-home supportive services paid for through the Medicaid, home, and community.

Community based services is a way to really keep people in the community as opposed to being an institutional care. In California, we have a robust program. It mostly operates on a consumer based model where the client sort of chooses and hires and manages their care worker. It's an incredibly effective program.

I would say, for people with behavioral health disabilities, the really promising models are, for instance, in San Francisco, they have a promising model of a pilot contract based services where there's actually an agency that hires and trains and manages culturally competent, skilled in-home supportive service workers that work throughout, let's say, a building where formerly homeless people live who might, because of behavioral health disabilities, have trouble, or they don't have the niece that they can pay to care for them. But what this does is this is like one of those few win wins. It allows people to remain independent in the community with dignity, and it keeps them out of expensive nursing home care.

Senator Wahab.

Thank you. I just had a follow up to the question that was asked. In particular. I've heard this multiple times, that forced supportive services, if you will, whether it's getting clean or whatever the case may be, or mental health, is definitely not something that California really likes to model itself after. However, some of the conversations in other states clearly show that it has been helpful in some capacity.

There are, I'm going to say anecdotal at this point, because I'm sure there's data out there, but I don't have it with me. Where potentially getting individuals treated, right, in conjunction with the housing first model, but stating that it is a requirement that you need to get clean or seek services that need or needed even job placement and other services, not just drug treatment or anything like that.

Many practitioners have actually stated that it is beneficial because the client eventually realizes that, okay, the way that I was living was not necessarily healthy for me or my family. And even some will say that I would have never become clean if it wasn't like a requirement of this program or that program. There have been Assembly Members in the State of New York that have actually reached out and told me that this is what they do versus us. And so I just want to see if there's any consideration to kind of make this potentially an option. Not 100%, but kind of incentivizing that even further, because I think that that's one of our big concerns as well.

I think where we most do force treatment, unfortunately, is in our criminal justice system. And unfortunately, the outcomes are not great. It's tempting. I understand the temptation to do it, but just sort of relying on what the evidence shows us, particularly for substance use disorders, it's not very effective. I'm not saying that there aren't people who will attest to, for instance, their jail stay has been their wake up moment.

There certainly are people for whom that works, but as a policy, I would go against it because I think all of the evidence supports that. It's a very hard thing for people to agree to while they're dealing with their survival, and that once you take care of their survival, once you give them a place to stay, then what you want to do is make it incredibly low barrier. So as soon as that person has that moment of awareness, you're working on it.

As someone who does a lot of addiction medicine, we talk a lot about motivational interviewing or really trying to figure out, trying to help the person see that this isn't working for them, and then they tend to adhere to the treatment. A problem that we have now is sometimes when that person reaches that moment, the treatment isn't available. That we need to work on. We need to make it incredibly easy to attend to.

I think what we've seen, and when these have been compared head to head, is the problem is there are some people for whom that works. But to be honest, Senator Wahab, those same people would do just fine in support of housing. The people who it doesn't work for are unfortunately left outside. And any progress we've made in motivational interviewing, any progress that we've made to push them towards that moment of realization has gone backwards. And so you can find people who got better, but those people were also going to get better if you offered it in a very low barrier way.

And you're specifically talking detox, not necessarily also mental health services.

So mental health services are a slightly different question. But we certainly have people, we have in California a pretty robust system of the 5150-5250 LPS of force treatment when people are direct dangers to themselves or others. I will tell you that one of the problems with that system, and you can talk to any of my friends who work in emergency departments and the like, is that that system doesn't, I think good people can disagree on where you draw the line of when someone has to be compelled to treatment or not. I think very reasonable people have very deeply felt and reasonable things on that.

I can tell you that the system is not working right now because there's no housing. That when you're a physician or a nurse, and you're in an emergency department and all of your rooms are filled with people on 51-50s there's no hospital beds for them and there's no place for people to go after they leave the hospital. What do you start doing?

You start sort of saying, I think this person can go out. And I think that our system is not working, not so much, because we don't have a structure to care for people who at that moment need care, but we literally don't have a place to send them after they leave.

And I can tell you that the shift in healthcare, even over my career in healthcare, I finished medical school in 1995, and even in that period, there's been just a dramatic decrease in what we do as an inpatient versus an outpatient. We can do bone marrow transplants as an outpatient now. We can do incredible things as outpatient. It's cheaper, it's safer, it's all good. Similarly, in the mental health space, right, often people need a week, two weeks, three weeks in the hospital.

But then what they try to do is get people back into the community in a structured way, intensive outpatient treatment, where they might be coming to treatment for 8 hours a day, five days a week, but going home to sleep at night. Then they might back off and do three days a week and then eventually more integrated into the regular community care. Those things break down when you don't have housing.

So I don't mean to sound like a broken record, and, obviously, I learned all that biochemistry and everything to become a doctor because I do believe in healthcare. But I'm saying to you, I'm speaking to you, really pleading with you as a healthcare provider, we can't do our jobs without the housing. And if you try to fix the problem from the other end, I'm not saying healthcare doesn't have things to fix, but if you try to fix it from that end without fixing the housing, our hands are tied behind our backs.

Definitely. Thank you.

Thank you. Senator Menjivar.

Well, I had a question. I was going to say a comment, but you took the words right out of me on your second question, so no more comment. All that to say, as a social worker on this dais, I 100% agree with you. My wife is a substance abuse LMFT. I could sit here and tell you so many stories of how many times if you force patients into treatment, they're never going to do it. You mentioned something that's so key. Motivational interviewing is the key.

What's it called? Intervention utilized with individuals. You have to build a rapport. You have to build a rapport or else no one's going to want that treatment. So that's why housing first is so important, because you build a rapport. But also, I want to mention, I think, and I was a little late, and I apologize if this was mentioned already, but you can't look at this homelessness crisis without looking at the mental health piece without it. Right?

And I think it really, us here and everyone here, we should look at it goes hand in hand in ensuring, as a previous EMT, I would go and drop off 5150 patients at ERs and hold the wall for 5-6 hours because there were no beds. There's no beds for anyone there. And the physicians would tell me, we just need a bed to put someone who needs the extra couple of weeks.

In LA County, we've done a lot, we've done our tiny homes and so forth, but there are no tiny homes for the mental health version of it. Right? And that's what I think here. I want to plead, to ensure that we also find that temporary housing for those on substance abuse and those who need a little bit more help with mental health on the way to PSH.

Yeah. And I think one of the reasons I got into this housing business is because the reason that there are no beds has a lot to do with the fact that people stay in the hospital for a long time, and then you discharge them, and then they come right back. And so we definitely probably may need more beds, but it's actually even hard to model how many beds we need. If we actually had a system where when people were ready for discharge, they could be discharged. Because all you need to do is delay a discharge for a short amount of time, and the whole system backs up.

If there are no other questions, I have a... I'm sorry. Senator Ochoa Bogh.

Hello. Good afternoon, and thank you for being here. So I should have said Dr. Kushel, right? Yes. Dr. Kushel. So I was reading the Breaking the Cycle, those referenced it earlier, and I was just kind of curious. My first question was, I noticed that many of these studies were, in my opinion, pretty outdated. We had a 2008 study, researchers by the RMIT University, where, it's quoted here, what is the cause of homelessness?

Where it's being referenced as where they found that fewer than 15% of their large sample of people experiencing homelessness have substance abuse issues before entering homelessness, which was right around the time of the housing collapse. And then there's other studies that were quoted that were also a little later than that, but still pretty old.

I have a study here, and mind you, I come from a real estate perspective, so I'm looking at from that angle, so I understand the cost of housing in California, and it's mind boggling on that end. But I have another study that was conducted in 2019 by the UCLA Policy Lab that suggests that 78% of unsheltered adults might struggle with mental illness and 75% with substance abuse disorders.

And according to this article that I have, it says the data aligns with the findings of the Los Angeles Times analysis of homelessness data, as well as to the practical experience of service providers across the country, such as St. John's program, A Real Change in Sacramento. And so I absolutely agree that housing is an issue, and I also believe that behavioral health and substance abuse is a huge factor, especially when we're looking at it from a local perspective.

And I speak to local sheriffs and chiefs of police in our area as being one of the key factors when they're dealing with people dealing which are unsheltered. So I would love to give you an opportunity to comment as to the date of this data that was placed on here versus having new or more relevant data and why that's not in part of this.

So the good news is we just completed a large statewide study of what's called a representative sample of adults experiencing homelessness. So we actually have, right off the press, in fact, so far off the press, we haven't finished the report yet, but we'll be done in a few months. But I can give you some previews of it, of what's called a representative sample. So this is all individuals who are experiencing homelessness, whether or not they interact with services, et cetera.

So I think we'll be able to get you up to date data on that very soon. The UCLA Policy Lab study was a very important study. I'm close to those investigators. It's a wonderful study. But just to be clear of how they got their data, that is, data based on people's use of services.

So they're going to have a higher proportion of people with mental health and substance use services because they're sort of recording people as homeless as they enter the mental health system and the substance use system. When we looked statewide, I think it's going to be more about 30% to 40% with regular substance use problems. Depending on how you define it, we can cut it a little different way.

My favorite analogy for this comes from a recent book put out by the University of Washington called Homelessness is a Housing Problem. And what they note, as I had sort of used this analogy to them, they told me that a lot of people have used it, and I think it's a very helpful one, which is musical chairs. Which is if you're playing a game of musical chairs and someone, adults play the game, and then they pull a chair away, turn off the music, and all the kids scramble to the chair.

If you have a kid who sprained his ankle the night before the birthday party, and you pull away a chair, the kid is a sprained ankle is most likely going to be the kid who's still standing. So if you ask the question, why is this kid standing? Well, that kid is standing because he sprained his ankle. But if you turn it around and say, why is there a kid standing? There's a kid standing because there are only nine chairs and there are 10 kids.

So either two kids are going to sit on top of each other or someone's going to be standing. And so I think the same way with the mental health and substance use question. If you ask, why is this person homeless? Unquestionably someone with a mental health or substance use disability is at a dramatic increased risk of becoming homeless, and then those disabilities get worse during their homelessness. So if you look across people who are homeless, unquestionably a disproportionate number, have mental health or substance use problems.

But if you ask the question, why do we have so much homelessness? It's because we don't have enough chairs. And if you look, for instance, in a place like West Virginia, by all accounts, much higher rates of mental health and substance use than California, but much, much lower rates of homelessness because they don't have this affordability crisis. So I'm not going to stand here and deny that people experiencing homelessness are more likely to have mental health and substance use problems.

And I don't think we should ignore those issues, and we need to have robust evidence based treatment for it. But the heart of our crisis in California is not that we actually have more mental health and substance use. We actually are a very healthy state, and we actually have lower amounts of mental health or substance use problems. But for those people who use substances, they're fighting against such difficult housing costs that they wind up losing out. So both things can be true at once, I think.

And I completely agree with that. I just wanted to make sure that we had that on record on the date of the studies as well as what the findings were. The other comment that I wanted to make was, I completely agree with you, the mental health bed capacity. We just don't have it in California to address those issues.

And as we realign our criminal justice systems where we try to take away the incarceration part of people having actual substance abuse, we don't have the capacity to tend to the behavioral health or opioid problems that many people face. So it's one of the reasons why I've been trying to author bills that create those grant programs to be able to create that mental health bed capacity, which would take away the amount of homeless people in California. And I agree with you.

I really appreciate a comment that was made to me, and it really struck me because I had a colleague who stated, you know we talk about housing affordability, but the question should really lie in how do we make housing more affordable? And I think that's something that I always think about when we discuss policy and the impact that this policy has on the ability to make housing much more affordable in California. So thank you very much for your time.

Thank you so much.

Thank you. A couple of things I want to note, and if there are no further questions, then I'll hand it gavel over to Senator Alvarado-Gil. I remember a few years ago, right before the pandemic, I was visiting a permanent supportive housing complex in the Hayes Valley neighborhood in San Francisco. And various, I forget how many, but a number of the people living in that supportive housing were in a conservatorship. So these are people who were so severely debilitated, they qualified for conservatorship.

And contrary to public notions on this, it's not easy to get someone into a conservatorship in California. These people were conserved, and they were in permanent supportive housing in that conservatorship. And so when we talk about people who are pretty severely debilitated, pretty severe mental health, substance use problems, that doesn't mean they can't be held. Now, they may need a transition.

If they're really in bad shape, they may need hospitalization before, but they can be housed, and that's going to make it easier for that conservatorship or whatever treatment to succeed. And I mentioned at the beginning that I sometimes get into spirited discussions with some of my constituents who, they are very frustrated with what they see on the streets in San Francisco. And this is not just San Francisco. It's in cities throughout the state.

People are very, just at their wits end about what they see on the streets. Why isn't anyone doing anything about this? This is absolutely devastating, heartbreaking, inhumane. And it's easy to say, okay, that's what homelessness is, the most severely debilitated people on our streets. That that's homelessness. And what I try to convey to people is there are plenty of homeless people that you don't see or you see, but you would never know that they're homeless. They're taking their kids to school.

5% of schoolchildren in San Francisco, and I think that's pretty consistent statewide, in the central part of the state is probably more like 10 or 20%, of students are homeless. They have parents who are bringing them to school every day, people who are going to work, but they might be waking up in a shelter or couch surfing or living in a car, and they are functioning, barely. And those are people that people don't see.

And so I think it's really important to think about the homeless people that are not obviously homeless. And the last thing I just want to say is, in San Francisco, we have a large stock of single room occupancy SROs. They used to be called flop houses.

And for many, many years, if you were very low income and maybe you had a mental health issue, but you could, with a disability check, pay for an SRO and you had a place to live, it wasn't fancy, but you could at least have a place that you could barely afford with your disability check. Those SROs, now, the last I checked, they were like 15, 16, 1700 dollars a month. It was restaurant workers, retail workers living there.

People who would normally get a regular one bedroom or two bedroom that they can't afford that anymore. So they're living in the SROs. And those people who were in the SROs before on disability are living on the streets because there's nowhere else. So it's just everything pushes down when you don't build enough housing. The middle class gets pushed down, working class, the working poor, and, eventually, you have people who end up that musical chair is not there for them and they're out on the streets. So if there are no other questions or comments, I want to thank you, doctor, for joining us today. And I will hand the gavel over to Chair Alvarado-Gil.

Thank you, Dr. Kushel. So we're going to move on in the agenda to the next panel, the state agency programs and coordination efforts. So I'd like to invite up our representatives from state agency programs, Lourdes Morales, Principal Fiscal and Policy Analyst with the Legislative Analyst Office, Secretary Lourdes Castro Ramírez, Business, Consumer Services, and Housing Agency.

Corrin Buchanan, Deputy Secretary for Policy and Strategic Initiatives, California Health and Human Services Agency, Dhakshike Wickrema, Deputy Secretary, Business, Consumer Services, and Housing Agency, and Kim Johnson, Director of California Department and Social Services. Thank you all for being here today. Welcome. And we'll start with Ms. Morales.

Good afternoon, Chair and Members. I'm Lourdes Morales with the Legislative Analyst Office. I've been asked to provide an overview of the major investments in recent years related to homelessness by the state, as well as begin to share some of what we know about how these programs are working and what they've accomplished. My comments today will be based on this handout, which I hope you have before you. It's also available on the LAO website.

So if you turn to the first page, we just provide a high level overview of the federal, state, and local entities that all work together to address the needs of people that have a challenge affording housing and are experiencing homelessness or at risk of homelessness. Zeroing in on the state, we have four main state entities that are primarily responsible for addressing housing and homelessness, those being HCD, CalHFA, TCAC, and the Interagency Council on Homelessness.

I'm sorry, can I just interrupt you briefly with your acronyms, willl you tell us what the agencies are?

Yes, so the Department of Housing and Community Development, that's HCD, the California Housing and Finance Agency, CaLHFA, the California Tax Credit Allocation Committee, TCAC, and the California Interagency Council on Homelessness, Cal ICH. My apologies. So, as I mentioned, these programs primarily administer the state's housing and homelessness programs.

The council has another sort of broader role in addition to administering homelessness programs, where they convene representatives from across the street as well as other stakeholders to really think about and coordinate the state's overall homelessness response.

So, as you can see from the table, the council is co-chaired by the secretaries of the Business and Consumer Service Housing Agency, as well as the Health and Human Services Agency secretary, and has participation from departments across the state in areas, like Department of Veterans Affairs and the Department of Corrections and Rehabilitation.

And so it's really sort of these other departments, like I just mentioned, that have additional roles in supporting the state's response. For example, by administering the state safety net programs that also serve to weave together the departments across the state that support homelessness.

And so if you turn to the next page, you'll see that there's a table that begins on page two and spans into page three that identified the major investments in recent years from these core four departments as well as the Department of Social Service. Given the focus of the hearing today, the table begins in the 18-19 fiscal year, as this is really when the state began to take a much more active role in addressing homelessness.

It was this year that the state established the Homeless Emergency Aid program, HEAP, within the council I mentioned, and investments in addressing housing affordability and homelessness is really sort of picked up from there. And so, importantly, this table emphasizes these additional actions the state has taken in recent years to address housing and homelessness. It doesn't reflect baseline funding that has been sort of ongoing.

So, for example, bond funding through Proposition 1, as well as ongoing revenue from the SB 2, which established a recording fee on real estate documents. And so, for example, if you look at the multifamily housing program administered by HCD, you see that $325 million has been allocated towards this program. But this doesn't reflect the additional about $1.5 billion provided to this program from Proposition 1. So in all, you see that about $23 billion in discretionary funding has been provided in the state across these five departments.

A large amount of this funding has gone towards the Department, towards HCD, about $12 billion. Again, in many cases expanding these long standing programs like the multifamily housing programs, in other cases, establishing brand new programs like the $2 billion provided to the accelerator program, which helped address funding gaps in some shovel ready projects that were waiting for tax credits to help those move forward more quickly. The state also provided about $5.4 billion towards the Interagency Council on Homelessness.

They are primarily providing flexible funding towards local governments. 2.3 billion towards Department of Social Services, primarily to expand housing supports for people that are participating in some of the state safety net programs like Cal Works. An additional 2 billion was provided towards additional tax credits and about 1 billion towards CalHFA to help finance some developments like accessory dwelling units. If you turn the page, we begin to provide some high level information about the state's current approach to oversight and accountability.

Overall, you'll see that there's just a lot of variability in where the reporting requirements are established. What are the reporting intervals, what data actually comes to the Legislature, whether that comes automatically or via request. We will note that in recent years there has been some improvement in the use of electronic dashboards that are available online so you can track the performance of programs more readily. Both HCD and DSS have made notable progress in this area for some of the programs they administer.

But overall, we do know that it's much easier to provide information about spending expenditures and uses, rather than sort of more outcome based information into something that is very of interest to the Legislature. For example, it's harder to just track the duration of housing stability, for example, or the rate of return for homelessness. It just takes more time and it's much more complicated.

So we do see generally sort of more spending and use information available, although we again have noted that there has been some progress on this front over the years. On page six, we provide a high level overview of four key state homelessness departments, these being Homekey, HAPP, the Homeless Housing Assistance and Prevention program, as well as the Encampment Resolution Funding Program and the Family Homelessness Challenge Program.

The table provides information about how much funding the state has allocated towards these programs, how much has been awarded. Generally, awards go to cities, counties and continuums of care and where funding remains with the timeline for getting that funding out. The remainder of the handout goes through each of these four programs in turn and begins to provide more detail about what we know about how these programs are working. So I'll highlight some of that information quickly.

Turning to page seven, we begin the discussion of Homekey, which allows local governments to acquire and rehabilitate properties like motels and commercial properties. As you can see from the table, over $2.8 billion has been awarded so far across two rounds in various regions across the state. A lot of the funding went to Los Angeles County, where over 4,000 units are anticipated due to this program. The table on the next page provides more information on the status update.

As you can see, overall, Homekey has funded 210 projects across the state, which collectively are expected to create about 13,000 units. Because a lot of these units have covenants that guarantee affordability over a 55 year term. In all, the Administration anticipates that these units would house about 212,000 people over their life. All of the round one funding for Homekey has been allocated as well as round two. There was significant demand in the round two funding, so some of the round three funding was even accelerated.

And so in all, there's about $900 million remaining in Homekey that's anticipated to be awarded later this year. And once that funding is allocated, that would exhaust all of the currently appropriated or proposed funding for Homekey. If you turn the page, there's a discussion of the HAPP program, which provides flexible funding to large cities, continuums of care, and counties as well as tribal governments.

So the table that spans page 9 and 10 provides a snapshot of the program across the first two rounds of HAPP funding, which locals have had access to for some time. A total of $823 million of the 950 have been encumbered by locals to address homelessness in their community. That's about 86% of the funding encumbered. About 127 remains unobligated. So on the bottom of page 10, we lay out a little bit about what we know about the people served.

In all, nearly 75,000 individuals and 18,000 families with dependent children have been served through those first two rounds of HAPP. The HAPP round three funding associated with the 21-22 fiscal year, about one billion dollars were recently made available to local governments, and applications are being reviewed by the Administration for HAPP round three.

The budget already includes an additional billion dollars for the 23-24 fiscal year, which would be administered in the coming year, and that would once again sort of exhaust the currently authorized funding for this program. A few high level highlights about this program. We have seen over time that there's been more partnership cultivated at the local level in applying for these funds and using them for using the funds more collaboratively. We've also seen the most evolution in the oversight approach to the HAPP program over time.

Initially, as I mentioned in those first two rounds, a lot of the tracking was around expenditure and use and some demographic information. Beginning with round three in the 2021-22 fiscal year, state law established new requirements for locals to develop action plans to really sort of set their goals for how they plan to use the funding. And so we're sort of seeing that move forward now. One of the challenges is just giving the lag in reporting information.

The first reports of that round three funding won't be available till December 31, 2023 which is after when the Legislature is being asked to consider the round five implementation legislation. Just two final programs, the Encampment Resolution Funding Program. On the next page, page 12 just highlights how the Encampment funding has been provided over recent years. As you can see, two rounds of funding have distributed nearly $96 million across various jurisdictions.

The round two disbursements was first and foremost given to applicants that didn't have funding available under round one because there was significant demand for that program. And the final tranche, about $400 million, is anticipated to go out in the next fiscal year. And once again, this is another area where there's no additional funding proposed or authorized for this program. And finally, the Family Homeless Challenge Grant made about $40 million available specifically to address the needs of families experiencing homelessness.

From this program, we've seen about $17 million be allocated so far. Applicants anticipate that they'd be able to serve nearly 2000 families with dependent children with this funding. The remaining funding will be available to the same candidates as round one that demonstrate that they continue to make progress and meet program requirements. And so that just gives you a high level information around how much funding has been allocated so far, what remains, and what we know about these programs so far. Happy to take questions when appropriate. Thank you.

Thank you, Ms. Morales. We will continue with the panel and have questions at the end. Next, we'll be hearing from Secretary Lourdes Castro Ramirez.

Thank you.

Thank you, Chair Alvarado-Gil. Thank you. Closer, here we go. All right. Thank you, Senator Alvarado-Gil and Senator Wiener. And thank you to the Committee Members. Appreciate the opportunity to be able to testify here today. As mentioned, I'm Lourdes Castro Ramirez, and I serve as Secretary of the California Business, Consumer Services and Housing Agency. I'm also the co-chair of the California Interagency Council on Homelessness, and I want to lead off with just some context and background.

Some of this information may sound familiar based on Dr. Kushel's presentation, but I think it's still important to be grounded in a few facts. Like many states across the nation, California's housing and homelessness challenges have been decades in the making. We simply have not built enough housing. The problem is so severe that for every 100 low income households, there are less than 30 affordable and available homes. Limited housing supply and high rents are squeezing low income households and also placing them at higher risk of homelessness.

And this is disproportionately impacting black, indigenous, Latinos, and people of color. Study after study has shown that the most effective response to homelessness is to build more housing and housing that meets people where they're at. And so we're focused on housing interventions that are supporting people where they're at in their community and ensuring that we're doing so with a focus on being person-centered. Today, I will provide a brief overview of the state's coordinated response to address homelessness. This is a collective effort.

It's a collective effort that focuses on building more affordable housing more quickly. It's an effort that is person-centered, as I stated, and this is not a band-aid or a quick fix. It really requires continuing to work together with local communities to address root causes and to implement housing solutions that are responsive to the urgency of the moment while building lasting results and positive people outcomes. The state's homelessness response is coordinated by the California Interagency Council on Homelessness.

The council oversees the implementation of the state's housing first policies and promotes system level problem solving. Just two years ago, the council adopted the action plan for preventing and ending homelessness in California and launched the Homeless Data Integration System, also known as HCIS. Both actions were the first of their kind to provide a coordinated state level policy framework and data strategy. Last year, as mentioned, Secretary Ghaly and I became co-chairs of the council.

This was done to enhance the vital coordination that is required between housing, health and human services. As Council members, we're focused on advancing best practices, providing technical assistance, developing policies, and advancing research, including the recently released statewide landscape assessment. The council will continue its work to align systems and investments to expand the spectrum of supports that are necessary as we serve people experiencing homelessness. And key to this mission is our shared goal to build more housing. Build more housing in every community, large and small.

To advance this goal, we're implementing an array of housing policies with promising success. We're making sure that local governments plan for 2.5 million homes statewide through our current planning cycle, and, as was mentioned earlier, we're requiring that 1 million of these be affordable to low income Californians. We're also witnessing significant progress in fast tracking affordable housing approvals, including thousands of units that have been produced as a result of the ability to utilize SB 35, which has provided new streamlining authority boosting affordable housing construction.

Additionally, the number of ADUs, also known as Casitas or granny flats, has grown exponentially, from less than 2,000 permitted statewide in 2016 to more than 20,000 in 2021. That's a tenfold increase over the course of five years, and thousands of housing units have been unlocked by HCD's Housing Accountability unit as they continue enforcing the state's housing laws. As the Governor has made clear, we will use every tool to ensure that jurisdictions fulfill their state housing law obligations.

To complement our housing policy work, we are also delivering unprecedented state resources to communities, from capital financing to accelerate the production of affordable housing, to an infusion of flexible state funds to cities, counties and continuums of care. The return of these housing investments is not just a onetime return, but it's multigenerational. Because of the 55 year affordability covenants, we're estimating that each unit will serve seven different families over the span of the 55 years.

While our state and many across the nation have witnessed increases in unsheltered homelessness, we have seen some very encouraging trends. From 2020 to 2022, unsheltered homelessness in California increased at half the rate of the national average, according to HUD. We attribute this progress to our pandemic relief efforts, including project Room Key, Homekey, and providing emergency rental assistance to low income households across the state. It is important to note that not every person that's at risk of or experiencing homelessness needs permanent supportive housing.

In fact, most don't. Rather what they need, like you and me, is an affordable place to call home. To that end, we're utilizing state resources to build more units that are affordable to low income households and people exiting homelessness. From 2018 to 2021, the state financed almost 60,000 permanent affordable housing units, and we have 24,000 more in the pipeline. And these numbers, of course, don't capture the number of units that are being created without any state subsidy. So I'm optimistic about the momentum.

I'm optimistic about where we're at. Providing real, lasting change requires a policy response that addresses the full spectrum of supports which requires all of us. And you'll hear soon from HHS in terms of how we're continuing to advance this work. Over the past three years, I have visited communities across California to learn about the impact of their housing and homelessness investments. I've seen the joy and the relief on people's faces as they are welcomed into their new homes.

And I have also felt the emotion of a mother's heart as she has shared what it meant for her children to move out of a car and into a home. Each community has followed their own unique approach while centering equity and the diversity of the people who live there and using the approaches that we know work.

From Salinas to San Diego, from Riverside to San Francisco, from South Lake Tahoe to Los Angeles, what is consistent is a willingness and a shared commitment to build more dignified, affordable places for people to call home. Thank you for your leadership and partnership, and we'll be prepared to answer questions once my colleagues provide their remarks. Thank you.

Thank you, Ms. Castro Ramirez and for bringing us hope, ending with hope and the joy part. I think that this is a topic that really is devastating and reminding us that there is some light at the end for us to aim towards. So thank you for wrapping that up. We will move forward with Deputy Secretary Corinn Buchanan.

Many thanks. Hi, folks. Corinn Buchanan, I serve as our Deputy Secretary for Policy and Strategic Planning at the California Health and Human Services Agency. I just want to thank you, Secretary Castro Ramirez, for your leadership. I don't think we could ask for a better housing affordability champion here in California, so thank you deeply for your leadership. As you heard, California Interagency Council on Homelessness, the makeup is new, and our CalHHS secretary, Dr. Mark Ghaly, serves as the co-chair alongside Secretary Castro Ramirez.

We get to spend a lot of time together these days. In this new role, CalHHS is focusing our energy on the integration of health, human services and housing to meet the whole person needs of Californians who are experiencing homelessness. There are six CaLHHS departments that are represented on the council, and we are working both to make our mainstream services responsive to the needs of people experiencing homelessness, as well as implementing housing programs here within our agency that provide direct housing assistance.

Two places where we have made really significant investments in those housing interventions and the supportive services that must go along with them are in our social safety net programs and in our healthcare delivery systems. So you'll hear more today about those specific programs from the Department of Social Services from Director Johnson, including our progress to date. And I'll be highlighting our focus on those with the most complex care needs, including individuals with behavioral health conditions.

As we have heard today, while they don't make up the majority of people experiencing homelessness, they make up a sizable percentage, and we're thinking really specifically how to meet their unique needs. Departments across our agency are part of a collective strategy to end homelessness, like the Department of Aging's master plan for Aging, the Department of Developmental Services' role in addressing housing stability for their consumers, the Department of State hospitals in their work to advance mental health diversion and community based restoration.

And key to the approach across our agency is addressing racial disparities among Californians experiencing homelessness with black and Native Americans overrepresented in our homeless population. For this reason, we must center racial equity in our implementation of the programs that we're administering. And we're committed to using a racial equity lens as we are designing programs and policies, as we're implementing those programs, and as we're evaluating those programs.

Back to that complex care needs, between 2018 and 2022, which is when we have our most recent point in time data, we saw a 23% increase in people counted as severely mentally ill, reaching nearly 40,000 individuals in 2022. During that same time period, we saw a 77% increase in chronic homelessness to over 60,000 individuals, which, as you may know, is defined by both the length of time homeless and the presence of a disabling condition.

Addressing the needs of those individuals with those complex care needs is really front and center in our approach and in our efforts to provide housing as a stabilizing force in people's lives. So Department of Social Services Housing and Homelessness Division is responsible for overseeing seven housing and homelessness programs that are embedded in the social services delivery system.

With one time program expansion dollars of over $2 billion invested over the last two years to serve families in the Cal Works program and the child welfare system, as well as to serve seniors and adults with disabilities, including those who are connected to adult protective services, those who can be connected to SSI benefits.

Getting those long term income supports for people to stay housed, as well as project room key, our hotel motel effort in response to Covid-19 and the Community Care Expansion program, which is a capital program designed to expand and preserve board and care settings and other supportive settings that can serve people with complex care needs.

As you'll hear from Director Johnson in just a moment, these DSS programs, I like to call them a manifestation of our motto of meeting people where they're at by offering housing support in a way that's integrated into the delivery system for vulnerable families and individuals.

So I'll just take a moment now to provide some information about our work at the Department of Healthcare Services, where we're taking really big steps to address the social drivers of health and housing, being chief among those factors that directly impact our health. As you heard from Dr. Kushel, as the primary equity tool we have in our safety net toolbox, medical supports many of the important housing programs we've launched.

CalAIM has established programs that support temporary housing solutions, provide resources to help beneficiaries find and obtain housing, and provides the case management and care coordination that often hinders the success of people who have multiple chronic conditions who are experiencing homelessness from attaining and maintaining their housing. California will continue to maximize and leverage federal resources to support housing and intends to seek a new waiver which would allow for the provision of up to six months of rent or temporary housing under certain conditions with the Federal Government.

Department of Health Care Services is also administering the Housing and Homelessness Incentive program, which allows for our Medi-Cal managed care plans to earn incentive funds for achieving progress in addressing homelessness by keeping people housed and developing the necessary capacity and partnerships to connect their members, their beneficiaries, medical beneficiaries to those needed housing services. Next, I am going to talk about three efforts that are specifically focused on behavioral health. The first is the California Behavioral Health Community-Based Continuum Waiver.

It is an 1115 demonstration waiver that is also being pursued by the Department of Healthcare Services. I told you we were going for every angle we can to really move the needle on homelessness.

This waiver would allow us to expand behavioral health services in Medi-Cal beneficiaries who are living with serious mental illness and young people with serious emotional disturbance, with a focus on children, a focus on people experiencing homelessness, and a focus on justice involved individuals, among many other things which I won't have time to get into today. This waiver would also allow for counties to cover the rent or temporary housing for up to six months for certain beneficiaries.

The second behavioral health program is called the Behavioral Health Bridge Housing Program, and I am happy to share that. Last month, we released the first round request for applications of what will total 1.5 billion in funding to counties to address the immediate housing needs of people experiencing homelessness with serious behavioral health conditions. And lastly, the Department of Healthcare Services, along with our team at the California Health and Human Services Agency, are supporting the implementation of the CARE act.

I'll do a nod to our Senator Umberg on the CARE act side, a new civil court process that will serve those with the most serious untreated mental health conditions who too often suffering in our jails or on our streets.

The Department of Healthcare Services will be providing technical assistance and data and evaluation, which will include understanding the housing outcomes of those served by this new model, which focuses on accountability both for the individual and on the local government to provide a holistic care plan that includes housing.

In closing, I'll share that today's hearing, I think, and the panel is a testament to the coordination and collaboration that is required across all entities, housing, human services, health programs, to discern existing challenges and to act for future solutions with your legislative leadership. There have been tremendous investment signaling our collective recognition and partnership on the importance and urgency, frankly, of this issue.

And our state has made in these historic commitments to ending homelessness, we have also made commitments to holding ourselves accountable in new ways, both at the state and the local level, to turn our investments into true, tangible resources. We need more housing. We need more rental subsidies. We need more services and supports for people to get and stay housed. And this truly takes creativity and innovation. We can't expect this work to get done with the same approaches we've used in the past or with the same people doing the work.

We need to get innovative on the housing side, and we need to grow our workforce of direct service staff who can offer real solutions. At CalHHS, we wholeheartedly believe that this work is possible if we prioritize it. We want to thank the stakeholders, the community based organizations, the local governments, our healthcare partners, who are proving every single day that this is possible. So thank you.

Thank you, Deputy Secretary, and I appreciate you bringing that full lens of other services that are attacking the same issue. I want to pause for a moment. We have two more panelists. I will say that if you have a handout or something that you want us to look at while you're presenting, please mention that at the beginning. Was there any clarifying questions before I go on?

Okay. All right. So we'll move forward with our Deputy Secretary Dhakshike Wichrema.

Thank you. Good afternoon, Chair Alvarado-Gil, Chair Wiener and Members of the Committee. Thank you for the opportunity to testify today. I'm going to talk a little bit about data, some of which is in the background, I noticed. And then I'm going to talk about the homeless assessment, which the secretary mentioned. And then I'll do a very high level overview of some of the programs, which Ms. Morales has already provided, a lot of details. I won't duplicate that. I am Deputy Secretary Dhakshike Wichrema.

I work for Secretary Castro Ramirez at the Business, Consumer Services and Housing Agency. So a little bit about data. The secretary mentioned HDIS. That's called the Homeless Data Integration System. And this system was launched in 2021, so fairly recently. But what it does is it takes data from the 44 COCs, Continuum Of Care entities. These are HUD mandated local entities. There are 44 in California. They are mandated by HUD to collect data on who's being served through the homeless programs.

But now, for the very first time, the state has integrated all the data from the 44 communities. And we are able to get a bird's eye view of the data aggregated at the state level. And we don't just collect the data. There's a staff that cleans the data, de-duplicates the data.

True picture of unduplicated clients served throughout the State of California. And this is really a very powerful tool. Like I said, launched in 2021 and already, and I'll tell you more about how we are using it really to help local communities and also to help the state understand how our investments are being used. So one of the ways it's being used is the homeless assessment, which I think you guys have all seen and is reflected in the background.

And this is a very tangible use, again, of the integration of the, it's a three year study period, July 1, 2018 to June 30, 2021. So all the data I mentioned is, within that three year study period, some high level takeaways. What the state now we can see during that three year study period helped almost 600,000 people across California. And each consecutive year in that three year period, the state helped more and more people.

That's showing the reach of the investments the state is making, where each year we were helping more. It does show, and this is validating what we all know, the overrepresentation of black and indigenous people, especially in the system. So they are overrepresented five or more times more than their representation in the general population. I will say quickly here, I'm going to talk about data, but I do want to acknowledge that this is something we really care deeply about, how to reverse this trajectory.

Speaking of breaking the cycle, around how can we really think about racial equity and building these kinds of goals within the funds we provide so that people are provided the tools and the resources and also setting goals to really break the cycle around the overrepresentation? We'll tell you a little more about that when I get to the grants piece.

We also saw during this three year study period that most of the people being served were over the age of 25. 56% were over the age of 25. But as Professor Kushel mentioned, a large proportion in the three year study period, almost 30% were at least 50 years old. So you're seeing, you're serving a lot of people who are adults. However, it is important to note that 24% during this three year study period were children under the age of 18.

So because that's not surprising, you have a single mother, a single parent, and usually there are two kids in the family. So you're going to see a lot of children being served throughout these. So 24% were children, 6% were unaccompanied young adults between the ages of 18 to 24. And I will say there's a large proportion, even in the family group that are headed by youth parents. And then finally, 10% are veterans.

When we looked, we could also see who has emerged in the last two years. So 66% of the folks, of that 600,000 we had not seen in HDIS for the last two years. So we consider them newly homeless. Either they've never been homeless and they're homeless for the first time, or they had been housed for some time and they're reemerging. It's hard to know, but we consider them newly homeless about 66%.

On the other hand, there were about 20% who we consider chronically homeless, meaning they'd been homeless for at least a year, over a three year period, and they had some kind of disabling condition, physical, mental health, substance use issues. So you can see the two kind of spectrums. The points that have been raised is a very diverse population that needs no one size fits all. When we looked at the fiscal analysis, the other thing we did for the survey is not just the HDIS data.

We also looked, this is what the statute required us to do. Who among the state family was really investing or administering funds that could address homelessness? 35 programs were identified. And when we looked at the analysis of those 35 programs over the three year study period, almost $9.6 billion was being invested to address homelessness. The good news is over 5.5 billion. So more than half of that was invested to preserve or produce affordable housing.

And when we looked at how much affordable housing was being produced or preserved, as the secretary mentioned, about 60,000 affordable housing units were being produced or preserved through this investment, including over 10,000 that was targeted for people at extremely low income with homeless backgrounds. So you can see the secretary mentioned, this does not count what comes in the pipeline after 2021. This is only the study period. Also, 17,000 emergency shelter and interim housing beds were being created. So we need to do both.

We need to help people come off the street. But we are also building that deep bench of affordable housing to make sure there's an exit. So that's a little bit about the data. About 50% was being tracked into permanent housing outcomes. When you looked at the destinations, 70% had exited, 30% remained in the system. And of those who exited, we did see 24% with unknown destinations, which, again, is because we don't have enough places sometimes to put people into.

And so there's more that we will learn as we keep digging into the data. I'm now going to provide a high level overview of the grants. Ms. Morales provided some of the information already. So I'll just mention a few things that might be helpful. HHAP, which she mentioned, the Homeless Housing and Assistance Program. This is your flexible, one time, five year grant, which goes out to all 58 counties, all 44 continuum of care entities and the big cities.

You can use these flexible grants in multiple ways. And what we found in round one and round two, where we have the data. Round 3 only went out in the winter of 2022. So it's brand new. People haven't really started using them yet. But when you look at round one, when you look at the expenditures, localities were using them for shelters and navigation centers and outreach.

But then when you looked at round two, people were using it as operating subsidy, matching them with the HomeKey projects. So you can see the HHAP is very important to really activate HomeKey projects, at least based on the expenditure data we do have. As I mentioned, round three just went out and we're in the middle of reviewing round four. HDIS is important here because HDIS allowed us to use that as baseline data. So every applicant, there are 114 eligible applicants.

We provided the HDIS data that we received from them as a baseline, and they had to use that baseline data to measure their goals. So for HHAP three, they have goals for 2024 that they have set along system performance metrics, like how many people are you getting into housing? How many people are returning from housing? How many people are you serving? How many people are first time homeless?

So we are measuring all those outcomes, but we have a baseline data that's apples to apples now, and that will help us measure their progress in 2024 for round three and for round four. Once we have reviewed those, those goals will be for 2025. But this is again the power of HDIS providing us the baseline data. The other thing I want to mention is I mentioned the racial equity goals.

Each of the goals that are in the homeless local action plans have racial equity goals embedded in them. Where we want the localities to tell us, what are your strategies to really address homelessness around underserved and overrepresented populations? And we want them to report out on their strategies and their goals around racial equity goals, underserved and overrepresented communities. We are also having a youth set aside. So HHAP three and HHAP four has a 10% youth set aside.

I think at least the advocates tell us that this is very important, providing kind of this set aside because it allows people to plan and build capacity. And I think we can say that because of this, when you look at the point in time count nationwide California actually had the largest absolute decrease among youth in the nation. So we saw 2,500 fewer youth from 2020 to 2022. That was a 21% decrease.

So I think this youth set aside is really helping the youth community serve youth in a very person centered way. And finally, there's a tribal set aside. So there's money that goes out to the federally recognized tribes. We have a tribal liaison who's from a tribe and has former experience being homeless herself. This has really helped us consult and provide a very targeted, person centered approach among tribes that have received the hapset aside, we also have competitive grants. The encampment resolution Fund is a competitive grant.

$50 million went out last spring. And as Ms. Morales mentioned, when we got the investment for round two, we used some money from round two to go back and look at who had applied in round one. And if they've met the quality standards, we funded them as well. So about $100 million has gone out to encampment resolution grantees, about 26 communities. And then we will round two, the remaindered, about 230 million dollars that's being reviewed right now.

The applications have come in, and thanks to the Administration and the Legislature, there's round three that will be coming out in December, later this year. And then finally, family challenge, as Ms. Morales mentioned, 17 million has gone out. These are four year grants really looking at innovative ways that families can be served. And that went out to 10 grantees. As you mentioned, as Ms. Morales mentioned, HHAP five is coming up. That's another billion dollars.

And as the Administration has signaled, they're really looking forward to working with the Legislature to think about accountability. As you know, pro housing policies are making a real difference. However, some communities need additional support, and so the Administration intends to pursue statutory changes to prioritize not only spending on activities such as home key operating sustainability, but it could be accompanied by expanded housing streamlining provisions. So more to come on that.

And then finally, even though HCD is not here, I do think it's important to provide some high level framing and takeaways on HCD's investment, which is really about housing production. And as you've heard from the panel, it's really looking at how HCD is working in tandem with the services and supports and the HHAP flexible subsidies, because it's going to take all of us working together to really create the investments we needed.

As the secretary mentioned, all the units that HCD produces is for extremely Low income households or homeless households with not just HomeKey, all their investments. And the investments hold the units affordable for 55 years. Since 2020, HomeKey has awarded over $2.7 billion to 210 projects totaling 13,000 affordable units, and HCD also provided initial operating support for these projects, including an increase in funding for operating support if the project was serving people experiencing chronic homelessness or if the unit served homeless youth.

60% of round two HomeKey awardees created permanent housing, which is up from 40% in round one. And as you heard, there'll be another $750 million dollars available later this spring for an additional round of funding. So I'll just close to acknowledge what everybody has been saying and agree that this is an all of government approach we are taking here, and it will really take all of us working for some time to reverse the trajectory and break the cycle. Thank you so much.

We're going to keep moving along. I know that time is of essence here. We will move Director Kim Johnson thank you.

Chairs and Committee Members. Kim Johnson, California Department of Social Services and appreciate the invitation to join this afternoon. The Department of Social Services Housing and Homelessness division designs, supports and oversees the delivery of programs that are tailored to the unique needs of children, families, older adults and people with disabilities who are experiencing homelessness or housing instability. As you've heard Deputy Secretary Buchanan mention, each program is embedded into the broader social Safety net program in order to meet participants where they are at and integrate services effectively.

This includes services provided by the CalWORKS program, Child Welfare Services System, Adult Protective Services and Disability Benefit Services, and each of our programs, as you've heard through Dr. Kushel, utilize that housing first approach. Page 10 of your background document outlines the seven housing and homelessness programs that we oversee. And as you've heard, we were grateful to have the one time program expansion dollars by the Legislature and the Governor totaling more than $2 billion invested over the last two years.

These programs are made available to county social service programs and tribal governments throughout the state, and the Department encourages and works with grantees to blend and braid the tremendous and significant state infrastructure investments that you've heard about with that wide array of health and social service interventions. I'm pleased to report that as of January of 22, the Department has made all of these funds available via applicable funding notices and has awarded over $1.5 billion in funds to over 350 grantees to implement these programs statewide.

The remaining 500 million is available via relevant funding announcements, and we are in the process of reviewing submitted applications. The criteria for awarding these funds is described within our funding notices, but our metrics include, but not limited to, the number of families and individuals enrolled, the services provided, and the housing outcomes, which I'll speak to in just a moment.

Along with these significant funding expansions, the program eligibility was expanded to serve families, older adults and adults with disabilities at risk of homelessness who are not yet in receipt of an eviction notice, which allows grantees to help stem the inflow into the homelessness system on the preventative end and provide services and supports further upstream.

Additionally, all of the onetime investments over the last two years provide multiyear spending authority to ensure grantees can commit to longer term support for individuals and families who are enrolled in our programs. This allows local communities that flexibility to provide services and through supports in response to individualized needs, whether they be that short term or one time intervention or longer term service and support again want to note that the importance and just appreciate on the ground all of the work that's happening locally.

The state has provided robust and tailored technical assistance with a number of partners to ensure that these funds can be leveraged and off the ground. We also have again focused our work with tribal governments to expand access to these resources. Have engaged in government to government consultation with tribes to ensure that they are completely accessible, and five of our seven programs designate tribal governments as eligible grantees. As was mentioned and in your background document, we know that families with children represent 35% of California's homeless population.

Supporting families in obtaining and retaining stable housing leads to better outcomes for parents and caregivers as well as their children across multiple other systems, including education, workforce, child welfare, and health. It's a keystone to not only addressing homelessness, but more broadly in breaking the cycle of intergenerational poverty, which again disproportionately impacts people of color. To achieve these goals, the Department operates three programs that serve families. The Homeless Assistance and housing support programs provide temporary housing, rental subsidies, and supportive services to families.

In our CalWORKS program, this program has served more than 66,000 families and permanently housed more than 31,900 families since the program's inception in 2014. In fiscal year 2021-22, 47,225 families were served through the Homeless Assistance Program. Six months after exit of the CalWORKS Housing Support program, 88% of participants retained housing. We also have another program in this space of serving families and that's Bringing Families Home Program, which provides the same resources to families in the child welfare system to keep help families together.

This program has served over 4,700 families and permanently housed 2,200 families since its launch in 2016. As it relates to unsheltered populations with a disabling condition, the California Homeless Data Integration System HDIS, as was referenced, reports 46% with a disabling condition and 20% over the age of 55. And we know, as we've heard from Dr. Kushel, that the older adults are the fastest growing population of homeless individuals in California.

We operate four programs that serve these populations. Home Safe, which provides housing and supports to those in the adult protective services system, which can be considered amongst the most vulnerable populations in the state. This program has served more than 5,600 people since its inception in 2018, and six months after exit of this program, 85% of those participants retained housing.

The Housing and Disability Advocacy program combines housing assistance with disability benefits advocacy so that people who are unhoused and who have disabling conditions can get the income assistance. As you heard again, Deputy Secretary Buchanan mention connect to that longer term housing stability. This program has served more than 5,500 clients and helped permanently house more than 2,800 people since its inception in 2018, and six months after exit of this program, we are seeing 80% of those participants retaining their housing.

You've also heard a lot of mention related to the state's response to Covid-19 and Project Room Key, a national model for protecting people experiencing homelessness. And I want to also thank Dr. Kushel and many in this room for their thought partnership in establishing this program.

Since March of 2020, over 16,000 rooms, those are again hotel and motel rooms across the state have been secured and over 61,000 individuals have been sheltered, representing a 50% number increase in the number of shelter beds as was mentioned in the survey, and exceeding the goal of our original goal of 15,000 rooms that we put forward. As of January of this year, over 2,200 hotel and motel rooms are still occupied by over 2,700 individuals experiencing homelessness.

We are grateful to the support of the Legislature to be able to have the ability to rehouse and connect those in this program to longer term supports. We have eight communities reporting successfully transitioning over 80% of Project Room Key participants to permanent housing, another 19 communities reporting 70% to 79% success rates in the space, and 15 communities reporting 60% to 69% success in that permanent housing. And under the Project Room Key and rehousing strategies, grantees have expanded those rehousing services.

We are currently in the process of determining the appropriate date for project room key closures of those that are still open, based on the local needs and in consultation with local emergency and public health departments. And lastly, our newest program in a partnership with the California Department of Healthcare Services as we work in tandem to design and implement the programs that was mentioned the Behavioral Health Continuum Infrastructure Program, or BCHIP, and the Community Care Expansion Program.

We issued a joint request for applications in January of last year.

The Community Care Expansion Program provides capital funding and operational subsidies to preserve and expand assisted living settings that can serve people who are homeless or at risk of homelessness, and this funding supports residential care options, including residential care facilities for the elderly and adult residential facilities, often referred to as board and care, where we have seen an increase in closures in recent years and which serve as a critical housing resource for people along the long term care continuum.

Investing in these settings divert recipients of the SSI and SSP and Cash Assistance Program for Immigrants, or CAPI program, from homelessness and will form a key part of the state's strategic multiagency effort to both maintain and increase the state's portfolio of housing options while reducing again the inflow to the homelessness response system. As of February, just last month, CDSS has announced a total of 207 million through the Community Care Expansion Capital Projects of 32 projects, creating 1,172 new beds.

Program grantees and awards are posted on our dashboard, and we've also awarded 186 million dollars to 35 participating California counties through our preservation program for the immediate, again, preservation of these settings. I'm also glad to take any questions. Thank you.

Thank you for that, Director Johnson. So I know we have some questions from the Committee here, so we'll go Blakespear, Senator Caballero, did you raise your hand there?

Blakespear, Caballero.

Okay.

Thank you. Well, thank you for the information. That was all very interesting, each of you providing different data, and I really appreciate that. I wanted to particularly say thank you to Deputy Secretary Wickrema for the information about the true picture of the data in the last two years and the alignment of HUD with our local coordination and oversight. I think that's really important. And I was really interested in all that data you presented.

In preparation for this meeting, I reviewed the recent homelessness related augmentation and oversight, which was the first thing that was discussed by Ms. Morales. And so there are a couple of things that stood out to me that I just wanted to really highlight. One of them is just the reality that since 2018, we've spent $23 billion on housing and homelessness.

So that is a huge amount of money, and it's really important that we remember that we have done a lot of good and that we are doing a lot and that things that we are, as a state investing in this. However, we are seeing more and more people living unsheltered and this is increasingly the biggest problem that we face in the state.

So putting that number in context and then recognizing that one of the buzzwords that we hear here in Sacramento all the time and that the Governor is also talking about is this accountability. And so to me, when I read the sentence that where reporting requirements exist, they generally capture spending and uses rather than outcomes, I find that very alarming. And I feel that every agency at every level should not be capturing spending and uses instead of outcomes.

So we should be really clear about $23 billion going out the door, that we want to see how many people are being housed and how long they're staying housed, and to be really focused on that and not just on which pot of money it went out the door into, because as policymakers, as agency officials, there's no way that we can actually make decisions or course correct when we don't actually have that outcome. So just really dialing in on that being a major problem.

And then I want to also mention this other sentence which says that this is related to HHAP, and it says that where local goals. Sorry, whether local goals align with legislative priorities is unclear. So I come from being a mayor of a city and having local goals align with the legislative priorities is really important. I think in the biggest sense, we all want to see a lower number of people living unsheltered. We want to solve for homelessness.

But this question of how is HHAP money being used? And it was shared, and the data shows that it's navigation centers and its social services and its shelters. But everything we talk about goes back to homeless. The homeless problem is a housing problem. We need to be focused on building housing.

And I think back about the first panelist who talked about the musical chairs aspect of this, that when one chair is removed and there are 10 people and then there are only nine chairs, the boy with the broken ankle is the one who can't find that chair.

And so we're spending all this money to provide him a social worker, to try to advise him on how to get to that chair in the next round, or we're providing a navigation center, or a temporary place for him to sit while he waits for a chair.

Just this huge amount of resources being put into not actually providing the chair, which is actually what we should be doing. Which goes back to the point of, like, how do we most directly, as a State, fund housing. Not funding, funding all these other things for certain subgroups is clearly really important. But to be focused on that outcome part, because when we go back to spending and uses versus outcome. Outcome is that that boy gets to sit in a chair when the music stops.

And I think we all want that. And we're all united with local priorities and legislative priorities, but with a big grab bag of different options that this money can be spent on, it's very hard to actually see that we're achieving those goals. I'm really interested in trying to collectively move in that direction. And if there's any thoughts on how we can more closely align to getting that housing built from this panel, I'd really appreciate hearing it. So thank you.

Thank you, Senator. I think that the way you've summarized it is it's critical for us to ensure that as we address the, when we say that we want to meet people where they're at, we know that we have a number of individuals and families that are living in unsafe conditions, right, in conditions that are not suitable for habitat.

And so we were very focused on making sure that we're doing everything possible to bring people in safely, and that requires a level of service delivery and a level of interim housing. But on the housing production piece, I think it is very important that we continue to double down on producing more housing units. That is a critical priority for this Administration. We are building many more housing units. We're building a robust housing finance system. We're creating capacity at the local level.

And I think that it's also important to acknowledge that a $23 billion investment, as you mentioned, is resulting in things tangible change and tangible units and supports. But the scale and the magnitude of the issue is very significant. We need to plan for 2.5 million units by 2030. A million of those units need to be affordable to low income households. And so a critical partner in this effort needs to be the Federal Government.

The last three sort of significant cycles where the Federal Government has been involved in providing significant funding to be able to do this was in the 1930s, public housing, in the 1970s, the section eight housing choice voucher program, and in the late 1980s, with the low income housing tax credit program. So as we continue to invest at the state level, we also need to continue ensuring that federal funding is matching the scale of the issues that we have in the state.

So I guess I would say that there's no disagreement that we need to continue to do more to create more housing units. And what the state has been doing is essentially employing every single tool at our disposal. We're unlocking state lands, making that available to produce affordable housing. We're working with cities to build capacity to provide the level of technical assistance to be able to leverage their own lands to build more affordable housing. We're also coordinating and connecting our housing investments with our service investments.

And I will say that we are seeing at the local level that communities are stepping in and stepping up and we need to continue that level of momentum.

We need to continue that level of focus. We're also very mindful, I know that previously there was a question regarding the cost of building affordable housing or housing in General. We're also very mindful that we need to continue to do everything possible to reduce that cost. And I would say that to do that, we also need to ensure that we're holding local jurisdictions accountable for removing barriers to development, for meeting their fair share when it comes to producing housing. Again, no disagreement.

This is a priority for the State, and we recognize that, as was mentioned previously, this is a crisis that has been many, many years in the making. We're making up for years of not investing the way that we should, and we are moving as fast as we can.

Thank you. Can I just make one follow up comment? I think coming from local government, sighting of homeless housing is a big problem. So even though we say cities are doing more, they're not doing nearly enough. And there are many, many cities who want the county and somebody else to handle this problem. And they say we don't have the capacity or interest or land or whatever the reasons are nimbyism that leads to this actually not being cited in cities that need it.

So that is absolutely a barrier we need to address at the state level.

Yes, if I could comment on the issue about oversight and alignment with legislative priorities. As I mentioned, the HHAP program has historically been the most flexible, particularly the first two rounds of funding. That's changed in the third round where there's this inclusion of local action plans for the fifth round of funding, where the Administration has put forward budget related legislation, the Administration is proposing a prioritization of uses, including having HHAP funds support, care court implementation. And so that is one way.

I think.

If the Legislature were to adopt that TBL, whether it's that exact list of prioritization that's proposed by the Administration or a different list where you could begin to sort of shape how local governments are using the funding, clearly that comes at a trade off where you remove some of that flexibility. And so there is discussion to be had on that front that could address the issue you were raising. Senator, thank you.

Thank you. Senator Caballero

Thank you very much Madam Chair. Thank you very much for your presentation. Let me just say that it's overwhelming the number of funds and the different ways that they're being utilized. And if you take a look at some of the funds, they're all going to the big cities. The Room Key went to the big cities. So the challenge becomes, how do we access this equally or fairly or equitably? And I don't have this solution.

Let me just say, as a point of frustration, is that the number one issue I'm asked by constituents is, what are you going to do about housing? What are you going to do about homelessness? And your point is really well taken. Everything you said is absolutely true.

We're counting the number of chairs instead of trying to figure out how to be able to really quantify, as we roll these funds out, and particularly in the homeless area, what our goals are, so that we recycle people through in many instances. And I've talked with some of the local health homeless service providers, and they end up on the street six months down the road because it's not a permanent solution. Right. And so we do need to build housing. I don't have a solution for that.

The fact that people don't know that we've allocated $26 billion for homelessness. My frustration is that the locals are not, when they open the shelter or they do something, they don't say, oh well, this is with state money. It's just, here's what we're doing like this. I think what we need to do is have a coordinated approach that says it's got to go in every single community. And if you're not going to do that, then you don't get the resources.

Because my experience is it goes into blue collar communities. The homeless shelter are always on the poor side of town. And the challenge with that is that it's not equitably distributed. And I really do appreciate BCSH aggregating the data that's coming from the COC's, because that's been my frustration. Is how do they compare to each other? How are they doing?

What are some of the best practices so that we can be a little bit more nuanced about how we do our funding and don't allow the recycling of individuals. We get them off the street for a while, but then they're back on the street because we haven't created the permanent housing or a place for them to go.

And as a footnote, I want to make sure that the Project HomeKey, I think LAO mentioned that there's covenants with the purchase of the hotels and the residences that are being used for homeless. And I'm hoping that the property is being managed so that it is in the public sphere. So either it's a housing authority that's the owner of the property or the city or the county, and that we're not leasing for 55 years. We need to own it at the end of it.

And I don't know that we've ever made that a requirement. But I want to make sure that we don't lose the opportunity to own low income housing that has been subsidized for years and that then all of a sudden loses its subsidy and it can be used to make profit for somebody. I don't have any questions. This has been very informative, but also really frustrating because we have set these priorities and I think you all have done an incredible job.

But it seems to me that the situation doesn't get any better. And so we better start building. The bottom line, we better start building.

Thank you, Senator. We're going to move to Senator Wiener and then Senator Skinner.

Thank you. I just have a positive comment and a request to Secretary Castro-Ramirez, I guess to others as well. So about four or five years ago, I've always been focused on youth homelessness back to my time on the Board of Supervisors. We have these kids who end up on the streets, and if we can get them off the street and on a better path quickly, we can avoid them becoming long term chronic homeless.

And we about four or five years ago, started working intensively to try to get more state resources focused specifically on youth homelessness. Until I think 2015 or 16, there was almost no, almost zero. It was like $1.0 million a year or something like that. The entire state budget that was specific to youth homelessness, basically almost nothing in the context of the scale of this problem. Senator Holly Mitchell started getting it increased before I got here.

We then sort of picked up the baton and kept working to get it increased even more and ultimately got the set aside, both in HomeKey and other budgets to focus on at least that minimum threshold on youth specific homeless programs. And we've definitely seen some improvements. When I first started doing this work in the Senate, I believe only one third of California counties had youth specific homeless programs.

And so, for example, when I was in Fresno four or five years ago for Fresno Pride and I met a guy who opened up a youth shelter with 25 beds in Fresno. In Fresno. And on the first night, like three or four hundred kids showed up for the 25 beds. So the need is extraordinary. And these kids, they don't typically want to go into an adult shelter or an adult system for understandable reasons. And so we have to have these youth specific programs.

We checked, and I think we're now up to two thirds of counties have youth specific homeless programs. It's like 39. So that's fantastic. It needs to be 100% when they have these youth specific programs. It works wonders for these kids. So I want to really thank the Administration for supporting the set aside. I would like to see the set aside be a little bit higher.

And I want to just note for HomeKey, and we had a Bill in this, I believe Senator Menjivar is doing the Bill this year, and I'm co authoring it or joint authoring it. HomeKey funds, only government can apply for them, right? Only local governments can apply. Our nonprofit housers cannot.

And when it comes to youth, we have our youth focused homeless providers, the Larkin Street Youth Services of the world, who are the absolute experts on how to get kids off the streets, how to house them, get them in a better house. They are not eligible to apply for that funding. So Senator Menjivar has a Bill this year to allow them to directly apply for home key funds and other funds. And I really want to just plug Senator Menjivar's Bill to the Administration. It's really important.

Like the fact that we've just gotten this minimum set aside for youth homelessness, and we're now seeing double the number of counties with youth specific homeless programs because they're able to access these funds. So it has a direct, positive benefit. And I really want to see the momentum keep going. So I don't know if you have any comments on that issue.

Yes, Senator, I would say you're absolutely right. When you prioritize and you dedicate resources, including establishing set asides, we see the impact of that. Deputy Secretary Wickrema spoke to the pit count and the reduction in youth homelessness. And so there's another indicator that points to that. I will say that in terms of HomeKey, Senator, we do have local governments partnering with nonprofits. I was in Riverside and had an opportunity to visit with a nonprofit that partnered with the local housing authority.

I'm interested in sort of trying to figure out what are some of the barriers. So we'll definitely follow up. But I would agree with you. I think that we need to continue staying focused. We know that we are moving the needle as it relates to creating more housing and services. And just the last point that I will mention, just about two weeks ago, the Federal Government announced the release of vouchers for foster care youth that are transitioning from the foster care system into being independent.

And these vouchers are for housing. And so we also want to ensure that we're pairing up those rental subsidy supports with actual units.

That's great. And the California Coalition for Youth has been our partner on this work, and I'm sure they can tell you all the challenges with the current structure. Thank you.

Senator Skinner.

Thank you. Some of you spoke at the oversight hearing we had in the budget on this topic, slightly different, but still about trying to track our investments. And at that meeting, I posed and going to pose it again, that given that we are coming into a time now where we are not going to have the level of State investments to make.

And while I appreciate the comment about the Federal Government, it's been more than 40 years, probably, yeah, at least 50 years, 40 years since the Federal Government has really put any significant amounts of money towards housing. So I would say that if we are trying to address this in California, we should not hold our breath in relationship to the Federal Government. And additionally, not all, but much of the problem is our own making.

So the question, or what I would pose again, is that given that we're going into a time where we're going to have less resources to direct, not the surpluses we've had in the past, that would the agencies themselves be willing to come together and figure out how to merge the programs so that we are reducing our administrative overhead on the state level. Thus, that would be saving some funds and reducing the administrative overhead for the entities that are applying for this money.

Because when we interact with the providers, and we're going to hear from some in the next panel, they describe the amount of grants that they have to cobble together to operate their programs and what it costs them to administer those grants and just to even apply for them. And that it also leaves, there's a group in LA that calls it sort of unicorn housing, that the ideal housing that would get funded doesn't exist. It's impossible, or there's not a population to even utilize it.

So they joke and call it unicorn housing. So I guess I would pose the question once again, given that we are coming to a point of lesser funds, can we be more efficient both for ourselves, reduce our costs and for those that we are funding?

Kim Johnson, Department of Social Services I'll just note a couple of efforts that I think are along those lines. And one I mentioned, that the application, especially as it relates to serving those with behavioral health, was a joint application between the Department of Health Care Services and Social Services, between community care expansion and behavioral health dollars.

So one application out into communities to apply for. The other thing I would say is that for our programs, which are again embedded in the safety net programs, is that we have shifted our funding distribution to allocations, still having a plan that outlines, again who's going to be served, how they're going to be served, how things are going to be integrated.

But as opposed to having full applications year after year to go forward, we have streamlined that process for our county social service agencies and tribes to do that as an allocation with a simplified plan. So just in the spirit of the question, want to share those examples that we can continue to explore.

Yeah.

Another, Corrin Buchanan, California Health and Human Services Agency.

Another example along the same lines is through our work on the California Interagency Council on Homelessness, we have a state funding working group that has stood up to be able to think about the efficiencies that we can create internally within our own programs, from the applications to the implementation of those programs and the way in which we're collecting data on those programs. Which both helps us at the state level to understand the outcomes of our programs and how to drive investments in the things that really work, namely rental subsidies and that direct financial assistance, as well as help being helpful to the locals who are ultimately administering these programs.

Apologies, but those are descriptions of what you have done or are doing, but not of what we might do.

Yeah.

Thank you, Senator. So just a few other thoughts that I would offer. I think consistent with what my colleagues have said in terms of what CalHHS and DSS is doing, we recognize that it's very important to take a look at all of our programs and look at ways to be able to consolidate and streamline. So that's a critical priority in a way of reducing redundancy, reducing cost.

We completed that effort through the super notice of funding availability for multifamily with an HCD. Four programs consolidated into one application. But I think your larger question is, is there an opportunity for us to take a look at agencies and departments and find ways to be able to reduce costs? And what I would say is that consolidate. Right. What I would say is that within housing, we have two agencies.

Well, we have two departments that are responsible for housing, the Housing and Community Development Department that leads everything from administering dollars to also enforcing housing state law, and the California Housing Finance Agency that is also looking at ways to unlock homeownership opportunities. So I don't see an opportunity for consolidation there, but that's not to say that there may not be opportunity to explore.

I will point back to what Deputy Secretary Buchanan said about the importance of bringing systems together to ensure that we are co investing and being strategic about how we're delivering these resources. At the local level, there's the housing investments, focus on preservation and producing more housing, and there are the human and health services investments that are focused on strengthening the safety net system.

So I think to the extent that we can strengthen that coordination and make it easier for locals to be able to apply for funding or to bring together our dollars, that may be sort of a way of getting to your question of consolidation. But I will say that I think in General we're pretty streamlined in the housing space. We're pretty streamlined with two departments that have very sort of clear mandates.

As mentioned, over the last few years we have been growing our capacity and doing our best to pay attention to reducing costs, eliminating duplication, being more responsive and responsible to local government. Just quickly, as an example, through the HomeKey initiative, our approach was not just to develop the guidelines for a new program, but our approach was to develop the guidelines and to provide the level of technical assistance to ensure successful outcomes for those communities that were applying for HomeKey.

I think that that was a very important piece of our approach that led to almost 13,000 units being funded in less than two years. So I appreciate the spirit of your question, Senator, and I think we will continue to look at ways to be smarter about how we spend limited resources.

Can I just follow up what I was hearing, especially going back to Senator Blake Spur's question and her comments and question in one particular area. This area of consolidation that you're responding to now was not so much the usual kind of agency consolidation or bureaucratic consolidation that we've heard over decades that might lead to cost savings or streamlining or something like that, although maybe that's been said.

But a consolidation of information that directly points to outcomes being achieved on a real time basis, I don't feel we have that. And it's not just all of you. It's in other areas that are at crisis levels in the state right now. Now iso on the electric grid. Any one of us can check right now and see basically on a public platform exactly where power is going anywhere in the state. You can't do that with water.

Despite the fact that we've been dealing with a water crisis, homelessness is a recent big investment by the state. So I think it's understandable that after a couple of years of heavy investment under this Governor, which has never even been done before, and I think the Governor deserves tremendous kudos for that, getting us in the game and kind of replacing what isn't coming from the Federal Government. Hasn't been coming from the Federal Government.

I mean, we have an Administration now that's saying, fine, we'll do it ourselves. But I think the next step here, one of the next steps before we could even move to the issue of fiscal accountability or efficiencies, is let's get everything on the same platform, which really means we have to get beyond a fear of it's one thing to do with the state, but beyond a fear, including here in the Legislature, of appropriations issues with regard to local governments. We have a lot of that information.

I know in Santa Clara County, we'll hear from them, I think, later on today, where I'm from, there's a lot of data that would have to be integrated into what all of you do and are doing in order to try to set up an outcome based real time database that really tells us this is the effectiveness. Conversely, we're still, or to the know, sort of in this old model as a Legislature or stuck in it.

I, I don't mind doing this, but I had to call for an audit of that flow of resources into my own county. I think that's going to pick up at least one other city. It's basically San Jose and one other city, which puts know on the defensive a little know, why are you auditing us? But in the absence of having a dashboard we can go to that's outcome driven.

There's no way I could even tell my constituents why money is going, for example, to a motel acquisition instead of to mitigate the largest homeless encampment in the state, which is right in the middle of my city. We can't answer those questions real time. I wouldn't expect you to be able to answer that question real time because we just don't have that. So I'll stop there.

But it's obviously less of a question than just a comment that I really think we need to go in that direction. Seems like it could be handled administratively, but if it needs to be in some way led by the Legislature or direction needs to be given legislatively to go do that, and we'll fight for the appropriation to go do that, so be it. I think people here would take that next step. And again, I'll leave it there.

Thank you, Senator. I'm going to wrap us up if there's no more questions. So I want to thank all of you. You have a lot of data, a lot of information that you gave us here today. I did want to make a point of clarification. So in the Lao's office presentation, page two, we started talking about the amounts spent in each of the departments. I want to clarify, is this 23 billion or 23 million?

It's 23 billion b with AB. Yes.

Okay. So on the handout, it's top left side. On page two, it's parentheses and millions. So can you clarify that just so we know? Because that's a significant difference in terms of what we're spending. And I want to make sure that I'm acknowledging all the surprise from this Committee on the dollar amounts.

Yes. 22,890. 6 million. So 23 billion. So it's an issue of the commas, but, yes, I can confirm it's 23 billion.

23 billion. Okay. So that is staggering. As you've already heard, looking at the numbers, and I'm not a mathematician, but we have an estimated 170,000 homeless individuals in California. And when you do the math, what we're spending on each homeless individual to help them would be the cost of two salaries, three salaries. It's a six figure. So I'm confused. I'm shocked at these numbers, and I want to dive deeper into this.

Not today, but we are stewards of taxpayer dollars, and when we are throwing money at a problem and we're not seeing improvement, the questions that I ask is, what are we doing that we need to stop doing? What do we need to continue doing? Because it's working? And what do we need to start in terms of being more innovative and more creative? Because $23 billion in taxpayer money is a huge amount to go to 170,000 individuals.

And then we're seeing the numbers increase in terms of homelessness. So I just want to underscore what's already been shared here. And again, I'm not a mathematician, so help correct me if that is not true. The second thing I wanted to point out is California is such a diverse community. Our state is so wide. I mean, just to go from my district to point a to point b is about 12 hour drive, and I hit snow, desert, mountains, everything you can think of.

And so when I think of the homeless community here in California, I automatically go to the rural centers of my district, and data is telling us that about a fifth of the homeless population resides in rural communities. And when I look at the disbursements of the grants, when I look at where the billions of dollars are going, I'm seeing urban centers, I'm seeing major cities, I'm not seeing that earmark or that set aside for rural communities.

And Senator Menjivar, she touched on this, that, that rapport building to help lift somebody out of poverty, lift somebody out of a mental health crisis, certainly to lift somebody out of homelessness. That rapport, that relationship is vital to the success of that partnership and more so in small communities, in counties that I represent of under 50,000 residents, of under 20,000 residents, of under 2000 residents.

And so I'm concerned that we are hyper focused on these major cities and implementing solutions where a small amount of resources dedicated to a rural community can change the lives of so many people. And at some point, there's a tipping point, right? That if we're employing these one size fits all strategies and programs into our major cities and urban centers, and we are not using the lens of our rural community experts, then we're missing a mark there. So I just want to leave you with that.

And also, when presenting the expenditures, particularly the grants, I would love to see a heat map of where these monies are going in California. And right now it's kind of separated by San Diego, LA, Bay Area. That to me, doesn't tell me what's happening with the northern part of our state or even my district, the eastern Sierra regions.

And I think about the unhoused that are trying to survive in zero degree weather, in blizzards and extreme weather patterns, in deserts, and where transportation is an issue, where even accessing hospital services is an issue.

So I'm hyper focused on that area and hope that the data, whether it's through this new data set, the HDIS, or even the way that we frame and we look at homelessness here in California, that we have answers of what is happening in our rural communities, what is happening with our people with disabilities, and how are we ensuring that there's equity in the $23 billion that we're spending that is going towards major cities and urban centers?

Senator, if I could sort of provide more context for that 23 billion, if that's okay, digitally highlight that's the amount that the Legislature has authorized in discretionary funding in recent years. How that funding has flowed out to communities is really in sort of various stages. So, for example, if you look at the table for HAP funding, it's nearly $4 billion that's been authorized for the Legislature towards that program, but only about 950 has been out for any sort of considerable time.

An additional billion just went out at the end of 2022. And so a lot of this funding sort of has still not made its way out. So, as you think about the effects of these dollars, it's something that we will see over the years to come, even for the resources that are allocated for the 2023-24 fiscal year. A lot of these programs have three or five year expenditure windows. And so just wanted to sort of highlight that point. Thank you.

Thank you. Thank you for that. And with all due respect, because I know you work extremely hard, and we are all in public service, we are all stewards of public tax dollars. The biggest issue that concerns me about this money is our inability to measure the outcomes. And for me, seeing charts with numbers, with dollar signs, I get a picture of that. But I'm looking for those outcomes. How are we changing people's lives?

How are we changing the trajectory of their need for services or for support? How are we using our partnerships in the community, with our local governments, with our nonprofits, to ensure that outcomes are happening? There's faces, there's lives, there's hearts that are being affected through the homelessness crisis. And we are so drowned in the numbers. And so those numbers, for me, need to translate to outcomes, real life, human circumstances, outcomes.

And so I encourage you to seek those, as we hold all of us accountable for those dollars and as we issue grants out to the communities, to our governments or our counties, those outcomes are just as important as accountability to the dollars.

Thank you.

So I'm going to move on past the gavel to my co chair and thank you so much for all of your information today.

Thank you all so much. Okay, we're now going to move to our third panel about current outcomes and gaps. We have three panelists. Sharon report, who's the Director, California policy for the Corporation for Supportive Housing Alex Visotzky, the senior California Policy fellow at the National Alliance to End Homelessness, and Mary Kate Johnson, Director of regional homeless Prevention for all Home California. And you'll each have up to five minutes for your presentation. So welcome and thank you.

Thank you. I'll start. Good afternoon, Chairs and Committee Members. Thank you for the opportunity to speak today. My name is Alex Visotzky. I am the California Policy fellow for the National Alliance and Homelessness. We're a DC-based organization that works on lifting up what the evidence tells us works and using that to move federal policy as well as practice within the field. My position is based here in California and focuses in on state policy.

Before diving into current investments, I think it's important to remember to step back to a longer historical scope. The modern era of homelessness really began in the 1980s and was in large part a result of federal disinvestment in affordable housing, starting with dramatic cuts in the early 70 s and further disinvestment for the next couple of decades that left things up to states and local jurisdictions to supplement what came in from the Federal Government.

But about a decade ago, we saw similar disinvestment from California with major cuts in affordable housing funding in 2011 2012 following the Great Recession. Meanwhile, the state has only very recently made major investments in homeless services, allocating money through the HEAP program in FY 18 19 and then Hap in more recent years. Those are major investments. California has made huge breakthroughs in just the last three years in funding homeless services, but it comes after years of very little funding for a problem that was growing.

So we're here because of decades of disinvestment and policy choices, and it's not going to be undone by a couple of years of one time investments, no matter how effective those investments are. That being said, there's a number of critical ways to make sure that the state's homelessness programs, including HAPP, which has been discussed today, are as effective as possible at ending more people's homelessness. The federal Continuum of Care program, or COC program, provides a helpful model for accountability.

This is a program that's about two and a half $1.0 billion annually for continuums of care around the country, with $500 million or so of that coming to California, much of that going to supportive housing, rapid rehousing and other homelessness interventions. It's not nearly at the scale it needs to be, but it is effective within the parameters of the program. The COC program combines accountability to its grantees, which are regional, with accountability down to the community and project level.

HUD requires individual projects to apply to their COC through a competitive process, with the COC then ranking these projects according to a community's given ranking policy and then submits that to HUD as part of a process that's a mix between formula grants and competitive process. HUD requires COCs to establish a reallocation policy so local COCs can monitor community level projects. And when a project isn't meeting its goals, then move that to another program that is more effective and is meeting its goals.

The incentives are really strong here for regional cocs to monitor performance of individual projects, provide technical assistance, and move money if necessary. Because if individual projects don't meet their goals, the larger community isn't going to meet its goals, and that will make the larger continuum less competitive when it applies for federal funding in the following year and the whole COC may get less money.

All of that is predicated on a level of confidence that funding is going to continue to be allocated on a year to year basis for the program. With this ongoing funding, increases or decreases in funding are a pretty powerful tool to hold local jurisdictions accountable for their performance. Following from that, I think the state can do a lot here, especially in the HAPP program, to adopt some of these learnings. Now that we're about three years into HAPP, for example, goal setting is one.

The federal COC program works because there's clear goals and every community's outcomes are the sum of individual grantee goals. I think at the alliance we'd recommend the state look at setting overarching goals for homelessness that can then be viewed as a north star of sorts. And then local goals can flow out from that big state goal. And that means that we can all hold each other accountable.

It's not just the state holding local communities accountable, but that local communities can hold the state accountable to its goals. We'd also recommend some refinement in the goal setting process. Right now, the way HAPP is structured, it has an all or nothing goal setting approach where you have to hit all of your goals to unlock bonus funding, which is an incentive for setting unambitious goals. The converse side of that is incentivizing locals then to set out of reach goals that they might not achieve.

So we'd encourage the state to look for kind of an in between approach here. The other piece I'll say is know. Ongoing funding, which I think Sharon will talk more about, is a really powerful tool when it's paired with the potential for reallocation of funding. So the promise of future money or the threat of losing funding can be really powerful in driving performance.

So while it's really important that we be investing in homelessness responses, it's also really critical what we are investing in, how that money is structured, and that it's structured in a way that allows local systems to scale up, invest in what works, and meet key goals. That should include goals like greater racial equity in our homeless response. Deputy Secretary Wickrama on the previous panel mentioned some of these racial equity goals.

We're not going to achieve greater racial equity and combat racism built into our systems without making investments in a way that incentivizes local jurisdictions to put their funding into what works. Use data in ways to reallocate funding as appropriate, including from projects that are not advancing racial equity and their outcomes. Thanks so much for your time.

Thank you.

Thank you. Good afternoon. Sharon report with the Corporation for Supportive Housing and thank you for inviting me to speak to you today about outcomes and gaps. To illustrate outcomes, I thought I'd start with examples of two cities with similar homeless populations, both committed to solving homelessness in about 2011. The first city is Houston, and it has decreased its homeless population by about 55%. Houston began with data on NMet housing need and plan to meet that need.

They coordinated all system resources and committed new ongoing money to develop housing, to offer incentives to landlords, to take federal rental subsidies, and to invest in housing based services. The second city is a city here in California. It had a slight dip in homelessness for a couple of years, but then that was followed by an uptick. This city embarked on a series of one off projects, some focused on housing, but for very short periods meant to test pilots that never expanded.

The city spent significantly on shelter, but only 8% of shelter residents exited to housing. And I apologize. I should have mentioned I do have a handout as well, so that does tell you a little bit more about what each city did. The California City's path follows a common pattern of one time funded programs that never receive sustained commitment. One time funding has never proven successful in any jurisdiction in making sustainable reductions in homelessness, and we see that as a problem here in California.

In General, accountability should mean all levels of government are committed to solving homelessness through investment in what works, which is ongoing funding for housing and housing based services to drive a more accountable process. The state should lead in setting statewide goals of reducing homelessness in collaboration with local governments. All of our mainstream systems should coordinate around these goals and should establish protocols to prevent people from exiting these systems into homelessness. And we need wise investment in both shelters and housing.

With most of the homeless money going toward housing. If we can create more housing for people to exit homelessness, our shelter beds turn over more quickly, ideally at least four to six times per year, and people can be moving into housing more quickly.

When we underinvest in housing, people are unable to exit shelters except to return to the streets, giving the misguided impression we need to form more shelters because people who want a shelter bed can't access one on gaps my organization worked with the California Housing Partnership and the Hilton foundation to draft the California Homeless Housing Needs Assessment, a report that answers what it would take to solve homelessness in California by 2035.

The report found that California will have 22553 households, homeless households with unmet housing needs over the next 12 years. These 225,053 households are experiencing homelessness or will experience homelessness and won't be able to get help with our existing resources. For California to meet this housing gap, we would need to invest in the following we anticipate that half of that need can be met with building new, affordable and supportive housing units, which will cost about $5.7 billion a year.

We also can meet the other half of that funding unmet housing need by providing rental subsidies to help the remaining 112,526 households access existing rentals. Funding those rental subsidies, plus funding the operating costs of new housing, would cost about $1.8 billion a year.

About 63,000 households would need services and supportive housing to gain housing stability and thrive, and those services would cost an average of $488,000,000 a year, and we would need an additional 32,235 interim housing beds like shelters and navigation centers, and that would cost a total of about $630,000,000 over the 12 years. These investments would average about $8.1 billion a year for the next 12 years, and we acknowledge this is a lot of money, but it totals a little less than 2.7% of the state budget.

We also can count on an existing $1.2 billion each year in state and federal Low income housing tax credits, leaving a total gap of 6.9 billion. After year 12 the state would need to invest 4.7 billion annually to pay for ongoing costs by making data driven investments through ongoing funding, mostly in housing. This report shows that California can solve homelessness. Indeed, Houston is not alone and achieving significant reductions in homelessness. 87 communities and three states have eliminated homelessness among veterans or people experiencing chronic homelessness.

And the Federal Government has decreased homelessness among veterans by 55%. These jurisdictions all led data driven strategy that committed ongoing resources to housing and housing based services. Thank you. I'll look forward to any questions you might have.

Good afternoon. Thank you very much. I have a handout here, and so I invite you to follow along. My name is Mary Kate Johnson. I'm the Director of regional homelessness prevention at an organization called All Home. All Home, launched in 2019. And our regional action plan lays out a roadmap for reducing unsheltered homelessness by 75% across the Bay Area region. We bridge counties, sectors, and silos, and policy and systems work to prevent and end homelessness.

And to get to the 75% reduction, we need simultaneous investments in interim housing, permanent housing, and prevention. These are three strategies. Each of them is critical, and none of them will reduce homelessness without the others. And broadly speaking, we recommend that for every unit of interim housing or shelter that a community invests in, that community should also invest in two units of permanent housing and four units of prevention.

And this is essentially to create flow, to my colleague's point, through the homeless response system and then prevent homelessness by keeping people out of the homeless response system and in their homes. This is essentially a math problem, right? The overall number of people experiencing homelessness is only going to go down if there are more people exiting homelessness than entering it. And so we're really driving coordinated regional strategies to help make that happen in the Bay Area.

The problem is basically that an average of three people are becoming housed, are becoming homeless for everyone that is housed through local homeless response systems, every year, 17,000 people, on average, experience homelessness for the first time in the Bay Area, and at the state level, that number jumps to 94,000 people.

Essentially, we need a regional strategy that's coordinated to address this inflow and keep people in their homes to stop homelessness before it happens, by really targeting the resources to the people who are most likely to become homeless. And I want to take a moment and just situate prevention on a continuum. The homeless response system is for people who are already unhoused.

This targeted prevention approach is meeting people at the front door of homelessness and keeping them in their homes using research based tools, including an assessment tool that I'll talk about in a moment. This is essentially also a math problem in terms of the fact that the cost of living far exceeds what jobs bring in and what fixed incomes for seniors bring in.

And so upstream, many of these households will need an ongoing rental subsidy to alleviate their rent burden and kind of fix that basic math problem that's pushing them into homelessness and in many cases, pushing people onto the streets. So all home partnered with Bay Area Community Services backs and we built an online platform, which is basically an application portal where households can navigate and apply for emergency rental assistance in several languages.

And we use a research based assessment tool so those households are asked questions that are based on research about known risk factors for homelessness. And we assign priority points so that programs can then reach out proactively to the households who are most likely to experience homelessness and provide them with emergency financial assistance, housing stabilization services like budgeting and financial literacy support, and legal services, referrals to every household facing eviction. And you can see sort of snapshots of our portals right here on the slide.

We're working all across the Bay Area. We're really proud of these programs. We're working in urban areas, we're working in rural areas. We launched early pilots with Covid-19 rent relief funds, and I'll talk about the results of some of those in a moment. Those were in Fremont, Oakland and San Francisco. And now we're relaunching with a mix of local public and private philanthropic dollars.

So we are operating currently in Napa and San Francisco just relaunched mainly with local propsy funds, whereas Napa's pilot is completely philanthropically funded. And we're really trying to drive this coordinated regional strategy to produce outcomes that show the need for greater and more targeted investment in homelessness prevention services and all homes, playing several roles. We're fundraising, we are a grantee, we're a grant maker. We're convening and partnering to really drive these strategies.

And our goals are to keep people housed, to reduce inflow at the system level so that we can focus. Our homeless response systems are extremely overwhelmed. They need to focus on the people who are already unhoused versus people who are entering homelessness for the first time and the large numbers that I just mentioned. And we really want to be closing the gap between what people's incomes are bringing in and what it costs to live in the Bay Area and beyond.

And through all of that, we're trying to reduce racial disparities in who becomes homeless and target resources to the households who need the most to stay housed. So we had a lot of Covid-19 rent relief money in the steady state programs that are launching now. How are we really using those resources to target the households who are most likely to experience homelessness without this money?

We are using research and basically looking at household composition, housing and income status, and other situational factors to target resources to the households who are most likely to experience homelessness without these funds. So the age, right, we want to be targeting seniors families. Tay. We want to be looking at who's experienced homelessness previously, because that's a huge driver. It's a huge predictor, a huge predictive factor in future homelessness.

And we're also looking at situational risk factors like chronic health conditions, which Dr. Margot Kushel talked very compellingly about earlier. And I'll talk about some early results from our programs in San Francisco and Oakland. In San Francisco, they received over 15,000 applications. They issued over 5500 checks and dispersed 38 million in total funds with a $6,900 average assistance amount, which we expect may go down in the steady state programs. We just have fewer resources now, but I think it's really notable.

The results of the targeting had. So 98% of those households that were served were below 50% of the area median income. 36% had experienced homelessness previously, 17% had received an eviction notice, and 77% identify as black or indigenous people of color. In Oakland, the results were really similar. They received more than 19,000 applications with a $7,600 average assistance amount. 84% were below 50% AMI, 38% had experienced homelessness, 15% had received an eviction notice, and 78% identified as people of color. These are more outputs than outcomes.

The number one outcome we really want to see is housing retention, but that's tracked over time. So it's hard to track that in a pilot that's operational for a year. But essentially, research from the lab for economic opportunities at Notre Dame, California policy Lab, it shows that emergency financial assistance really decreases entry into shelter and reduces the use of homeless services over time.

And it's a very compelling kind of trauma informed response to keep people in their homes in the first place rather than responding once they've already become homeless. And so I want to talk for a moment, finally, about gaps. There are about 500,000 people or households, excuse me, with extremely Low incomes in the Bay Area. 68% of those are renters. 80% of those are cost burdened. Sorry. 80% of those. 68% renters are cost burdened, meaning that they pay more than 30% of their income on rent.

And half of those folks are getting no assistance whatsoever to maintain their housing. So we estimate that every year between 30 and 40,000 households are at imminent risk of homelessness across the Bay Area. And basically, to address that with an average cost of 10,000 or less per family, it would be about 300 to 400 million.

Now, if we wanted to provide a rental subsidy program to eliminate the cost burden for the roughly 200 and 7275 thousand households that are rent burdened, that would go up to about 2.9 billion, is our estimate. So housing is very expensive and to the earlier points raised, the high housing costs are driving this extreme need. But this is the ballpark that we estimate to keep people housed and really stabilize them given the current environment. Thank you.

Thank you very much, colleagues. Are there any questions or comments for panel number three? Yes, Senator Cortese.

Well, thank you, Mr. Chairman. Thank you to all of you for what you're doing in the fight here, the struggle to eradicate homelessness. Just a question with regard to the, I think it's Ms. Um.

Report? Is this your handout? Thank you. Trying to get at least formal enough to use people's names here, and I appreciate the last presentation as well. And I just wanted to sort of tie a couple of comments together and get a reaction with a question on this handout, it talks about the California City in the third box having an investment in shelters without plan for people to exit to housing, resulting in 8% of people leaving shelters to housing, all home.

By the way, full disclosure, I was part of the original advisory council and such, so I've worked with them in the Bay Area in my regional capacities, particularly, especially before coming here to State Senate. But I thought I heard more of a discussion about the need for the front end of that Continuum, if I can call it that, the shelter piece, in order to get people off the streets and into shelter. And I don't want to paraphrase what was said, but back to this box.

What I'm curious about and of know numbers and statistics are always a little provocative in terms of what do they really mean, just using San Jose as an example instead of an abstract California City, since I come from there, and I think I have license to talk about it a little bit. There has never been in that city or that county sufficient shelter beds for the homeless dating back to the last 22 years that I've been involved in local government, state government.

In fact, what's always been alarming to me over the last several years is that as homelessness has increased, especially unsheltered homelessness, that basically the number of shelter beds in the city and the county remain stagnant, remain in stasis, basically. So that when I'm in some other city like New York, to use another sort of non abstract reference, regardless of how well or poorly they're doing, getting folks from shelter to permanent housing or permanent supportive housing, they have a pretty robust shelter system.

Big city, much bigger than San Jose. And the question when I'm visiting places like that is often, can we come out and see your interim housing or your shelter system?Either. And my response, unfortunately, is no. Not because I don't want to invite them and roll out the red carpet and greet them at the airport and show them around, but because we don't have one, basically.

And what I usually tell them is if you fly into San Jose Mineta International Airport and you want to see it, you really don't need me. All you need to do is drive around the airport and we have a thing there called the Guadalupe river, and that's basically our shelter program. It's tents and tents and tents. And we are building permanent supportive housing as robustly as anybody per capita in the State of California with the 2016 bond that we did almost $1.0 billion.

San Francisco, I know, has a couple of bonds like that, a lot of self help. Alameda County right next to us, a lot of self help. But it leaves us in a situation then, after 22 years of not really having a shelter system, of essentially trying to move people from creek to condo or creek to studio. Two problems with that that I've witnessed essentially as a local official.

One is, as fast as we can build three or four or five thousand units of permanent supportive housing, and we're doing that. All of that billion dollars is committed now to housing projects in just five years since our. Since our bond measure in 2016. But it'll be some more years before those units are built that we have people out in the elements unstabilized. Many literally unstabilized from a mental health standpoint, not the majority, but based on our numbers, 35-38%, perhaps.

Essentially in this out in the elements kind of unsheltered condition. And so it's hard for me to fathom, and I'd like to be corrected if it's possible to do so, essentially continuing to push all of our chips to the middle of the table on permanent supportive housing only. I raised this recently in another setting where really good people were there. In fact, a former Legislator was there, Holly Mitchell, who said, it's got to be both and. It's got to be both and.

But we aren't hearing that from everyone. And I was just trying to point out. Now, I don't quibble with your statistic here, but when you say resulting in 8% of people leaving shelters to housing, how many are in shelters in the first place?

To me, the bigger concern is, if I had everyone sheltered and I can start moving them out 8% at a time in tranches, I'd feel a hell of a lot better than I do right now because I'd at least have them un-warehoused because they're moving out at some pace, but out of the elements. And something I probably really could show visitors from New York, hey, we're stabilizing people.

We're wrapping them with services, the county can afford that. We've proven that it costs us way less to wrap them with services than it does to have them in and out of our systems eight or ten or twelve times a year, incarcerated and such. So we know that it cost us $85,000 a year not to wrap them with services. Cost us about thirty five to do it. So the reaction I'm looking for is, what are we really saying? How are we going to define housing first?

Is it really going to include catching up on shelters? Or is it really going to say, you know what, let's not waste our time with that, because we don't really need shelters. I mean, I heard you say something like that. We don't want to create a cycle of increasing the number of shelters. It just seems to me that's not our worry right now. It's catching up with 22 years of neglect, of just not having beds. And you can push back.

No, I could be a pin cook.

I appreciate the question, Senator. I think it is both, and. But we need to invest wisely. So I would say we don't really see it as shelter versus housing. And in a housing first approach, shelter does play a role. It plays a role of keeping people safe while they're waiting for housing and helping them access housing.

I think my point is that we need a lot more housing than we need shelter beds because I think, as mentioned by my colleague, when we have too many shelter beds, then what happens is that eventually people do have to leave those shelters and they do return to the street. And so we're cycling people in. And I think Senator Caballero had mentioned that before, which I think is very accurate, that people are often cycling from the shelter to the street.

And so the 8% statistic means that if you build too many shelters, people are not able to ever move out of the shelter into housing. And what we want to see is some system flow where people are coming off the street, going into shelter, and then moving into housing as quickly as possible. If we do that, then it means that for every shelter bed, we have four or five, six housing units available for that individual or that family.

What happens more often is that we think we need a shelter bed for every person who is experiencing homelessness. And that is not an effective use of shelter beds because, again, we want people to those shelter beds to be cycling. So for five, six times a year, somebody new should be moving into that shelter bed and moving the next person moving into housing. I would just say that we shouldn't count on building all housing that we need.

We do think we need a mix of new units that are newly built and rental subsidies that can be accessing units in the private market. And prevention is important, too. So we do need to really have a balanced, comprehensive approach and not rely on one intervention to get people into housing. There's also rapid rehousing, which is a way to pay for rental assistance for short to medium term. And for some people, they can grow their income once they're housed, and then they can move out.

Another household can move in, or they can keep that housing and take over the rent. I think one last point I'll make is that most people don't even need supportive housing. So I'm from the Corporation for Supportive Housing. So obviously fully believe in the model, and it is critical for people with disabilities who have been homeless repeatedly or over the long term. But most people need an affordable home.

And a lot of our affordable housing that we build in California, most of it does not go for people who have been homeless. Most of it goes for higher income populations, important as well. But if we really are serious about solving homelessness, preventing homelessness, we would be targeting a lot more of those units to households who have either been homeless or who are on the brink of homelessness. And to do that, we would need support for paying for some of the operating costs of those units.

But it's an important component we're really not investing in here in California. So I would say we don't want to over invest in supportive housing. We don't want to overinvest in shelters. We really need more of a balanced, comprehensive approach that's more like a system where we're really assessing what our needs are, figuring out how many shelter beds do we need, how many new housing units do we need, how many rental subsidies do we need to really meet the unmet housing need?

And while people are in shelters, they're still technically considered homeless. So we're really not solving homelessness with just shelters alone.

But I would just say, if I may, through the chair, and I don't know how much real life experience is skewing my, biasing me here, but we had second largest public health and hospital system in the state down there in Santa Clara County. We brought out mobile units, mds, created personal relationships with the unsheltered homeless, got them lined up for permanent support of housing, and then three days later, the patient physician relationship is gone. Their name has to be scratched off the list, basically.

You know why? Because they're not there anymore. They're transient. And I'm just submitting to you, if you don't start with stabilizing people, at least where you have a place that you can go back to them and help them. It's true, really, across the board and across age groups. I heard our chair talk about youth homelessness. We're graduating 15,000 kids, as you know, Mckinney Vento kids into homelessness every year. And what are we doing to intervene? What do they need? A room? I agree with you.

They don't need a $1.5 million Silicon Valley medium priced home. They'd be happy in many cases, most cases, with a room in somebody's four bedroom house. We've done that with veterans before, but we're not even intercepting them. I just don't know how we send them out into the elements, lose track with them, absent putting an ankle bracelet around them, which I'm not going to do. I don't know how we keep track of folks if we don't stabilize them in some kind of a shelter.

I think we could quibble about whether that makes them homeless or housed, but it's really not the point to me. The point is I need to be able to go knock on the door the next day and say, I'm here with your wraparound services. I'm here to make sure you're doing okay with your education, whatever the case may be. We just can't do that when people are in 27 different tributaries.

I don't disagree with that at all. I just think we need to make more effective use of our shelters.

Thank you. Yes, I agree. I think this points to the importance of upfront investment, and I think there are a lot of strategies. Some of them are being piloted in Santa Clara County, actually, around prevention and interim housing. So, briefly, I'll just say to the point you raised about shelter. Interim housing is sort of a smaller site configuration that provides more intensive support. And the rates of exit to permanent housing are much higher than in traditional congregate shelter. So I'll say that.

And then also reaching people on the front end with prevention services is really critical. A lot of our programs are using subgrantee networks. So our system that we're using at All Home is actually modeled on Santa Clara's homelessness prevention system, which is a network of 19 service agencies that are communicating with people in real time. We've taken that model, and we've engaged subgrantee networks in Oakland and San Francisco and Napa.

And these folks have really deep reach into communities that in many cases aren't even connected to HMIS. And when that word of mouth spreads and people hear that housing resources or financial assistance is available, they can apply. And those are people that aren't necessarily even connected to the system. And so when we can kind of reach people on the front end and provide them with a lower cost intervention to keep them housed. It prevents the sorts of situations that you're speaking about.

Thank you for your responses both. I appreciate the give and take, and I'll return it to the chair.

I can just add one brief thing, which is I think the problem is arising where as folks are moving into shelter. Right. More folks are falling into homelessness, which is why the prevention piece is so critical. And so even as we scale up shelter beds, if we're not then exiting folks out of those shelter beds back into permanent housing, you're going to continue to see this clog of the system where you can't move folks out of shelter beds.

So even though you've increased shelter beds, which Santa Clara County is a great example, big increase in shelter beds in the last couple years. I think, but I think the point is that if you can't invest in the system as a whole, you're going to continue to see these kind of backlogs and can continue to see unsheltered homelessness persist even as shelter beds get added.

So it's not just let's put X number of dollars in the shelter system, it's let's put X number of dollars in the system and grow it concomitantly for all the kind of key components that move someone through.

Great. Senator Blakespear.

Yes, thank you. I just want to emphasize what my colleague, Senator Cortese is saying about just how deeply upsetting and problematic it is that our shelter system is.

Our creek beds and the shanty towns that are springing up in the Caltrans right of way and our downtowns. I mean in the shadow of our state capitol, we all lawmakers walk by, people living in tents and encampments and trash and just the normalizing of that, that people living in public spaces, mentally ill, but also just living there, always trying to come up with the system that says, where is somebody sleeping tonight and where are they in six months and where are they in two years?

And to have that as our analysis, I think is so important because things are just continuing to get worse. And for many of us, it's not the state we want.

There are things that coming from a place of compassion and wanting to help people who need it. But also recognizing that there's a point at which you want to say you want to criminalize living in our public spaces, like, no, you can't live here because these spaces are supposed to be parks and they're supposed to be downtown business areas and that this is not an appropriate living situation and we shouldn't allow this to flourish like this. So, how do we come up with that system?

I think, I think about this and struggle with it all the time, but I'm increasingly seems like we just need the public sector to build the housing that it's tonight and six months and in two years, and to make that a really direct line, not to have it be funneled off into all these different areas that then are sometimes funneled back and sometimes are ineffective, but just to really try to solve for this. And so I'm eager to try to figure out what that is.

How do we do that? Because it's so important that I think that we attack this problem really with the vigor that we can in this state. But recognizing that front end part about the encampments is just really unacceptable, and we need to do better on that part.

Great. Colleagues, any additional questions or comments? Okay, thank you so much. Appreciate it.

Thank you.

Thank you.

We'll now go to our final panel, and I will hand it back over to Senator Alvarado-Gil.

Wonderful.

Thank you so much.

And I just want to thank everyone who's participating today for their attendance. I know we have a lot of information to present, and this is a matter that is of utmost importance to many of you.

So now we're going to hear from our fourth and final panel, which includes Consuelo Hernandez, Director of Santa Clara County Office of Supportive Housing, Rachel VanderVeen, Assistant Director of San Jose Housing Department, Michael Roberson, homeless services coordinator for Tuolumne County, and Jody Ketcheside, deputy chief operations officer for Turning Point of Central California, Inc. Thank you all for being here.

I'll just remind you that if you have a handout or something you'd like us to refer to while you're presenting, please let us know, and then any acronyms, please let us know what you're talking about before you give us the acronym. Thank you so much. We'll start with Ms. Hernandez.

Good afternoon. Maybe one more time. How about now?

Yes.

Okay. Good afternoon, chairs Wiener and Alvarado Gil. My name is Consuelo Hernandez. I am the Director of the County of Santa Clara's Office of Supportive Housing. I have the very fun job of working with 15 cities, all looking to meet their RHNA goals, address housing and homelessness, all while trying to figure out how to fund the ongoing supportive services that are needed.

And I'm happy to report that, that partnership, it's very strong in Santa Clara County, including last year, we approved our first affordable housing development in the City of Los Altos, which you wouldn't think affordable housing. In the City of Los Altos, 90 units, including 20 units for formerly homeless families. This afternoon, I'll share with you a few of the things that we're most proud of in our county, and that's our collaboration and coordination.

This really started in 2015, where the county created our office of supportive Housing and made a commitment of building and prioritizing affordable and supportive housing. And, of course, we cannot do that alone. Next to me is my colleague Rachel from the City of San Jose. We meet at least seven times a month, both to look at the housing development pipeline, the shelter pipeline, or interim housing, as we refer to it. In Santa Clara County, we coordinate with the housing authority. We look at lease ups.

Happy to report that of our supportive housing units in the county, we have a 2% vacancy rate. And if that unit is vacant, it's because it has some repair work that needs to happen. Since 2020, during this pandemic, we have already housed 10,000 people, and amongst them, 15,124 accessed shelter and 23,574 households were served with homelessness prevention. That's during a global pandemic, and of those, 3% returned to homelessness, which we're very happy.

And now we're interested in doubling down in our efforts to prevent people from becoming homeless to begin with. It was mentioned earlier that for every household that we serve, three new people become homeless. Later this week, we'll be releasing a report. In 2019, that ratio in Santa Clara County was 2.5. Today. For every household that we serve, another 1.7 become homeless. So we are, in fact, bringing that number down because of the collaborative effort in our community.

We have 47 new developments that are resulting in 5000 units. Of those, 2700 are supportive housing. We are serving 400 households at a time, getting them document ready so that there is that pipeline. We have a 13 Member client engagement team. I know the Senator was speaking earlier about how difficult it is to find people who are unsheltered. We don't necessarily have that problem in our community now because Covid allowed us to test a lot of new models where we are actively helping people.

We don't need to develop a navigation center. We're running it out of our office and the clients come to us or we go to them. And now we've been able to increase the number of people that we house by three times. So last year, we were able to connect about 300 people, new people, into programs. This year, that number increased to 1800. So we're starting to see a lot of that because of those commitments that we have and honestly, because of all of the funding.

So at the same time that I have the privilege of working with 15 cities, I also get to work with all of our county departments that manage the different resources that you heard about earlier today and weaving and putting together all of the different layers of funding, the regulatory requirements. And from a customer perspective, they don't have to know how we break that funding. Right. We're client centered. We get them housed.

We worry about the technical side and how to make sure that we're meeting the expenditures and looking at the outcomes. So it is not a very easy job right now, I know there is a push for more shelter. I have on Thursday to get prepared for 400 angry members of the public who do not want to see shelter in their community. I don't think we have a problem in Santa Clara County anymore in terms of saying yes to permanent housing.

I think our problem is I have 10 projects, fully funded, waiting for tax credits, and they will sit there for years unless we figure out a way to mobilize our funding differently. So in our community over the last three years, we have seen things shift where people are saying yes to housing. Fortunately, shelter is still a hard sell for us. I have a lot more to say, but in the interest of time, I will move to the next speaker and happy to take questions after.

I appreciate that. Thank you. We'll move forward with Rachel VanderVeen.

Thank you very much. Good afternoon. I just appreciate your time and support today. San Jose appreciates all of the support you have shown at the local level, providing resources to address the needs of our homeless and lowest income residents. We specifically want to thank you for $85 million in HHAP funds, 125,000,000 in HomeKey funds. These investments have allowed the city to be creative in its approaches to solving homelessness.

I also want to thank our tremendous partners in this work, Santa Clara County, the Santa Clara County Housing Authority, Destination Home, and our affordable housing developers who are working in San Jose every single day to find ways to house our residents. San Jose is responsible for crisis intervention for our homeless residents. In this role, we have found solutions that include emergency interim housing.

We began by building individual cabins as emergency interim housing with shared restrooms, showers and kitchens, providing 80 beds for homeless individuals to move indoors and receive a variety of services on site. Next, modular units. So then we moved into a prefabricated modular unit with a bathroom inside of the unit, increasing privacy for our homeless residents.

This was a change that we learned from working from our residents with lived experience who were living in the cabins in the interim housing that we had already built. San Jose utilized modular housing to build over 300 interim housing beds. From inception of the interim housing program through the fall of last year, the city has sheltered over 1100 individuals in these interim housing communities, with 47% of them leaving to permanent housing and 22% into successful temporary housing.

What we have found and was stated in the last panel, emergency interim housing is far more successful than our traditional congregate shelters for connecting residents to long term housing, largely due to the investment of services and staff that are there and available on site. San Jose has set a goal to expand our interim housing by 1000 new beds, and this is an aggressive goal that we need to partner with every agency and every level to make that happen. Next, encampment services.

So, in an effort to increase the safety and conditions for unhoused residents living in encampments, the city created what we call the Services Outreach Assistance and Resources, or SOAR program. So our SOAR program provides hygiene and infection control, trash services, comprehensive street based outreach and support services, and housing and shelter referrals for encampment residents. And last year, 16 of San Jose's largest encampments were selected to participate in our SOAR program. And then, permanent housing.

We continue to invest in the creation of permanent housing as the ultimate solution to address the needs of our homeless residents. The city and county have worked together to jointly Fund 12 developments in our pipeline right now that are all ready to go, which will result in 571 permanent supportive homes for our homeless residents over the coming three years. From our perspective, the tools that are most effective at the state level include four items. First, streamlining, reducing the timeline for producing affordable housing.

Streamlining itself has reduced the time from nine months to a year. In many cases, in the development timeline that is significant and real and is making a difference. We are at the point where every single affordable housing development that's moving forward in San Jose is using some form of streamlining. Second, another key policy was CEQA relief on HomeKey and for the creation of emergency shelter.

This has allowed the rehabilitation and construction timelines for these specific types of housing to be cut down to a number of months, which has allowed us to house our homeless residents much faster. Third, allowing state funds to be used for the operating costs for interim housing sites is key to provide much needed funds for operations and services in these interim communities. And finally, we continue to see demand outstrip the availability of tax credit funding across the state. Recognizing this need, the state made accelerator funds available.

Moving forward, we need to continue to innovate around finding alternatives to tax credit financing in order to move the level of affordable housing forward that we need across our state. And with that, I just want to thank you for your time and this opportunity.

Thank you so much. We'll keep moving along, Mr. Roberson.

Good afternoon, Committee Members. My name is Michael Roberson and I am the Homeless Services Coordinator for Tuolumne County. And on behalf of the nearly 56,000 people who live in our community, I would like to thank you for the opportunity to share today, Tuolumne County is situated in the Sierra Nevada foothills along the historic gold Country, Highway 49 bordering the Stanislaus National Forest and Yosemite National park. Our community is an international tourist destination rich in natural beauty and history.

Today, March 7, marks my one year anniversary as the homeless services coordinator for our county. In other words, my perspective is new, fresh and maybe naive. Before I started this journey, I knew that homelessness was complex. It was my ambition to find a developed plan for reducing homelessness at either the state or federal level that our rural county could follow.

A plan that involved partnership with local service providers, faith based organizations, the continuum of care, our regional community action agency, the housing authority, and engaged Members of our community. It quickly became apparent that my job was to coordinate such a plan for Tuolumne County. Through the technical assistance and coaching of the Changewell project a Tuolumne County homeless services system of care was developed, and an illustration of that system flow has been provided for you today.

Alignment between these system components and the Tuolumne County Health and Human Service Agency staff is underway, but these efforts need to be tied to a larger state and region wide rationale. In 2022, the use of funding for homeless housing from the California Department of Social Services provided support for services and case management that place people in housing. Through HDAP or the Housing and Disability Advocacy Program. Staff has placed 37 homeless and disabled individuals in temporary housing and 10 individuals in permanent housing.

Through CalWORKS Housing Support Program funding for homeless families staff has placed 45 individuals into temporary housing and 27 into permanent housing. Through Project Room Key, 77 individuals were placed in temporary housing. These funds come as allocations, whereas the Homeless Housing Assistance and Prevention, The HHAP grants come as an allocation and as competitive grants, both of which require applications. And there are myriad other state and federal grants that require complicated application processes and reporting. Grant fatigue is real.

In 2022, Tuolumne County Development of Social, Department of Social Services received over 380 referrals for homeless services, 161 individuals were placed in temporary housing and 100 individuals were placed in permanent housing. And all of this happened with only one full time social worker dedicated to homeless services. More social workers would make for even more effectiveness and more manageable caseloads. The county has budgeted to increase the social work labor force, but attracting qualified applicants is difficult.

January 2022 point in time count identified 266 homeless individuals living unsheltered in Tuolumne county. This counting mechanism is grossly ineffective in rural communities. Our California Statewide Automated Welfare System, CalSAWS, data shows that Tuolumne County has 826 who receive Cal Fresh benefits that identify as homeless. That is a difference of 560 people, but funding is based on pit data and not CalSAWS data. Tuolumne County is 77% public lands, which significantly reduces tax revenue, making the provision of essential government services difficult.

The Tuolumne County Board of Supervisors, with the leadership of the county Administrator, Tracy Riggs, are committed to reducing homelessness. Nine priority projects were approved by the Board of Supervisors in December of 2022. A list of these projects has also been included in your packet. With focus on these priorities, our community will see both an increase in housing capacity and a reduction in homelessness.

One of our board's legislative priorities for 2023 is to advocate for and support legislation that will increase rural counties access to additional funding for programs that combat and reduce homelessness. So, in short, what do we need from you? What we need from you is a streamlined, comprehensive and coordinated plan to combat homelessness that is not complicated. What we need from you is ongoing funding for homeless housing initiatives that come as allocations and not through a grant application process.

What we need from you is funding to recruit and retain homeless services social workers. What we need from you is equitable funding for rural communities. And what we need from you is legislation that supports rural community efforts to reduce homelessness. This last Sunday, I checked in as a worker at the Red Cross and county coordinated emergency shelter. The shelter was open because of widespread power outages and low level and unprecedented amounts of snow.

People dropped in to charge devices, to warm up, to eat a meal, and for some to spend the night because they're homeless. In that 12 hour shift, I witnessed mental health episodes and the effects of drug use. I heard stories of brokenness and broken families, of unemployment and unemployability, and of the desperation of some newly unhoused as they recounted the story of their roof collapsing under the weight of snow. So I'm one year in.

I know more now, and one of the things I know for sure is that we need to do better at making homelessness rare, brief and one time, and I think we can. Thanks for your consideration.

Thank you Mr. Roberson, moving on.

Jody Ketcheside.

I was on. Okay. Thank you for having me here today. My name is Jody Ketcheside. I'm a deputy Chief Operating Officer with Turning Point of Central California, a nonprofit that operates across the state. My regions are in Madera County, Fresno County, and Tulare county. So I have the unique opportunity of working in a couple of different continuums of care and being able to work in both an urban setting and a very rural setting.

There is a handout that you were given that kind of shows some of the successes that we've seen with the rollout of the State Dollars. I would like to draw your attention to the Porterville Welcome center data that shows the number of people that have been served. So as you can see, that demonstrates pretty well that the point in time homeless count is a drastic undercount.

Since that project has opened, we've seen over 2500 unduplicated folks come through the doors looking for services and meals, and they thought they only had like 120 homeless people in that area. So when looking at rural allocations, we have to really acknowledge that those rural point in time counts are even less accurate than the urban ones. Folks are more difficult to find in the rural communities. Sometimes the communities have less tolerance, and so they hide really well.

And so the allocations to rural communities are frustrating because we might receive an allocation of, this is an example from about a year ago, $189,000, and 8% of that goes to serve youth. So we're looking at like $30,000 to serve the youth population in this large rural area. And you cannot start a new program or operate a new program on $30,000. So when you really break down the rural allocations and then look at those carve outs, it's just not enough money to serve the youth.

And the counts are just so much larger than you can see on paper. One of the things that is working really well in Fresno, we increased our shelter beds. We actually refer to them as triage centers. All of the services are housing focused, and you can see there the results of being able to transition folks on to either temporary or permanent destinations.

I think specifically for the youth population, those temporary destinations are important to measure so that we can see that folks are leaving to safe destinations. And a lot of times those temporary destinations turn permanent. So people who are operating these programs, often the first thing they do is try to connect them with folks that they may have lost contact with or that they want to reconnect with. And a lot of times those result in trial housing that turns permanent.

So I think those are very important measures to keep tracking and to track maybe even more closely. One area for improvement that I would recommend is the caps on the administrative funds. As Senator Skinner was saying, it's very difficult to manage the grants with such a small percentage of admin allowed for the grant. When admin is set at 7% or 10%, most agencies are operating somewhere between 12 and 17% admin. I can speak for turning point. We're operating 14-15% admin.

So it really does restrict the folks that can use the agencies that can do these projects to those larger agencies that are able to continue to operate programs while they wait for contracts or be able to float the difference between the admin expense and the cap on the estate dollars. Overall, I want to thank the state in general for the allocation of these funds.

We've made a lot of really good strides in both communities that I work in in improving the response to homelessness, and I appreciate it. Happy to answer any questions.

So we will now bring questions back to the Members of the Committee. Yes, sir. Go ahead. Senator Blakespear.

Just quickly, in reading the earlier data, it seemed like the reunification with family and friends was actually ineffective. So statistically that those people cycle back into homelessness and permanent supportive housing was the type of housing that was effective. I know in my County of San Diego, there was data that showed that most people are actually self resolving, though. So mostly they're not going into government housing, they're self resolving in various ways. So I think those two data points are in conflict.

But I do raise it just as an issue.

Yeah. For someone who qualifies for permanent supportive housing, permanent supportive housing is likely the answer. For someone who is higher functioning, just able to maybe go back into the workforce, those temporary destinations often become permanent, or they self resolve out of that. So they may go stay with a friend and then work long enough, they save some money, and they move out into their own apartment.

But for someone who qualifies for permanent supportive housing, which is someone who's typically demonstrating chronic homelessness as well as a disability, those folks definitely do better in that setting and typically are less likely to fall back into homelessness and.

So I just want to say that this panel, I think, was one of my favorites because you got the contrast and comparison of a major city and then rural California, which just adds to the diversity and the richness and just why California is just such an amazing place to be. I also did some homework prior just to make sure that I had an understanding of the disparity between rural and major city urban centers.

And what I heard today just underscored that we have a system that's so complex to navigate that in order to compete with large major cities, our rural communities are really struggling to get those applications out or to even qualify under these very stringent guidelines.

And so although I applaud county, Santa Clara, and cities like San Jose of being able to bring these real amazing models forward and things that we can duplicate, I think the onus is on us as a state, agencies, and legislators to ensure that we're creating a path to parity for our rural communities. Because what I'm seeing is that the numbers don't compare to the major cities in terms of the amount of homeless individuals. But I also know that there's great variances.

And the other thing is that we know that we can make an impact with a smaller amount of funds that are targeted and more free-flowing, if you will, to be able to deliver things like what Mr. Roberson is presenting or what Ms. Ketcheside is presenting. So I think you're definitely going to hear that resonate this year about uplifting the voice of the rural communities, ensuring that we're providing those avenues.

And those of you who are doing a great job, please assist us in helping to support our other communities here in California, both with mentoring and modeling your programs. And it could even be with grant assistance, because I think that's another opportunity that we have as purveyors of large communities to be able to help build that bridge in California because, as you know, there is a migrant population also with our unhoused, that they would go to one county, to another, to another, seeking for permanent housing -

- and oftentimes we're not connecting, we're not sharing resources or even communicating to be able to provide those safety nets. And as you heard earlier today, that $23 billion really hit us hard at this side of the dais. So we want to see our dollars really have an impact of the lives of Californians and be able to partner with you and the community to make sure that you have access to those resources.

The other thing that I wanted to say was I asked for an accounting on encampment resolution funds and family homeless challenge grant funds in my district. So I have 13 counties all rule, and not a single one of my counties got encampment resolution funds. Not a single one of my counties got family homeless challenge grants. So that, to me, is telling me that we have a problem.

We have a problem here at the state where we are not creating avenues for our small rural communities to thrive. And that concerns me. So that's how I'm going to wrap it up in terms of my comments. I hear you, and thank you so much for being here. I appreciate all of you and thank you for staying and bringing forward your truth. Okay, I will now pass it over to my co-chair, Senator Wiener, for our public comment.

Great. Thank you. Oh, yeah.

If I just know with the limited time, we don't get an opportunity to talk about all of the challenges that we face in our community. I would be remiss if I didn't mention that one of the big struggles that we have in Santa Clara County is with the undocumented population. So we've started a family homeless challenge where we are hoping to end family homelessness. We started with about 1200 homeless families in our community queue.

And of those, about 25% we cannot help, or we cannot serve with an emergency housing voucher because they don't qualify. So I think there is a gap that we don't see in our system. We don't ask the question, "Are you undocumented?" I think that if there is an opportunity to think more locally; what are the challenges that we face in Santa Clara County that maybe we can learn from the work that the rural counties are doing and the reverse.

And I think you all have a very difficult job of prioritizing the limited resources that you have. And we make it sound easy, but it's a lot of work, and we don't have enough funding to be very similar to you all. We don't have enough funding to help everybody. We have 10,000 homeless people. And if we did, we wouldn't be here with you this afternoon, sharing with you some of those struggles.

So I just wanted to mention that we make it sound like we're doing a lot, and we are but three years into this pandemic, and we're coming out of it very damaged and injured, trying to figure out how we're going to sustain these services over the long term. Thank you.

Great. Thank you so much. Thank you very much. We'll now move to public comment, and we're going to start with public comment. Folks who are physically in the room. Feel free to come forward. Of course, when we do bill hearings, we ask people just to state their name and position. Obviously, there's no bill here, so if you could just state your name, affiliation, if any, and just make brief comments, that would be great. Come on up.

Hi. Thank you so much. Danielle Bradley, on behalf of the California State Association of Counties, representing all 58 counties here in California, I want to start by saying thank you to the Chairs and the Legislature for their leadership on this incredibly nuanced, complicated issue. Counties are incredibly grateful for the recent one-time investments that the state has made in homelessness that have allowed for a lot of innovation and investments in new strategies and partnerships.

However, the only way to make meaningful and sustainable progress is through the development of a comprehensive system built on accountability, clearly defined roles and responsibilities for all levels of government, and ongoing funding. CSAC is currently engaged in an association-wide effort to develop a comprehensive homelessness strategy that identifies the gaps and barriers within the existing system, as well as maps out the resources and tools needed to improve the system.

Informed by collaborative efforts with several key working groups, CSAC has and continues to identify policy recommendations, including specific recommendations around housing prevention, unsheltered response, workforce capacity, and sustainable funding. We are finalizing those recommendations currently, and we are extremely eager to be sharing those with you very soon. We thank you again for your time, and CSAC looks forward to continuing our partnership with the Legislature, the Administration, cities, and other stakeholders to develop a comprehensive approach. Thank you.

Thank you, Mr. Mirante.

Thank you, chairs, for this wonderful hearing. My name is Louis Mirante. On behalf of the Bay Area Council, wanted to just highlight this report that you heard about today, comparing Houston to some of the lessons we have here in California. Houston was able to reduce its homeless population by 55% by doing many of the things that you are funding through the budget today.

One of the big differences, though, between Houston's approach and ours is they also focused on the general production of housing as a policy merit for homelessness itself. They've reformed their zoning, they have a much more streamlined process for housing review, and they have much lower fees. All challenges that local governments raise to housing production in California and all issues that explain why it's so hard to stop the rise in homelessness in California.

Just more and more people are becoming homeless than we have resources to pull them out. So, I encourage the Legislature to continue finding ways to streamline housing to reduce fees. Senator Weiner has SB 423, which we're strongly supporting, which would at least stop one of those tools from sunsetting and going away. But encourage you to remain thoughtful, remain optimistic about new solutions like the ones you've heard today, and just want to thank you for your attention to this issue. Thanks.

Thank you very much. Any additional speakers, please come forward.

Good afternoon, my name is David Bolog. I'm speaking on behalf of Take a Stand Stanislaus. They wanted to let you know that the state has not been prioritizing the money allocated to homelessness correctly. And we don't need money allocated that use until that they can find real solution, not just throw money at it when more than half of Californians can barely pay their bills. Thank you.

Next speaker.

Thank you. Good afternoon; my name is Jenny Choislaw, I'm an intern with California Coalition for Youth and appreciate your attention on breaking the cycle of homelessness. Also, thank you, Senator Wiener, for the acknowledgment earlier. CCY believes that the best way to break this cycle is by ending youth homelessness. Youth will move along with the pathway of chronic homelessness if there was no intervention to change the trajectory.

The set-asides in the programs such as HAPP and Homekey have been critical to ensure that communities don't forget this population. We saw that communities like Tahama, where prior HAPP and HEAP were the only programs serving youth through the County Office of Education and the Homeless program; now, they're funding a youth-specific provider to serve youth.

This is what set aside is accomplishing, and we urge a Legislature to increase the set aside to 25% because most of the communities are view set aside as a ceiling rather than the floor, and youth are undercounted. This pit counts as they usually don't match the literal homelessness definition driven by HUD and missing youth that are couch surfing or sleeping in places that are hidden.

With respect to accountability, CCY supports accountability, and we want to see these outcomes work for the youth, meaning that we need to consider exits to safe and stable locations as a measure of success. Thank you.

Thank you. Any additional public comment here in the room? In the hearing room? Okay. Seeing none, we'll go to remote public comment to the phone lines. Is the operator here?

I am.

Ladies and gentlemen, if you have a public comment, please press one then zero on your phone. If you are using a speaker phone, please pick up the handset before pressing the numbers once again. For a public comment, press one, then zero.

Great.

And once they queue up, would you let us know how many?

Sure. We have three queued up right now, getting their line number, and then the first line we will go to is line number 39. Your line is open.

Thank you very much. Good afternoon. Chairs and members of the committees. My name is Simone Tureck Lee, and I work for John Burton Advocates for Youth. I want to share a bright spot in terms of California's investments in homelessness, as referenced by the Cal ICH deputy secretary since 2020. Apologies for being a little out of breath. There has been a 21% decrease in youth homelessness in California. This is due to our state's youth set-aside policies, which started with HEAP and continued with HHAP.

As Senator Wiener alluded to, HHAP has truly become the foundation of funding in California for youth homelessness, and I want to underscore how important a continued investment in HHAP is to sustain and to build on this progress. We really appreciate the discussion about potential policy changes to HHAP, particularly around accountability and administration, and we believe with changes like these, the state should be ready to move forward with the longer-term funding commitment for this program, and I'd like to close with sharing that.

We are one of the co-sponsors of a Bill on the Assembly side introduced by Assemblymember Luz Rivas, AB 799, which shall make some of those changes to HHAP that will support its growth into a longer-term series of measurable investments. We also have a write-up of an analysis of the reduction in youth homelessness that we've seen in this year's pit count data, and I'd love to share that with the committee via email. Thank you.

Great. Thank you very much, and feel free to send that in. Appreciate it. Next speaker?

Sure. We have line number 32. Please go ahead.

Hi, my name is Mara Gobi, and I'm the Homelessness Prevention Program Manager for San Francisco's Department of Homelessness and Supportive Housing. I wanted to highlight the innovative program that we have in San Francisco created with all home support to provide emergency rental assistance and housing stabilization services to households at the highest risk of experiencing homelessness in our community. The San Francisco Emergency Rental Assistance Program is a collaborative effort between multiple city agencies and community partners working together to coordinate the provision of available prevention resources.

Based on significant research on the risk factors of homelessness. We have created a tool to target assistance to households who are most likely to experience homelessness in the absence of this assistance and to address racial inequities in our city.

Mary Kate Johnson spoke to the accomplishments of this program in her testimony, including more than 6400 households served since May of 2021. 34% of whom had minor children in the household and 16% of whom had a senior in the household, both of which are considered risk factors of homelessness. Despite the impressive impact this program has made in San Francisco, the past two years have demonstrated just how high the need is for rental assistance, longer-term rental subsidies, and deeply affordable housing in our community.

And we are constantly seeking new solutions and funding to address this growing problem. I appreciate the opportunity presented by the Senate Housing Committee and Human Services Committee to discuss this important issue. Thank you for your time.

Thank you very much. Next. Speaker.

Thank you. We do not have any other in queue. It's one then zero for public comment.

Okay. If there's no one else in queue, we will close public comment and bring the hearing back to the committee. I want to thank everyone, all of our witnesses, and members of the public for participating today. Really informative testimony. I also want to thank our committee staff, both on the Housing Committee and the Human Services Committee, for doing a stellar job organizing the hearing, providing the background document, and so forth. We have a lot of work to do, as always, on this.