Assembly Budget Subcommittee No. 6 on Budget Process, Oversight and Program Evaluation

Are we appearing on this? Make sure, because I can't see it.

Thank you. Really appreciate everybody for joining us today here in budget sub six. Today is very much focused on the issue of homelessness, but from a very specific level. We are looking at the state homelessness funding programs as well, and looking at what states and local governments have done, and also get a good sense of what sort of measurements we can try to put in place to get us a better sense of how we get to the end goal.

I think we all have the same end goal. We want to see more permanent, affordable housing being built. We want to see more people off the streets. We want to see more people served. We've obviously spent billions of dollars on that at the state level. I know it's taking time to get out to locals as well as to nonprofits and community organizations.

So today, we really want to take a good look at a variety of those issues and figure out what we can do to help get the money into our communities faster so that they can build homes and service people and need. Very honored today to have Dr. Kushel here to be our first speaker, provide an overview. I know she was integral in helping write up the California Interagency Council on Homelessness report. Always love her thoughts.

And I guess, as she's approaching us, would love to hear if there was anything in particular in the report that was surprising to you or anything that you would say in the 253 pages we should really zero in on, because there's quite a bit of information. So with that, turn over to Dr. Kushel.

Okay, well, thank you for inviting me, Chairman Ting, and other Members of the Subcommitee. My name is Dr. Margot Kushel, and I'm a Professor of medicine at UCSF and where I direct, the UCSF Center for Vulnerable Populations and the UCSF Benioff Homelessness and Housing Initiative. I do a lot of NIH funded research and substantial experience researching homelessness. And as Chairman mentioned, I was one of the co authors of the landscape report.

As you know, Californians identify the homelessness crisis to be one of the most important issues facing our state in the past few years, we've seen year over year increases in homelessness, despite efforts at every level of government to end it. In California, according to the 2022 point in time count, approximately 171,500 people experience homelessness on a single night means 44 out of every 10,000 Californians. And while fewer than 12% of Americans live in California, 30% of those experiencing homelessness do.

And we account for half of all people living unsheltered in this country. 67% of our population of people experiencing homelessness do so without shelter. Despite concerns to the contrary, we have robust evidence that the vast majority, upwards of 90% of people experiencing homelessness in California lost their housing and became in California.

In California, as is true across the country, homelessness disproportionately affects certain populations. Black Americans, indigenous Americans are vastly overrepresented. In the past three years, we've also seen this enormous and disproportionate increase in homelessness among Latinx Californians. Members of the LGBTQI communities are overrepresented, and homelessness is increasingly affecting Californians over the age of 50. The fastest growing peak group are those 65 and older.

I'll say that in the early days of the pandemic, many feared that we would have dramatic increases in homelessness throughout the state and the country. But quick action at both the local, state, and federal level, including emergency rental.

Assistance programs, project Roomkey and homekey, and others, likely prevented the worst possible outcomes. Homelessness has increased during the pandemic, but it increased at the rate we would have expected without the pandemic, consistent with prior years. However, due to the large number of households currently severely behind in their rent, I actually fear that the problem is going to get worse before it gets better.

To be clear, the increases in our homelessness are not due to failures of our use of evidence based policies to end homelessness, such as housing first. It's rather due to the structural conditions that Chairman Ting mentioned. Most importantly, the lack of deeply affordable housing and any efforts to understand the impact of our state funding needs to consider its deep underpinnings in this structural problem. In California right now, we have 23 units of housing for every 100 extremely Low income household in our state.

Those are households that make less than 30% of the area median income. They represent most people who experience homelessness. Our recent research across the state showed that the median monthly household income immediately preceding homelessness for adult Californians was $926 a month. About 40% of those experiencing homelessness in California entered it after leaving a situation where they were leaseholders. The other 60%, where they were not leaseholders, they were doubled or tripled up.

We found that the median monthly housing costs for those leaseholders was $700 a month, and for the non leaseholders, $180 a month. So I guess I challenge you to think, if you're making $926 a month, you both can't afford $700 a month in rental costs, and how else are you going to find another place that you could get for only $700? So the federal, state, and local governments have this unique and critical and separate roles in addressing the crisis.

The recently released landscape assessment report showed that between 2018 and 2021. So this is the 200 page report in front of you, the state directed $9.6 billion through 35 separate programs administered.

By nine separate agencies or departments.

Homeless services in those three years reached 571,000 individuals, unique individuals. And these programs increased in scope over that period such that they went from serving about 273,000 people in 2018 to 332,000. Fundings provided programs that were funded, at least in part, by the state reached 48% of those individuals. So the money that the state is spending are reaching those individuals, reaching homelessness. State funding tended to be one time or relatively short term funding, and that problem comes up often as an important limitation in its effectiveness.

The state has numerous important other roles. Homeless policy set of the level oversight. State Interagency Council set statewide data, and the state can use its coordinating power to help smooth out the difference policies. Local governments likewise have their own role to play. Many local governments contribute significant local dollars to this problem, and we actually saw in jurisdictions that raised and contributed a lot of local dollars less of an increase over the period of the pandemic than those that didn't.

They didn't necessarily go down, but they went up less, and the situation would look worse without their local funding. Oversight and accountability are clearly important in addressing a crisis of this magnitude. But I urge you to balance a need for accountability and oversight with an understanding of the depth of this crisis and the limitations of homelessness services. The homelessness services itself can't solve this problem, and I like to use the analogy, forgive me, because I'm a physician, about the emergency Department.

The emergency Department is absolutely critical. We saw its role during the pandemic, but we did not expect our incredible emergency Department nurses and physicians to solve the pandemic. What they were doing was dealing with a downstream impact. And I think that analogy holds true for homeless services at times.

We saw in the report, the demands of accountability can have unintended consequences, restrictions on funding that limits its utility and the stifling of potential innovation from local governments who know their own ecosystems and culture, and that they differ from one another. And frankly, it can sometimes stifle innovations that could lead to new, groundbreaking ways to treat this.

The key challenge facing us, I think, is creating the right mix of balancing the critical need to spend these dollars well, to demand outcomes, for the money to track those outcomes realistically, and to do all of that without stifling effective solutions, many of which will require some local flexibility. Solving this crisis is going to require funding, coordination, accountability, and I would add a bit of grace. Thank you for inviting me, and I'm happy to answer any questions.

Thank you. Dr. Kushel. Open up for questions. Looking for questions from the Committee.

Thank you. If we do have any questions from the phones, please press star.

Oh, no, operator. No, we don't have questions from the Committee. Thank you, operator. Mr. Essayli, please.

Thank you, Mr. Chairman. I just had a couple of questions. You mentioned that we have half of all the unsheltered people are in California.

Yes, half of all the unsheltered people in the country are in California. 30% of those experiencing homelessness are in California. But half of those experiencing unsheltered homelessness.

And what percentage of the nation's population is California?

12%.

So we're 12%, and we have half of all the unsheltered people?

We do.

Do you think there are any policies in California that are attracting unsheltered or homeless people from other states?

So we've just come out of work across the state where we did what's called a representative sample of every adult experiencing homelessness in the state. We did it anonymously. People didn't really have any incentive to lie to us. We were from the University, and over 90% lost their housing in California. And about that amount were actually born in California, which surprised me. A higher percentage of the people who are experiencing homelessness in California are born in California. I wasn't born in California than most Californians.

I don't think that this is a problem of people coming to California. I think this is Californians becoming internally displaced because of our own failed policies on housing, and frankly, because everyone wants to live in California. We brought a lot of people to California, people like me, but we didn't build housing to accommodate them.

And you think everyone has a right to live in California even if they can't afford it?

Well, I guess I would say. What would the other states say know? Are we going to send our own folks who've worked their whole lives in California out of the state, impoverished? Some do leave. Certainly. We've seen decreases in our population over the last few years, I think because we don't have sufficient housing. Often people who are experiencing homelessness don't, frankly, have the ability or social ties or anywhere else to go.

Let me just ask a couple of quick questions. You focus your narrative on that it's an affordability issue, which is resulting in the homelessness. But you've mentioned nothing about drug addiction, mental health issues, which I understand an overwhelming majority of those homeless are suffering from mental health issues and drug addiction issues. So what percentage of the homeless population have one or two or both of those issues.

It depends how you define the severity, but somewhere between 30 and 50% of people experiencing homelessness have those problems. I would say that the analogy that I like to use, I mean, I think it's important to note, for instance, there are good ways to look at how much substance use and mental health there are in a community. We use different sort of research methods, and what's really interesting is California rates relatively low on those.

As bad as our crisis is, we're actually on the very low side. We're a pretty healthy state. When you look at the states that have the highest level of substance use, mental health problems, it's mostly like the former Rust Belt, Appalachia. When you look at any measure, whether it's opioid overdoses, whether it's percent of people living with disabling mental health, people on mental health, disability, et cetera, they're much higher in communities like those.

If you look at rates of homelessness, though, rates of homelessness don't actually track with every measure we have of mental health and substance use in a community.

Dr. Kushel, I'm a little stunned because you make it sound like the problem in California is not that bad. California has the highest population of unsheltered people. The next highest state is Washington. They're number two. Yes, and they only have 12,000 people. We have 115,000 unsheltered people. That's nine times more than the next closest state. I don't buy that. New York has high housing costs. There are other states, other states that have really high housing costs. They have really complex issues. They have affordability issues. Nobody has the problem that we have in California. Something is wrong here.

So I would respectfully say New York actually has a higher per capita rate of people homeless than California does. We're obviously both big states, or our absolute numbers are large. But if you look at it as a proportion of New Yorkers who are homeless, compared to the proportion of Californians, New York and Hawaii have a higher proportion who are experiencing homelessness. The difference is a right to shelter.

And 95% of those experiencing homelessness in New York do so in shelters. In California, we don't have a right to shelter, and 67% of those experiencing homelessness are unsheltered.

Okay, I don't want to take up all the time, but just a last question. Do you think a mentally ill person or a drug addicted person is capable of making rational decisions?

I do. And I also know if I think what you might be asking is, can they be housed?

Well, I'm talking about intervention and this housing first approach where housing first, then persuading them to enter treatment or rehab. I don't know how effective that is. It doesn't appear to be effective based on the data.

So I can share that, the data. You have to remember that housing first doesn't create housing. Right. We have a housing crisis in California. But the choice at hand first or housing first. And those have been tested head to head in reliable studies I've done some of them. This County of Santa Clara approached us about 10 years ago and asked us as outsiders, I'm not from Santa Clara, to help them identify the most chaotic homeless people in their county. And they said to us, I was brought in as like, an outside evaluator to hold them accountable to house the most chaotic people. And Mr. Essayli, when I say chaotic, I mean chaotic.

These were folks who had, on average, over the past two years, I think it was about 10 jail stays, an equal number of psychiatric emergency Department visits, about five emergency Department visits, lots of hospitalizations. These were the people that every police officer knew. They used a housing first to house them. We didn't go out looking for them. We said, they're so chaotic, the police will come across them, people will find them.

And what we did is we put flags in their system so that when they got booked into jail, when they got booked into a psychiatric emergency Department, someone from the team went out to them at seven in the morning and they said, I know you've been up all night having a bad night, but will you sign these 50 pieces of paper to give us permission to follow you for a 50/50 chance of getting housing?

We approached well over 300 people, and three people refused to sign the 50 pieces of paper for a 50/50 chance of getting housing. We randomized them on the spot. So at that moment, we flipped a coin and said, you either get housed or you don't. Over the seven years of the study, 91% of those people who we met outside the jail or outside the ER with very significant mental health and substance use problems were successfully housed.

We followed them for seven years. They were housed. They stayed housed for an over 90% of the nights, meaning a few people spent some time not housed. What did we see? Their psychiatric emergency Department use plummeted. Their use of outpatient mental health and substance use treatment increased. Housing we didn't ask them, we didn't require treatment. But they all took it up. And more importantly, they were no longer homeless.

I don't have more questions. I just think there's a huge disconnect because you're painting a rosy picture. And when I walk the streets of Sacramento and LA, there's a lot of people in need, and they're not getting the help they need.

Right. We don't have enough services, these programs.

No, we have plenty of services. The programs don't seem to be effective, but. No more questions, Mr. Chair.

Thank you, Mr. Fong.

Thank you, Mr. Chair. I want to kind of delve a little deeper into the data and how it's collected. I believe a few years ago, Assembly Member of Correo did a hearing on this, and it was a lot of conversation about the point in time count versus HMIs. And we all understand at that hearing, and I think it's probably even more intense today that we're undercounting. So in terms of the numbers that are being mentioned, are they coming from the point in time count or are they coming from HMIs?

Great question. So the 171,000 figure is a point in time count number. That was a 2022 point in time count. The point in time count was not held during the pandemic because of logistic difficulties. That number, I would say, is best understood as a good way to compare year over year, but it doesn't have as much meaning in the moment because. It's certainly an, they're really sending volunteers.

Out, they're guessing how many people are in that tent, et cetera, et cetera. And most importantly, it's a point in time. So most people who experience homelessness do so for less than a year. So if you only spent, were homeless for three months, you only had a one in four chance of being homeless on that night.

The other numbers I mentioned are from HDIS, the homeless data information system, which merges all of the HMIS homeless management information systems, which every local area collects on people who use homeless services. The advantage of that data source is it doesn't have the point in time problem. The disadvantage is not all services submit to HMIs and not all people use services. So there are sort of undercounts in different ways.

Someone who has participated in my point in time count in my community, I do believe it is a snapshot in time, but it is highly inaccurate. Exactly. And I do believe that of the two comparisons, the HMIS system is actually a more accurate number.

Yes, I think that's fair to say. I think it has its limitations if people don't engage in any services in HMIs. But HMIS has many advantages over the point in time counts.

So if I could, I guess, address what you've identified as kind of. One of the challenges with the HMIS system is should services or organizations who. Are not entering data into HMIs. Should they. Be encouraged to, or what incentives do you think should be put in place to allow that count to be better, especially since it's not a point in time we're dealing with what the. Because we're allocating $24 billion. We have allocated over $24 billion, and if the data is innaccurate, we can't really measure whether it's working right.

I think there are a couple of things with HMIs and HDIs. One is more people collecting it, collect it. One of the reasons people don't collect it is it can be burdensome to do it. But more importantly, I think we need to do affirmative outreach and make sure that whether or not people present themselves to services, we're finding them and counting them. I think it's sort of combining a little bit of those things. I think the other challenge that anyone who works in HMIs will say, and I think you'll find that in your report, is tracking exits. What happens after people leave.

We don't have great data on that. And I think the second most common exit, and it was my team who looked at that data, was unknown, where we couldn't actually tell where people went. Getting better data on where people are coming from, how long they're in the system, and where they're going to with more accuracy, I think, would give us a better picture.

I think you and I are in agreement that that is a critical component of whether we are, how we measure the efficacy of what the state investment is, if we are going to continue to. Invest resources, whether it's in housing. Whether it's in substance abuse counseling or mental health access, if we're not measuring it correctly, we are doing ourselves a disservice in terms of your analysis and your research. Has anyone compared the differences between the HMIS HCIS numbers versus the point in time account and whether they even correlate at all?

I mean, they do correlate. Okay. We are planning to do this in one county that we were in for a statewide study. We collected names for exactly this reason, because we wanted to see if we were picking up in our study the same people who were showing up in HMIs. It's hard to compare them, though, even if you have names, because of know over time.

One of the things that my data team was talking about doing is randomly choosing a day and looking at who was in know, using any services in that day, and to see how it compares to point in time count numbers. I think that the point in time count numbers is intentionally by HUD, kept relatively consistent methodology year over year, so that you can get some sense of whether numbers are going up or down.

So if I could ask from a trend line, I have a look in 2020 and tell me if my numbers are incorrect. The HMI system in the State of California has 162,996 Californians who access services. In 2021, 176,838. And in 2022, it's, of course, 174,000. So it went down. I'm trying to kind of understand if that.

Yeah.

Do you believe that to be real?

The problem I have with HMIs is in one way, like point in time count. We know we don't want those numbers to go up. Right. HMIs going up can go up for one of two reasons. The population is increasing or we're doing a better job reaching that population. That's why it's such a hard comparison to have.

True. But I may add, though, that if we have more volunteers, for example, in a point time count, we may actually be counting more people, too, just because we have more people going out and counting.

The HUD does a lot of TA and makes a lot of demands of the COCs that do the point in time count. And I've actually been involved with sort of HUD's decision on how they do the point in time count. They intentionally try to keep it the same year over year so that you at least get the same amount of missing-ness. It's a little bit like this, but absolutely, there are problems with it.

Or maybe better just to do multiple point time counts.

Exactly.

That may be the.

I think we need a variety of systems. The other thing I would encourage you to think about is that most people experiencing homelessness, while they might not always access the homeless service system, we see them in other systems. I think there's an opportunity that we don't collect great data on housing status, for instance, in the healthcare system.

We know that most people experiencing homelessness interact with the health care system. Most use publicly funded health care. It would be really extremely useful if we could collect better data in the healthcare system. And we've talked about using different methodologies, some that come from ecology, actually, that actually try to compare different data sources to try to figure out the true number. And we're going to be working on that in the next year.

So then my final question, I mean, understanding this whole conversation we've had, and LAO estimates that the State of California is more than $24 billion toward housing and homelessness initiatives. And with whether you're. Let's combine the point in time count data with the HMI system, how effective has the interventions been, and where are our gaps?

Yeah, I mean, our gaps are that we are a million units short of the housing that we need for our extremely low income households. And to be totally honest, sometimes I think it's a miracle that we only have 171,000 people experiencing homelessness every night, even though that's an outrage, because what that reflects is not 171,000 people experiencing homelessness, but millions of people living doubled and tripled up, spending 80% of their household income on rent and living on the verge of homelessness.

I think that our homeless services have been a relatively effective emergency Department. But what we need to do is we need to get to the root of the problem and fix it if we actually want to make progress.

And you would agree, though, that the root causes are housing affordability in addition. To, I think, the substance abuse access. Mental health access.

Absolutely.

Foster care system.

Right. But I would add that if you start trying to fix it by fixing the mental health and substance use without fixing the other, we're not going to get good outcomes. I can tell you that I treat addiction every day. I still do a lot of clinical medicine. We can do a lot. When someone comes to me who's sleeping in a shelter on the street, my ability to intervene is very limited.

I can also tell you if you are caring about costs, the most expensive thing we can do is institutionalize people. And so I think we need to solve both together. I am not saying that our mental health system and our substance use system are adequate, but I'm saying is that we could have fantastic mental health and substance use services with no problems at all. And if we didn't have the housing, we still wouldn't be serving people.

I view that the challenge for us, and you can correct me if I'm wrong, or maybe my analysis needs to be a little bit more detailed, is that we have a lot of broken systems.

Yes.

Whether it's in the foster care system or the criminal justice system or the housing space. And we have a lot of these broken systems that have created individuals who are either potentially homeless or are going to be homeless or are homeless currently, and they're flowing into the homelessness crisis. And so we're throwing a bunch of money into the homelessness situation, but we're not fixing the systems above.

Right. And the key system, and I know I sound like a broken record, but what we need to do is we need to close that gap. We obviously aren't going to immediately close that million unit gap tomorrow, but we need to start making steady progress on that. Nothing else that we're going to do is going to be effective.

You could have the most expensive and fantastic and well functioning mental health system, and if people are sleeping in shelters or outside, it's not going to serve you very well. You're going to fill up your hospitals, you're going to spend a lot of money, and you're not going to have good outcomes. And then when people leave those hospitals, they're still going to be homeless.

But they're not mutually exclusive. You wouldn't say they're mutually.

Oh, no, absolutely not. We can do hard things and we need to do both at once. The only mistake we could make is if we only fixed the non housing things and didn't fix the housing things.

I think you have to do both for sure.

Thank you. Yeah.

Thank you, Mr. McCarty.

Yes, thank you. I asked some of these questions last week, and I asked you this question at our caucus. I think I got an unsatisfactory response.

Oh, no.

But I'll go back circled again, but first, kind of visiting the other issues. And I think it's important to note, I don't disagree with many things I just heard here, but one thing that I have heard from others, and I was like, oh, that's a good point, too. If you look at California, I don't think where people are getting a bus to come be homeless here. Most homeless people I talked to in my own neighborhood, I said, where are you from? What happened?

And they're usually from kind of the area, too, that being said. And also the notion that if you look at like West Virginia, they have worse poverty rates, worse foster youth, way worse addiction and their homelessness, it's like.

Is 1/8 ours or something.

So it's not all that. And let's face know, a lot of the homeless out there become addicted or mentally ill because they're out there. I mean, if I was out there sleeping in the cold, I'd probably be drinking, too. Stay warm. Literally, it's going to be freezing tonight. It's going to make snow here in Sacramento. So that's just the reality. But the hard facts, and this is where I concur with some of our colleagues, is our solutions,

and the math here, this is the Budget Committee, just don't add up. We need a drastic reality check. So let me just walk through some numbers. So, as Mr. Fong said, we've spent roughly 24 billion the last few years in these programs. I think some of that's behavioral health. It's like roughly 12 to 15 billion. For our money, we've given cities to address homelessness.

And our mayor in the back of the room and other big city mayors are going to say, give us more, give us ongoing. But I don't know. We've had the best budget run in 100 years and I don't see it continuing. We muscled up 12 to 15 billion and it hasn't gotten any better. And so I think the big issue is if you try to be everything to everyone, you're nothing to nobody.

And we're trying to do a little bit of permanent supportive housing, a little bit of shelter, and we can't afford them both. And the question I ask you is, if you just had limited resources, why would you not just focus on shelter? Because if you focus on supportive housing at $600,000 per bed, we're going to be able to maybe serve 5% of the population. And if you go to your constituents, that's great, great news, 5% of the people have homes.

They're going to be like, what about the 95% I see with my own two eyes? We're not making any difference. So just the back of the envelope math we have, I think it's 175,000 unsheltered, not just over 100. It's way worse than your number. 175,000 times 600,000 per bed per permanent supportive housing is north of 100. And like I said, we muscled up 12 to 15 in the best budget years in the history of California, and we're not there, we're never going to be there again.

And so if we keep doing a little, this little that we're giving a partial solution to 5% of the population, while people are literally going to freeze tonight in the streets of Sacramento, it may snow here in 12 hours. Right outside in Sacramento, for the first time in 20 years, we have tents. We don't have, like New York, the right to housing. So why wouldn't we just put all of our money into shelter and triage? It makes no sense. My city here in Sacramento, they recently had $50 million for shelter and they just said, you know what shelter is a band aid. We don't want any more tent cities.

We don't impermanent supportive housing. So they decided to spend all of that money on some housing projects. Well, 600 grand a bed is going to get them 83 units. We have 5000 homeless in Sacramento, and those 83 units, they probably won't be built for three years, because some people will sue, stuff like that. So, again, why don't we use all of our money to focus on shelter? And you say your answer may be, well, the long term results are not good for people in shelters versus the streets.

Their outcomes may not be optimal, but we don't see people living in squalor under the freeways in all of our districts. So you do the same thing over and over, and you don't get the results you're looking for. Why would we try to do everything when we can't do it

Right? Thank you for that question. I think. I think of a few things. One is we need to do both. The other is, I urge you not to think about it as 171,000 people. It's about two or three people at high risk of homelessness who are falling into shelter, falling into homelessness. So if you build shelter and you don't do

anything to remove people from shelter into anything more permanent than that. No matter how many shelters you build, I promise you, you're just going to need more. And when I talk to my colleagues in New York, in case you can't tell, I'm a native New Yorker, and so I spend a lot of time there.

And when I talk to my colleagues in New York, they say, please don't make the mistake we made, because they're spending such an enormous part of both their local and state money on upholding the shelter system. And every day, more and more people fall into homelessness. If you think what California spends is a lot, you should see what New York spends. And they have a higher per capita rate of homelssness than we do.

So I think the answer, they don't have people outside. Right? That clearly is better in some ways. But shelter is $100 to $300 per night, per bed. And so I guess I would urge you to think about, first of all, not everyone who's homeless needs permanent supportive housing. Most need a rental subsidy.

Most just need support to get out of that shelter. There are many, many people with mental health and substance use problems who live in the community, and you would never know that they had mental health or substance use problems. And many, many people who are homeless don't have mental health and substance use problems. You could flip the question and say, why should I spend $300, or let's say $200, split the difference a night on a shelter which is $6,000 a month.

What if I gave this person $1,500 a month in a theoretical world and had to move in with roommates in a really nice apartment. Shelter is just a very expensive intervention that doesn't get us where we want to go. All home, which is a nine county sort of organization in the Bay Area, proposes thinking about a 1,2,4 ratio for every unit of shelter you build. You should find two housing outcomes. Maybe permanent supportive housing. It may be a permanent rental voucher, it may be some other home share. Situation, and four units of prevention.

Because you saw, like, for instance, in Los. Angeles, who raised substantial local dollars, thousands of people, but for every person they housed 1.7 people experienced homelessness. So they recommend a little bit of doing both, building shelter, but being sure you had housing outcomes. Not everybody needs their own unit. Not everyone needs permanent supportive housing. The services and permanent supportive housing can be billed to Medicaid.

Medicaid, a lot of that money comes from the Federal Government, so that's sort of a nice thing for us to know. And we certainly need the Federal Government. To step up with housing vouchers and things.

Fear that if we only build shelter, we'll never build enough, because we have so many people who are on the verge of falling into homelessness, and once they get in shelter, if we don't do anything to get them out of there, people are just going to stack up in the shelters and that is really expensive.

But what do you say to the people that are out there with nothing tonight?

I have no question that we are under sheltered. We need to build more shelters. I just think we need to be measured about it.

The last question, I know we have many more panels and many more questions here. Are there shelter things that there cheaper shelter versions that we're not thinking about doing? Because it just seems that the two solutions are 600,000 or $100. Go to big five and buy a sleeping bag and a little tent. Are there, like, shelter things that we're not doing at the small housing and stuff like that? But what things could we be zeroing in on for our definition of shelter?

I think, well, if you're thinking the big cost with shelter are the personnel, that's what's expensive about shelter. It's not so much building it, it's staffing it. Like, when you gather a bunch of people together, you need 24/7 staff, which housing doesn't have. Like, we don't provide that for people living in housing. And so I think that there are different models of shelter that can be lower costs, but the key is to be sure.

I don't want you to think that it's permanent supportive housing or nothing. We clearly can be doing more with shared housing. Whenever I'm rooms, I must whoever lived with a roommate. Most people have lived with roommates. Can we be giving people more agency or more choices to live with roommates or things? I urge us to sort let go of this dichotomy because we absolutely can't build $600,000 units for every single person who experiences homelessness. That's not going to work either. It.

Mr. Bennett looks like he wants to ask a few questions.

Thank you. I'm just concerned about wanting to the. Other speakers, so I have a couple of quick questions. One, while these speakers are here, because. I may have some questions after that.

I can stay around for sure.

I would appreciate that. Number one, I just want to get on your radar screen. You mentioned that we're a million units short, and we've heard that number a number of times out there. And we are in terms of low-income units. But it seems to me that we use the term affordable housing too loosely and we don't really get after low income. And when you talk about homeless people, it's got to be low and very low income.

Extremely low-income.

Options have to be out there. And it seems that we are getting distracted. My own view is like, we shouldn't build more market-rate housing until we build these million units or until we make a significant dent in this million. That's where all of our energy should go. There will be market-rate housing built. We shouldn't be doing that. And I'm concerned about the crowding out.

We have in a city, in my district, some prime properties that could have been very good properties for low-income housing, but they're all getting market-rate housing on them. It's just going to make it hard to build that.

That's number one. And the other one I just want to quickly ask you about is you talked about gathering the names. It seems to me that, from an accountability standpoint, I'd like to get your quick take on this. From an accountability standpoint, if I put my city council hat on, I put my county supervisor hat on, all of the people that might move in or might fall into housing, that's an issue that fall into homelessness. I mean, that's an issue that we should be concerned with.

But from an accountability standpoint, if I was tasked with identifying the 500 regular homeless people in the city, and the goal was within two years, 400 of those 500 had to be housed, that that would be an accountability measure that would make almost everybody feel good because people know those people and we're getting those people in. And then L.A. got caught in that they were housing the people, but more people were falling.

Doesn't solve the problem, but it does at least create a sense of accountability for your current population. I'm very interested in. And perhaps after the other people talk we could talk about that a little. Tie things up too much.

Sure. Should I defer answers or shall I? I should answer. I mean, I think the first question. Look, we need housing at every level, but there's no question that the homelessness population not only needs affordable housing, but actually the highest level, ELI, extremely low-income. The people who make less than 20% of the area median income and up to 30%. And so if we want to get at this problem, that's the housing. I think we also have to be real.

When I talk to my, I'm just a physician, but when I talk to my housing developer friends and my affordable housing developer friends, they say those need deep subsidies. Like people making $960 a month just can't pay enough not only to create the housing, but frankly, to sustain it. This is where I feel like the Federal Government has kind of abandoned us, right? But there's no question that if we had, we're so short of every level of housing that people are sort of moved down.

People who could afford in other places better housing are sort of crowding out the people who are lower income. So I think the answer is both end, but I think Assembly Member Bennett, you're absolutely right that this population is desperately poor and that's what we need to focus on for this population.

If I could respond to that just real quickly, since maybe you don't have to stay around as I'm doing this, but the other first world countries that have solved this problem, they do it with deep subsidies.

With deep subsidies.

They do it with deep subsidies. Deep subsidies.

I think we're going to be sitting here just talking around this circle forever. And deep subsidies mean, you don't have to say, okay, the way we're going to get the funding for this low-income housing is we're going to let somebody build 10 units of affordable housing and they'll give us one low-income housing unit. That is a failed policy to try to address this issue. Instead, you say build 11 units of low-income housing and we just have to make that commitment.

Absolutely.

Until we make that commitment, it's going to be a real challenge. Is your perception also?

Yeah, I fear that I've been doing this since 1998, and I fear, like, I'm going to retire and I'm still going to be having these same conversations unless we get at the root. And it's a tough conversation to have because we're so far from it. We're going to need the Federal Government to step up.

But California is in the state now that even if the Federal Government decided to fund housing choice vouchers, right now only one in four households that qualify get them. In most of the country, they could flip the switch on that, spend about what we spend on shelters in the country, provide it for everyone who qualifies. In most of the country, homelessness would disappear. We would still have a problem in California because we literally don't have the housing for those vouchers to work in. So it's a bit of both.

Thank you, Ms. Bonta.

Thank you, Doctor. I just wanted to kind of hone in specifically on some of the demographic questions and the nature of the population that we're dealing with, per some of the questions that were raised earlier. So in the report, we outline the fact that almost one in four of people who are experiencing homelessness are actually children under the age of 18.

Yes.

And likely not going to be people who are drug addicted substance abusers.

For the most part.

Right.

The single age that people are most likely to be homeless, we call it the modal age is zero, is before you're one years old. That is a time in anyone's life that they're most likely to be homeless.

So we're talking about 25% of our population, 130,000 people that are captured in this report. And in our population, just from a cost-efficiency standpoint, the children experiencing homelessness. Is it more cost-efficient to build a home, or is it more cost-efficient to find ways to be able to keep the people who in their homes?

The first rule is stop the bleeding. We have to keep people who are housed where they are and so that they don't fall into homelessness or, frankly, become evicted, even if what we see is most people before homelessness go through this period of being doubled up or tripled up where they've already been evicted. Obviously, if you can stop the eviction, you stop that process.

But we also need to focus on those who are doubled and tripled up to keep them there and keep them from becoming homeless.

Thanks. We spend a lot of time talking about housing production, which is absolutely something that we need to focus in on. I don't know that we spend as much time talking about ensuring protections for tenants so that they can actually stay in their homes and provide the kind of subsidies that we need to, an emergency rental program and assistance for those populations.

Thank you. My quick question for Dr. Kushel. Earlier, you were concerned about some of the accountability metrics, and then you thought we should focus more on certain outcomes, on what outcomes we should be focused on. Because I think that's something, that issue is something that we're looking at right now.

Yeah, I mean, I think sometimes when the accountability is too narrowly defined, you find that the money becomes difficult to use. I hear all the time just being out there in the community, talking to providers, where they talk about unicorn funding or unicorn units, units that have been so constrained in how the funding is used that they can't find a person to fit that. That isn't serving anyone's interest. I think we can absolutely hold people accountable for housing the people who are homeless.

You choose it, whether it's the most complicated people, the largest number of people, or whatever, but giving local governments some flexibility in how they do that and not making it hard for people to use the money that's coming their way.

Then how would you measure? Because you do data, you do research, what outcomes would you say we should look at? Because we care about, obviously, getting people into permanent housing, getting people off the streets, what outcome?

I think you want to look at outflow, for instance, for people who are in shelters, you want to make sure they're not staying in shelters too long, because if a system is working appropriately, people would be in shelter and then moved out to permanent housing, and then somebody else can fill that shelter bed. That way you don't have to create endless shelters for everybody. So certainly outflows to permanence, lack of reentrance into homelessness.

You don't want to see people who've become housed come back to your system again. I think that there can be some accountability for people who we see with complex needs in all these systems. Are they being prioritized? Are their needs being met? Because they're often the people who are causing the most problem. I think there can be some prevention work. Are we getting prevention dollars to the people at highest risk? And there's a way to sort of test that. And are we decreasing outflows?

And then I think you can look at certain populations. I mean, we see such disproportionality in certain populations. We always talk about mental health and substance use, but we don't talk about the elephant in the room of the ways in which the Black population, Indigenous population, and now Latino populations are so overrepresented in this population. And I think we need to be holding our systems accountable to make sure that they're not leaving those most impacted populations behind.

I'm glad you brought the issue of outcomes. I was just looking at the report and just noticing on some charts, and I'm just focusing on one chart. This is outcomes for people exiting programs. Reporting data to HDIS by June 30, 2021. Of that, 22% exited to homelessness. So they went through the services, but they still exited to homelessness, and another 35% exited to unknown destinations, which people think is homelessness without a label, Right? So that's over 50%. Is that kind of representative?

I think it gets to the root of the problem is that there is no place for people to go. And I can tell you we've been doing a very intensive, what we call longitudinal study where we actually collected a group of people who are homeless and have followed them, for now, a decade to see what happens. 80% of these older adults in Oakland got rehoused, but 50% of them reentered homelessness. And the only things that protected them from reentering homelessness was having some sort of rental subsidy.

Those with rental subsidies didn't reenter homelessness. Those without got housed for a year or two and then came back into the system. I think it's hard to hold the homelessness system entirely accountable for that, because where are people going to go when you have a client in front of you who makes $960 a month and you're trying to find a place for them to live for that?

Until we solve that problem, I think the system is going to continue to sort of strain under the weight of that.

One last thing. It wasn't clear, I know we've talked a lot about the money that's been appropriated. It wasn't clear how long it's been taking to get it out, because I know even though it's been appropriated in the budget, a lot of it hasn't reached the communities. And I guess the report didn't really give us much indication of that. Do you have a sense of what's been done with?

I don't know for sure, but I think it varies by program, and I think it varies by program design. I think you see programs like Homekey that came on board very quickly and other programs that were just harder to make use of.

Got it. So you would encourage us to take a look at that individually? Okay, great. Not seeing any other questions. Really want to thank you, Dr. Kushel.

Thank you.

Appreciate your insights. We're going to move to our next panel on state perspective with Lourdes Morales from LAO, Dhakshike, Deputy Secretary of Homelessness, Business, Consumer Services, Housing Agency, Dhakshike Wickrema, as well as Zach Olmstead, Chief Deputy Director of HCD. So with that, I think LAO is going to go first.

Good afternoon, Mr. Chair and Members. I'm Lourdes Morales with the Legislative Analyst Office. I've been asked to provide an overview of four key homelessness programs for the state. I'll be making my comments from this handout, which you should have before you. It's also available on our website. If you turn to the first page of the handout, you'll see an overview table of the four key programs that will be discussed during this panel.

We have Homekey, administered by HCD, as well as HHAP, the Encampment Resolution Funding Program, and the Family Homelessness Challenge Grant, all three of which are administered by the California Interagency.

I'm really having trouble if you got to be a lot closer to that microphone with that mask on. I think that would help me. Thank you, Mr. Chair.

Okay, so we have sort of the three programs administered by the council on the table. The table identifies how much the budget has allocated towards the three programs. To your prior question, how much has actually been awarded? Awards are usually provided to cities, counties, and COCs. And for the funding that remains, what is the timeline for getting that funding out the door? We also identify the reporting requirements associated with each of these three programs.

So in the pages that remain in the handout, I'll go through each of the four programs, in turn, providing a status update and some of the preliminary findings from these programs. So, turning to page two, where we begin our discussion of Homekey. As was already sort of mentioned, Homekey provides grants to local public agencies and tribes to acquire properties like motels and commercial properties in order to quickly expand the supply of housing for people that are homeless or experiencing homelessness.

The table on page two provides an overview of how funds for the first two rounds have been distributed so far. As you can see, overall, the largest allocation has been allocated to communities within Los Angeles County, where over 900 million has been provided and about 4,000 properties are intended to or units, excuse me, are intended to be open as a result of that funding, many of which are already in operation.

If you turn to page three, we provide a little more detail about the overall accomplishments thus far. As you can see, for the $2.8 billion that has been allocated across 210 projects, the state anticipates creating a total of nearly 13,000 units, many of which, I already mentioned, are already available, and these would support about 213,000 people. Over the life of these units, there's affordability covenants that ensure that they stay affordable over a long time.

So over that entire duration. Overall, all of the round one Homekey funding has been awarded. The vast majority of that funding has been towards acquisition of properties. For round two, the state saw significant demand on Homekey funding to such extent that some of the round three Homekey funding was accelerated to ensure that all eligible applications received funds so that these projects didn't have to reapply later and have delays in getting the units up and running.

So this means that there's about $900 million left in Homekey funding that's anticipated to go out this year, some of that money next month. With that funding release, that would sort of exhaust the current authorized funding for Homekey, and there's no additional funding that's being proposed at this time. If you turn to page four, we begin the discussion of HHAP, which is the state's largest, most flexible program related to homelessness that provides flexible aid to the largest cities, counties, and continuums of care so they can address homelessness in their communities.

The table that spans pages 4 and 5 provides a snapshot of the various rounds of HHAP funding. Overall, you can see that across the first two rounds of HHAP funding. About $834,000,000 has been encumbered locally, and about 86% of this funding. I'm sorry, about 86% of the funding has been encumbered and about 52% has actually been spent locally.

So from the first two rounds, there's about 127,000,000 that remains unobligated. Importantly, though, the program allows for a five-year expenditure window, so locals do have additional time to get this funding out. On the bottom of page five, we sort of begin to outline a little bit about what we know about the people served through the first two rounds. Overall, about 74,000 individuals and nearly 18,000 families have families with dependent children have been served so far.

The round three funding was just recently released, and the Interagency Council is currently reviewing applications for the fourth round. Last year's budget did provide an additional $1 billion in funding for HHAP for a final sort of fifth round. And once again, once these funds go out, that would sort of exhaust the currently authorized funding for the program. In terms of sort of how the project, sorry, the program has evolved over time, we have seen an increase in regional partnerships over the first four rounds of the program.

Most importantly, additional sort of jurisdictions either joining their funds in order to sort of work more collaboratively in addressing homelessness in their communities. In terms of accountability, we've also seen significant evolution in this program over time. The initial two rounds did have some annual reporting, but it was mostly about sort of tracking expenditures and uses.

With the start of round three, there were significant changes where there's now the inclusion of local action plans so that locals identify their goals as a way to sort of track progress over time. There's also an inclusion of bonus funding for jurisdictions that are meeting their goals. Now, there is questions about whether the local goals do align with legislative priorities for these programs, and so that's still a question, but it does reflect greater oversight and accountability.

However, one of the challenges that just the sheer sort of work in gathering the information and reporting and compiling it does mean that there is a lag in when this information ultimately becomes available to the Legislature. And so sort of, for example, the reporting for round three, which is that first year where we are going to have more data, won't be reported until the end of this year.

So that means that there'll be a misalignment between when that additional data comes in and when the Legislature will be asked to act on budget legislation related to that fifth round. Turning to page seven of the handout, there's a discussion of the Encampment Resolution Funding Program. So these are competitive grants to cities, counties, and COCs in order to address unsheltered individuals living in encampments.

For this program, you can see on slides 7 and 8 the funding that has been awarded over the first two rounds of the program. In all, about $96 million has been awarded. For the second round, for the second round, there's still sort of some allocation remaining that will be going out, and then all of the third round will be going out in the next calendar year. And then the final program that I'll highlight for you is on page nine, the Family Homelessness Challenge Grant.

This is about 40 million in one-time funding that was provided specifically to address families experiencing homelessness, so adults with dependent children. In particular, there was 30 million allocated towards grants to communities to address this issue. About $17 million has gone out. This is sort of more recently released, and they'll be sort of tracking towards objectives identified in the applications for these programs and as they sort of demonstrate their meeting goals.

These same jurisdictions would be the ones eligible for the remaining funding should they meet those objectives. That concludes my comments and happy to take any questions. Thank you.

Thank you. Next.

Speaker thank you. Chirking. My name is Dhakshika Vikramer. I'm the Deputy Secretary for the Business, Consumer Services and housing agency. And I'm here just to provide a quick overview on some of the programs, actually, that Ms. Morales went over. So I'll try not to duplicate, but just add to some of the things she mentioned. So Ms. Morales mentioned HAPP, which is the flexible one time Fund, but over five year period, it's first started, as she mentioned, in 201920.

And so we've gone to three rounds now, Hap one, Hap two, Hap three funds just went out and we are in the middle of reviewing Hap four, as she mentioned. I will mention, going back to what Dr. Kushell mentioned, chatting, that there are metrics in Hap three and Hap four which mirror some of the outcomes she mentioned, for example, looking to see how we can reduce unsheltered homelessness.

Looking to see how many people we are serving that reach, looking to see how many people are newly homeless. That means who has not emerged in the system in the last two years. So we can see who's coming up. And that's been a two year gap. Newly homeless, looking to see how many people are returning to homeless.

So these are fairly standard metrics and outcomes that are collected across the country, which are now embedded in Hap round three and will be in Hap four, and I'm sure Hap five as well. Along with other things we want to add. I will also mention that there is a youth set aside, which the youth advocates will mention, because in Hap 1 and 2, there was an 8% set aside. In Hap 3 and 4, there's a 10% set aside. A bright spot because of that.

If you look at the AHAR, which was mentioned, the 2022 national point in time count in California, we were one of the states that had the largest absolute decrease of youth experiencing homelessness, and we had a -21% decrease from 2020 to 2022. Youth advocates, if you talk to them, will say that this, because you have this targeted funding now that's flexible, that can be used for planning and interventions, especially for that youth population, 18 to 24.

As Assemblywoman Bonta mentioned, this is a really good prevention early intervention thing to make sure people don't age into homelessness. So just want to mention that round three, as we said, the checks just went out. And then round four, we are reviewing, we are looking really carefully to see those outcomes. So round three, there were outcomes for 2024, and round four, the outcomes will be 2025 so all of these things importantly use HDIs, which was discussed as a baseline.

So for the very first noun, we have this baseline that can be used as apples at apples comparison so that people are measuring their outcomes versus the baseline provided through HDIs. Speaking of HDIs, I know the landscape assessment was mentioned. So wanted to mention again that that's a three year study period, 571,000 people served. And while that, I thought one of the takeaways for me was that you're seeing this greater reach year over year.

And while there is a 25% unknown destination outcome, what the researchers at Turner, I had asked them to look into this. When you look at the national unknown outcomes at other places, California's outcomes actually are lower on the unknown side. So our providers are doing, it's not perfect, but a better job compared to the national kind of data around who is exiting to unknown destinations. And two, over that three year study period, the number, the percentage of unknown went down. So we are getting better.

But I can address more questions around HKs, which I'm sure will come up. And then encampment resolution Fund. There are also metrics there because again, the goal, as was mentioned, was around placing people on a pathway to permanent affordable housing. So those are the metrics we're gathering on encampment resolution. As you know, there was a 50 million round one. There was a round two, which we are in right now, opened in December and June 30, whenever it's over the counter.

And there'll be a round three in December of this year, another 400 million. The last thing I'll mention is around accountability. You probably saw that with the accountability we've built into Hap three and hap four, we are also thinking about what more we can do. One thing to keep in mind, as Dr. Kushel mentioned, is the context at the local levels are very different. So we want to make sure that we are taking into account market forces and other dynamics which were referenced.

For example, research shows that in California, the median renter is paying more than 50% of their income towards rent. That itself is kind of a place where people then are in danger. One expense that they're not expecting could throw them into homelessness. So that's where we really need to think about building housing, but also the prevention mechanisms in those upstream systems to make sure it doesn't swamp the progress on the ground.

And so as we move forward, I think we need to think about what are local jurisdictions doing with their local kind of authorities to build and permit more housing. So I think we look forward to that conversation as we think about how that becomes part of accountability as well at the local level around producing and preserving affordable housing for folks. Thank you. Thank you.

Thank you. Zach Olmsted, Chief Deputy Director at the Department of Housing and Community Development, appreciate being able to weigh in on the department's role in addressing homelessness in the state. The Administration believes the work that we do in housing is a really critical component of our approach to homelessness.

HD is with making sure that every local government zone for their housing need so that there are opportunities to create affordable housing and permanent supportive housing where collectively over 1 million units now need to be zoned for those purposes. And they must be zoned to accommodate the needs of our extremely Low income, our Low income households, which includes those who are homeless.

And all of these plans now must affirmatively further fair housing, which means that in order to be deemed compliant, they must have clear plans to address disparities within that community segregation. And so while the committees are likely familiar with Homekey, and I do think it's important to note that nearly every one of HD's affordable housing programs addresses the needs of extremely Low income or homeless households. In fact, those projects that do so are the ones that are the most competitive within our programs.

Because we build that into the scoring, we reflect those values to serve at the deepest need within all of those programs. So it's not just home key or our no place like home program that are producing units for these households, for homeless households, but it's nearly every federal or state program the Department administers. So since 2018 alone, we have awarded over 13 billion in investments and these resources have already resulted in nearly 10,000 homes being built and in service.

Over 22,000 more are currently in construction and 24,000 on top of that are in the pipeline already been awarded and will be coming online in the coming years. So I want to offer a few specific examples beyond homekey to kind of illustrate that point. 47% of the units that we awarded from the accelerator funds that creative use of mostly federal funds that we use to accelerate housing projects that were stuck.

47% of those units funded extremely Low income units at or 30% or below the area median income just for 2122 budget year alone. The resources we deployed from our state share of the Federal Emergency Solutions grant program rehoused nearly 14,000 households and provided emergency shelter for an additional 50,000 people.

The last round of our housing for a Healthy California program did a little more modest, but over 500 permanent supportive housing units across seven counties even a program like our affordable housing and Sustainable Communities program, which is not one that people think about addressing, homelessness funds quite a bit at the extremely Low income and homeless household level. The last funding round, for example, funded nearly 4500 units. Over 1300 of those were for extremely Low income households, over 400 units of permanent supportive housing in that program.

And of course, I mentioned the no place like Home program, which, while complete now has created over 17,000 units of housing, over 6300 of which were for persons experienced with chronic mental illness and homelessness. But I want to speak a little bit more. These programs, homekey, all of that we're doing, all those numbers I gave, I want to talk a little bit more of return on investment and impact. We hear a lot about the costs here, but these investments are not just one time, they're multigenerational.

We have regulatory covenants for all of our programs that require affordability, affordability for 55 years. So these are not one time benefits or one time outcomes on an average turnover. We're going to serve at least seven households over the course of that time. Right? So we need to begin thinking about in that terms. We see ourselves as helping to build that capacity, build that portfolio across the state that has been underinvested for a long time, underproduced for a long time.

So I think it's important that we remember that we're going to serve hundreds of thousands of Californians in the numbers I just mentioned. I'll talk a little bit more about home key. I don't want to be duplicative. Created nearly 13,000 homes already, 210 projects across 42 counties, seven tribes. And I want to point out a couple of things. We continue to also Fund not just the acquisition or the creation of these units, but the operations of these projects as well.

So in our last round of funding, we increased up to at least three years of operating supports within those awards, compared to the two years that was available in the first round. And so of that 1.9 billion we did in the second round, it broke down to about 1.67 billion for the capital and acquisition costs and about 282,000,000 of support for operating costs. I would also like to add that we did have flexibility within this program, right. Both interim and permanent housing.

But in round 260 percent of the awardees created permanent housing, which is up from 39% in round one. So we are doing that balance that was spoken to a little bit earlier. We also increased the per unit operating dollars for projects serving, getting at the point of serving at the greatest need for those that were addressing people experiencing chronic homelessness or folks or homeless youth. We also had many of our projects.

We're able to utilize federal project based vouchers, which decreased the need for additional operating support, which is great. Not all projects, of course, can have that within it, but the use of federal, state and other local sources to provide medium short term operations. And coupled with our operation awards, we're seeing an average operating support about five to seven years for these projects right now, which is pretty healthy. Specific to the goals of serving homeless youth, HD awarded about 156,000,000 for 25 projects.

That was 40 million above what our statutory set aside was, and those supported the creation of 535 units for homeless youth, along with a couple of manager units. We're also really proud of our work with tribes. We have made several awards. Like I said to seven different tribes, we will do another tribal specific set aside within the remaining funding that we have later this year. So we do have one more round of funding due out very soon.

736,000,000 is what we expect, along with a separate set aside for tribes of about 75 million. And then taken together, these will exhaust the funding that's been appropriated so far. Pleased that local governments continue to be willing partners, we do have a public dashboard on our website of the round two of funding for those that are interested. We're still seeing certainly the acquisition. Hotels and motels, of course, are a popular type, but there's interest in modular housing, acquisition of existing multifamily housing, other adaptive reuses.

And so I just wanted to mention not just homekey, but some of those programs to provide that snapshot of what this Department is doing, what our role is in kind of addressing the issue. On the supply side, we do believe that homelessness is a housing problem, and we're proud to be part of that solution and increasing that portfolio as we are so desperately needed for extremely Low income households and homeless households. Happy to answer your questions.

Thanks. Thank you. We're going to go to questions. Ms. Sanchez, I have a question for.

Mr. Olmstead as I speak to people in LA, San Diego, or even parts of my district, Riverside and Orange County. It's very hard to believe that these metrics are ways. How are we able to measure the success of these programs, specifically project Homekey?

Well, so for the production programs, it's quite simple, right? It's the actual creation of those units and people living in those units. We had the first round report to the Legislature saying, how many? 6000 units, about over 8000 folks living in those units. On average. Right. You're going to see at least one to three people in each of these units. You can do a little bit of rough math of how many people are living in those units.

So it's a little simpler maybe on the housing side than it is for maybe some of the services side, because we Fund the creation of units, whether it be acquisition or construction, and we build those units. Right. And so that's a way to kind of measure the outcomes there. They're fairly clear. Certainly we want to make sure we have as Low vacancy rates as possible as possible on those units. That's also a part of our accountability work. All these are public funds.

We see our accountability work not just with local government zoning for housing and building housing, but in our deployment of these funds that we're getting the outcomes that are expected when we make those awards. Right. The number of units created, the folks living in those units.

And a quick follow up, I'm glad you brought up public funds and accountability. Would you agree to opening your books and complying with a performance audit by the State Auditor to make sure that those metrics are accurate and not just a financial audit, but one to examine outcomes, performance, as you've mentioned, in achievements as well?

Well, I think certainly whatever the State Auditor reaches out to us, we always comply with those requests. They've engaged us quite a bit in the last couple of years on a lot of our federal funds and the like. So certainly whatever is reached out to we are always seek to not only comply with our partners, but implement the funds that are given to us by the state Legislature through that budget process.

Thank you.

Thank you, Mr. Fong.

Thank you, Mr.

Chair.

If I could ask the deputy secretary of homelessness, the CICH, the Governor froze $1.0 billion in Hap funding in November and then released the funds. And I believe the Governor issued a statement that he wanted to see more results faster and that the State of California wasn't meeting the. And I was wondering if you could identify to us how he defines or how we should be defining success. What are the results he's looking for, if you can shed some light on that.

I think one of the things we are doing is as we're doing Hap four review, which is underway right now, we are looking to see again, these are metrics that were there before, but really making to sure that people are really looking at unsheltered homelessness, how many people they're reaching. I should have mentioned there are also racial equity goals connected to these metrics because we think that's important because we heard about the overrepresentation of various groups.

So looking at all of those metrics that are connected to the main metrics around racial equity goals. And so we continue to work with all the jurisdictions. As was mentioned, there are 114 eligible jurisdictions. So that's 44. Continuum of care entities. These are entities created by HUD that receive federal funds. 58 counties and the 14 big cities. Right. But even though there are 114 eligible applicants, because people have chosen to come in jointly, which is a good thing. Right.

There's regional collaboration that also, I think, is a measure of success. We only got 75 applications because so many jurisdictions came in jointly. So I think there are various ways where we are measuring success around regional collaboration. Looking at how they are braiding funds, looking at the way racial equity goals are woven throughout the various metrics that I mentioned earlier, and also thinking about, systemically how they are building systems to prevent and end homelessness. So every jurisdiction is different.

And I think we, as Dr. Kushel mentioned, want to be intentional about how we approach this without being, like a blunt instrument, but really looking to see that it's making sense on the ground. Sure.

So let me delve a little deeper. You gave me a very long answer.

I'll try to be short. And.

No, that's okay. I appreciate the detail, though. I think I want to get a little bit more specific. So I'm reading from the governor's press release on November 3, which writes, collectively, the plans as submitted would reduce street homelessness statewide by just 2%. And he froze those dollars, the $1.0 billion, because 2% wasn't acceptable. So are you saying that the goal is more than 2%, or what result do you want to see? Do you want to see a reduction in homelessness?

Assuming it's either the point in time count or the HMIS numbers, is it 5% reduction? Is it a 10% reduction? What number are we looking at? As you in charge of overseeing these and reviewing these hhap funds, what are you looking for?

Well, again, I think 2%. The Governor didn't think 2% was enough.

Which I don't, and I agree with him on that one. My colleagues might be surprised that I would agree with the Governor on that one.

But, yes, I think that's why in the full review process, I think the hope is when we look at the aggregated numbers around that measure, that it will be better than that. But I want to, again, stress that that is one of multiple metrics. As you heard from Dr. Kushel. We want to make sure that we are taking as comprehensive a view as possible about this because in the end, these are people who need different types of customized services.

So I think, as you heard from the Governor, 2% was not enough. And we will see in the Hap four review process how people come in on that measure as well as the other measures.

So more than 2%, but don't know more than that.

I think that we will have to see, because I don't want to speak on behalf of the locals because we want to make sure that we are providing technical assistance. Each jurisdiction receives technical assistance because, and I know you wanted me to short, but I think this is important. No, this is important because earlier there was a discussion around should we just do shelter? Should we just do permanent?

The unfortunate pieces, we have to do all of them, depending on the money we have and the resources we have. So this is why some of the calculation will be from the jurisdiction side, is how much shelter beds should I invest in versus how much permanent housing should I invest in versus how much prevention should I invest in. So some jurisdictions may have fewer folks on the street than others, and so they may have a lower amount that they have to work towards than others.

So this is why it's not a one size fits all, nor should it be. It would not be a good program, to Dr. Kushel's point, if it was a one size fits all.

I agree. There's not one size fits all. What is done in Kern County and Tilleri County is different from Riverside, was different from LA. I'm just trying to grapple with as the Budget Committee, that as you review these proposals from these local jurisdictions and the Cocs, I guess I'm just trying to understand there has to be some results, some accountability measure that you're judging these proposals under to release the funds.

I guess from our perspective, and I think you've heard this from some of our colleagues, is that if we don't understand what the metrics are, then how do you expect us to allocate $1.0 billion or 1.5 billion or 5 billion? These are significant amounts of money.

There are metrics, as I meant, I'll say them again. So it's a billion over five years. Right. Which is why, as Ms. Morales mentioned, people are also trying to budget for a five year period, and they're trying to budget for different types of populations because some of what's in the application, which we ask for is in their application, they, to talk about the demographics that they're reaching, youth, seniors, families with children under the age of 18 single adults.

So they need to have kind of a comprehensive view of the demographics they're trying to serve. Number one, the other metrics, like I mentioned, there are six system performance metrics which track with the HUD metrics around. How many people are you serving every year through HMIs? What is the point in time count and how do you want to bend that curve right to how many people are newly homeless that you haven't seen in HMIs over the last two years?

You're tracking that how many people are returning, how many people went from the streets to shelter or from the streets to housing. So those are metrics that are already built in as accountability measures, like any grant, right, which you're measuring them based on a baseline from HDIs. So those are metrics that are already built in. That's part of the accountability. The other accountability, I think, as you heard Mr. Olmsted mentioning, is we're trying to think about are there other ways?

Because you heard some of this around, if you don't have enough housing, where are you going to place somebody who's making 900 a month? Or if you're a mother on Cal Works, single mother would teach two kids making 500 a month. Where are you going to go with that? So a service provider can wrap a whole amount of services around somebody, but you can't find a unit or even a shared unit.

So some of the accountability that's coming in the next round potentially will be looking to see how jurisdictions are really planning towards that to increase the housing placement piece. But just wanted to stress that accountability is already built in, in 3 and 4, around these multiple metrics.

So in all these metrics, how do you define. Do you want to know how many are newly homeless? Is there a number there that you're, you know, I'm going to continue to read from the press release that the Governor sent and said California's demand accountability results not settling for the status quo. As a state, we are failing to meet the urgency of this moment. Collectively, these plans set a goal to reduce street homelessness 2% statewide by 2024.

At this pace, it would take decades to significantly curb homelessness in California. This approach is simply unacceptable. So I guess looking at just the street homelessness piece and a 2% reduction, do you have a number in mind of what the cities and counties should do to reduce street homelessness, for example?

I mean, I think that, as you heard from the previous, I'll just be honest, if I had the answer, magic bullet, I don't think I would be here. I would prefer to do something else. But what I will say is, if you look at the ahar, the 2022.0 in time count, California's street homelessness increased at a rate that was half of the national rate. So I think that's actually a testament to the Legislature and the investment made.

And so, just as you saw from the landscape assessment, the reach that the investments are having in the community, I think we should all kind of kudos to the Legislature for the investments, because it's amazing to me, which nobody's talking about, that the rate of increase in California was half of the national rate of increase around unsheltered homelessness. It's still a huge number, as Dr. Kushel mentioned.

But it's going to take us some time to really be consistent around our programming and our investment and really think about how we can customize investments on the.

I will just say we are partners with you in this. And so as you identify your metrics, which is how many individuals you're serving, how many are newly homeless, street homelessness, housing goals. Right. I don't dispute any of those goals and those metrics.

I'm just trying to understand in the five years that you have for this $1.0 billion to be allocated, what we're looking milestone year over year, and if we're not meeting those goals, let's say next year or the year after that, the year after that, then what triggers are in place then to reevaluate the strategies? Right. Because that's what we're trying to achieve. As the chair says, we are looking for outcomes and results.

Actually, that's a good point, because, remember, HAPP is just one piece of the puzzle. HAPP is flexible funds, one time funds of five years that can be used in flexible ways. So, for example, a jurisdiction can have a homekey site, which is capital, but they need the operating and services subsidy. Hap can be used in conjunction with Homekey to provide the operating subsidy.

I guess the Chair gave me a very good question. I'll ask is, are you using the same metrics across all these programs?

Well, there are different metrics for capital. Right? Which Zach mentioned, because you want to build the unit, but then you have different metrics for HAPP, which is you're trying to serve people and you're trying to fill gaps. So I think I say that because HAPP cannot be considered alone, it has to be considered around the breadth of programs that serve a person.

Yeah. And I think that's where we're trying to get the data. And maybe that's the conversation we had earlier in the first panel. Are we comparing apples to apples or apples to oranges? And so how are we, I mean, the same question I would apply to Homekey and to the behavioral health programs and everything else is that we have to figure out what success is. And of course, you guys are implementing the program. You're telling us whether these programs are successful or not.

And of course, we have our own opinions, too, of what success is. But no one should expect the Legislature to continue to invest billions of dollars if a program isn't working. I guess my fear is that I don't hear a lot of times some honest assessment of, like, hey, it's not working, and who is going to tell us whether it's not working or working.

And this is why there's always this push pull of whether that we want an outside audit or whatever, because we need an honest assessment, I think on both sides, both from the Legislature and from the Governor's office to figure out, because this problem is getting more intense, it's getting bigger, the numbers, and whether it's point in time count or HMIS, the numbers are not moving in a good direction. And so that's what I'm trying to get at.

No, I understand what you're saying. So let me say a few things. I think, as Dr. Kushel mentioned, research and data shows, and this goes back to the early 2000s, just to resurface some of that research cost-benefit analysis was done in 2004-2005 and that's how supportive housing emerged, because it is actually cheaper to build housing that's affordable, as Mr. Olmsted said, for 55 years. So that unit is staying affordable for 55 years, unlike the places where you and I live. Right?

And then with the services attached, it's actually cheaper for the taxpayer, better outcomes for the person to invest government money there versus keeping the person on the street. Right? So that is research that has been undisputed since 2004. So I think you ask, is this a good investment? I would say yes, because you are actually getting better outcomes for the person. It is a better use of public funds to invest in permanent housing with services versus doing the alternative.

And I certainly don't dispute the need for permanent housing. I don't dispute the need for more mental health access to kind of channel. What Assemblymember McCarty was saying is that this is not sustainable. And that's a challenge. Not only do you have to thread kind of the metrics and the data, but then you also have to thread sustainability.

And if the problem continues to grow worse, especially in the most vulnerable populations, as Assemblymember Bonta has highlighted, we are in this vicious circle of having to constantly put more resources in to a problem that continues to grow worse. And it's a repeated hearing. We're going to have back and forth to say, well, we're building all these things and we're getting, and these are the quote-unquote metrics, but maybe we're not measuring the right thing.

I think part of it is we've been investing for the last four years. We should have been investing for 30 years. Right? So if you're planting an olive grove and you're starting the seedlings now, it's going to take some time for the investment because you can't just uproot, say it's not growing fast enough. So I think some of this is where the beginning of the investment period, some of the home key sites are going to come on board in the next few years.

And I think the HAPP dollars are also reaping benefits on the ground around. You're seeing the reach. So I think some of this is, as Dr. Kushel ended, having some grace. I think some of this is about just staying the course.

But as you mentioned, there has to be a bending of the curve.

True.

I don't know where we are, but I don't see the curve bending.

Well, I'll go back to something she said, in the emergency room, which some of you and I have been there. If there were 100 people there last month when I went, and next month I went, there's 100 people there. I don't shake my fist at the emergency room doctors and say, these people obviously doing something wrong. There are always people in the emergency room.

No, the emergency room is serving the function of the emergency room, but we have to do better, which I think is what Assembly Bonta was saying about going upstream to the education system, the mainstream housing system, to prevent people from coming to the emergency room.

I say that because the investment in HAPP and Homekey makes sense, because you are making sure that people who fall into homelessness are being served appropriately, doesn't mean that if there are more people and hopefully there are less people than last year, that it's a failure. It just means those other systems need to somehow be helpful.

And I think that I said that earlier. Right? It's the other systems that we need to be addressing. I certainly think that we should be releasing the funds to our local jurisdictions. They are dealing with a homelessness crisis that's continuing to intensify. The question I have is, if we're going to fix the broken systems, then we have to be able to measure it. And if we are going to measure it, we got to measure it correctly.

Correct.

And if we're going to define success, of course, then success is either number of people housed, a reduction in street homelessness, those are the metrics I would hope to hear would be the key ones.

Those are definitely the key ones for the homeless system. But I think if you're talking about accountability for the upstream systems, that's why that's a different. Which we don't control. Right?

So you'd have to think about something else there, I will say, which is not part of this, that this is where the Interagency Council, the State Council is important with the State Action Plan, which includes 18 state Member departments, because that's where we can really think about the health care system and the criminal justice system, which is, again, not the homeless system that we are measuring, but we are measuring outcomes in the homeless system. There needs to be a connect over there to stave the flow.

And I won't belabor the point, but we are having a budget hearing on the homelessness program.

Correct.

And so that is what we're trying to get to the bottom.

And we do have metrics on that. Right? On the homeless system, which we are collecting.

Thank you. I appreciate your candor.

I'm going to Mr. McCarty and then Mr. Bennett. But before we get. I don't want to leave Mr. Fong's point. I get the programs are different, but again, the goal is the same, is to get people housed. So I think, I want to make sure that as we're looking at the metrics, that even though we have different programs, that we're ultimately staying focused on what the ultimate goal is. Right.

Because the challenge is you could have a successful program, but if they're falling through the gaps, then if step one is successful. But we didn't do step two, and somehow step three is successful. The fact that people can't get from step one to step three is a problem. And so I think that's where we're struggling. I think the other thing that I'll ask later is, again, we know the money's been appropriated, but how much has actually been given out?

It's a whole nother thing between the money's in the agencies, the money's been appropriated in the budget, but we know that it hasn't hit San Francisco, hasn't hit Bakersfield, hasn't hit the places where it needs to help. So I think that's something that I will ask later, but I'm going to go to Mr. McCarty and Mr. Bennett?

Yes, thank you. As quickly as I can here. Does the Administration view the housing created by the Homekey program as shelter housing or as more permanent?

It's flexible topology that allows for both interim and permanent, and in some cases, interim housing that will be converted to permanent housing later. The last round did, 60% of the projects were permanent housing, with the remainder being interim or interim to permanent. So a lot of it's about meeting the community where their needs are. Right. We had seen in this, especially in the first round of.

I'm gonna cut you off, because Mr. McCarty is graciously giving me some time here. So interim housing would be counted as housing and not as shelter housing.

It's not permanent housing. People do not have leases. It would be a form of shelter.

My second question is, we've been subsidizing the purchases of these motels, et cetera, for the Homekey program. Are the areas responsible for the operation and maintenance, and we have pretty attractive prices, unit pricing there for the Komekey projects, 175,000 to 250,000, roughly. What about the ongoing cost? Have they been reasonable? Have they been $300 a night per person, $100 a night per person? Have they been much less than that?

Well, in permanent housing, you don't do a capitated rate like that. It's just what the cost is to operate and maintain the building. As I mentioned, we do provide operating support, and through Homekey as well, we assist with the acquisition, as you noted. And it is the localities who are the owners, or they seek to work with partners to be the owners. It is the responsibility of the operating.

But we have provided up to three years of operating support and coupled with other investments they have, we're seeing about five to seven years of operating support on the books.

Do we have some kind of average of what the average per unit operating cost is for Homekey?

It's going to vary on the project and their expenses, whether they're interim or permanent. It's going to be more expensive for interim because of higher staffing needs, as was mentioned earlier. But permanent housing is just property management, standard property management, and you have rents coming in to help subsidize that.

It's going to vary, but can you give me the range?

I can't because, like I said, the different typologies are quite different for this. So on an interim site, you might see more of a shelter kind of cost model based on the staffing. For a permanent housing, it's someone who has lease. Right? They're paying rent. That offsets the operating expenses.

My final question, does the state think that there are many more Homekey opportunities out there if we had enough funding, or do we think we've picked all of the low-hanging fruit there?

We saw significant take up in the last round, as was mentioned by my colleague at the LAO, we actually extended and moved forward some of the funding so we could fund all those projects because we had higher demand than what was available. So we're pretty optimistic. We're seeing a little bit higher costs on acquisition as can be understood, but we're still feeling significant.

Thank you very much, Mr. McCarty. I appreciate it.

Mr. McCarty, then Ms. Bonta.

Yeah, thank you. I know this hearing is to ask questions, but also it's a chance to talk to us. We write the Budget Bill, right? Last time I checked. So to Mr. Ting and Ms. Korea, our esteemed budget leaders on the sub-four and Budget Committee as a whole, I just think that we need to look at simple mathematics, and we can't do everything for everything. So everything for everybody. And just the crisis in our streets that we need to focus on emergency shelter right now.

And I'd like to focus on permanent supportive housing, but it would know a hundred years to get there based upon what we've been.

And here's what I'd say. This has been a debate in San Francisco for decades around permit supportive versus emergency. I think we got local panelists coming up, and I think you should ask them because they're seeing it on the streets, so they're actually making those decisions day by day.

Fair enough.

And having to struggle between. We have our esteemed Mayor here. They're looking at whether should we do shelter today or permanent shelter tomorrow. I think those are tough choices.

Yeah. But with all due respect, our mayor here recently, they made a choice to do permanent supportive housing. And there's no money for shelter. And they literally just shut down a shelter over here, 10 blocks from the Capitol, and they're trying to get some county money to repurpose it, but that's not their plan.

And they're going to be able to get permanent supportive housing for 83 people in the next maybe three years, whereas we could use that money today for shelter for people that are sleeping in the rain. So to our State Agency Director, I know you mentioned that the ratio was like 40-60 for emergency.

In the last round of Homekey. Well, actually it was about 40% in the first round of Homekey went for permanent housing. Now it's 60% in the second round for permanent housing.

Permanent. So 40 emergencies, 60 permits.

About, yeah.

if we want to meet the moment and address what we see out there in our communities today. Do you think that's the right ratio?

I don't know if it's for me to answer at a community level. I think what I was going to say to your other colleague is, I think one of the real strong benefits of Homekey, is that it meets communities where they were at, right? A lot of communities, they may not have had a shelter at all. And an interim site really makes sense, right? If some communities may say, we have a lot of shelter, we want to invest more in permanent housing.

So when they have these sites or these opportunities, I think they're the ones coming to us saying, here's what we need, and we're happy to help work with them in that we do pre-application consultations so we can talk through. Hey, here's what the costing is going to be for you to run a permanent supportive housing versus to run an interim housing, right? Because the obligations are ultimately on that locality. So I think it does depend on the community and their need.

What we've seen is a growth in rounds in communities seeking more permanent housing than interim housing. As they remember, this started as a pandemic response, getting folks who were very high at risk. And so I think that's one of the reasons why we've seen a little bit more gravitation towards the permanent housing solutions. And so I think it does depend on the community, but it is that both and approach that most are taking.

And then how much capacity do you think is out there for underutilized hotel rooms? If you drive out of the Capitol right now on Highway 160, like you go to Arden Fair Mall, for folks who don't know the area, there's a new self-storage place right there. And it was a hotel. It was the Radisson Hotel, like 200 plus rooms and it closed down and it's like that's gone forever. So how many underutilized hotels are really out there that we could be using? And you know, a 100, as you told Mr. Bennett, I think you said 170 something per unit.

I think that was what he quoted. There were projects that cost that much. We're seeing a little bit higher in the second round as the cost of acquisitions go up for properties.

Well, I assume even if it's higher than 177, it's not 600.

No, it's far less than new construction. We're seeing about 200 and 250 thousand.

That's a bargain compared to the other options. So how much capacity do we really have in some underutilized hotel assets across?

Yeah, I mean, we certainly saw hotels be a big part of that first round. Right. We were really seizing on the moment of a distressed assets during the early days of the pandemic. It is not the only typology, right. We're seeing modular housing, sometimes acquisition of multifamily existing, multifamily buildings that maybe were built at market rate, but that developer wants to get out of it. It's really an adaptive reuse model overall.

And certainly hotels, motels are ones that lots of communities look at, but it's going to depend too, on where that hotel is. And sometimes a big part of this was also the assessment of the appraisal, right. Of the condition of that property, because then you have to build in rehab costs as part of it.

So maybe a move in ready hotel maybe costs a little more, but it was a residence in that made a lot of sense because it could convert right away to housing versus something you got to put kitchenettes in or whatever. So there's a little bit of the availability of the hotels might not be where communities want them, but I still think we're seeing significant interest. I'm still seeing city councils, right. Prepare for the next round in terms of acquisition of motels and hotels. So it's community specific.

Do we have it all? Inventory or analysis, I guess, of how much capacity is out there with existing hotel motels?

I mean, it's willingness to sell, remember, for these operators too. Right? So I don't have that. We could ask our Department of General Services, who are a partner here in assisting with appraisals and the like. But I guess I'll say this, we did not see a lack of demand in this space. Right?

In the second round, we still saw excessive demand for what we had available so I'm pretty confident, given the interest of cities still reaching out to us about when the next round is coming, that we'll probably see the same this final round.

And then lastly, some of the monies that we used during COVID were to lease the hotels versus purchase them. Right.

My Department did not do that. Department of Social Services did what was called Roomkey. Right? When that was the kind of mass releasing of hotel rooms. That's correct.

And going forward, we don't want to go that route. We want to do the all out purchase.

I can't speak to it. We were implementing the homekey program, which was on the permanent acquisition, so a separate program from the leasing of the rooms. That Department of Social Services and our partners.

Thank you.

Assemblymember Bonta and then Assemblymember Carrillo.

Thank you. I just wanted to turn our attention for. Did you want to respond, by the way, Ms. Carrillo, too. Why don't you go ahead and do that and I'll ask my questions.

Thank you, Ms. Bonta. To your point, Assemblymember of the work that we do in sub-four and the overall work that we do in sub-five, as we have a conversation amongst ourselves here, I just want to remind folks, the new Members as well, that the investments for housing and homelessness through the State of California are fairly new. So the results that we're getting are new. The reports that we've managed to put together are new.

This is not something that the state has been actively engaged on. And so the challenge that we face is that we are trying to solve a crises that we see every day. But the programs and implementations and studies and reports are all new. They're all less than four or five years old.

And so I want to thank the departments and all those involved and all the panelists, because we are trying to solve a very big problem while at the same time, counties and cities oftentimes across the state, 58 counties across the state, don't share data, don't share information. That's also a new process that we've implemented. I can speak from the City of Los Angeles. The City of Los Angeles does not have its own health Department. It relies on the Los Angeles County Department of Health.

And so they have to work in collaboration. The bureaucracies of government often get in the way in which things are channeled and funneled and the way that money and resources are then operating on the ground. And so for all of the different communities, all of the different counties, all of the different cities, all of the different continuums of care, all of the different agencies and resources.

It is a ton of information that we as a state are only beginning to try to surf through. And so the question that I often ask, and that we have been asking in sub-four, is what actually is the role of the state? Aside from implementing these huge programs and the allocation of funding, at some point the state actually does kind of release its power and control to local governments.

And so we are trying our very best to have resources, have answers, have reports, while at the same time, I think providing a little bit of grace to the folks that are doing it on the ground. And yes, I agree with everyone, like the results are not fast enough, the encampments continue to grow, it continues to appear to the General Public as if we're not doing anything about it, but it's quite the opposite.

And so again, I just share that just as a moment of our own reflection of what the role of the state is. And again, just a reminder that it is a fairly new process that the state is engaging on with everybody that has been working on this on the ground. And I have a lot more questions, especially on just the levels of accountability on Homekey in particular, and the long term investment that I hope to hear from you.

But I defer back to you, Assemblymember Bonta, thank you for the opportunity to respond.

Thank you. I did want to thank you for sharing that and actually picks up on my question around the encampment resolution funding in particular. So, just recognizing that I represent Oakland, so have firsthand kind of knowledge of the issues that we've had there. And I'm just looking at the ERF, round one funding, we had $50 million in round one funding. We anticipated that that would ensure that 1,400 people would be anticipated to support. We actually were able to serve 1,500 according to the applications.

But only 418 people entered into some kind of transitional housing or permanent supportive housing. I think that's $35,000, $36,000 roughly per person for those applications. I know and recognize that supports for encampments have to be the costliest, most emergent area of funding allocation that we can offer. I am concerned, though, that with the line in here that says, we are unclear how the other 1,100 individuals experiencing homelessness were served with this funding.

And I would love for you just to be able to expound upon that a little bit, whether it's a city county, data and information sharing issue, or concern that we have, whether we can make any corrections from round one funding that can show up in the round three funding around the collaboration that's required, and to Mr. Fong's point around making sure that we have the kind of metrics in place to be able to get more information about that just so that we're being diligent in our expenditures. I did want you to speak to that a little bit.

Thank you, Assemblymember. So the handout before you that you were referencing sort of allowed us to sort of capture some of the information that had been shared with our office, the LAO, from the Administration. And so it's reflecting sort of the information that was provided to us at this point. I think one of the challenges that maybe has come up previously in this hearing is sort of the information that's making it to our office into the Legislature and the public more broadly.

We talked about the HMIS system having sort of a wealth of information, but for a whole host of reasons, the state and sort of our office doesn't necessarily have direct access to that. That needs to be sort of packaged and cleansed and the identity sort of protected.

And so I think that's, I turn it over to the Administration to talk a little bit more detail about what additional information they have, because again, this just sort of reflects what we were able to gather based on the available data sources. But there might be a wealth of additional information that we just haven't tapped into yet.

Thank you. Just to add to that, Assemblywoman, so this is a fairly new program. And so this is from the first quarterly report. So it doesn't mean those other folks are not going to continue to be served and placed into housing, because this is the first quarterly report, the first kind of data we are seeing. So I think though the first quarter report is still showing quite good progress because I used to work at the local level.

Sometimes it can take 9-10 months to really engage somebody and get them into housing. And speaking of connecting this to a previous conversation, the North Star is always getting somebody into housing or interim housing and then permanent housing with services. So it doesn't mean the folks that the program is over. It's just beginning. So we will see future quarterly reports and we can come back and provide kind of the continuing work on these various projects across the state.

Thank you. I appreciate that. I just want to make sure that we're always in a situation when we are learning from the opportunities that we have, particularly as it relates to those encampments. I did want to just move a little bit to the ERAP Program, recognizing that it's a portion of the HAPP Program. This last month there was a press release issued by the Western Center on Law and Poverty, amongst others.

And I learned that there's a remaining $177 million allocated to the state emergency to the ERAP Program, and that may end up being used to primarily support administrative fees associated with legal notices of why assistance was denied instead of providing applicants the assistance which they have been waiting on for months. Additionally, we know that the private contractor associated with that in this release is receiving $8 million a month to be able to provide that information when the program closes.

We're going to end up with applicants who don't have resolution or disposition and who are not going to be able to receive that funding. So in the spirit of making sure that we are speaking more to oversight, I would like you to just expound a bit on whether these funds could be better used besides dealing with the administrative fees associated with not providing the support that we need to.

Our Department administers those funds, and unfortunately, I can't really speak to it. It's an active litigation, so I can't really share anything to that matter. But we are quite proud that we've helped over up to 360,000 households and over 4 billion in funding, so unfortunately I can't speak to it. Do active litigation around that matter all.

Thank you. Ms. Creole, your turn.

Thank you. Mr. Chair. On the issue of accountability and transparency, and just what works are you able to provide us with? And again, as I mentioned earlier, knowing that these programs are new, that the State of California is investing in these programs particularly, what do you think when it comes to homekey? How will we measure success five years from now, five to seven years from now? Is it by units? Is it by people? Are the measurements different in terms of families and individuals?

Earlier in the panel we talked about with Dr. Kushner the different levels of homelessness. Right. Those that are on the brink of homelessness, those that are being displaced by massive gentrification, which is what I see in my community and probably what you see in Oakland and other areas, versus those that are chronically homeless or chronically suffering from substance abuse, mental health challenges, et cetera. Everyone requires different levels of treatment and different levels of opportunity to be housed.

So how will we think about the future as we develop policies, to Mr. Mccarty's point, and in budget, not only just allocating funds, but seeing programs that are functional, effective, working, and ultimately getting people off the streets.

Yeah, I really appreciate the way you framed that. And Homekit, at its core is a production program. It's increasing the capacity and the portfolio within communities across our state. So it's one of many. It's certainly targeted towards our homeless households. So certainly the units we create are critical. Right. But it's the people who live within those units. Right. And that's why I think it was really important that I mentioned that we have affordability covenants on these units, especially the permanent units.

Interim can be a little bit different, but the permanent units we create are affordable for decades to come. They serve many, many households. Even homeless households are going to have turnover rates. And so we need to think about that in human person terms. Right. If we create 13,000 units of honky right now, we're going to have maybe even a conservative estimate of 1.5 person per unit. Right. Per those units. And then we get those for decades.

So we are building that capacity for our communities so that when the other programs within this continuum are working, there are places for people to go. Right. So it's not just the home key projects, but the other affordable housing we're creating, right. 22,000 plus in construction right now, 24,000 already funded. We got 3 billion more in funding coming in. Notices of funding availability just across our programs this year alone. So we are still building that pipeline to your points. And it's coming. Right.

We're right on the precipice of realizing a big infusion of these affordable homes in our communities, many of which are targeted towards extremely Low income on homeless households. So Homekey is just one of them. And certainly, I think we too often talk about units. We're not talking about the households behind that. And we're not actually thinking about these as multigenerational investments. We're talking about them in one time expense terms. But you know what?

That's a one time expense that has many, many outcomes over the life of those investments, not just that one household who moves in first. So I would say that it's appropriate for us to begin thinking about it in those types of terms. Units are an easy thing to measure, so you often see that talked about.

But I do think it's important for us to begin thinking about what our communities, in terms of that pipeline so that there are places to transition into on that permanent housing spectrum.

The permanent housing portion on covenants is really interesting. We just did something through budget last year, and I think this is important for Members also that we often talk about local control and what local control means. Right. And in one of our local government's Committee, when related to policy, it's one of the biggest issues. We entered into covenant affordable housing that expired.

And so in the City of Los Angeles, we had what Dr. Kirschnell mentioned earlier, the Low income senior individual, elderly age, paying $700 a month for a one bedroom apartment in Chinatown. That Covenant has expired after 80 years. It expired, and there was no safety net for all of the individuals that live in this covenant apartment of Low income affordable housing.

So their rent went from $700 a month, which is high for an individual living on Social Security and very small income, to now being market rate at $2,000 plus a month, creating immediate, unhoused communities of senior citizens and elderly people.

And so on a policy side, outside of budget, when we're thinking about what housing looks like for the State of California, that local government piece is a huge part of a challenge and hurdle that we have to overcome when it comes to permanent, affordable, Low income housing, especially for our most vulnerable communities.

So I appreciate you bringing it up, and I think it's an important piece of the conversation when we think about in housing or local government policy areas, how we think about the creation of what it truly means to create affordable, Low income housing, not just temporary, not just for x amount of years, but permanent, so that we don't have these situations where you have senior citizens automatically being dumped on the street, for lack of a better term, unfortunately, which is what we've seen happen, and immediately displaced living in their cars and not in a dignified manner of someone, obviously, that needs support and services at that age or those with disabilities, which we also see as well.

So just food for thought, I think, for the Committee and for the Members when you go back to talk to other folks about policy ideas. Just something to think about. Thank you.

Thank you, Mr. Sally.

Thank you, Mr. Chair. And I appreciate the questions and thoughtfulness today. I want to draw your attention to this chart. I just pulled up here, this calm matters chart, and you could see since 2014, the homeless rate has increased, going from around 100,000. Now we're up to 170,000, mostly in the unsheltered population. So would we agree that what we've been doing so far is not working? Mr. Olmsted?

I mean, I wouldn't agree because, as was mentioned, we've only had a couple years of investment, so we're not seeing the payoff. The units. I said that our department's funding, for example, are in construction right now. Development takes a couple of years, even if we deploy those funds very quickly. So I can speak for our Department. We haven't been given the chance to see the impact yet.

Four or five years. Not enough. Out of curiosity, what happened in 2014 that might have infected this graph? Any ideas? Anyone on the panel? 2014. Why such an uptick beginning that year? Do you know? I'm sorry, Ms. Wikramia.

Close. Dakshika Wikrama. Yes. I mean, there are multiple factors. So if you go even before 2014. Right?

I want to know about 2014.

Sometimes things that happened like 56 years before 2014 is when you start seeing kind of lagging results of what happened before. So there are multiple factors. There's a Professor at USC called David Myers who looks into census data, and what he's shown is, after the recession in 2008, like many homeowners lost homes, and what did they do? They entered the rental market. Right. So when homeowners with more purchasing power enter the rental market, what happens? They push out people at the lower income rate.

There's something unique about 2014. Everything goes up after that. And I can tell you that's when Prop 47 was enacted. So Prop 47, I can tell you, as a prosecutor, was a really important tool because it gave us the ability to get people into treatment who were on the streets and using drugs, either to self medicate or because of their situation, they became addicted. So we had a mechanism to get people off drugs and into rehab. And then into services.

And I can tell you, the prosecutor, we didn't put anyone who was addicted to drugs in jail. We simply brought them to court. We gave them the opportunity for rehab. So I just want to point that out because I think that's an important statistic. I want to fundamentally agree with Assemblyman Mccarty. I just think the obsession with housing first is wrong, and it's harmful. We have people who need help now, not later, not in 10 years.

You have people on the streets of La, Sacramento, San Francisco, living in terrible standards, and I don't think that's compassionate. So what are we doing now to get these people off the streets? Mr. Olmsted, you work for the Governor, correct?

I'm appointed by the Governor.

You're appointed by the Governor. Is the Governor thought about declaring an emergency or setting up emergency shelters? What are we doing to get people off the street?

Unfortunately, while I'm appointed by him, I'm not on a speaking term basis with him, not that high up in his office.

But you speak for him. It's a crisis. I mean, you've been around LA, Los Angeles.

My Department is an implementer of funds. We're not in the business of doing emergency declarations in that way. We implement the funds the Legislature and the Governor agree to Fund, and we deliver on those problems.

Come on, you're just focused on money. You're not concerned about policy?

No. We implement laws, too, including all the housing laws that have been passed the last couple of years.

So you do discuss policy. You are interested in policy.

We implement those policies.

And you don't think there should be a discussion at the Executive level of whether we need emergency shelters to house people who are out in the streets, living in squalor?

It seems like we're having that discussion right now, so I think it's healthy.

What baffles me is it sounds like an academic conversation. Meanwhile, there are people suffering outside, and we're just talking academically about in the future, 510 years from now, we might have a handle on this, and I see no evidence to support that. I think the focus should be shelter first, housing earned. We have to get people off the streets. I do not think it's acceptable in a civilized society to allow the number of people that we have living on the streets. It baffles my mind.

So I want to go back to something you said when you were asked about the measure of success. You said you measure the number of units built or made available. Is that correct?

That's one measure that's often talked about yes.

Is that your primary measure?

I think it's the measure that most, not just our Department, but most of the industry and the world uses. I don't think it's the most important measure around return on investment and impact. It's how many people are we housing within those units and for how long and how much of return and investment we're getting.

Well, the government's not into the house building business. We're not home builders. Right. I think the focus should be on how many people we get off the street. Correct. To bring the homeless number down. Don't you think that number is more important than the number of units that are built or created?

We're implementing the programs as they're structured in the statutes given to us, which are production programs. We're assisting developers to create those programs. So we're implementing the programs that have been created by this Legislature with funding appropriated by this Legislature. And we are pretty proud of the work that we're doing.

You're proud of the work that you're doing? Okay. Question what I hear, and this could direct to anyone on the panel, what I'm hearing is an affordability crisis in California. Would you agree it's a huge problem that you guys have identified, cost of living in California?

Absolutely. We have an affordability crisis. We think homelessness is a housing problem.

Okay. And have you guys looked at any of the policies that are driving up the cost of living in California, such as what's driving up the cost of utilities? Has anyone looked at that?

I can't speak to that. It's not my area of expertise. So that would be a question, I think, for the utilities aspects of our Administration.

Well, you know, it's not just rent that drives people homeless. There's other costs you have to pay for groceries, utilities. You have to live. You guys have not looked at all what the other contributors to the cost of living, such as utilities? You know, people were hit with huge.

Other people. Different Subcommitee, different hearing.

Okay. Different sub. I just.

This is a. I understand your line of questioning.

Yes.

This is panel specific. These are experts that oversee housing. So you may want to focus your questions on that.

Thank you, Mr. Chair. I guess the difficulty I'm having is this is not a single issue of housing. It's a very complex issue, and I'm not convinced that dissolution is to just spend billions of dollars on subsidizing or building housing. I think that's a part of it. But there's so many other issues to look at that are driving up homelessness. And I don't think it's fair to the voters or taxpayers to just focus solely on housing.

We have to have a broader conversation and especially to the points of sheltering, getting people off the streets. It's an embarrassment, I think. But with that, I don't have any more questions.

And again, I would totally agree with you. There was a housing Health Committee five hour hearing last week. I think, like you said, you brought up mental health. These are all interrelated. You have other areas around that. This hearing was meant to be a little bit more narrow. So I don't want to limit your questions, but just to set the proper context. I think your frustrations and your point of questionings are valid because you're right. It is very complex and there is no single bullet.

I would say part of how we got here is we haven't hit the mark on a variety, like you had mentioned, we haven't hit the mark on a variety of issues. So I think what we're trying to ascertain in a very narrow way, at least at this particular hearing, is just are there certain ways that we can now that the money is just starting and the money is just appropriated and that means it just got to the cities. The cities are just starting to spend it.

I guess my only question on that is there anything we can do now? Not in two years or three years or five years. Is there anything we could do in the next few weeks or months to set up some temporary housing to get people off the streets? I guess that's a question.

I think it's a great question. We got three local panelists coming up. I'm hoping directly ask them because I think they face that question tonight. Right. Not yesterday, not tomorrow. They face it yesterday, tonight and tomorrow. Right. And so that's the question that they are grappling with as we speak every day. So I think totally going to ask you to hold that. So just going back to this panel for the state, as I'd mentioned, just kind of dovetailing off Mr. Fong's comments.

There's a programs, a lot of measures. I think this report is great because it provides the first comprehensive look at all the different things we're doing. I think one of the challenges, and I think it goes partly to Mr. Asali's comments, is should there be one place in the state that is just sort of focused on this issue? We got substance abuse, we got mental health over HHS. You're the division for Business. And then we got other areas.

Some of this is education related, so it's sort of a different pot of money. I think one of our challenges is a lot of these programs are relatively new. When I got up here in 2012, the issue wasn't housing. It was jobs. We're coming off a foreclosure crisis, coming off a big recession. Everyone's talking jobs and jobs and jobs. We didn't start talking about housing till about four years later because, like you said, the numbers started going up.

And when we got here, when I got here in 2012, we were getting out of the housing business. We had laid off a lot of HCD. You're probably a new employee. Everyone there is probably a new employee because we were getting rid of that division. So part of it is this is what had happened based on the response to the great recession. And now we had to respond because it has become an emergency.

I think we need to figure out how we coordinate this better and what the measurements that we're looking at are. I think that's one of the major, major challenges that we are facing. So I guess we had talked a little bit. You sort of inferred a little bit about Hap specifically because there's a focus on Hap, but Hap is only 1 billion of the 9 billion that we did in that one year.

So I guess how do we make sure that while we do the performance measures for HAPP, that we're also getting the performance measures for all these other areas, so they're linking up and we're actually getting to our goal?

I think that's an excellent question. For example, part of this is looking at how we are doing at the local level around making sure people can breed. For example, use Hap as the operating subsidy for the home key unit so more people can move in quickly.

On the encampment resolution Fund, for example, we are looking at those leverage points where people are using encampment resolution today to help people in encampments, for example, move them into interim housing, could be a home key site, could be hap funded, and then move them into permanent housing with an eye towards a home key.

So I think some of this is going to be chatting more complex than we want, but looking at the local level, how all these pieces are coming together, because the fact of the matter is, unfortunately, while you would want everything in one place, and I use this example at another hearing, if you're a woman veteran, your children have been taken away from you, you're living in your car, you have mental health issues, there are series of interventions that are needed, and sometimes they are all needed at the same place.

So it's tough to think that one place could provide all of that to that person. But I think it's a good question that we should grapple with around how to really think about how the homeless piece meets the housing piece meets the criminal justice piece meets the mental, so that we are kind of providing point of service to people wherever they are, whether they're on the prevention side, whether they're experiencing homelessness, whether they've been housed. And you want them to retain housing.

Right. Because just looking at page 69 of the report, it was the 10 most common pathways from first to second enrollment, meaning, I guess, your first enrollment with HDIs and your second enrollment, the top two were emergency shelter to emergency shelter. So that was sort of, like, very common. Right. So they're stuck in that system. Number two was street outreach to street outreach, which tells me they're on the street, they're just getting touched at the street level. Right.

And the third was more hopeful, was emergency shelter for rapid rehousing and then street outreach to emergency shelter. So I guess it's good to have this data, but it's trying to. How do we ensure that we are all sort of bringing together this information to get to the result?

And I don't know if that was a question, but in case it was, HDIs is, for the very first time, like you mentioned, allowing us to kind of get insight into the pathways. And I will just mention there's another Bill, AB 977 that we are in the middle of implementing now that will bring even more data points into HDIs home key and some of the Department of Social Services, CalWORKS.

So that will again help us to think through connections across systems and hopefully forge better collaboration for these folks who are shared clients.

Got it. One thing we didn't have a chance to touch on, I want to do this very quickly because I know we have other panelists waiting for us, is how long does it take us to get the money out? Because I know part of our, I'll just say my frustration as we appropriate the money, we know your departments have to do Recs, then they do proposals. They get the money takes. It just seems like it takes time.

And part of the frustration, I think Mr. Essayli highlighted what's going on, because part of the challenge is we appropriated the money three years ago. Some of it's just starting to get out now, right? Or two years ago.

We've awarded over 13 billion since 2018. So I think we've done a pretty good job. Homekey. 1.0 we had to have that all out and allocated six months. No, I'm just saying. So we've aggressively put out that money.

But you are home key off the table. Right. Because Homekey is brand new. We tilted up like an emergency. So let's just move that off. When you look at everything else we were doing, everything that was kind of our stuff, whether it was the Low income housing tax credits, whether it was Cal Works, whether it was even heap and hap, it just took a while to do. And I'm just trying to answer the question, is there any way to do that faster?

I think Hap has gone out pretty fast, to be honest, because Hap 1 and 2 already out and hap three went out in December and those applications came in.

Yeah, but Hap one was 2019 or 2018. 2019. zero, heap. But it seems like it still takes almost over a year for the money to go.

Sorry, I just joined the state.

That's okay. That's my question. I'm just saying it seems like the data, my recollection could be incorrect. So you can feel free to.

I can just say Hap went out pretty fast, because what does pretty fast.

Mean in your time? I'll tell you, Mr. Osali is talking about. See, you know, I'm thinking fast would have been. It was done yesterday. Right. So that's fast to me. I want to hear what fast is.

It wasn't here. So just to give you context, hap three, the applications came in at the end of June and December. The checks went out.

So that's six months. But then when did you get Hap three's money? I guess. Was hap three appropriated in that fiscal year or the previous year? Meaning. Because the June is the end of our fiscal year.

Hap three was 202122 right? Yes, it was 2122.

Half three was 2122 fiscal year.

Yeah.

So the.

Right. So it took a year to get the, so that was a 12 month period just to issue what is the proposal or whatever, it's whatever documents you want to call. So that took a year and a half. So a year and a half is not in my estimation not fast.

Got you. And I think this is where the balance, that's

That why I think we can do better. Right.

The balance around accountability and metrics because some of that is making sure people are applying with action plans that include metrics which are going to take time for a locality. So there's a balance always. But I take your point around it was appropriate at 21,22 and went out the checks. I will say though, HAP, there was a startup Fund so they were given 20% of their funds ahead of time. So that helped kind of start the program going before the final disbursement.

Yeah. Great. Thank you. We appreciate all three of you being here. Appreciate your assistance. And we'll probably be having more information, more hearings in sub four. Thank you. With that, we're going to call up our next panelist. We have our great former Assembly Member Mayor Todd Gloria from San Diego. Thank you for your patience. Mayor Gloria we have Mr. Brad Jensen, Director of governmental legislative affairs from San Bernardino, county, so appreciate him from coming up.

And Mr. Peter Redux, who's assistant city manager for neighborhood services, City of Berkeley. Appreciate all three of yours and your patience in waiting around. Mr. Glory, good to welcome back.

Thank you, Mr. Chairman. It's great to be back. I mean that with all sincerity. No, I appreciate the chance to be here with all of you. Thank you very much for the time. As I mentioned, I'm San Diego Mayor Todd Gloria I'm here on behalf of the City of San Diego. I'm also here wearing the hat as the chair of the California Big City Mayors coalition. We are a bipartisan coalition of the 13 largest cities in the State of California, respectively, serving 11 million Californians.

I want to say at the outset that it should come as no surprise that California's homelessness crisis is the biggest issue facing us as mayors. And I'd like to believe that it's the top issue for all of you as lawmakers as well. Homelessness and the lack of affordable housing stifle a number of things that we care about. Equity, economic opportunity, exacerbates disabilities in public education, worsens outcomes.

This is all stuff that, you know, I believe the public has a right to demand results and accountability on this important issue and the funding allocated to address it go to the solutions that you all have been talking about this afternoon. I want to share right now that our big city mayors group share the sense of urgency that I believe you and Californians have on this issue. We are collectively committed to getting the results that you all want to see.

And we welcome the accountability, recognizing that we're held accountable every single day by the people that we represent in the cities that we serve. I'm here to make sure that we can develop a shared understanding of what that exactly means. I want to be brief in my presentation, recognizing that I once sat in your seat and these things can go long and you got other things you need to do. But I want to power through maybe three quick points, if I may.

I want to share with what San Diego and other big cities are doing with the money you've entrusted to us. Secondly, I want to share with you how we're working to collaborate with counties and COCs to get the results again that you're looking for. And lastly, I want to share what I believe that you might want to consider when legislating what accountability means in California. At the outset, I should just say thank you. Thank you for the funding that you've sent to us.

As bad as the problem is, it would be infinitely worse without your allocations. And we appreciate it. I do want to highlight what was just discussed because I do think it's a major failing, which is the need to actually get the money that you approved into the hands of those of us that are asked to put it to work as quickly as possible. To be abundantly clear, the money you voted on in June of 2021 only just came to us last month.

If this is the biggest issue in the State of California, it shouldn't take 20 months for us to get the funding that you've allocated to us. That is not urgency that you're talking about, that I'm talking about and the people of California are talking about. We can also go on and other things along those same lines. But I think that's a point of potential progress.

I bring this up because the amount of money, the billion bucks that you put in that particular allocation is only just now hitting our cities. So when you are understandably asking about where are the results, you can absolutely say, the money I can share with you. Well, we're just now getting this money and we have our own processes that we have to follow in terms of procurement, competitive bid, et cetera, et cetera.

And by the way, if none of you have cited a shelter, I'd invite you to go up on that odyssey with me, it is never quick or as easy as people like to make it out to be. That said, collectively our cities have added 9000 badly needed shelter beds to our emergency response system statewide and served over 25,000 people. With some of this funding, our cities have set up congregate nonconegate sites, safe parking lots, coordinated outreach, rapid rehousing. The list goes on and on.

In San Diego, we've been able to grow our shelter system to nearly 2000 beds. In fact, while I was on the way up here today we announced the allocation of another 164 beds for families in the City of San Diego. Right as on the way up here today. That's your money at work. That's, by the way, not reflecting the numbers I just gave you. In the last five years, the City of Sacramento grew its shelter system from 100 beds to 1100 beds.

San Jose is funded modular quick build. Oakland operates safe parking lots and safe cabin communities. Bakerfield has operated shelters with enhanced mental health services. Point is, this is not just in San Diego. It's statewide. Collaboration, as I mentioned, is an important theme and I think that's what you expect from us. And at least in that area I think there's some good work. There could also be some improvements. The reality is that all levels of government have a role to play.

You've heard about the Federal Government with the need to vouchers your funding, our land use authority, county's mental health abilities. Collectively, that's how you address this issue comprehensively. Your hap funding has forced the City of San Diego, the County of San Diego and our county COC to work together to use the same baseline data. When you're asking about results we're finally starting to use the same data to figure out where we're going and what goals to set. We have the same set of goals to follow.

Project home key funding again, you provided allowed the city to secure and sustain funding for roughly 370 permanent supportive housing units in partnership with the County of San Diego. This is a solution where the city purchased the housing and the county pays for the services. The city has also partnered with the county on shelters that are on their property. But we Fund the services again with your money. We're working with a multitude of other ways.

My point is that you're forcing us to do collaboration that I, as a former local official didn't ever really see before and it's happening now. I think this isn't necessarily statewide in its distribution but I would like to think that San Diego is a leader in this. Lastly, to the nature of this hearing accountability, I think it's important that the goals that we set as a part of this conversation are clear and measurable. I think you could probably agree with that.

When local governments met with Governor Newsom late last fall, we broke the release of our funds funding down to two simple goals. First, reducing unsheltered homelessness, and second, placing more people into permanent housing. These goals should be also directly correlated to the investments that you're making. I would point out that HAPP is not the entirety of what we spend money on. Right.

We have local funds that we commit to this. We have federal funds that we receive. There are other ways that we Fund this particular system. And so as you make your goals, and often these goals are for the totality of what we're doing, but understanding that you're judging it by a smaller amount of that funding that can only be used in certain ways, I think that it would be a mistake to. Well, let me skip all that part.

In San Diego County last year, we housed 12,000 people, but 15,000 fell into homelessness. So that means that for every 10 people we get off the streets, 13 become homeless. That's not just the San Diego thing. In Sacramento, I'm told the numbers are for every 10 housed, 12 become homeless. In LA, for every 209 people housed, 221 become homeless. So with regard to the observation that we're spending more than we ever have, yet we're not seeing the results. It is largely about the inflow.

We do have a system that can successfully get people off the streets, into shelter and into permanent housing. But of course, that system isn't sized to match the demand that is out there. We have to do more to address upstream causes, specifically around prevention, in terms of the inflow onto the streets. And I believe that HAPP funds, plans and reports should more directly be tied to measuring outcomes of the programs that have been funded by HAPP.

Accountability should also consider things like Low vacancy rates, high rent rates, the sunsetting of many COVID era protections that have gone out there that are actually contributing to this inflow of folks falling into homelessness. And what I want to say is that if we want greater results from our investments, we need to have more resources and more continuous funding. Mr. Chairman, and Mr. Mccarty, I believe, mentioned this earlier.

You're not going to be surprised to know that if you want us to be able to do more, we need more. That's just the fact of the matter. And I understand the financial realities that this Legislature is staring down right now. But the fact of the matter is, again, if we all agree this is the biggest problem in the State of California, you're going to spend $300 billion this year and $1.0 billion for Hap funding is a significant sum. That's real money.

But again, is this the biggest issue? If it is, I'd ask you to Fund it accordingly. And importantly, I would tell you that when you make it ongoing, I can do more with less. That shelter I just mentioned is on a one year lease. Because you give me HAP in one year allocations. I can't lease it for multiple years if I don't know that funding is going to be coming regularly.

So it makes that the price point that I pay probably higher than it would be if I could make a longer term commitment. And the goals that you set for me, I can't make as substantial as you'd want because those funding isn't there. We have two other witnesses, and I want to be succinct, but I want to point out that the big city mayors group has asked for a greater allocation of both HAP and of Homekey funding. A question was asked, what can you do immediately?

Well, Homekey typically identifies housing that currently exists that we can bring into the public ecosystem and put to work. We believe that there are substantial amounts of home key opportunities across the state. But we know that this program is already going to be oversubscribed on day one. And the inability to bring these units into our control means that others will get them, not for the use of the homeless, for the homeless, but for other purposes that may have public benefit.

But you should consider whether or not this is the time to try and grab those units and put them into use for, again, the biggest problem facing our community. Lastly, it isn't all just about money, Mr. Chairman. It's also about land use regulation, streamlining, which you have done, and you can continue to do more of City of San Diego has already implemented SB nine. We're underway on implementing SB 10, and more will be done going forward. And behavioral health reform is also extremely important.

Big City Mayors Group is big fans of conservatorship reform, and we're standing in solidarity with Senator Eggman to try and get that done this year to address the severely mentally ill that are so troubling to so many of our constituents. I'm also sponsoring AB 367 and SB 44, which seek to address our fentanyl crisis, which I believe are supercharging our homelessness crisis and making the resolution of the encampments that so many of you hear about more difficult to do.

I could go on for much longer, Mr. Chairman, but I recognize the time and the need for other witnesses to comment. But I appreciate the opportunity to share this point of view as the mayor of a big city, and I'm happy to answer any questions you may have.

Thank you very much. Mayor Gloria. We're going to go to Mr. Jensen.

Good afternoon, everyone. I'm Brad Jensen. I'm the legislative affairs Director for San Bernardino County. I appreciate the opportunity to testify today, and I echo the comments made by the mayor. I think they are very much spot on. We are very grateful for the funding that has been provided to us as a local government, and we appreciate that the investment by the state and the Governor in addressing this huge crisis that we face. I'll share my comments a little bit.

I think the mayor's laid the ground very, very well. And one of the things I think is the perspective as a county. San Bernardino County is a rather unique one in the state. It's the largest geographic county in California. It's the largest county in America. It's at over 20,000 sq. Mi, and yet it has a population of 2.2 million. It has kind of a dense suburban core, but very vast deserts and mountains. And all of them face homeless problems.

And so for us, when we look at the homeless crisis, it's very severe in our county. In the last five years, based on our 2022 point in time count, we have 3,333 individuals who are homeless. That's a 54.7% increase since 2018, nearly 60%. That is a very severe crisis, and we are doing everything we can to address it. We appreciate the investment by the state and the resources that have been made available to us to do that. And yet it is an ongoing struggle.

We do not have the same kind of problems that, say, a Los Angeles or San Francisco or San Diego has, but it is a problem for our residents, and it is a challenge for us to continue to address it. We have very hardworking men and women in our county who collaborate and work with our local government partners, our cities, as well as over 400 nonprofit providers. In our continuum of care, we have a very effective system. We have invested in our relationships.

We are trying to address the problem as best we can, and yet it's an ongoing struggle. The investments made by the state are substantial. We appreciate them. And I echo the comments by the mayor that they need to be ongoing. However, we're trying to use those dollars effectively to put them where we need it. That's one of the great things about the HAP dollars is how flexible they are, how they can be used and repurposed to address new issues and new problems that arise over time.

I won't go through all of my points here just in the interest of time, but one of the things I will say is that our continuum of care is very, very effective, and it's something that we should discuss, I think, as a state, about how local partners, especially local governments, work with their nonprofits in providing very effective services for the homeless population.

We have all 24 of our cities involved in the continuum of care, which is run by our county and has been run since 2008, has over 400 providers, and has an average budget of around $15 to $20 million every year. We feel that it's very effective. We've invested in these relationships. We're able to pick up the phone and talk about organizational and communication issues, about providing quality services to those who are homeless. We have used Homekey and Roomkey very, very effectively.

We have built eight new projects, adding 310 units, with more on the way. That has enabled us to house 800 people in the last two years. That's a very, very significant number, and yet it's still not enough. As the mayor has said, we have more people becoming homeless more rapidly than we can house them. And for us, that's a very scary Proposition. How are we going to get a hold on this problem if the numbers continue to increase, no matter how many people we house?

We have, I think, done some innovative things in our county. We have a very effective outreach effort that's led by our sheriffs and also by our county fire teams, in partnership with our Department of Behavioral Health and with other local jurisdictions. A few points here just on funding is that the flexibility is very important, and we've tried to allocate it on a broad spectrum to address rapid rehousing, doing continued outreach, system support, Administration, youth programs.

And yet, one of the things we're struggling with is the addiction crisis, especially with fentanyl. Fentanyl has exploded on our streets in the last few years. It is killing thousands of Californians. It's something that really is out of control. A number of pieces of legislation has been introduced this year, and we appreciate those. But yet we're struggling with coping with this crisis. How do we handle this type of highly addictive, very deadly drug?

My last point here is, just before I turn the time over, is just the challenges that we face in working with our nonprofits. Many of our nonprofits, especially in the Inland Empire, are not sophisticated operations. They may be church based or faith based related, they may be small mom and pop operations, and yet they have a desire to provide services.

And yet we usually have to do a lot of handholding and coaching to help them through a very complicated administrative process, filling out the paperwork, getting the money where it needs to go. It's a challenge for us, and it is also a challenge to just simply look in the long term, over the next five to six years, how much progress are we going to realistically make in addressing our homeless problem? We've had an interesting discussion this afternoon where we've talked about the larger picture of homelessness.

The way I look at it, and I think the men and women in my county look at it, is that what we're doing is we're doing our part within the state. We're lifting where we stand, and we're doing the very best we can. We appreciate the dollars, which has been a big help, and we're trying to do the best we can with it and hold ourselves accountable to deliver services for our residents.

Thank you, Mr. Chair and Committee Members. My name is Peter Radu with the City of Berkeley, and I want to thank you for the opportunity to talk to you today about what the City of Berkeley has done and plans to do around encampments specifically, and how state funding has supported that work. Berkeley is the City of About 125,000 people, but on any given night, we have about 1000 people experiencing homelessness.

And while we saw a 5% decrease in our homeless population between 2019 and 2022, we actually saw a 70% increase in tent and encampment homelessness over that same time period. Berkeley's encampments, like our pier cities across the state, are nothing short of a humanitarian disaster. They are posing increasingly serious health and safety risks to the residents of those encampments, as well as to their neighbors.

And I'm talking about things like active rodent burrows, loose and scattered syringes, unmitigated human and pet waste, total and complete blockage of sidewalks, even sometimes lanes of traffic, fires and fire hazards. The list goes on and on. This is actually increasing people's likelihood of death. And I can also say, though, that with that being said, the City of Berkeley punches well above its weight for a City of our size in terms of finding progressive service forward responses to encampments.

In 2021, our council funded the interdepartmental Homeless Response team, which I direct, which is the first point of response for homeless encampments. And since September of 2021, when that team was stood up, we have conducted 41 tenant RV closures. We've cleaned an additional 30 encampments, 475 people, and again, a population on any given night of 1000 have been offered shelter, and the overall acceptance rate is 40%. Notably, when we make non congregate shelter offers like motel rooms, that acceptance rate jumps to 84%.

So we've made a meaningful and visible impact on our encampment landscape in Berkeley. And all this despite not being a direct recipient of HAPP funds, we're not one of the direct recipients of state funding. Berkeley actually has no dedicated sources of funding to do any encampment filtering work, except for what we can muster through our General Fund, and our voters are very generous, but there's a limit to what we can do.

This is why we jumped as a city at the opportunity to apply for the Encampment Resolution Fund grant program, and we were one of the first 19 cities to be awarded a grant under that program. It allowed us to master lease a 42 room motel at the cost of $4.7 million, all the encampment in people's park in Berkeley to make way for affordable student housing, low income housing, and permanent supportive housing on that site.

In an unprecedented town gown partnership, the city and the University worked very closely together over the course of several months in 2022 to resolve that encampment. And while the University's ultimate effort to close that park were not successful, I can tell you that the resolution of what at the time, was the largest, most entrenched, and most dangerous encampment in Berkeley was a resounding success. Thanks to this state funding, 73% of the encampment residents were sheltered, and an additional 13% were housed directly from the park.

That's 86% moving indoors. Only 14% relocated to other unsheltered locations, and all of that without citing or arresting anybody for being homeless. Since that time, the people who have actually moved into the motel, which is almost 100 people at this point, 50% of all exits have been to permanent housing. And I think that's actually remarkable for a program that does not have any permanent housing or deep subsidies tied to it on the back end.

Consider that the state currently requires that Homekey, for example, receive all referrals through its COC in Berkeley. This well intended policy impacted our resolution efforts at People's park in a very significant and meaningful way.

At the same time that we master leased the 42 room Roadway Inn to resolve the People's park encampment, we also were awarded homekey funds to buy a 42 room motel, the Golden Bear Inn, which had a permanent supportive housing conversion timeline that was almost identical to the lease up timeline for the roadway.

And yet we could not create a pipeline from one to the other because of the requirement to go through our COC. Imagine what we could do with state support to intentionally align housing exits on the back end of ERF funded projects. Next week, Berkeley intends to apply for the second round of ERF funding to mass release another hotel to resolve two encampments in West Berkeley that are now our largest and longest remaining.

And we also intend to apply for home key three when that NOFA is released later this spring. We would be strongly supportive of state legislation or guidance that would allow for a direct pipeline, direct referrals from ERF funded projects into Homekey and other state funded permanent housing projects. Please let me be clear. This proposal, this policy proposal, is not an attempt to undermine coordinated entry.

That's a well intended federal policy that really is designed to ensure that the people with the greatest needs receive the most intensive resources. Instead, it simply affirms what we in Berkeley already know to be an undeniable truth, that simply living in a large and dangerous encampment is, and of itself, a health risk that increases a person's vulnerability to premature death. And it deserves to be explicitly weighted as such when we make prioritization decisions.

So thank you again for the opportunity, and I'm happy to answer any questions that you may have.

Thank you. I'm going to go to Mr. Essayli because he had questions, or do you want to go to Ms. Mccarty? Up to you. Okay. Mr. Mccarty?

Yeah, thank you. So I realized, too, that this issue, as Ms. Carrillo stepped out, is a new issue for state government stepping in and spending huge sums of money, and for cities as well. Predominantly, it's been, respectfully, a county issue, right.

So I'm sure the City of San Diego budget did not have a massive infusion of money for homelessness. I know our City of Sacramento did not. But this is an albatross around all of our necks. I know. Know. When you stepped up and left the great state Assembly here to run the beautiful City of San Diego, you knew that this was an issue that you want to try to fix, but you couldn't tackle it overnight, and you'd be kidding yourself if you thought that you could.

And I know that all big city mayors are just trying their best, trying to contain it, stopping it is one thing. Trying to contain it, stopping it from spreading. And the numbers you point out illuminate the issue that you solve, like whack them all. You solve one problem here, and you have one and a half problems over here. But at some point, our constituents, just like your constituents, are on you. They see it with their own two eyes. They want to address it.

So how do you grapple with coming up with long term solutions with the band Aids today? I mean, the examples that you talked about in Berkeley sound horrific, but you know what? They're right here in. So, you know, I kind of think, like, sometimes we need to be like an ER doc and just triage. And so what do you think that the recommendations from your city should be versus short term chaos in front of us versus solutions several years down the road?

Well, I know because I watched you work for many years. I know because I watched you for many years do this work that you're capable of multitasking, which is what it requires us to do. We have to address the immediate catastrophe that is on our street while simultaneously making sure that we actually get the housing capacity and supply that we have not had for a long time.

And so when I mentioned SB 9, SB 10, that's taking the good ideas that you're creating up here and implementing in my city. And frankly, going beyond that, you can look at what we've done around accessory dwelling units. You all gave us a baseline. We've gone beyond that in order to create naturally affordable housing that does not require money from the taxpayer to actually create units that are affordable.

So while we triage and stand up, coordinate street outreach, where we build the shelters, we create the permanent supportive housing through things like Homekey. We have to do those reforms and do them both at the same time. I have a council that's been very supportive of that. There certainly is public pushback from folks who are concerned about changing their neighborhoods in terms of the housing density intensification.

And you won't be surprised to know that a lot of my day is spent getting yelled at about homelessness while simultaneously being told not to build more housing in your neighborhood. And they don't necessarily see how that's contradictory. But the point is, you just have to multitask, and I would just shudder to think how this would go without your support.

And so part of why I'm here asking for, if not additional support, ongoing support, because what I fear right now, Assembly Member, is that the shelters that we've been able to increase in my city, thanks to your support, annual allocations, and I have to keep those things running. I have to tell the providers, you can keep those folks on staff. I have to tell the people who live there that they'll have a place to be tomorrow and the week after that.

So I would say as this group and as all of you consider what changes you'll make, consider the fact that there are in my city thousands of people who are living in these settings because you've allowed them to be, and any changes will disrupt certainly their lives as well as our ability to actually do more. But it's multitasking. That's all there is to it.

Yeah, and I know, too, that you see what's happening in the world, and there's a $20 billion deficit and coming up here to get more ongoing, permanent money. So that's a disconnect as well. Right. But you also said something very illuminating, too, is that the money from 2021, like we're seeing in all of our budget action, takes time to get out there. So you just got it a few months ago. So it was 15 months. So there's money from 2022 as well.

So going forward, uncertain whether or not you have permanent long term money, the monies that you're getting in your city, and you can ask Berkeley, are you going to prioritize more the crisis we see today, the need for shelter today, literally, like I told you earlier, Sacramento is going to have the first day snowing, maybe in 30 years tonight. And the priority is here in our city is building housing one day, three years from now, as opposed to doing shelter today.

And I disagree with that policy. And frankly, our constituents are in the same spot. They want us to tackle the problem in front of us today.

Well, there's a couple of things in there. First, if I can say not just the speed with which the money, but let me also point out that there's $360,000,000 in bonus HAAP funds that haven't been allocated yet. That's not additional budget capacity. You could make that happen. I would get that money out the door. I mean, we could all do a lot with that money if it were allocated now. Right?

Would you use that for emergency housing?

So transitioning to that thing, and if I may know, we talk a lot about our shelter operations amongst the different mayors, and it's my understanding the City of Sacramento intends to replace at least a portion of those shelter beds that were ended that you've referenced a couple of times. But here's my attitude.

We have to do something right now, not just because, as was mentioned, this is a health threat to people right now living on the streets, but it's also about the fact that this is what constituents are the most angry about and so when considering these housing interventions or permanent supportive housing or shelter, whatever it is, people are so angry, it can be difficult to get them to accept these interventions because they're just so, frankly, angry.

And so one of the best things we can do is get people off the streets because it keeps them safer. And so for me, we have put a high priority on additional shelter capacity. In the two years that I've been mayor of the City of San Diego, we've increased shelter capacity by over 60%. Again, thank you to your funding for making that possible. And that's simply because even in San Diego, we have a very large storm coming at us right now.

We're battening down the hatches for it. And I know that there will be hundreds if not thousands of people living on our streets. Getting them off the streets now today is preferable to making them wait. What is. Take your measuring, Assembly Member, but if you want a section eight voucher in the City of San Diego, that's a 12 year wait. So that gives you a sense of how long people must wait to get to this kind of housing. And there are certainly people who push back.

And my answer is, we have to do a little bit of everything. But the fact of the matter is we got to get people off the streets today for their own safety and to enjoy the continued support of the General public for the reforms that will solve this problem long term, which is the housing densification efforts.

So if we reallocated this 360 plus for emergency housing, what would the big city mayor's response to that be?

As you heard from San Bernardino, we want flexibility. I mean, because here's what we are able to do with the money because you make it so flexible, is that I can take some local funding. I have a local housing trust Fund. I have county money, I have COC money, I have federal housing vouchers, and I'm able to find where those gaps are and put it to work.

So to the question, I find great success in getting shelters done because you can usually, whether it's a sprung structure, whether it's a hotel conversion, it's a relatively quick thing to do. The housing, if you're building new construction, that's 18 months, two years, potentially longer. And again, that doesn't match the urgency with what you're saying. I would just simply say allowing us to have the flexibility while encouraging.

When you have the goals and you set that you want less people on the streets and you want more exits of permanent housing, I think you will get that reaction. But I would implore you to allow us to continue to have the flexibility to make sure that we're getting as many people off the streets quickly. And I think we end up in the same place. That shelter is the way to do that.

Yeah. Well, here's the problem with the flexibility. And I love my mayor, amazing guy. You know him very well, and I disagree with him in our city. And I told him this as recently as last week, they had an allocation for emergency shelter housing they decided that they wanted to build focused on permanent housing instead. So they redirected the money for emergency housing over to build that. And so I don't think that's an evil decision to make, but it ignores the immediate crisis today.

And I don't think that that's going to solve the problem we're facing today in our communities. And so unless we have more direction than the flexibility that you're asking for, may not get the results that we as a body are trying to accomplish. And what the Governor has asked for to have results now.

Well, give us the flexibility with the objective of saying you have to get an X amount off the streets, because if you do it year over year, it's going to go where you're talking about, because waiting 2-3 years to construct something just won't do it. But the flexibility is something the mayor's group very much wants to see maintained.

Okay, thank you.

Ms. Bonta.

Why thank you. So good to see you, Mayor Gloria. And I continue to hear flexibility and opportunity to be able to do that is critical. One of the things that I also heard was the impact of our one time funding approach for you all from an implementation perspective. In fact, you have evidence to be able to actually say that it actually is more costly in some ways to be able to do that because you can actually anticipate being able to secure leases and take other opportunities.

So just wanted for you to be able to speak to that. And I also just wanted to have you, Mr. Radu, speak to the opportunity to be able to link the encampment resolution funding to other opportunities and sources. I think you made a really great kind of potential policy point about how we should be able to provide flexibility around the nexus of the ERF fundings to other funding sources. And I just wanted to have that be laid out a little bit more clearly.

Do you want to start?

Yeah. Thank you, Mr. Mayor. And Assembly Member. I think federal law requires that we participate in a system called coordinated entry. We have too few resources and so we have to find a way to ration them. For better or for worse, the federal government has said you should do that on the basis of vulnerability. There's a lot of flexibility, in my estimation, having been somebody that's worked around these federal regulations for the past several years in how we interpret that.

And so I think any guidance from the state or anything that we can do at the state level and at the local level to explicitly consider encampments as a unit of analysis when making vulnerability determinations is all that I'm saying here. We currently often look only at individual characteristics. So what's your homeless history? What's your medical history? How close are you, as a person, to death? What we're not looking at are things like systemic factors. What was the last zip code that you lived in?

And what are the socioeconomic conditions associated with that zip code that may disproportionately cause you to fall into and repeatedly fall into homelessness? We're also not looking at things that I would call circumstantial factors. Right.

Do you live in a very dangerous encampment? That is, and this is the case for the encampment that one of the encampments that we're looking at resolving and trying to find resources to do it in Berkeley. It is literally about 5ft away from the Amtrak line. If somebody gets too drunk and stumbles in the wrong way, boom, they're dead. And this has happened in Berkeley. That is a risk factor.

And when we talk about public health things like the COVID response, we were very intentional in looking at how zip code impacts your likelihood of contracting COVID. And so we responded by prioritizing testing and vaccine resources accordingly. I think we can and should do the same when we look at encampments because they're disproportionately affecting low income zip codes, and they're disproportionately populated by people that were last housed in those low income zip codes. So that's one thing. And just to the Mayor's point, more flexibility locally.

I think the state has done a lot of good work, specifically with AB, I think it was 1380, from several years ago that created the homeless. Multidisciplinary teams give local governments the capacity to have some of the clinical determinations coming out of that information sharing be something that informs coordinated entry placement decisions. Right now, I think, at least in Alameda County, it's become so score based and so technocratic that we lose some of that just reality checking in terms of having clinical judgment.

And if you defer to local experts who are working with these clients every single day and who are very familiar with their circumstances. And yet, for whatever reason, and I can think of several people in the encampments that we work with right now for whom this is the case, they are unable or unwilling to complete a coordinated entry assessment. So they're not even known to the system, and yet when we find them, they're laying in their feces in a tent.

They're extremely vulnerable, but they're just not engaging. And so we should be giving our local clinicians some voice in making those prioritization determinations. So this is a no to very low cost policy proposal that I think could create a lot more, that could catalyze a lot more movement out of encampments.

And I would just say to your question about economy, Mr. McCarty... Cheap. And so when I'm doing these master lease agreements, it sounds like Berkeley is doing something similar. It's just logic. If you're going to offer someone an opportunity to lease something for a year or to do it for three years, you'd understand why the price point would be different. I think that's also true for sometimes the minor capital improvement that might be necessary. How far are you going to go if you can only maybe maintain...

I have a couple of shelters where I think we need to make some investments, but I don't have the knowledge that whether or not that money is going to be there. And so it just gets kind of complicated. I acknowledge the reasons for why we're where we're at, but I think in the request from cities, counties, and COCs to do more and to achieve more and to do it at a lower price point, I think this is one way to do it. Maybe somewhat counterintuitive, but from the ground view, down on the sidewalk level, that's the reality.

Thank you. Mr. Essayli.

Thank you, Mr. Chair, and thank you for being here. And I actually have a lot of sympathy for you guys because a lot of times the state creates an issue, whether intentionally or unintentionally, and sort of dumps the problem on the locals to figure it out. So you guys are on the front line dealing with this day to day. And so one of the things that stood out to me, Mr. Mayor, is you said for every 10 people you take off the street, 13 more go on the street. So what, in your experience, is causing the acceleration of people into homelessness?

The high cost of housing.

Is it just housing, or is it just no high cost of living in general?

I don't know what these numbers are because often, as we've discussed, the data here is not always pure. But when I talk to people, or just what I actually observe, if you're having $3,000 a month one bedroom apartments like we have in the City of San Diego, of course you're going to end up with a tremendous amount of tent encampments. It's just going to be the case. Now, within that population, do you have folks that are dealing with severe mental illness and severe substance abuse disorder?

Absolutely. There's no question. I think both have been supercharged. I don't think we talk enough about mental health issues generally, and I think the last couple of years are cause and reason to make that worse. Certainly, substance abuse has always been a problem, and I would suggest that fentanyl is absolutely making this worse. So altogether, these things are not helpful. There are certainly other outliers that are out there, but the root cause, in my judgment, is the cost of housing. No question. But there are these other components, which is the reason why I brought up the issues around conservatorship reform and some other, I think, criminal justice and other prevention efforts that come.

I do want to talk to you about that, but I feel like when we talk about homeless, there's almost two categories of homelessness. You have transitional people who are kind of transitioning through homelessness. And I think, to me, that's the typical person who got kicked out of their apartment or got fired or laid off or whatever, and they're sort of transitioning.

But then you have the chronic homelessness, and I think that's what, when the people are upset or complaining about, it's that element of the chronic homelessness probably at these camps that you mentioned that are, I think, a bigger challenge to deal with. And to your point, if you have someone in a camp or someone with mental health or addiction issues and they don't want help, what can you do?

Well, this is where our hands are often tied. Right. And who did the tying is always an up manner of argument, but doesn't matter to the shop owner, to the resident. They don't care. This person is there. I think you make an important point that we need to talk a little bit more about. The majority of the folks who we're concerned ourselves, who meet the legal definition of homeless, go overlooked. Right. They're sleeping in a car discreetly, they're couch surfing.

They're living in unstable housing environments, and they're eligible for everything we've talked about today. That is the vast majority. But there is that highly visible minority that consumes a tremendous amount of resources, like a lot of the resources. And then to your point, what can we do?

Well, I would argue that for a lot of the severely mentally ill, the threshold to try and serve them is artificially high and should be reduced because there are people who say, Mayor, why aren't you doing something about that person over there? And my answer is that currently they're defined to not be a harm to themselves or to others, even though their behavior is concerning both for themselves and for the broader public. Around the substance use.

When I was on the City Council, Spice was a thing. We had to deal with that, right. Now it's fentanyl. And I would say that's a million times worse. But the point is, this thing is ever evolving, and we just have to find new ways to deal with these things as they present themselves.

When you're talking about something that is orders of multitude more addictive than heroin, when you talk about something that is extremely cheap and very easy to traffic, you understand why this problem is getting worse. You be an outreach worker. This is not pointed, but you be an outreach worker and try and talk to somebody that's high on fentanyl. They're going to accept the help? No, they're not going to. And we have to have other options, not just incarcerative options, but other options to try and get them off the sidewalk.

Yeah, and I would say, if we get a better handle as a state on the chronic homelessness, which I think is the element that's most visible, I believe the public would be more supportive of the programs in general. Because the problem is you're spending a lot of money on the other majority of people. But the problem people see on the streets is not changing. It's getting worse.

Right.

So in their mind, the problem is getting worse. It's not getting better. So would you support changes in policy or law to force people into treatment against their will?

Yes. The Mayors group is supporting or will, I don't think I'm anything out of the cat, out of the bag. I think there's an announcement, like, next week. But SB 43, which is Senator Eggman's bill around conservatorship reform, we supported a version of it last year. It came close to passing. We are supporting it again this year. I think that would be very important. We were very supportive of CARE Court. Many of us stood with the Governor when he announced it last year.

We stood with him when he signed it. So we are willing to engage in this issue, and that's a partnership and an offer I'd make to this Committee and other Members of the Legislature. If there's ways that we can work together so we have more tools to try and respond to these folks. Again, I think you have it exactly right. People are focused on that subset.

And when we talk to them about the success that we're having, people think we're crazy because they don't believe that we're actually making progress in terms of actually getting people off the streets. They still have that person standing on the street corner near their business screaming, and we haven't done anything about that person. Unaware of the fact that we've been able to transition thousands of people, individuals, families, off the streets. That goes unnoticed, because, again, the vast majority of this problem is very discreetly handled and not noticed by the general public, even though it's the bulk of the population.

And this policy change do you believe would end up saving resources so you're not having to chronically or repeatedly deal with some of the same individuals? Or who's going to pay for all this conservatorship?

Well, I think the County may be the better suited to answer that.

I think the conservatorship conversation is a really difficult one. Part of it is that there's obvious a clear need to do that. I'll give you an example here. Our Sheriff's Department has operated an outreach team called the HOPE Team since 2014. On average, that team has to contact a homeless individual over 60 times before they accept assistance and resources. And that's a way that we use to try to provide resources and avoid incarceration and arrests.

But 60 times to talk to an individual before they accept help? I think it's a broader conversation, and it goes into CARE Court, like the Mayor mentioned, and it goes into a broader perspective about how do we deal with mental health in this state. How do we get the resources to these people who have fallen into homelessness and are not willing to accept care, are not willing to receive treatment that is desperately needed?

Or they're unable to? A lot of it is if you're that severely mentally ill or addicted or both, I don't believe you're going to make the best decisions most times.

And this is one conversation we've had at the county level, which I think is very relevant, is prevention. How do we prevent more people from falling into homelessness? There was a recent CalMatters article which is quite interesting, basically saying that California seniors are the most vulnerable population moving into homelessness. On a county level, what we've tried to do is how do we identify these individuals who are right on the edge? And it goes to housing costs, but it also goes to what's their family situation?

When we try to place a homeless individual and put them in housing, we often reach out to their families because that's their support network. These are the people that they might listen to, they might trust and rely on, who can help guide them through a very complicated administrative process to help stabilize them. And that's one thing that I think, as a broader policy conversation, is focusing on prevention and working more with families to prevent people from falling into homelessness.

When we talk about more people becoming homeless than we can house in a reasonable span of time, that is something we've got to really, really address. At a county level, we're trying to do that through our Department of Aging and Adult Services, our Department of Transitional Assistance, but it's not easy to do. We do have people that are in our system, but our own departments often struggle to talk to one another.

I want to just dive into this conservatorship issue. So I haven't read this bill, so I'll have to read it. But what would be the idea that you would go to court and have a particular person declared a conservator of the county?

Senator Eggman's bill would adjust the threshold for conservatorship to include things like your ability to care for your own health and well being. So beyond the threat to yourself or to others, but to also include are you able to follow medical direction, are you able to provide for your...

Right. Provide for shelter, provide for the basic necessities. But who's going to take on that responsibility, I guess, is my question. Is it the county, is it the city, is it the state? It's very onerous to have to, once you declare a conservatorship, you're responsible for that person's well being.

That is true. I mean, her bill does not change the structure, it changes the legal threshold.

It would be the counties.

Correct. But may I say, to your previous question, this is very expensive currently. We have people in my city who call 911 daily. They elicit a 911 response, rolling units, personnel, that all costs tremendous amounts of money. And to the extent that if those folks were able to get the care they need, the housing stability, and not call me every day, I mean, we'll save some money. And we'd probably be willing to put some money in towards housing interventions to actually help keep that person stabilized. But the point of the matter is, right now, if they decline those services, they're still within their legal right to do that. And we have them on the street corner screaming.

So, Mr. Radu, do you also support compelling that element of the homeless into care when they refuse chronically?

I, respectfully, Assembly Member, I'm not in a position to sort of make those, as a staff member. I appreciate the question. I think what I can say is we've talked a lot today about how homelessness is fundamentally a housing problem, and I think the data bear that out. It's true. But to Assembly Member McCarty's point, there's also the chaos on the streets that we have to contend with.

And I think for the encampments that we're seeing in Berkeley, the People's Park encampment that we resolved, there is a lot of mental health and substance abuse problems. I mean, I'll give you some statistics from People's Park. 82% of those folks had mental health problems, 68% had substance abuse disorder problems, 51% physical health. We're applying to ERF round two to resolve an encampment in which 85% of the people have mental health problems, 80% substance abuse. So this is very serious.

So there's a subset of the population, and predominantly they are living in these really chaotic, very difficult to resolve encampments for whom it is true that we definitely need more deep subsidy and more affordable housing, but we also need a system of care that brings the supports to make sure that they succeed in that housing. And right now, at the state level, there is no mandate that the substance abuse system prioritize referrals out of an encampment that a local jurisdiction has identified as dangerous.

There's no mandate that the mental health system. And now I want to recognize the complexity of that statement. Right. When you reorganize how you prioritize, you create new winners and losers. And so it's an administrative problem, it's a political problem. But I can say, as a matter of fact, until we contend with that reality, I think it's going to be very difficult for us to create pathways to stability at the local level. Because the welfare state in California is administered at the county level. And yet predominantly, it's big cities and cities that are responding to encampments.

I think, Mr. Mayor, the Big City Mayors from 2021 floated a statistic that I found to be very compelling. When you look at the 2019 point in time count data, 59% of the state's unsheltered population resolve in the big 13, reside in the big 13 cities, but only 28% of the general population. That's more than twice the share.

Do you agree with some of the earlier speakers that all of these are residents of your city, or do you believe that any of them are being brought in from other locations, or that they're coming here from other locations?

I think the majority, and our data actually, from the point in time count, suggests that about 70% of folks were last resided in Alameda County. We don't have city specific data, and it's something that I'm pushing that we work to sort of gather. I do think that we do see some folks migrating into the city to receive services, but they're not coming from Milwaukee, they're not coming from Detroit.

They're coming maybe from El Cerrito or from Richmond or from cities that are nearby to come. And also, notably, within Alameda County, we're paid by the county to be a regional hub. So we see folks coming from our neighboring cities like Albany and Emeryville, which are much smaller, coming to Berkeley. And some of that is by design.

I just, I think, Mr. Chair, that's a big issue too. This has to be looked at statewide because we don't know where the particular people are coming from, and we're asking particular jurisdictions to foot the whole cost for it. I think a few Members have said it. I mean, we're kind of out of money from the state.

So, I mean, we'd love to just have unlimited money. So I'm interested in looking at some of these policy issues, whether it's the conservatorship issue or how money is allocated that already exists, into doing it smarter and better and working with the locals. I think you guys have a better handle on the issue than maybe some of the other policy people. So I just appreciate you being here and the opportunity to engage. Thank you.

Thank you, Mr. Essayli. One question for Mr. Radu, and I'm just opening up my phone to get the question. So you had mentioned the state referral from the ERF program to permanent housing. What does that mean?

What I mentioned, Mr. Chair, was that we are struggling to find permanent exits for people that are in our ERF funded project. Because while we did budget and received ERF funding support for some flexible dollars on the order of between $7,000 to $8,000 per person, we don't have, right now, deep housing subsidies or housing units on the back end to which we can refer people.

And I thought it was ironic that we had a 42 room master leased hotel through ERF and a 42 room motel that we purchased with Homekey on the same timeline. And we couldn't actually create a direct pipeline for that cohort. So any flexibility that allows us to put ERF funded projects first in line, I think. Of course, they have to meet the permanent supportive housing eligibility guidelines and all those things. But all things equal, if we gave some flexibility to ERFs, I think we could see a better pipeline out of encampments and into permanent housing.

Yeah. If you have more suggestions to get to Genevieve, as we're doing that. I think we've had a lot of long standing programs. Now we have some of these newer programs, and it's just connecting them. Making sure that they're linked properly or that they're able to work together properly, I think that's been the part of the challenge that we're starting to see. So I think that feedback is extraordinarily helpful.

Well, and I just want to say, respectfully, Mr. Chair, that that doesn't create more resources. Right. It just reallocates the deck chairs. And so if a goal of the state, if one of many goals of the state is to help locals respond to the most chaotic, most problematic encampments, I do believe that that would help. But, of course, it's not going to create more resources. It's just going to reallocate the deck chairs.

I fully understand. And then, in terms of Caltrans, how's Caltrans been to work with? Because I know that's been an issue.

We've actually had a couple of instances in the last two years in which we've partnered very closely with Caltrans to resolve encampments on the I-80 corridor and more recently, the I-80 Gilman Interchange, which is one of the worst in the state. But some of that construction is impacting city right of ways in which we had some of our most entrenched encampments, in fact, the one that we're proposing ERF-2 funding for.

And we partnered very closely with Caltrans to make sure that the encampment resolution timeline coincided with the construction timeline and vice versa. So our partnership with Caltrans has been, on those big encampments, has not been bad at all. I think one opportunity for us to improve coordination with Caltrans is on some of the smaller encampments. Oftentimes, we'll get maybe, like, one or two days notice when they intend to resolve an encampment, and they ask us to do outreach, we're often scheduled. Our outreach team is just because of our backlog of work, two to three weeks in advance. And so that just kind of pushes the problem onto the city right away.

Got it.

On that point, if I can just say we've been able to use HAP funding to contract with an outfit called City Net, and we coordinate with Caltrans now as they do the cleanups, the rightful removal of litter and other property. But to have workers there to actually help get the individuals who may be living in the right of way into shelter against shelters that are funded with HAP funding. It's the kind of coordination we're really proud of.

Governor Newsom came and personally highlighted that particular program. I'm not saying our freeways are clear of encampments. Clearly, it's a bit of a Whac-A-Mole situation, as was mentioned. But there's a quantifiable improvement because of the CDC guidance coming back and allowing us to do that work again, Caltrans. But then coordinating it so the exit isn't from one freeway off ramp to another, but from a freeway off ramp to housing. Again, that's something that you all help to do, and I think you should rightly take credit for helping make it possible.

And if we can help with more of that, please let us know. Because we know Caltrans is as frustrated as you all are because it wasn't like they welcomed people to the freeway off ramps, but that's where they've congregated. Mr. Mayor, we definitely heard your point about flexibility. I think what we want to do is make sure that there's flexibility, but there's also performance measures, kind of what Dr. Kushel said. And so, as you can, appreciate your two measurements about reducing unsheltered homelessness and permanent housing.

But if you have other thoughts on what those are, I think we're going to be taking a look at that during these budget hearings. And then to our colleague from San Bernardino, if there's other ways that we can help direct you. There are numerous other sophisticated nonprofits, whether in LA or San Francisco, I'm sure San Diego.

Please let us know, because I think there's a lot of folks who've been doing this work for quite a while that I think would be willing to assist and willing to work with your folks on the ground with that, I'm going to see. We really appreciate all three of you for being here. Thank you so much for staying at this very, very late hour. I know your schedules are tight, but we really do appreciate your time.

And again, as we go through our deliberations and our feedback, really, your feedback on the programs that as they're existing and what you recommend to improve them is really very critical. So please get any of those items to Genevieve. That'd be very, very helpful. I'm going to move to public comments, see if there's any public. Just thank you. Thank you so much for coming today. Any public comment in the room? We have public comment. Thank you for...

Yes, thank you. Kim Lewis representing the California Coalition for Youth. And always appreciate the Legislature's attention to our young people experiencing homelessness because they do have different needs than our chronically homeless population. So when we're talking about accountability and outcomes, we need to have different outcomes for our young people as well. So we need to be thinking about exits to safe and stable housing.

Because we don't want them growing up in our housing... So we want to make sure that when we're talking about all these measures that we're doing what makes sense for our young people as well. Also think about increasing our ongoing funding. We're very supportive of that, increasing the set aside for youth. And some of those allocations, that's like $30,000. And when people use that as the ceiling rather than the floor, you're not really doing much to fund a program at that dollar amount. So really encourage it and really appreciate this conversation. We'll send you some suggestions on the trailer bill administration's language to make better improvements. Thank you.

Thank you.

Hi. Justin Garrett with the California State Association of Counties, representing all 58 counties in California. CSAC's top advocacy priority this year is to meet the homelessness crisis head on. Counties are grateful for the recent state investments that have helped us really innovate and make significant progress. However, we believe that meaningful progress on homelessness can only be accomplished through the creation of a comprehensive homelessness system with accountability, clear lines of responsibility for all levels of government, and sustainable funding.

CSAC is engaging in an association wide effort to map out the existing system. What are the gaps and barriers, and what tools and resources are needed to make further progress. So we look forward to, or getting close to being able to develop our comprehensive plan and sharing that with you. It'll include recommendations related to prevention, to housing, to the unsheltered response system, workforce data, and sustainable funding. So we're appreciative of the attention on this issue. Excited to partner this year with the Legislature, the Administration, cities, and other key partners. Thank you.

Thank you.

Hi, I'm Mari Castaldi. I'm the Senior Legislative Advocate on Homelessness at Housing California. As someone who works with service providers, local jurisdictions, people experiencing homelessness all across the state, I hear constantly about how impactful the state's investments have been, but I really appreciate your framing of comments around balancing flexibility and balanced systems with really strong long term outcomes and housing outcomes.

What we know is that housing with support services is the most effective way, particularly for folks experiencing chronic homelessness, to not only end their homelessness, but improve their health outcomes, their income, all those other wellbeing traits we want to see. And really long term solutions at scale require long term funding at scale.

So we're super supportive of ongoing funding, including potentially exploring revenue sources that can bring funding to scale in a dependable way at the state level that would help us address some of our budget shortcomings as well. So thank you so much for this hearing and for your time.

Thank you. I appreciate it. Thank you for sticking around. Also, Operator, I apologize I didn't announce the number, but hopefully it's been on the website. Anybody on the phone for public comment?

Line 21, your line is open.

I'm with the Corporation for Supportive Housing. Thank you for holding this hearing today. We cannot make headway in reducing homelessness until the state takes the next logical steps in pursuing that commitment, which requires ongoing funding invested primarily in permanent housing. Only ongoing funding and permanent housing reduces homelessness. The more housing we have, the fewer shelter beds we need. We have a bottleneck in shelters right now because we currently don't have enough housing for people to exit.

Available housing allows our shelter beds to turn over, making them more effective. Homelessness is solvable with ongoing, consistent funding in what works, we can build enough housing and pay for enough rental subsidies to help Californians exit homelessness for good. The federal government, in fact, reduced homelessness among veterans by 55% through ongoing funding for rental subsidies combined with services. And a recent report showed it would take about 2.7% of our state budget over the next 12 years to solve homelessness. Thank you very much for your commitment to solving this issue.

Thank you. Next caller.

And we have no other questions at this time.

Thank you, Operator. Seeing no additional public comment in the room, we will adjourn. Thank you.