Senate Budget and Fiscal Review Subcommittee No. 4 on State Administration and General Government

The Senate Committee on Budget and Fiscal Review Subcommitee 4 on State Administration and General Government will begin in 60 seconds.

The Senate budget and Fiscal Review Subcommitee 4 will come to order. Good morning everyone. Welcome. We are holding our Subcommitee hearing here in State Capitol room 113. At this moment, we will go ahead and establish a quorum. Consultant, can you please call the roll.

For the purposes of establishing a quorum. [ROLL CALL] Madam Chair, you have a quorum.

Thank you. And before we begin, we wish to acknowledge that Sacramento is unceded homeland of the southern Maidu, valley and plains Miwok, the Nisenan people, the Patwin Wintun people and Members of the Wilton Rancheria tribe who have inhabited this landscape since time immemorial.

We extend our gratitude and respect to the ancestors of all California Native American tribes and their descendants as we recognize that wherever we are joining from, we are all on California Native American land. And with that, most of our agenda here today.

I'll start with the just an opening statement and it is my first Subcommitee hearing here in Budget 4. And before we turn to the panels, I to, I want the public to know that I recognize the pain, the loss of hope, the anger, frustration that many are feeling out in our communities.

I understand that sometimes it feels like no one is listening. And my parents gave me a nice reality check this past weekend that they too feel this way. And I will tell you it wasn't an easy conversation with them.

These types of conversations are never easy, whether they are loved ones or strangers, as people who worked in tough environments, who paid into a system, who believed that if you did your part, the system will hold up its end. It was difficult to hear loved one and it was painful.

They were not angry with me or angry at all. It was something much deeper. It was anxiety, it was confusion. It was fatigue that comes from trying to make sense of systems that just no longer make sense. They talked about work, how it used to be straightforward. You knew where to go, they said.

You knew who to ask, you knew how to apply. And now they see the struggle of applications that seem to disappear into systems that no one can really explain. They talked about electricity bills that arrive and feel like mortgage payments.

They talked about public agencies with middlemen and stacked layers of distance between effort and opportunity and not knowing who is actually accountable. My mother said all we see is Democrats and Republicans attacking each other. But who is protecting the bottom rung? My father is still hanging on to hope and said quietly, we're just waiting.

I know many of you are waiting for stability. Many of you are waiting for Democrats and Republicans to focus back on you. I know many of you are waiting on this system to make sense again. And when people who worked, who sacrificed, who believed in this state begin to feel uncertain, that's not just an economic issue.

It's a moral one. And it is about whether government remembers who it exists to serve. The pain in my parents voices is not isolated to my home. I know it is felt across the state. [Spanish]. They are carrying the cost. Families are carrying the cost to feel heavier than before.

They are navigating systems that feel more complicated than they should be. They are not asking for perfection. They are asking for focus. They are asking for seriousness. And they are asking whether the people entrusted with public dollars remember the weight those dollars represent. And that brings me to the responsibility of this Committee, Subcommitee.

Our responsibility here is not to decide who is right or who is wrong. It is to pause and to understand what has gone wrong and more importantly, what will it take to actually make it right. This weekend, my mother reminded me of something simple.

When we reduce a failure to one name, one group, one party or one person, we often avoid seeing something deeper. Because when something truly breaks, when families feel it in their homes, in their bills, in their uncertainty, that failure rarely belongs to one of us. It belongs to all of us.

And I believe that all individuals sitting at this dais want to do good by the people of California. I know they do not want to carry that weight of shared failure. Not for our constituents, not for our state, not for the next generation. Even when times feel strained, we cannot allow disagreements to turn into, turn us into enemies.

And when we deliberate in this room, our responsibility is not to defend one side or another. It's to pursue the right answer and to own the future that answers create. If families are waiting, we cannot afford distraction. If they are asking who is protecting them, we cannot afford status quo.

This committee will be guided by a simple moral compass, focus, respect, accountability, and protection of the bottom rung. With that, I want to give an opportunity to our Vice Chair for opening remarks.

Thank you, Madam Chair. There certainly is a lot these days to be frustrated by. We have a particularly challenging budget with the unusual circumstances of rising revenues, with a widening deficit that traditionally makes no sense at all.

And we're holding Subcommitee meetings to analyze budget proposals that, by the admission of the author of that budget proposal, is not really his budget proposal. We have to wait until the may revise so makes our job a little bit more difficult than normal. We certainly have the frustration of affordability.

And with regard to that issue, it's not a matter of the various sides of the aisle attacking each other. It's a matter of attacking the policies that create those affordability challenges. Regulatory issues that have been established in the past, some in the distant past, many people here didn't even vote on those.

The regulatory authority of an unelected California Air Resources Board that is charged to do things that very few people that are here voted on that back in 2006 or 08 whenever AB 32 was passed. The policies are the issue and I welcome my Democratic friends for us to try to do something about that.

Now bringing it back to this hearing, we'll be talking today about the never ending story of homelessness. Struggling with a level of homelessness that skyrocketed during the sort of top down approach that our Governor initiated when he was first elected.

Establishing over 30 different programs to address homelessness, all of them specified at the state level to tell cities and counties exactly what to do with only one of those being actual flexible funding for counties who always have been the health and human services providers in the state of California.

And thankfully we have abandoned for the most part all of those top down programs and concentrated more on flexible funding to counties. Not everybody agrees that that's enough. But it is least the appropriate approach because during that period of time we spent over $20 billion and the homeless numbers experience exploded.

So remanding it again has historically been the case to counties with flexibility. Flexibility, Iit would be nice if it were if the flexibility were provided without the narrow guardrails of housing first as the only approach to getting people off of the streets. But the the attraction of all of the counties doing things that work in their county.

And I would submit that what works in LA is not necessarily going to work in Modoc. But some counties will be more successful than others and the others can learn from those some. Hopefully we can get to that direction of homelessness. So I look forward to the presentation today. Thank you.

Thank you, Mr. Vice Chair. And I look forward to many hearings with you here. Okay. All right, we'll go ahead and move forward. We will welcome public comment on the remainder of the agenda at the conclusion of our hearing. And we will be beginning with the focus of as you know, the focus of today's hearing is on homelessness.

Our order of business today is as follows. We will open up with an update on the state of homelessness in California. We will then review and conduct oversight on state homeless data collection systems under the purview of California Interagency Council on Homelessness.

And next we will review the conduct oversight on the Homeless Housing Assistance and Prevention Program administered by the Housing and Community Development Department.

And then we will close the discussion portion of our agenda by learning from our tribal counterparts and local government partners who receive HHAPP funding so that we can hear their perspectives about the significance of that program and how adoption of the Governor's proposed budget would impact them.

And at the conclusion of the agenda, we'll take public comment related to any item on the agenda.

And I also want to just notify everyone that we will move the vote, the one vote that we have over, and so we will not be voting on it today. And with that, we will start with item. So we will start with item two.

So to start us off today, I would like to ask Dr. Ryan Finnegan of the Turner Center on Housing Innovation at the University of California, Berkeley, to feel free to begin when you're ready.

Thank you, Senators. Thank you for the opportunity to speak with you today. And also thank you for your continued attention to this issue and your dedicated work on it. It's important. So I'm just here to present some of the recent data and research that the Turner Center has been conducting on homelessness programs in California in recent years.

That work includes analyses of administrative data from both federal, national, or federal, state, and local governments, as well as interviews and collaborations with hundreds of local service providers, administrators, and people experiencing homelessness.

I'll focus on four key points today, that includes recent trends in homelessness data, where progress is being made, remaining challenges, and potential risks to sustaining our progress toward ending homelessness. So first, homelessness remains high in California, which I think is not news to any of us here in this room.

This chart is showing you the number of people that were counted as experiencing homelessness on a given night in the regular point in time counts of homelessness. And in 2024, this number reached 187,000.

The chart is also showing you that most people experiencing homelessness in California were unsheltered during these counts, meaning that they were sleeping in tents, vehicles, on the street, or in places not meant for human habitation. The share of unsheltered homelessness has declined as shelter and transitional housing programs have grown in recent years, however.

So in 2019, about 72% of people counted during these regular counts were unsheltered, and that declined to 66% in 2024. Partial data from 2025 recently showed a 9% decrease in unsheltered homelessness. Those are partial data, and I'll return to what that means in just a little bit.

To compare rates of homelessness between different places, we often compare the count of people experiencing homelessness to the total population. For every 10,000 people in the population, how many are experiencing homelessness on a given night In California, that rate is 48 out of every 10,000 people.

That is more than twice as high as the national rate, and it is the fifth highest rate of the 50 states. Research consistently shows that the main factor explaining states homelessness rates is the availability or lack of housing that people can afford.

California's high and rising level of homelessness coincides with it having the third largest gap of affordable housing for households with extremely low incomes relative to the other 49 states. Now, for any given person, the reasons for experiencing homelessness are extremely complex.

It is often a complicated and compounding series of events that can include health crises, job losses, family breakup, substance use, and mental health challenges. But when we compare, why does California have a higher rate than other places? The disconnect between incomes and housing costs is the key factor. Homelessness is also a statewide challenge.

This map is showing you that the rates of homelessness are relatively high for Most of the 44 Continuums of Care in California, also called CoCs, with darker shades of this map indicating higher rates of homelessness.

CoCs are entities that administer federal homelessness funding and coordinate services for designated regions, which in California are almost entirely counties or collections of counties.

So although California's large cities contain the largest numbers of people counted as experiencing homelessness, the places that have the highest rates, which are the darkest shades of blue on this map, vary widely, and they include cities, they include largely suburban communities, and they include rural communities.

Homelessness can look different between these different places, as do the resources and the capacity to address it, as the Senator noted.

For example, we have heard from service and housing providers in rural parts of the state that the state programs and resources are particularly crucial for their efforts to end homelessness in their communities because they often lack the same kinds of local or philanthropic funding that is available in some of the state's larger cities.

I'll just pause to note a few important considerations about what these data can or can't tell us and why. Different kinds of data might tell you different things. So the first is that the point in time counts of homelessness are meant to provide a snapshot.

They give you the number of people on a single night, which allows you to do comparisons between places or comparisons over time, but that they are not the same people from one year to the next. And so there are also two components to a point in time count.

And that's an important consideration for understanding that 9% drop in unsheltered homelessness that's been recently recently cited. So in every year, each CoC uses administrative data and other information to measure the number of people that are sleeping in shelter and transitional housing programs. That is called the sheltered count.

Unsheltered counts typically come from teams, often local government staff, sometimes with volunteers as well, who canvas public and outside spaces. These counts are the most comprehensive data available for unsheltered homelessness, but they are also known to be significant undercounts.

They often miss people who aren't visible to count teams, and that is particularly true in rural areas where the geographic spaces are very large to cover, and on tribal lands where counts are often not conducted or reported in the same way as they are for federally defined Continuums of Care.

And so while the sheltered counts are conducted annually, HUD only requires unsheltered counts to occur every other year year. Even still, half of the COCs in California Conduct an unsheltered count every year. But when HUD reports an annual statewide number for California, it reports the most up to date unsheltered count for about half the CoCs.

For the other CoCs that didn't conduct an unsheltered count, it carries forward the value from the previous year. And this is where there might be some different numbers reported for what the 9% decline showed versus what the federal numbers from HUD will report when the official data are released at some point later this year.

The 9% drop in unsheltered homelessness comes from 30 out of 44 Continuums of Care conducted in unsheltered count in 2025. That means there are 15 COCs that are not represented in that 9% drop because they did not conduct a count in that year.

However, when HUD releases its official numbers for the state of California, it will include those 15 CoCs, but it will use the value of the unsheltered count from 2024. That means that it will artificially show a 0% drop in unsheltered homelessness simply because they didn't conduct a count in that year.

When you combine the 15 CoCs with that no new value, a 0% drop with the 30 CoCs that showed a 9% drop, HUD is likely to report a 6.7% drop in unsheltered homelessness in California. So it does not mean that the 9% number is incorrect.

It just means that those two values were conducted for different sets of Continuums of Care based on the recency with which they conducted an unsheltered count.

The other important comparison here is between what these point in time counts, which are often usually reported by HUD, will show versus what the state's internal administrative data will show from the Homeless Data Integration System, or HDIS.

The HDIS, rather than needing to be a snapshot, is a dynamic picture of who is served by local homelessness programs across the state of California that allows us to understand the characteristics, numbers, and outcomes of people served by programs.

And it helps us understand both why there might be rising numbers of people experiencing homelessness while there is also progress being made by programs. So I agree with the Senators. It is often extremely frustrating to understand when more is being done to address homelessness, why are more people experiencing it.

And the HDIS data give us a powerful tool for understanding exactly what's going on here. And those data show that on average, a couple hundred people are successfully placed into permanent housing programs every day. However, a larger number of people are entering homelessness because they can't keep up with rents with the incomes that they have.

And so that disconnect is what the HDIS data allow us to understand in a way that the point in time data can't describe in that same way. There is also a difference in how you would interpret the trend in a point in time count versus a trend in HDIS data that rely on services.

A rise in a point in time count is pretty clearly showing a rise in the level of homelessness. But if you observe an upward trend in the HDIS data that can reflect several things at the same time, it can mean that the level of homelessness and need for services is increasing.

But it can also mean that homelessness service programs are expanding their capacity and reaching a larger number of people and doing a better job of meeting the need that already existed.

And it can also mean that the data reporting systems are improving and that a larger number of programs are reporting better data on the people that they are serving and their outcomes. And therefore we see a larger number of people reflected from one year to the next in this HDIS data system.

I defer to my colleagues at the Interagency Council to share more details about those data, But I wanted to add some notes on why might we expect to see or interpret things differently between these different data systems that are often used in California.

Given that, I'll note a few areas of progress that stand out in some of the recent data. The first is that we've observed significant growth in the capacity of homelessness service, shelter, and housing programs, and that state funding has been a significant component in that growing capacity.

So this chart is showing an upward trend in both the supply of permanent supportive housing. So those are deeply affordable housing units paired with services. That's often an important intervention for helping people with significant and complex needs become and stay housed, as well as time limited rental subsidies, also called rapid rehousing.

That's an intervention that's meant to help families and Individuals who enter homelessness very quickly move back into housing on the private market, often with just maybe six months to 24 months of rental assistance, as they recover from significant events in their lives, regain employment, increase incomes, and work towards stability.

The chart also shows that after several years of decline, there was a rapid and substantial substantial increase in the supply of shelter and transitional housing beds, which is often called interim housing in California. That rapid increase was catalyzed by Project Roomkey during the COVID 19 pandemic.

But in the years since then, Roomkey wound down and with state, federal and local investments, many local governments and providers have managed to maintain that increased capacity in interim housing programs. Those programs have also increased in the breadth of the services and supports that they provide for the people entering them.

That includes significant case management, housing, navigation assistance, and increased integration with homelessness subsidy programs that are meant to provide an off ramp for folks coming out of a temporary housing program and re entering the housing market.

What's not shown in the chart, but is shown in data sources like HDIS is that there's also been a growing number of people served by programs like street outreach, case management, housing, navigation assistance both inside and outside of the shelter and housing programs that are shown on that chart. Again, state resources are key.

Some of that is funded through things like the Encampment Resolution Fund and the HAPP program, but much of it is also being funded through CalAim, the Medicaid waiver program that allows Medi-Cal participants to have some of their supportive services funded and reimbursed through Medicaid. Oops, wrong one.

There are also areas of progress for specific populations experiencing homelessness that show up as reduced numbers of people counted as experiencing homelessness in point in time counts. And the progress being made for these groups helps illuminate lessons that can be applied across the homelessness services system. So I highlight two areas of progress here.

The first is that between 2019 and 2024 on this chart, there was a 24% decrease in the number of youth who are not accompanied by an adult age 25 or older who are experiencing homelessness.

There has also been a 15% decline in the number of veterans experiencing homelessness on a given night, and that 15% decline follows several years of sustained decreases in the numbers of veterans experiencing homelessness.

In our research with homelessness service providers, including providers focused on these two populations, we have found several key factors that contribute to success, and I'll highlight three of them here. The first is that there are many programs that serve these populations in a dedicated way that are able to tailor their programs to these groups pretty distinct needs.

So our research has shown that when programs serve youth in a dedicated way, rather than youth entering programs for adults of all ages, their outcomes are better. And that's in large part because in these programs they are around folks dealing with similar issues. Service providers are able to provide supports for those distinct needs.

That includes things like high rates of youth who have recently exited foster care and need replacement support, as well as a disproportionate rate of youth identifying as LGBTQ and benefit from gender and sexuality affirming or sensitive care and in a way that can be tailored in a youth program and is more challenging in other programs.

Similarly, we see that when dedicated resources are available. So that includes things like the set aside funding for youth dedicated services in HHAPP and Homekey, the Veterans Homelessness and Housing Prevention Program.

We see a decline in their rates of homelessness because programs are reaching them in a more effective way and they're able to kind of circumvent some of the larger, more complex wait lists for the generalized programs.

And then third, we see that these programs do better when there is clear and strong coordination between all of the relevant public and private entities that provide these services. That includes things like committees that are dedicated to youth homelessness and programs within many of the CoCs in California.

And for veterans that includes a very strong coordinating role by the Veterans Administration, who works very closely with nonprofit service providers, local local governments, and the Federal Government as sort of a quarterback agency for ensuring program effectiveness. Of course, there are many challenges that remain.

I'll first note that homelessness is experienced very unevenly by race and ethnicity in California, and that is similar to the nation overall. This chart is showing you that the rate of homelessness for people in each racial and ethnic group and how it compares to to the rate for the state overall.

So when a bar is going to the right, that's telling you that there is a higher rate of homelessness for people in that group relative to the state average. And when a bar is going to the left, it's telling you that the rate is lower than the state average.

And so, for example, people identifying as American Indian, Alaska Native or Indigenous is 411% higher than the rate for the state's overall population. The rate for Black Californians is 292% higher. The chart does not show changes over time, but there are also differences in trends between groups, including rapidly growing homelessness among the Latino, Hispanic or Latin population.

These differences and disparities result from many structural and systemic processes that include many upstream factors like differences in access to high quality education, labor market opportunities, and disparities in how people navigate the housing market.

There are also systematic differences in criminal justice or foster care system involvement that increase the risk of homelessness for black people and other people of color, leading to these disparities. I'll also highlight there is a growing and consistent need for health and social service supports.

So while the housing shortage is a fundamental cause of the homelessness crisis and is the key remaining challenge, there are many people who require more support than just housing in order to successfully exit homelessness and remain housed.

So this chart is showing you that about 70,000 people on a given night in early 2024 met the criteria for chronic patterns of homelessness that refers to experiencing homelessness for at least a cumulative year in the previous three years alongside a disabling condition.

Disabling conditions can include physical disabilities, serious mental health, and substance use challenges, among other things. And so, as the homelessness crisis has continued, rates of chronic homelessness have continued to climb as well. And so homelessness, housing, health, and social systems must all continue breaking down silos in order to meet people's needs.

That means a stronger connection between things like county social services and behavioral health care systems with housing programs and providers. But these systems sometimes work in different ways and they sometimes speak different languages.

And so there is a need for the continued and important work of breaking down the silos and getting the care coordinated to meet people's needs holistically. Finally, I'll conclude by noting some potential risks to sustaining the progress that's being made in California.

The first is that HHAPP is an incredibly powerful resource for many local governments and homelessness service providers, as the Senators have highlighted and as the HHAP program has continued its flexibility, as the Senator noted, is a key part of its importance for these programs. And as we've reached now, six rounds.

Many programs rely on HHAP in order to sustain their operations. And the support that they get from the HHAP program cannot easily be scaled down. So for example, a shelter program operating hundred beds cannot simply reduce the number of beds to 50 and reduce its revenue from HHAP to 50%.

If revenue declines, many programs will have to shutter entirely. The risk of programs having to close when losing a key funding source can derail the progress being made by the people those programs serve. But they can also lead to systematic reductions in the capacity of the system.

Many of the program operators that we have worked with in our research have described that when they establish new programs, it requires a significant increase in their ability to stand up programs, train new staff and hire them, keep them on board, procure and operate new facilities.

And that loss of capacity if a program is ended is not easy to regain if funding is restored a year or two later. And last, there are several federal changes that could affect tens of thousands of Californians housing stability.

And so I'll highlight a few federal programs that are supporting tens of thousands of people right now with housing assistance that could face significant changes or reductions in the coming years in ways that might impact the level of need in California.

The first is that the Emergency Housing Voucher Program, which was launched in 2021 by HUD with ARPA funding, is running out of funding at the end of this coming year, and there are currently 14,000 households living in homes that are leased with an emergency housing voucher.

The recent federal budget did include additional funding for some replacement vouchers, but housing voucher scarcity is very significant across the state of California, where costs are high and there was already a high level of need housing.

And so there might be more resources needed than what the new federal budget provides in order to ensure stability for these 14,000 households. There are also potential cuts to the largest federal homelessness funding program, called the Continuum of Care Program that is administered by CoCS.

In our research, we have found that there are 32,000 people across the state that are living in permanent housing programs that are supported by Continuum of Care funds. Recently, HUD proposed a significant reduction in the amount of funding that can go to permanent housing, and that proposal was rescinded following a legal challenge.

But that rescission could be temporary. In the coming year, HUD is expected to again propose new criteria or eligibility for this program funding, and that funding is likely to have a much lower amount going toward permanent housing programs that currently support these thousands of households.

And finally, there are also procedural changes to eligibility in the programs that are currently supporting people in California, including a recent proposed rule that will exclude families with mixed immigration statuses who currently live in HUD assisted housing that includes housing vouchers and public housing. We find that about 7200 households in California will be affected by this rule.

These are households where, for example, there are three citizen members and one person who is ineligible by immigration status. That might be a person who's undocumented, but it might also be a person who's seeking asylum or has a temporary protected status.

And these families will be put in the position of either leaving assisted housing and trying to look for housing they can afford on the private market or separating with the ineligible member leaving the family in order for that the remaining members to continue receiving assistance. And so, in sum, I see that there's major challenges.

Of course, the crisis persists and the need remains very high. But there are also areas where there's clear evidence that the investments being made by the state are making a significant difference and moving the needle. And those areas can be scaled up and the lessons and successes can be spread to other parts of the system.

But in a time where there is increased uncertainty at the federal level, any changes in state funding will interact with that degree of uncertainty and could have a significant impact on the people serving locals or, I'm sorry, the people served by local programs and the people operating those programs.

I'll stop there and I'm happy to clarify or address any questions you might have.

Thank you. Before we open things up to questions from Members of the Subcommitee, does the Department of Finance have any comment on this item?

Isaebl Fairclough, Department of Finance, Nothing to add.

Okay. Does the LAO have a comment on this item?

Paul Steenhausen with the Analyst's Office. No, we don't have any remarks, but here to answer questions, if you have any. Thank you.

Thank you. And we will now open the discussion to questions from Members of the Committee. Mr. Vice Chair.

This 9% number, the Governor mentioned it in his state of the state, but I don't think at that time that 30 of the 44 continuums of care that you referenced were counted. But now, if I understand correctly, what you're saying is there is a 9% reduction in 30 Continuums of Care in the state.

Coincidental that those two numbers are the same. I'm not sure that that means anything. But are those 30, are those all of the point in time counts for those areas that have since been conducted?

Yes, that's correct. So the 9% number is coming from the 30 that conducted a count in January of 2025. There was a unofficial analysis. Unofficial meaning that these were not numbers that were published by HUD, but rather it was collected from each local Continuum of Care that published a report following their 2025 count.

That was somewhere around mid-2025 for most of these CoCs. And that analysis of the 30 that had published their reports did show a 9% decrease. I don't know if that analysis was the same basis for the governor's statistic, but that's correct that there are 30 that conducted a count. All 30 of them have published their own numbers. And those published numbers do show a 9% decrease.

And those are the 2026 point in time counts?

No, I'm sorry, Those are the 2025 counts. So these were conducted a little over a year ago. The numbers that were recently collected as of like a couple of weeks ago or a few weeks ago among Continuums of Care, those numbers are not expected to be published by localities until sometime in the summer.

So typically point in time counts are conducted on a single night somewhere in late January by the CoCs that do them

even numbered years.

So there has been some staggering that was introduced by the pandemic. And so it was traditionally that about half of CoCs did account every year and the other half did them in odd years.

There was not one done in 2021, so many did them in 2022 and switched to an even year cadence when they didn't do them every year, but some of them returned to their odd year cadence. So in any given year it will fluctuate the number that do them.

And typically the rhythm throughout the year is that they do the count in late January. Localities publish their own reports with the summary of their data somewhere around the summer, and then HUD publishes the data for all Continuums of Care somewhere in December of that same year. That has been thrown off this year.

So traditionally HUD has published all of the counts from 2025 by December 2025, and that didn't occur yet, and it's not clear when it will, but HUD has stated that they plan to release those numbers soon.

Out of curiosity, why January?

So I'll tell you what I think is true, but I apologize if I'm getting some of the facts wrong. I believe that the reason for January is because, particularly in cold weather states, the number of people who will be outside is lower and the unsheltered counts are more prone to error.

And so if you conduct the count in a month like January, where it's colder, the presumption, I believe, is that more people will be in shelter and transitional housing programs rather than being outside, and the shelter and transitional housing counts will be more accurate.

Now, that obviously is very different in California than it is in a place like New York where the system is different. That logic also means that you might see different patterns. So, for example, there might be people who are doubling up on a friend or family member's couch rather than living outside in January versus in July.

So I think in general, it is meant to minimize error, but there are absolutely different trade offs for various ways of conducting counts, depending on timing, placement, et cetera.

And is there any way of knowing the transitional impact, that is to say, how many people are homeless now that were also homeless, say, a couple 3-4 years ago?

Yeah. So the point in time counts do often collect that kind of data, but those, the detail of that information isn't typically reported to HUD, and they don't publish that number in a kind of systematic, national way. And so instead, each Continuum of Care does a survey at the same time that they're counting people.

And they will often ask very detailed questions about how long have you been experiencing homelessness this time? Have you previously experienced homelessness? When did that begin? And so they can measure things like, have people been experiencing homelessness for, you know, three years versus did somebody kind of move into homelessness in the last few months?

There are also Continuums of Care that collect names when they do these surveys, and they're able to match the name from one count to the next in order to understand how many people are newly counted this year and versus were counted in a previous count as well.

But for that kind of information, the HDIS is a much more powerful tool for understanding how long has somebody been entering homelessness, what kinds of programs have they been using, and then kind of what is their trajectory?

That's because the data track in real time their enrollments in different programs, but also the data collected for those administrative systems systems, they're just able to collect more detail in kind of a cleaner way that's less prone to error.

Okay, thank you,

Mr. Senator Cabaldon.

Thank you, Madam. Thank you, Madam Chair. And thanks for the presentation, I learned a lot from that. Can we distinguish at this point from the HAPP investments in terms of between CoCs, counties, major cities?

Are we seeing any differential performance in terms of some of the outcome indicators that are related to the different colors of HHAPP grantees at this point?

Yeah. So for the most part, I defer to my colleagues at HCD and the Interagency Council who have been collecting systematic data on outcomes for HHAP funded interventions. But I will note that I think there are two important notes based on the research that we've been doing.

The first is that there were significant changes to the HHAP program and how those funds are administered over the course of the rounds where there was increased consolidation of, like, coordination and planning between HHAP grantees within the same region.

So, for example, like the city, county and Continuum of Care of Sacramento are all HHAP grantees, and from one round to the next, there was an increased amount of coordination between those three entities in terms of their plans for using the HHAP funds.

And so in some ways it can be hard to say, like what happened with the CoC's allocation versus the county's when they're coordinating their use in a particular way.

The other thing that I'll note is that in some ways the way that each grantee is using its allocations and funds kind of plays into where they happen to sit in their system.

So, for example, in some places a city will be disproportionately the lead entity for running shelter programs, whereas the county might be in charge more of some of the service or perhaps contributing to the supportive housing programs.

And in that case the outcomes will look different simply because one entity is disproportionately running housing programs while one entity running shelter programs. And so it will look like the housing programs are housing more people simply because that's what those programs are doing versus what the shelter programs are doing. And so there are complexities there.

But I defer to my colleagues at Cal IC and HCD for more detailed information.

That'll foreshadow a question for them later.

But on the, so similarly then, and I'm only asking in case you have done separate research from them and you noted, I think, for veterans and for youth, that those investments that were specific and targeted were more effective than the general investments or general programs in terms of achieving the state's desired goals for persons experiencing homelessness in those categories.

Yeah. So I think maybe to put it more specifically, I think what we learned from those providers is that when they saw that they had a dedicated stream of resources coming to serve the populations that they work with. They engaged in a really kind of transformational planning process, often in some of their programs.

So for example, we heard from many youth homelessness service providers that when they knew that there was this set aside amount of funding specifically to serve youth, there was already a close knit community, community of youth providers and they were able to engage in a strategic planning process where they were kind of internally coordinating on who will invest in what types of services in a continuum of interventions.

So some kind of saying, okay, what we clearly saw amongst us was that there was a gap in kind of a subsidy program for youth who are coming out of transitional housing. And so they could internally coordinate on how to make that investment, how that program can best interface with the existing programs.

And that led to increased rates of exiting from transitional housing programs. As an example

We know that? Or it led to reports by those agencies that their belief is, or their numbers, which we don't have are that they are achieving increased numbers of exiting or is it research or yours...

It indicates that there's an act that that's true?

Good question.

Yes, great question. I don't have the numbers and the data at my fingertips. I don't want to overstate what I believe the numbers might say, but I am basing that on the interviews that we have conducted with homelessness service providers.

And then I have also kind of read other analyses that attribute some of these transformational changes to increased numbers of people exiting to transitional housing. But I don't want to overstate my knowledge of those particular findings.

But I also want to be clear that it's, it is, we did not hear or learn that investments were less effective for populations other than these groups.

Just that because these groups have a smaller number of providers that tailor their services in more specific ways and could rely on a more predictable stream of funding coming to them, they were able to engage in this really proactive and system level plan planning.

What we heard from other providers is that HHAPs flexibility is tremendously beneficial, but because it is so flexible, it means that there are many, many ways and priorities that those resources could go to.

And so it was simply a wider and more complex set of decisions and planning that needed to be done for addressing a more diverse and larger population in need of services. And so like I don't want to say that the money was not used effectively in other programs.

It's simply that for the more tailored populations, the planning process could look different.

I appreciate that. I think this is a key through line for a lot of today's hearing because there's a cost to that, right? If we had a tailored program for every population experiencing homelessness, the coordination, information reporting, data management, accountability costs of that are not trivial.

And our ability to track the outcomes from the state's perspective, because HHAP is not a generalized program to say, hey, we just want to help out in whatever way that we can.

Like we have, we do have expectations here around what both the Chair and the Vice Chair said earlier of reducing the, you know, substantially reducing the number of folks experiencing long term experiencing homelessness, reducing the number of returns. We have a set of expectations that are state interests that are different.

As a former mayor, like you have local interests too, but the state has a specific set of interests. And so the question I think that's come up for today and for last year as well is many of the regions and the grantees and especially the CoCs have invested in a lot of what you've described.

And I have to say this is foreshadowing. I'm not convinced that an advisory board of folks with lived experience or a long term strategic plan or a three year process to develop a racial justice lens on homelessness services or whatever, that those fit within the pocket of what we're trying, what the state's interests are.

Local regions and communities have their own responsibility for homelessness that predates and post dates us and the development of the capacity to do that in the way that the regions want to is not our business and we can't measure the outcomes.

So part of the question that's guiding me is this battle between the Governor and local governments which has been omnipresent in which they're both wrong. They both ascribe a lot of causality to their actions. When it was bad, it was all the fault of local governments and damn them. And now that it's down, yay us.

Look what we all did together. Everybody wants to take credit for the good news and, and ascribe the bad news to, you know, really complex social factors that nobody could get their arms around.

But it's kind of our job to get our arms around around those and figure out what are the most effective strategies that we can measure that we can hold accountable and that we can prioritize given the long term state's fiscal forecast as well. So very much appreciate the research.

Looking forward to some of these topics coming up again in the ensuing panels. Thanks. Thanks, Madam Chair.

Thank you. I kind of want to take it back to the slide number two and just Kind of.

You know, one of the things that really just popped out for me was the fact that in this graph here, we have the sheltered and the unsheltered, and it seems like it's pretty much not even, but the same for some time. And then there's a bit of a spike, a little bit before 2018.

It goes down and then it continues upwards. Right? Can you speak to that? That spike and the ongoing just, you know, challenges there?

Yeah, yeah. So I think in some ways that volatility in the numbers is often expected when the nature of the count is often kind of subject to a lot of external events.

So, just to give you one example, in point in time counts where there are significant storms on the day of the unsheltered count, it typically leads to a significant reduction in the number of people who are counted because teams have less visibility, less coverage, and it's harder to see folks.

So I think there is some significant volatility that sometimes comes from simply external factors that can lead to a spike or a drop in some places. There have also been a couple of other factors that lead to significant changes, like a shift in methodology.

And so many of the Continuums of Care have changed their methodology for conducting these counts in a way that can lead to a higher number because they're conducting them in a more rigorous way.

So, for example, sometimes some cities have begun doing the count solely with or predominantly with local government staff who receive a more extensive amount of training than the teams of volunteers who necessarily are trained less for conducting the count.

And so the data entry is simply more challenging when they're not getting as much training in how to do some of that. So I think, first, some of these spikes and dips can be attributable to sometimes some of these different volatilities will overlap in a way that leads to a spike, and sometimes they will overlap in a way that leads to a dip.

But I think that the, the other element of it is sometimes that there have been significant changes in local interventions that lead to significant shifts in people from unsheltered locations to sheltered locations.

For example, a big part of the change that we're going to see in the 2025 counts from LA, for example, has been attributable to the Inside Safe Initiative. And so that led to a significant drop in people experiencing unsheltered homelessness in some places and an increase in the number of people experiencing sheltered homelessness.

So the total count might not change as significantly as one or the other, but instead it's people moving from outside to inside so there are multiple fluctuations that can occur that lead to spikes and dips.

But I think the long term trend is simply attributable to the fact that there's more people entering homelessness than programs are able to help exit it. Does that answer your question? Sorry.

Yeah, I just wanted to point out, I mean, the numbers seem to be pretty consistently below 150,000, right. From I would say 2008, 2009 and then right around 2019, that's when it went over 150. But if you look at even just 2009, right. This is when the housing crisis was occurring. Right?

People were losing their homes. They were, they didn't know where to go. It was a huge problem. Yet the number it took it. I can't see what happened before then, but it does show that it got close to 150, but then it began to come down. Right? You know, I would assume that's 2010 and hereafter.

So even in a scenario where we had lots of people losing their home or potentially losing their home or lost their home, the number was still below 150. So, I mean, obviously I would assume that the changes in the way that we're counting is different then than it is today.

But obviously I think just visibility wise, I think that we'd see a huge difference between then and today. So I just kind of wanted to point that out and see if there's anything that I'm missing that I should take note of as we're having this discussion.

Yes, yes, Senator, thank you. So I think in part, the kinds of factors affecting the different people in the housing market were a little bit different in the foreclosure crisis than the ongoing shortage of affordable housing we're experiencing today.

And that's in part because the foreclosure crisis was affecting folks who were able to become homeowners, even if it was sometimes in a predatory or precarious way. And the folks who are able to become homeowners, a loss of housing is tragic and challenging for them.

But often what occurs is if they lose homeownership, they're able to move into renting, they're able to move into maybe situations with other family members versus what's going on in the more recent years with the shortage of affordable housing is affecting the people primarily who are like kind of already holding on by their fingertips.

And so the nature of the housing crisis in the foreclosure era is a little different than the nature of the house in crisis today in terms of who's getting hit by it most profoundly.

And so the folks who are kind of already holding on by their fingertips in the rental market, they're not able to fall back on quite as many other supports as the people who might have been homeowners and then experienced a foreclosure.

So work by Margot Kushel and her team at the Benioff Center Housing and Homelessness Initiative, they did a statewide study a couple of years ago that traced the these trajectories. And it's a long trajectory for many people from experiencing a housing disruption to actually like living outside.

And in many cases it really depends on where you start, when the disruption begins. And so if the disruption begins when you are a homeowner, even precariously so, there are many other ways that people kind of fall back onto other supports versus when it's somebody who is, you know, a renter in the the lowest cost apartment who experiences disruption, they're already much closer to the brink of living outside.

Recognize the LAO.

Just to add a point. This is what Dr. Finnegan was referring to. But if you look at housing prices with COVID, 2021 was about 15% higher in cost than the year before and went up another about 15%.

You had rents go up significantly and a lot of people who didn't have rent control or some kind of cap on increased rents were affected and saw big increases. And so there was really a spike, you can see around 2020, 2021, 2022 a spike in costs.

And back in 2008, you kind of had the opposite in a lot of ways, where you had lower costs for, for a lot of people. So just the connection between cost of housing and homelessness,

The other, I have one more question for you. How many, so when money goes out to the CoCs and then they provide that money to grantees, how many different like funding streams do could be used by a particular grantee? What are, I mean, I've heard CalAIM could be used.

What are the other like public revenues that could be used to supporting these efforts?

Yeah, so it varies widely. It varies widely between places across the state and the type of program that they're running.

So in many of like the rural areas or smaller communities where there's less federal funding and less local funding, often a program could be funded by HHAP alone, or it could be funded by something like a combination of HHAP and local government funding. Things are more complicated sometimes for larger programs operating in places like the Bay Area, Los Angeles, San Diego, where there's a more complicated mix of resources available.

And so to give an example, there's shelter programs, in Alameda County, like in Oakland or Berkeley, where there might be five different revenue sources that sustain the operations of that shelter, sometimes they're simply layered together to make ends meet in a kind of pooled way that could include HHAP.

It could include funding from the county and funding from the city and philanthropic funding and perhaps a small amount of federal funding that's administered by the CoCs or passed to through by local governments.

And sometimes those funds are combined in a way that there's perhaps like HHAP funding and local government funding that pays to keep the lights on and pays the operational staff. So that's like the front desk, the security, the janitors.

And then something like CalAIM, which is a reimbursement approach, will pay for part of the case management or assistance with applying to housing assistance programs. And so it's sometimes kind of hard to know, like, exactly how much each source is contributing to the whole when they're divided in that way. But it varies widely.

Is there a way to figure that out? And can you elaborate a little bit more on CalAIM? I mean, I did a little bit of research on it and saw that there was quite a bit of funding that they provide.

Yes, yes. So there is so first, there is a way to figure it out.

But I think what, my awareness of the HHAP reporting is typically that folks are reporting what they are using the HHAP funds for, and that there is not as much reporting on a program by program basis what other funds are being combined with HHAP.

But I defer to my colleagues at HCD who will know that for sure, but they do report at the system level. Like, here are all of the breadths of resources that we have available when they are applying for HAPP funding and what they intend to use those resources for.

We have uncovered this in our research, and uncovered is the wrong word, sorry, but we have measured this in our research of what programs are using and how they're combining them. And that's where we see this really wide variation between one program and the next.

I will say that providers have also shared that when they are layering lots of sources together, it does complicate the extent to which they are able to administer their services.

So as the Senators have pointed out, when there's multiple different funding programs that each have their own rules and their own compliance structures, it can become very complicated for the provider to say, okay, we can use HAPP funds for our general operations.

But this funding from the VA can only serve our beds that serve veterans, or this funding can only serve people with substance use challenges. So that can increase the complexity of combining funds. And then for CalAIM, the Terner Center has been conducting some research on how different housing providers are using that.

What that allows is for a reimbursement of specified eligible services that get approved by counties and managed care plans. So there's variation from one county or managed care plan to the next in terms of exactly what services get covered and how they get reimbursed.

But it also works differently from the provider's point of view than receiving funds via a grant from a county or from the state, for example, because they have to reimburse for specific services and specific clients.

So instead of being able to say, for example, we got $1 million from HAPP and $1 million from CalAIM, it's we have $1 million from HAPP for our operations. And then on a client by client basis and service by service basis, we submit for a reimbursement of the costs of providing those services.

In looking at this trend, they're now submitting that coincidence is not causation. This does coincide with some significant happenings, if you will, in our past. One is Proposition 47 was passed in, I believe, 2014.

And the effect of that proposition was to completely decriminalize all drug use offenses, which prior to that, the consequence of a drug use conviction or potential conviction was drug court, which was tremendously effective in getting a lot of people off of drugs that virtually disappeared after the passage of Proposition 47.

And there is disagreement as to how much drug issues contribute to homelessness, but it's certainly a significant contributor to homelessness. The other is in 2016, California codified housing first, and that very well coincides with the significant increase in homelessness numbers. And then in 2017 or 18 was the Boise decision, which impacts the, at least enforcement issues.

How much would you say each of these things contributes to the increase in homelessness?

Yeah, so the. I think all of those events certainly correspond to things that matter a lot, but I'm not sure that I can give quantitative assessments of the extent to which they impact the overall trend.

So just to maybe look through them one by one, the research that I've reviewed on the drivers of homelessness rates at the community level rather than at the person level. So at the person level, absolutely, substance use challenges, mental health challenges, all of them increase the risk of homelessness and make it much harder to exit homelessness.

But at a community level, does the rate in California increase because the rate of those challenges has gone up relative to other places?

I have not seen strong research that shows that there's been this growing rate of substance use challenges that leads to an upward trend in homelessness relative to other places that have experienced a similar increase in the rate.

So, for example, in West Virginia, it has one of the highest rates of diagnosed substance use disorders and has also experienced a large increase in that rate, but it hasn't experienced the same increase that California has. And so I think it's.

It's hard to pin down how much does that lead to an upward trend, although on a case by case basis, it is absolutely meaningful to the people who are trying to grapple with those issues and homelessness at the same time. In terms of, like the.

The Housing first program model, I. I think what we would expect to see is if Housing first was serving people in a less effective way, is that people would exit to permanent housing programs or stay in them less successfully.

And so what would drive the upward trend in the number of people experiencing homelessness is that people aren't able to exit. And as in my reviews of the data, what I've seen in California is actually that the rate of people exiting isn't going down. It's just that the rate of people entering homelessness has increased more significantly.

And so if the rate at which people are entering homelessness is one of the key drivers in this upward trend of the number of people on a given night, then I wouldn't attribute that to the adoption of a housing first model for the programs that serve people who are already experiencing homelessness.

It would be a different set of drivers who are affecting people who aren't yet experiencing homelessness and then get pushed into it as the key driver for this particular trend.

And then last, in terms of the Martin v. Boise decision, I think if the inability or constraint on encampment resolution actions was leading to the rise in unsheltered homelessness, then what I would expect to see in the data is that there are many shelter beds that are not being filled because localities lack the the ability or the resources to move folks from an encampment and into a shelter transitional housing program.

Instead, what I've seen in the data is that shelter beds and transitional housing programs are typically at capacity and have long wait lists. And the constraint for successfully moving folks indoors is that they lack the space to move folks indoors.

And where we have seen success is when, like in some programs like Inside Safe and other initiatives or encampment resolution funded efforts around the state, when the effort to resolve an encampment is paired with all of the outreach and services and increased shelter capacity, that's when we see the more successful moving in from outdoors to indoors and folks staying inside.

And so I think enforcement certainly has changed following the Martin v. Boise and then the grants passed decisions. And I think it certainly varies a lot in terms of how local governments respond to it. But what I've seen as a driver of the rate is the resources that are available.

Thank you, Madam Chair. I'm not going to ask you to for any conjecture about the effect of the vote of the statewide vote on the plastic bag ban or the measure to increase the amount that we contribute to the rainy day Fund that also occurred at the same time.

But I do want to note, maybe, I don't know if this is really a question, but just to note that, and at least a couple of us come from local government, that the incentives under the Boise decision would have suggested that you would have expected an increase in sheltered homelessness because if you wanted to tackle encampments and other enforcement issues.

Your only option was to assure that there were more shelter beds available so that everyone could, could access them. We didn't see that in the data. And so we saw more unsheltered homelessness and less and no increase in the shelter in sheltered homeless during that period.

So I'm not sure that Boise, which I shared the vice Chair's quarrels with, but I'm not sure we can ascribe these numbers to that. And then secondly, just to also note that 2016 to 2020 and 2020 to 2024 were very different Federal Government regimes in this space.

And what we saw during that 2016-2020 period was very little federal investment and engagement. And we, as the chart shows, we saw basically no increase in sheltered homelessness. And that's because the capacity wasn't there. The investments weren't there in order to make that happen.

And that's the period with one of the largest jumps in the gap between sheltered and sheltered. So we'll need a different study to, to try to untangle this more.

But the other, the only technical question I had is, you know, obviously the sheltered unsheltered is one of the key things that we're paying attention to here with a particular focus on unsheltered.

Of course, these stat charts are hard to read from that perspective because I can't really tell the unsheltered changes over time, other than your statement that it declined.

Is it possible, Mr. Finnigan, if you would provide to us the same chart, but split so we can see the differential changes between both of them, actually, because here it's just difficult. The sheltered base makes it difficult to distinguish what's actually going on with unsheltered unless you have a really close eagle eye on the graph itself.

So we'd appreciate it if you could share that with the Committee.

Absolutely.

Well, I thank you, Dr. Finnigan, for your presentation. This item was information only, but again, we, I think we're all very much invested in figuring it out and getting it right. And I thank you for your time today and for answering our questions. And we'll go ahead and at this moment move to agenda item number three.

Thank you, Senator.

Thank you. So item three on our agenda today involves oversight of the homelessness data collection systems at the California Interagency Council on Homelessness. I'd like to ask Meghan and Sydney to come on forward. They are here. And also Ms. Marshall is the Executive officer at the California Interagency Council on homelessness.

And Ms. Bennet is the Director of research for the council and just feel free to begin when you are ready.

Thank you Madam Chair. Just if we can queue up the PowerPoint, we'll just give it a quick second. Great, thank you. I think we're still in the morning. Good morning, Madam Chair, Members of the Committee and staff, and thank you for the opportunity to present to you all today. I am Meghan Marshall.

I'm the Executive officer for the California Interagency Council on Homelessness and I'm joined by our Director of Data and research, Sydney Bennet. Cal ICH is responsible for statewide coordination, data integration and accountability infrastructure across California's Homelessness response system. And so this hearing is intended to discuss HHAP, the outcomes of HHAP, the data available around HHAP.

But we serve the ecosystem of statewide investments, including some that were discussed in Health and Human Services Purview.

So we'll walk through the key data systems California relies on, give an overview of HDIS, which is the Homeless Data Integration System, its accomplishments, and demonstrate how we're now able to answer long standing questions about outcomes and cost effectiveness and close with our progress in the implementation of AB799.

I will not spend too much time on key data sources. They were, I feel, thoroughly covered by Dr. Finnigan, but happy to answer any questions that the Committee might have. But just to highlight that we use multiple data sources to understand homelessness at both the population and system level.

Each data set has a distinct purpose, cadence and set of limitations. Our role is to integrate and to do our best at interpreting the sources to produce clear statewide accountability. So I will go ahead and shimmy on over to this slide you see there that we have highlighted in blue HDIS.

That is where we'll spend the bulk of our time with you all but queuing city up. I just want to provide sort of a linkage between the locally operated Homeless Management Information System, or HMIS, and how it connects to HDIS. So HMIS is the federally governed system used by all 44 of California's continuums of care.

It collects individual level data on demographics, services and outcomes with very clear limitations. Data is self reported, it only includes those who seek services, are accessing services, and it excludes tribal homelessness and victim services providers, excuse me, victim service programs.

Cal ICS maintains HDIS which aggregates HMIS data statewide, providing the most complete picture of service usage and outcomes that California has ever had. It is the first of its kind. We are the only state to have this level of statewide collection of information absent the states who are also their own continuum of care.

So but this is the largest, most unique statewide collection of homeless data. So just to underscore a point here, HDIS aggregates the data, but the state does not control what is collected in HDIS or how it is collected. HDIS is governed entirely by the U.S. Department of Housing and Urban Development data standards.

So with that, I'll turn it over to Sydney to share more on HDIS.

Thank you to the Chair, Vice Chair and Committee for having me here today. I'm excited to talk to you all about HDIS. HDIS is the country's first state level integrated homelessness data system. The system is still quite young.

First launched in 2021, HDIS brings together person level data from California's 44 CoCs, providing the state's most comprehensive and current picture of homelessness services. Just five years ago this system didn't exist and its creation was foundational for our statewide homelessness reporting and accountability efforts.

As you'll see on the graphic in the slides, the data starts with each continuum of care and their HMIS system. That's where local service providers, including recipients of federal and state funding, enter data on their clients who are accessing housing or services on a quarterly basis.

Each CoC sends the data from their HMIS system to HDIS via a secure file transfer. That data is complex, totaling millions of records statewide. Cal ICH then conducts an extensive process to prepare the data.

This includes deduplicating and matching clients across the continuums of care to have that full picture, resulting in a statewide data warehouse that meets our reporting needs. Cal ICH has a multi step process to ensure accuracy and data quality.

This includes a pre upload screening tool, manual file reviews, automated error reports and summary figures which our staff review to confirm data quality and consistency. Our data quality in HDIS relies on accurate local reporting.

Cal ICH works to proactively identify any potential issues in the data and we partner with the continuums of care to resolve them in real time. We wanted to highlight that CoCs have been great partners in this work and have been extremely responsive to our requests to make data quality improvements.

One way we do this is through our CoC Data Quality Tool, which flags over 200 errors before the data is uploaded to HDIS in the first place. We are partnering with state departments to require the use of this tool.

Cal ICH also uses the results statewide from our Data Quality Tool to tailor technical assistance via our HDIS connect webinars and individualized support we provide to each continuum of care. HDIS captures data on projects, people and enrollment so that we can see which services people receive and the outcomes that follow.

No other statewide system provides this level of detailed insight. Projects are the interventions that CoCs operate to address homelessness in their community. Through the implementation of Assembly Bill 977, Cal ICH partners with the administering state departments to ensure that we are able to track state funded projects in our HDIS system.

HDIS has demographic data on people accessing services, which provides important information on their housing needs and allows us to look at data separately for populations like youth, veterans and families with children. And then we have data on each enrollment for a person who's receiving services, the timeframe of that enrollment and the outcomes that follow.

And that's the foundation we use for our performance measurement. HDIS serves three core functions. The first is measuring progress towards the state and local efforts to prevent and end homelessness. So this includes our action plan goals and accountability commitments.

We also use HDIS to understand disparities and advance equity and to analyze the effectiveness of state program investments which we'll be talking about more later with the implementation of AB 799. HDIS data is the backbone of statewide accountability.

This timeline here shows the rapid and sustained progress Cal ICH has made in less than five years since the launch of HDIS in 2021, including our work to implement several pieces of legislation pertaining to HDIS.

So the launch of HDIS in 2021 included our public Facing and Continuum of Care Facing dashboards, shortly followed in 2022 by the release of California System performance measures which are still used by the HHAP program to this day. And those were the state's first homelessness performance measures.

In 2023, in collaboration with Dr. Finnigan and the Turner center, we published the the first statewide homelessness assessment in California.

And then we also began our important work to implement AB977 technical assistance which is the program through which we are supporting administering departments and their grantees with HMIS reporting and the reason we will have all of this data on state funded programs and their effectiveness.

Then in 2024 and 2025 we stood up interagency dashboards and compliance reports as part of AB 977 implementation. We also released our Public Facing Help act dashboard that sets goals for reducing homelessness among domestic violence survivors, their children and unaccompanied women who are experiencing homelessness.

We also partnered with our council Member departments and the Health and Human Services Agency to begin linking homelessness health and social services data to get an even fuller picture of homelessness outcomes in California. And then this year into next year.

We are very focused on our public state program dashboard which will be part of our AB799 implementation and we'll come back to in a few minutes. And then also we will be focusing on data for single women with children which were added to the HELP act population and will be coming to that dashboard as well.

I will now pass it back to Executive Officer Marshall to talk about our ability to to measure cost effectiveness as well as Cal ICH's implementation of AB 799.

Thank you, Sydney. So I'll turn now to the question of cost effectiveness raised rightfully and prominently in the State Auditors 2024 report. So as this Committee is aware, reporting accountability requirements have significantly evolved over the now six rounds of HHAP. Excuse me. For example, HMIS reporting was not required until the fourth round of the program.

And HHAP rounds operate on a multi year funding cycle. So these realities made it made early cost effectiveness assessments incredibly challenging. But with three years of consistent standardized requirements and using the auditor's own methodology, we can answer the question of is HHAP a cost effective investment.

So again using the state auditor's methodology, and that was simply comparing the cost of an intervention to the public cost of doing nothing, HHAP4 specifically is highly cost effective.

So to calculate to achieve the $9,172 average cost per person permanently housed in the fourth round of HHAP, and again we're highlighting this round because this is the first round that required entry into HMIS and therefore is lifted up into HDIS.

But we divided that the $515.6 million in HHAP4 expenditures by the 56,210 people placed in permanent housing in the fourth round of the program. So the auditor used a national estimate of $50,000 per year for the public cost of one person experiencing chronic homelessness.

I will say California's cost of not addressing an individual experiencing chronic homelessness is actually somewhere in the ballpark of $110,000 per year of no intervention, no services. But for the sake of comparison wanted to use the $50,000 figure that was used in the auditor's report.

So even with that conservative number, HHAPs cost per permanent housing exit excuse me, exit is far lower. So I want to note that the dashboard displayed on this slide, that top photo that you see there, HHAP HDIS reported program outcomes per AB977. Those were never intended to be public.

They were meant to be internal tools, internal thermometers of sorts for us to assess program effectiveness and outcomes. But it became public in response to the audit to show that Cal ICH could in fact produce public data dashboards with the information that it was requiring grantees to enter into HMIS. So the dashboard's underway for AB799.

And I'm not sure how numbering of bills works, but 977 and 799 are unfortunately close together, but I refer to them as companion legislation. They complement one another in this way.

But the 799 dashboards will go much further, so they will be designed specifically with Californians in mind, intuitive, plain language, easy to understand, while maintaining the transparency that the Legislature, the auditor, the Governor has, has called for and expects and, and everyone deserves. Right.

So, yes, ask about that. Chart this figure.

Yeah, you can.

So this way of doing cost effectiveness, I think, tell me if I'm wrong. Assumes that if there was no HHAP, no one would, or at least none of these clients would have exited homelessness.

Correct.

I mean, is that a reasonable?

It is. It is the methodology that the state auditor used in, in the, in the report that it produced in 2024 and so wanted to, for comparison's sake, wanted to use that here. But as I was getting ready to highlight, the 799 dashboards will go much further with different methodology.

All right, so Turning now to AB 799, I want to emphasize that despite, you know, our increasing statutory workloads, CalACH has never missed a statutory deadline. So every statutory deliverable with a due date has been completed on time or ahead of schedule in our existence.

And I feel that's important given the inclusion of CalACH on a watch list for high risk investments from the auditor. 799 is the next major step forward in creating a unified statewide accountability framework. And the timeline for that is to have these public facing dashboards available on or before June of 2027.

So with that, want to highlight the five components of the statutory deliverables within AB799, most of which we have completed, all of which that remain are on track. So first we, you know, AB 799 required the addition of the Governor's Tribal Affairs Advisor to the council. We're very excited to have Secretary Christina Snyder Ashtari join.

You saw in Dr. Finnegan's presentation the disparity that exists in persons who are Native American and unsheltered homelessness in particular, but overall, and so her addition was incredibly important to our council that was completed.

Second is to coordinate applications for funding that is an ongoing component of the work of the Interagency Council, which again consists of 19 Department directors, cabinet level secretaries and two persons, two community experts appointed by the Legislature. And that work is included in each of our public council meetings.

Third is to develop and maintain a strategic funding guide and calendar of new and existing funding opportunities. We're very excited to Release this on March 4th, which is our next quarterly council meeting.

It is an interactive tool that makes it easy for a Californian who wants to know what is the totality of the state's investments in housing and homelessness. Not just HAPP , not just CRF, which are two very important tools, but just a program within a much larger ecosystem. And 4 and 5 are very related.

Those are these are deliverables that are on track to being met by the statutory due date. So collecting fiscal and outcome data on or before February 1, 2027 and annually thereafter.

Just want to note that HMIS and therefore HDIS does not collect fiscal information in the way that is required for us to produce a dash, a fiscal dashboard.

So we are continuing to work on a web based application that would make those dashboards compatible with the outcome dashboards that we'll be producing and again on track to meet those publicly available tools on or before June 1, 2027. So as we close, I just Want to emphasize where the state is headed.

We're aligning statewide measures across our Homelessness action plan and AB799 ensuring that performance is tracked consistently across departments and programs. This is incredibly challenging given the unique nature and language used in legislation authorizing those program. Definitions vary in from something as simple as what is homelessness?

What is defined as homelessness is different in entitlement benefited programs that are mostly operated by the Department of Social Services compared to what we see in the flexible nature of HAPP . But those are things that we are committed to tracking. And consistently in these dashboards we're organizing all public reporting around our action plan goals. There are five.

So regardless if you're an entitlement program or a flexible program such as hap, we want to know your exits from unsheltered homelessness, your moves into housing, housing retention, homelessness prevention and lastly an increased housing supply. How many units are you contributing to the ecosystem?

And we're designing these dashboards again to meet the expectations for transparency and public expectation for clarity. Should not be be that challenging to answer questions of how many people exited homelessness and went into permanent housing. And so again the dashboards that we have, the tools we have now were not designed to be public facing.

We understand that are addressing those in the implementation of these 799 dashboards. So in closing, California has now the strongest data infrastructure we've ever had to answer these really important questions. HGIS gives us the ability to measure outcomes and identify disparities statewide. 799 builds on that. And yeah, with that I will I'll wrap it up.

I see folks are pressed for time, but thank you and look forward to answering any questions that the Committee might have.

Do we have any questions from the LAO or Department of Finance? No. Okay, Members of the Committee, we'll go with our Vice Chair.

Thank you. On the last slide you comment about presenting outcomes through the lens of five action plan goals and you list exits from unsheltered homelessness exits to housing retention prevention and increased housing supply. So is there any attempt to measure the ultimate success of homelessness programs and that is self sufficiency.

Thank you Senator for the question. These are the five action plan. I should should note that these are the first action plan goals to have been established by the council. Previously the action plan was a collection of the state's investments and you know who they were eligible to be awarded to. General program outcomes.

But they varied in nature of reporting requirements, public reporting requirements. These five goals are the first opportunity for us to capture as an ecosystem the outcomes of these investments.

Secretary Moss, who is our business, consumer services and housing Secretary, as well as the co Chair, Secretary Johnson of California Health and Human Services Agency, are deeply committed to developing workforce measures and metrics. We have also the California Workforce Development Board who is represented on our council as well.

I'm sure you're tracking, Senator, the work requirements that are embedded now in entitlement benefits. And that lends itself, I would say, seamlessly to us adding those, those exits to self sufficiency in the next version of the action plan.

I asked the question because I rarely hear that articulated in any homeless plans. And I would hope that. And I'll admit that there are some people that are homeless that are. They're homeless because they're dysfunctional and maybe they can never be self sufficient. Allow that that might be the case.

But the ultimate goal of any social services program with regard to people that need assistance, the ultimate goal has got to be self sufficiency. And as I said, I rarely hear that articulated. So I'm glad to hear that.

Perhaps that will become a better part of what we're aiming toward with regard to oversight and ensuring that funds are appropriately utilized. Do you provide any standards or selection criteria that can help local governments utilize to identify who the best partners are to work with?

CalACH does not. I'll defer to our sister Department of Housing and Community Development who administers HAPP in particular. But those expectations of caliber of partners are mostly included in the standard agreements that are held between the administering Department and the direct grantee.

And so in the instance of HAPP, that's a city, a county and a continuum of care. And so insurance is always a big one that comes to mind. Oftentimes we'll hear from community based organizations that they are not in a position to carry the level of insurance required, but it is required for a reason.

And so those are things that I'm sure my colleague Megan Kirkabee can speak to a little bit more definitively. But those things are outlined in standard agreements.

Perhaps the answer is similar with regard to the findings of some fraud in the Los Angeles area and evidently more recently in San Francisco. Do you take steps to root that out or is that also the other entity that would monitor that?

I will offer my experience. Prior to this appointment, I served almost 21 years in local government. Sacramento county was my longest point of service.

Were you there when I was there?

I tell you this every time and you forget every time. In fact, there's a photo of me at 18 years old when I started my county career. And you then supervisor, but.

Well, I was much older than 18 when I

I'll include it next time I'm asked to present to the Subcommitee. Apologies for the, the tangent. But so in those two examples though, I will say that the, the system was operating as designed in that those instances of suspected fraud or, you know, abuse of government dollars were identified by the state's grantee.

So in both of those instances, it was the local government entity or local partner who identified through their monitoring processes which are outlined. Expectations of those are outlined in standard agreements.

They are the ones who happened upon those points of concern, did their own investigation, referred it to local law enforcement, who then opened, you know, a larger investigation. A year and some change later we hear about public charges.

So it is always particularly as somebody who's dedicated their career to supporting those in need, it is always incredibly disappointing to see, you know, these come to light. But in the instance of LA and San Francisco, that is what we would hope to see.

Government and government partners are doing their due diligence and monitoring who they are contracting state dollars for and in instances of concern are using due process to root those out.

Okay. And you're right, that is how it should be discovered. And I promise not to be so forgetful.

You said that last time.

I know. Okay. I really promise this time on record now.

Thank you, Senator.

Senator Cabaldon. Go ahead.

I wanted to return to the call we were having on the slide. We don't need to return to that slide necessarily. But so with these changes or with the updated Whichever1 this is 7999. Yep.

But with these changes, so will we'll be able to distinguish programmatic interventions in the dashboard and start to provide for grad students, for Turner, for LAO, for the auditor, for you and obviously for us start to be able to better distinguish these kinds of investments are working more effectively than these or at least under certain conditions.

Is it going to give us that level of information?

I will, I will just take a moment to take us back to almost the beginning this slide here in that. Nope. I guess it was one ahead projects. So project type is the thing that we will be able to dive into those deeper analysis. Sure. We can dig in then to what is funding those project types.

But is HAPP being as flexible as it is and dependent on local implementation of those dollars? You cannot compare the entirety of HAPP as a State Fund to for example CalWORKS Housing Support Program, which is for an eligible population of families with minor dependent children who receive entitlement benefits. Those are not apples to apples comparisons.

What we will be comparing are outreach projects, shelter projects, permanent housing projects to determine where the investments are being made that are most likely to result in increases in housing, housing retention, et cetera.

And I'm sure Ms. Kirkby will later correct my comments about planning and collaboratives and advisory committees and what have you that we've if we turn the needle, the dial down on those over the more recent rounds, but to focus more in these project areas. But will that also the dialogue we're having with Mr. Finnegan about the other?

What used to be in the HAPP reports the largest category other, and it does include some of these kinds of activities. And I know we'll hear later from a, from a local, I think COC about using the funding for biweekly planning meetings, for strategic planning sessions and that sort of thing.

Is there a category in the new in this system that will be sort of not, you know, not housing or shelter or services?

Other is a category in hds, we see virtually no programs in that category. And we're trying to find for all the programs that are labeled as other, reach out to figure out what kind of services they are and get that into one of our other project types.

HGIS only includes projects that are serving people at risk or experiencing homelessness. So something like coordination efforts that are not directly serving people experiencing homelessness or at risk would not be entered into our data system. We're really looking at all of the outcomes of housing and services and not other components around coordination that would be collected.

That data would be collected through the administering departments in other ways.

Okay. So we would still be able to, through HCD and the agency, LAO and finance still be able to tease that out though. Right. We wouldn't be putting the advisory Committee, for example, we say that's pretty closely related to this housing project. And so we want to put it in that we'll count it as direct housing.

We'll still be able to know the non housing, non services, I mean projects that we're talking about or programs.

Yeah, we would. And I just want to add specifically in HAPP 6, CalACH has worked in lockstep with HCD in the review of those regional plans, using our SPMS to measure against progress over time for each of those jurisdictions and doing targeted technical assistance offerings depending upon what has been most recently submitted for those plans. Plans.

And so I'll use an example if this would not be the case, but if it were the case that all of your HAPP Dollars were going to other and we saw, you know, decreases or no, no no positive progress being made in your SPMs.

You are then required to have a conversation with HCD CAL is there to support to determine, you know, budget change proposals for example that would make investments more likely for you to see that that forward momentum and progress in meeting your SPMs.

So it is not as HAPP is incredibly flexible for a reason should be driven by local need tempered with we still expect to see progress being made in these areas.

Great, I appreciate that because I think, I think although I agree with the last statement, I don't think it is a long term sustainable state strategy for it to be nearly as flexible as it is. And in fact it's become less flexible over time as we've learned more.

And some of those initial investments that we were making in capacity and in learning don't need to be continuously repeated. And so that is one of the lessons that we've learned through the various rounds by design.

And I think it seems to me that we will need to get more and more like a regular like you referenced a comparative program in DSS or whatever. It'll look more like that if we're able to achieve some sustainable funding.

I think the other reason why I was asking this is that the question about cost effectiveness that I'm hopeful that we'll get better measures of cost effectiveness and not just an update from 50,000 to 100 and something thousand for the avoided cost side. Every domain in public in state policy has the same point of view.

Certainly I come from the role of education and psychology. We just spend $1 in education. We'll avoid all these costs which is true and also not that relevant because we can't capture the county health costs and you know, the prison costs from 20 years later. Like it's not really meaningful as a cost benefit analysis in that way.

And we apply to every single thing. The water project, this park, like everything the state does can almost always meet that test if you're counting all the costs that any agency, public or private or nonprofit Bayer. So I hope we use this opportunity to to zero in on that too because we want to.

I mean I think we need to and the auditors comments are on target that we need to be able to use the data system to make real choices. Not simply to celebrate ourselves and individual programs and those that are part of ich, but really to. To. To make.

Make a choice about what's really working for folks in communities that need shelter and services. So I wanted to turn to the audits. I'm the vice chair of the Joint Legislative Audit Committee and the Senate's lead there. And so there's two I wanted to follow up, one of which is several audits in itself.

So firstly, the original audit, and this is not so much for you, but as much as for the Committee. The Committee staff is that in addition to the audit of the state, there were also audits for two local jurisdictions, San Diego and San Jose.

And I would just note that we still have many outstanding items from that audit, several from the city of San Jose about its performance measures, its financial reporting. These are not like wildly shocking findings. I don't want to walk out of here thinking that there's a national scandal or what happening.

But we also need to follow up in that space around what is happening. Those are two exemplars statewide. But to understand their progress in responding to the auditor's findings on the ICH side, it seems reasonable to me, although I think the auditor's choice to raise this in the high risk audit was not justified.

I mean, this is not a high risk item in this way may be important, but it's not high risk.

But given that aside the auditor's concern about the capacity of the council to perform the next steps, given how long we are from the first steps and how much validation and has to happen on, on performance measures and fiscal indicators and what have you, that, that, and you've noted how challenging it is and what the staffing challenges are also.

So I just, and I know you said it's going to be on time, it's going to be on time. But can you, can you dive a little deeper into that?

How can we be, how can we be assured that the specific areas that the auditor has identified that, that they think is problematic in terms of your ability to complete in a timely basis, how you, how you, how you see things differently and how you think we're going to, we're going to meet the, the deadlines.

Yep. Thank you for the question, Senator. So with regards to two components of those dashboards, right there are the, the program outcomes and then the fiscal data requirements. The program outcomes are things that we have now that, that is why we are aligning those measurements with our action plan. So we're not starting from scratch.

We have that infrastructure currently where we are now are receiving all of the, the variables that each of the departments collect with respect to their individually administered programs. I think it was mentioned earlier, some of those are on a reimbursement schedule.

So there's a tremendous amount of validation that happens from those departments before they send a reimbursement check to their grantee. HAPP obviously is front loaded. It's a very different operation, but it is and one of our largest and of course the most flexible investment. Those fiscal dashboards exist now on HCD's website.

And so the validation that happens for those reimbursement based programs coupled with the fact that our second, you know, program of interest being hap, those fiscal dashboards exist now.

So it is, it is a matter of identifying a web based application for those departments to submit those fiscal outcomes to and for us to automate, you know, reporting for the programmatic outcomes.

Thank you, Madam Chair.

Senator, if I might just respond to. You'd mentioned, you know, the iterations of HAPP and investing in advisory bodies and planning groups and so on.

And I'm sure any, probably everybody on the local panel can speak to the fact that, you know, they understood this to be a one time investment and it was meant to address gaps that existed for their community.

And for most there had been no investment or no dollars available to develop those sort of those advisory bodies, advisory boards, historically.

So I think that is why you have seen over time you saw those investments being made on the front end and earlier rounds of pat because historically there had not been any opportunity to bring Everybody together. In LA, you have 88 cities, you know, rural communities. Obviously there's a different challenge to bring your, your local partners in.

So I just wanted to highlight that folks were operating under the assumption that this was a one time investment and what could that investment look like to better understand the needs of their community?

I would just say. I think it's, it's a, it's a, it's a fair point coming from, well, not your county, but coming from local government. You know, at the. No, you forgot me too. I also.

No, I'm kidding.

I do represent a part of Sacramento county, so I represent part of Sacramento County. So if you are from Aylton, then well, it's great to see you here either way.

But so you know, obviously the, both the world and the state are constantly imposing new expectations and costs on local government governments and so I get the intuition but you know, we don't support in any way the writing of general plans to provide more housing.

I mean we don't, there's a lot of stuff that if you, if that local communities and COCs would want us to do in the, in other domains where when we put money out for affordable housing, we don't, we've never allowed the affordable housing developers to, like, take 25% off the top for strategic planning and for coordination.

We don't do that. And so I think it was an unrealistic expectation from a lot of folks at the beginning that if we're going to make it, if we're going to do a historic investment in homelessness, that that would be okay.

But I've been encouraged to see the Department and many of the applicants, you know, move beyond that quickly to what we really need, which is the actual projects and interventions that we're learning about that really work on the ground. So thank you. And thanks, madam.

Thank you. I need to process all of this a lot more. I think I need a little bit more time to process all of this. But I do want to start with some just very basic questions that for me internally will really be helpful in really understanding the rest of the information that you provided here today.

And I want to start with the interagency council that began or was established under law or legislation. Was it 2017 and then implemented in 2018?

I believe it was 2016, implemented in 2017 and at that point in time was known as the Homeless Coordinating Financing Council HCFC. But we underwent a transformation and a reorganization of the council in 2021 and that reflects our current, our current structure.

What was the major difference between those two?

The major difference was establishing the co chair model. So it had historically been the Secretary of Business, Consumer Services and Housing Agency as the chair co chair model. Obviously incredibly important because the majority in fact of our investments and our ongoing investments are made through health and human services based programming.

So that was the most significant, really bringing in those health and human services departments closer to the, to the fold and implementing 977, requiring those investments also to enter into HMIS.

Okay, great. And then the first Homelessness Action Plan began. What, what was it?

2021.

Okay, so. But it was drafted, you know, throughout 20192020 or something along that.

That predates my appointment. I can't speak to when the, the draft would have begun.

Now. Do you know why it's a two to three year plan?

Why it's currently a three year plan is because then we can measure true progress over time. As you know, again, because of the multi year funding cycle of hap. In particular, it is incredibly challenging to measure the overall effectiveness of a program that is still in operation. Okay.

And then also just want to make sure the first round of HAPP funds went out in 2019. 2020.

I believe that's correct.

Okay. And are you also tracking. I mean, I think that we would want to also have a sense of what the real estate market within those CoCs looks like in terms of. I think it's also like a cost issue. Right. If you are trying to look for location or to be able to provide additional housing needs.

I mean, is that being included at all? Do you think that's of importance?

It's having served the majority of my career in local government in Sacramento County, Yuba county and Placer, all three incredibly different. Most of the time it was in Sacramento county, but incredibly different landscape of homelessness, experiences of homeless, causes of homelessness and availability of housing to. To ultimately resolve.

We have internally what we refer to as community profiles to help the interagency council staff to help my team understand what exists and where the constraints might be so that we can support our council Member departments. And I'll use HCD as the example.

Cals very closely for all 58 counties for the 14 big cities, you know, City Council meetings, board of supervisor meetings, to understand the nature of local politics and how policy is impacting or potentially impacting outcomes of investments. And so in those instances, work closely with HCD to flag.

We're concerned about this trajectory and its impact on outcomes for HAPP or Outcomes for Encampment Resolution Fund, for example. Those are not things that we would include necessarily in an action plan.

Okay.

And the reason why I bring it up is because there's been a lot of talk about the role of private equity playing in, you know, housing, particularly here in California. And so just like I said, I wanted to just touch on that and see if that's something that you see as an issue that's contributing to this.

I would say, superficially, I would say not as a developer, financing expert. Absolutely. And represented on our council are calhfa, hcd, of course, and the. The Tax Credit Allocation Committee folks who also have a unique set of experiences with their. Their stakeholder infrastructure and rely on their expertise in. In those spaces.

Okay. Well, I think I just. That's. That's all I have at the moment. I can't think. Like I said, I think I need a little bit more time to process some of this. So I may get back to you on additional questions, but at the moment, that is it. So I'll go ahead.

Thank you so much for your time, for being here for your. We'll see you soon. Again, this item was also just for information only purposes. And we'll go ahead and move to agenda item number four. So we have. Item four involves an update and oversight over the Homeless Housing Assistance and Prevention Program administered by HCD. Okay.

Madam Chair, if I may, I will be probably departing during your presentation. I had scheduled a dental appointment before, before this was scheduled, and I have to take it. And it does involve drilling. And I can tell you I would much rather stay here than go there.

That was me last Friday.

But I must.

Well, thank you. I'm Megan Kirkeby. And then I asked Sydney Bennett from Calich to just stay up here with me because I think I can. You know, I think it might even be helpful to see how some of this works together.

But you know, between the HMIS HCIS system and how we collaborate together with the funding and our grantee partners. But I'm Megan Kirkeby, I'm a deputy Director at HCD and we are very grateful to be the stewards of HAPP, tribal HAPP and the Encampment Resolution Fund Program.

We're currently in the sixth round of HAPP and it's obviously matured a lot over that time in some of the ways that have come up already. And mostly I'm going to talk about HAPP with all of you today, our sort of broader General HAPP program.

But in acknowledgement of our tribal partners who will be on the panel later, I just want to also acknowledge our role in tribal hap. And Leanne Hatton Parks is here today who's a tribal specialist for HCD that works on our amazing tribal affairs team. And this is our fourth round of tribal HAPP.

And I'm really excited to announce that we received 68 federally recognized tribes apply in this round, which is an 86% increase. So it went from 16 to 21 to 37 to this round having 68 tribal applicants to that program. So just a small, a small thank you for the small caveat.

But you know, that's something we're, we're excited to see. And then also the Legislative Analyst office prepared a very good primer and detailed overview of a lot of the accountability evolutions in hap. So I'll try and just, just keep to some highlights there. But obviously Senator Cabaldon brought this up.

One of the biggest evolutions in my mind is that use of funds, of really acknowledging we want to see investment, we want to review these applications to see investment in housing funds. But that can be any kind of housing solutions, right?

That can be rental assistance, that can be interim housing, that has a connection to perm, that can be permanent housing, that can be. But it is really the focus on those evidence based strategies that we see impact the outcomes we want to see in homelessness.

A lot more of that regional coordination, making sure that those partners have a plan that they're applying together. They're talking to each other about that plan, that those regional entities are avoiding duplication between each other, that they're leaning on each other. Transparency is the other big piece of.

I'm always available outside of these hearings to talk through all of our tools and materials. But along with the HEIS items you heard about today, we were the first homelessness program to put our specific HEIS data online in a public dashboard. And so that's on our website, along with the monthly obligation and expenditure data.

All of our annual reports are online. All of our applications that include the budgets from our grantees are online. So those are some of our transparency evolutions that really helped address some of those audit concerns that I think folks heard about.

And that is a place where the state auditor did sort of acknowledge a risk reduction, but appreciate the Senator's point on other items as well. And then upstream policy accountability, you know, these are large. These are large investments.

And we want to make sure that it's not just about the money going out the door, but those that upfront planning and activity within the control that we know creates upstream changes in housing and homelessness and making sure folks are doing their legally required planning aspects there.

So those are some of the evolutions that are probably just worth mentioning. But I want to make sure to be able to be here to answer the questions that you all have.

And I'll just end by acknowledging that, you know, in taking over stewardship of this, one of the things that's most important for us is that our North Star with accountability is about income, about impact. I don't know. Sorry, I'm getting a cold. That was a very weird slip. But about impact.

And so where we are able to reduce duplication, we're doing it right. We've had a lot of places where we had to do manual reporting because grantees weren't yet in the process of really using this HMIS system successfully. As we get more uptake with that, then we can reduce duplicative manual reporting.

We streamline the monthly reports to be just that obligation expenditure information that helps us actually speed up disbursements and speed up interventions. Right. So it helps us see where folks, where folks are hitting walls.

And then we were able to get rid of quarterly reporting and move just to annual reporting for those reports that sort of give us more detail on progress. So the monthly reporting is just the money, and then the annual reporting is sort of where you're telling us your broader progress story.

And even that we think there might be further opportunities to reduce as this HMIS HGIS information kind of helps us. But we, of course, would never remove the important information that we aren't getting from those sources that we know you all are interested in.

So happy to, happy to have a dialogue and answer questions and do what's helpful best for you all today.

Thank you. Any questions from the LAO or Department of Finance? No? Okay, Committee Members, Mr. Vice Chair, before you leave, would you like to make a comment or Question?

Part with apologies.

Thank you. Senator Cabaldon.

Just one Mr. Finnegan refused to answer the question of what exactly caused the 9% reduction relative to the increases previous to that. Can you tell us what the answer is? I heard the governor's theory at State of the State, but obviously we know more now then in terms of data.

But can you give us a little nauance about.

Did you mean like what, what is like what policy interventions are leading to it?

Yeah, or other, or other explanations. Obviously, you know, a year ago, you know, the Administration was frustrated with local implementation and local progress and so were we.

And this year the Governor was more higher on it and because the numbers had changed and obviously there's a lot I'm not asking you to, to do a quick, a quick multiple regression study. What insights can you share with us about what are we are programs becoming more effective?

Are local regions becoming better at it or is it not yet attributable to can we not yet assign causation to any particular actions by the public sector yet?

You're probably going to always hear me say the same answer to that question until a researcher convinces the research has convinced me in one direction. And so, you know, if, if there's new research that reveals something else, I'll listen to that.

But time and time again it's that homelessness is a housing problem and that the, the things that we need to do are things that we are doing. And you know, a lot of housing is, is not the fastest moving policy tool in the world.

But I think we are beginning to see the impact of a lot of that work and a lot of the effort being made by locals. But yeah, you know, at the end of the day, the cause of homelessness is that people are paying too much of their income per month on housing costs.

And that doesn't leave a buffer for, of shocks that happen to every single person. Right. At some point your car is going to break down or you get a job loss or, and if you don't have a buffer that can start a cycle of homelessness that's actually really difficult to get out of.

And similarly, it's the same cause for when we see less home ownership, that lack of buffer means we also don't have. It's either saving for a rainy day or saving for that future investment. But either way, that investment, that upfront planning and investment in affordable multifamily rental housing actually helps those two big housing issues substantially.

And so that would be my unregressioned answer to that question of when we See progress, where is it coming from? That's just because that's where the studies have pointed to before is like the biggest impact can have.

I'm sure you saw this one coming. But if we're seeing some, if we're seeing progress and we're getting, we're getting smarter about our evaluation and accountability and planning, then why don't we, why don't we see an investment for the, for the next round of HAPP in the governor's budget?

To me, that, you know, I can't speak to why the Governor make that decision, but I would say from, from the place that I sit in, you know, it's also worth looking at that we just received applications for the HAPP6 round in August.

And so just from a timing perspective, it's, I think making sure that we're, we're putting money into the system in a reasonable way that can get drawn down also in a reasonable way.

So to me, it's not so much as a threat or a change in policy as, you know, just making sure that we're managing our pipeline of investment.

I won't ask Ms. Kirkeby to do two dental visits in two weeks. So, no, thank you.

You know, I want to go back and like, touch back to what I said at the beginning, right, during my opening remarks about the fear, the anxiety that people are living and remembering the various people that I've come across in my Senate district, people who own their mobile home and they feel like they're being squeezed out of their, out of the park where they pay rent at, or a farmer who's being, who's on the verge of bankruptcy and doesn't know what is coming next, or, you know, something as simple as rising property taxes.

Now accounting for having to pay a mortgage that is not what you're used to paying or okay with paying. So when people are kind of put to that brink, are we even thinking or considering or accounting for those? I mean, the situation is bad, but it could get worse. Right.

And I don't think we're really tracking or thinking of all those individuals that have stressed their struggle and their fear that they could end up being, you know, homeless. And so just wanted to kind of get your thoughts on that if you're thinking about it at all or including.

Yeah, I mean, I think in doing this work or, you know, in taking over stewardship of this, I think I'm a very curious person by nature and I think, you know, a lot of the transparency stuff is for you all, but it's also for Us.

And it's an important part of how we communicate with our grantees and being able to, you know, have a dashboard that shows us every month how that money is being planned for and how much still is yet to be planned for. You know, I think that's when I talk about the ability to intervene.

That's part of what I'm talking about is it gives us a chance to kind of go in and see, okay, where are. Where are we seeing which kinds of struggles?

How can we help that grantee, like, not to be a gotcha and not to hold back money, but to help us, like, intervene in a more strategic way so that we're addressing whatever. That we're addressing the. The concerns relevant to that community and being responsive. And I do think, you know, transparency is about.

Helps with intervention, but it also just helps that that transparency also means our grantees have more visibility with the public and with their constituents in showing how are they spending that money and what kind of pace is it coming at and where are there ways that adjustments could be made about that type of investment?

And, you know, we've had really productive conversations where we've stepped in with our grantees that have been, you know, letting money kind of, kind of go unallocated for longer periods of time and kind of finding out what's going on. I think there's been a lot of mutual education during that and ability to begin to see us.

I'm not saying we're all the way there, but to begin to see us as a way to help with that fear rather than to be afraid of us, you know, so that we can build that relationship, to say, you know, what is your community facing? How can we.

How can we help you get this funding out faster to address those issues? How can we help you find a local partner that might have similar experiences that can. That you can build off of what they're doing to help your constituents faster.

But we're not necessarily prepared for those potential, you know, possible, you know, additional variables. Right. That were people. And I'll just. I'm going to give you like a personal. I'll give you a personal example in my own home, I share this with others, is that my mortgage went from $2,500 to $3,300. That's huge, right?

A lot of people are facing that. You know, a lot of people have faced that. And so that's why, you know, kind of I asked, are we, you know, have taken into account the, you know, the real estate market since, in my humble opinion, it plays a huge role.

And if we're not really, you know, looking at, you know, foreclosures, right. If people are about to go home homeless, we're not taking that into consideration. We could be potentially facing. Be like, not prepared for.

I think one of the most. The. I think one of the best things in housing policy is the ways that we all work together. And so like HAPP can be a grant program that a local is using to address specific homelessness challenges. But it isn't the only thing that's going on.

And part of there's two big planning documents. Each city and county obviously does their housing plan, which would be bringing up everything you're talking about, right? Like, what are the financial circumstances going on in these communities? Where are we seeing these changes, where are these risks?

And then what are our plans and programs to address each of those risks? Right. So every single governmental constraint that's coming up for that, where the regional specific issues are coming up, what are the programs that that community is putting in place to be ready to address those things.

But then also in the HAPP program, beyond that city and county, they're working with the whole region, the county, the big cities, the county, the continuum of care, to form a plan that is thinking ahead about each of those things and thinking about who does what, who's on first, where, where are those roles and responsibilities of.

Of addressing those issues. So, you know, and that. That does get to. That is going to vary region by region and what they want the response strategy to be. But everyone does need to be thinking ahead about what those upcoming challenges are and be coming up with those plans that are going to be prepare their community.

But part of that preparation, going back to my comment before, is really understand. Is really like understanding that homelessness is a housing problem.

And so that the example you gave of that increase in the mortgage or those kinds of things, part of that is making sure that we have communities that are setting the table for housing development to happen in a way that is going to create more access to. More access to communities, more affordability.

And so it's not all on the local. It's a partnership, but it's about the local's job, is to set the table, is to get the zoning in place, to have those productive policies to remove constraints where they can to make it more feasible for additional housing options to enter the system.

And that does create relief in the system and create, you know, less opportunity for unexpected increases in payments and those kinds of things as well. And that's. That's part of our strategy to help help create those economic smoothing or that's part of our role.

What we're supposed to do at the local, regional and state level is help help create responsible interventions that that do create a smoother economic climate for our communities.

Thank you both and thank you for your presentation, for your responses. I appreciate it. This again, information only item and no other questions. We can we'll go ahead and move to agenda item number five.

All right, we now turn to item five on the agenda. So item five is an opportunity for the Subcommitee to hear from representatives of some of the recipients of H-HAPP funds so that we may learn from their experience, expertise and recommendations as we consider how to shape the future of H-HAPP program.

And we'll go ahead and begin with Deputy County Administrator Amina Flores Becker, representing Fresno County and the work Fresno county has done to address homelessness.

Thank you. So I just wanted to start off by saying that it's been really interesting to hear the dialogue this morning. And I just want to really confirm that no one is more bought in and invested in ending homelessness than our local agencies. As you, I'm sure, are sympathetic to.

These are our neighbors, these are our friends, these are our relatives who are experiencing this incredibly low point in their life. So we are incredibly invested in ending homelessness in our areas.

I did want to highlight, and you all have this handout, but I did want to highlight that in Fresno particularly, we have really leaned into partnerships and collaborative work.

And really I want to thank the state and HAPP programs in encouraging that and really kind of forcing it through HAPP4 regional action plan requirements as well as HAPP5 mouse through the regional action plan which started in HAPP4.

What that did is it really forced the local jurisdictions and the CoC to talk to each other and to plan collectively and collaboratively. And that has been a great addition. And then with the MOU, it forced the electeds to buy in as well at a different level.

And so what that has done in Fresno in particular is it has really lended to a super collaborative approach to where we are now planning together. And we are aligning contract language with our service providing partners.

We are aligning goals and priorities and really measuring outcomes and holding our service providers accountable because we are being held accountable to our funders not just at the state level, but at the federal level as well.

So this is all really lended to just a super collaborative approach in Fresno which is necessary with changing funding structures and priorities from our funders. So what in particular HAPP has allowed us to do, and really we have planned collaboratively with our city and our COC to do is utilize HAPP to leverage other funding.

So that's been talked about quite a bit. We have included language in our contracts to require our service providing vendors to be Calaim contracted with our local managed care plans to leverage Calaim to do things like street navigation, other community supports. We as the county are also the lead Agency for the Calaim benefit of transitional rental.

We are in the early stages of developing a flex pool that will serve our region really to more collaboratively and community wide, really assign housing or match housing to the local need. Right, the local community's need. And Fresno county is an incredibly diverse county. We are about 6,000 square miles, 1.1 million population.

80% of our unhoused, unsheltered population is in the metropolitan area. So we work very, very closely with our two major metropolitan cities, which is city of Clovis and city of Fresno. We have monthly meetings with them to really plan for not just HAPP funding, but homelessness response and housing response as a whole.

And that includes, by the way, our electeds. It includes the mayor of the city of Fresno and the mayor of the city of Clovis. It includes several city council Members and two of our supervisor board Members. And so we are doing all of that planning in response to, you know, the changes at the federal level.

We are doing that planning in response to changes in potential HAPP funding levels. We developed a pathway of different housing options with the changes in MHSA to bhsa.

And what opportunities are there to mitigate some of the impacts of both state and federal homelessness dollars as they pertain both to permanent supportive housing funding as well as your more emergency housing options.

So this is all really been led by our cities, our county, and really you as the state, as the funder with the requirements for us to work collaboratively. We also want to just really clearly communicate that we welcome accountability, we welcome transparency.

I think our experience has been that it's not a simple problem that we're trying to fix. It's an incredibly complex problem that is contributed to by things well outside of our control. And so as we try to address the problem as an emergency response, it's difficult to really paint the whole picture. Right.

So I think there is a lot of response from the county and our cities and our local agencies that aren't captured well in data that aren't reported easily. And so while we absolutely welcome accountability and transparency, I think that it's particularly important to note that it just doesn't paint the entire picture or really the entire effort.

I did want to speak also to how, and I mentioned this briefly, but how we hold our service providing partners accountable for the funding that we subcontract to them, which the majority of our local dollars, Both for our COC, our city of Fresno and our county are, the majority, is subcontracted out.

Our board and the city and our COC has taken a position that outcomes matter and system performance measures matter. And so we have started having cross jurisdictional meetings with our city, city contracted providers, our COC providers and our county providers to align outcome expectations, align outcome language and really just highlight the system performance measures.

And you would think that would be kind of common sense to a service provider who enters into a contract, but that's not always the case and they often need that like technical assistance and really kind of firm communication to ensure that they are meeting our expectations.

And we do regular audits, we report to our COC board of directors, spend down and system level data, not just specific to HAPP, although we specifically report on HAPP, but throughout the entire system. So that's how we really ensure accountability, not just for ourselves, but for our service partners.

And then finally, I just wanted to mention that our relationship and interactions with HCD has been incredibly positive. We have, you know, we have experienced responsiveness by hcd. We have asked for technical assistance and it has been granted.

And whenever we have provided feedback, it has been responded to favorably and has been in many cases implemented, which has concluded really in improvements in the processes. So I just wanted to make those statements and happy to answer any questions.

Thank you. Up next, we are honored to have Tribal Council Member Darla Merlin from the Tuolumne Band of Me- Wuk Indians join us today and share her community's needs and experiences. Welcome and feel free to begin when you're ready.

Sorry, I'm nervous. Kani soeshe. Darla Merlin. Kani Lashum Sakhnoom. Kani Chakichom Tangi Kamu Osh. Hi. Hello. How are you? My name is Darla Merlin. I come from the land of the Soap route. I work for Tuolumne Me-Wuk Tribal Council and a tribal Member. And I just want to thank you all for allowing me to speak here.

I'm a bit nervous. I'm going to come from a different perspective than from over here. So we do face homelessness in our community. It's huge. We. I'm going to tell it to you from my lens. I live there, I work there. And in the community every day, our community.

We are back in the backwoods, basically the back 40. We have beautiful piece of land, but it's land that wasn't, that nobody else wanted. So we took that land, our ancestors embraced it, made it their own, created homes, housing for generations to generations.

And we always look for the next seven generations ahead of us to make sure that they're taken care of. So Some of our homes, they have three to five generations living in them. I'm one of those homes who has three generations that live in them.

Due to the housing crisis, people moving into our area has raised the rents, has raised the housing costs. So it's not feasible for us to try and to live off the rancheria. Housing rents have gone from where it used to be a four bedroom, from 1400 to 3000, a huge spike.

Homes that would be normally 200,000 or 350 to 400,000. So it's an unbearable cost to our Members. So when we look at things for the future, we do look at those, look at those items to make sure that we're taken care of and our members are taken care of. I wrote a lot down, sorry.

But for us, when we work with the state for state programs, the hhap, we're very fortunate to be able to apply for this. But then when I hear that there's 515 million that's allotted to that program, 2% is only set aside for the tribes. We have 109 tribes in the state of California.

So if every tribe was able to receive some of that grant funding, it's $94,000 per tribe. That's not even enough to build a structure, to get infrastructure foundations because of the cost of everything has gone up.

We're grateful that we can participate in these programs, but we should not be aligned with state and city and counties with these programs because our tribal government were unique, we're unique in that. So when we apply for grants for HCD Calhouns, we're required to submit waivers because they want us to.

They tell us a grant, but then they turn around and tell us it's a loan. And with that being said, because we live on trust land, our trust land is held into trust by the Federal Government, which we, it's held in Federal Government for our tribal people in perpetuity for our future generations.

But so sometimes we are not able to receive some of the grants because the waivers aren't passed. So then that's another struggle for us. I think AHAPP needs to be funded more in future and I think the need to, they are reaching out to tribes now. They have reached out to tribes more, doing more roundtables.

But I think we need to have a bigger seat at the table so that they can, so that they know what our needs are. Because when they send out these NOFOs or these funding, the funding criteria, they don't know what tribes are about or what we do because we are structured Different. So that's where I'm at.

Thank you so much. And our third witness here we have the honorable Mayor Barbara Lee from the city of Oakland. Come on.

Good afternoon. Good afternoon. And Members, very happy to be here with you today. Thank you for giving me a chance. You know, I as I'm reminiscing about my time here in Sacramento, justice, FYI, I had the privilege to chair what was in the Housing and State and Land Use Committee of the state Senate.

So now I understand it's housing now, which is great. So it's good to be with you here at this Subcommitee. And I really am happy to be able to present for a few minutes Oakland's Use of Homeless Housing assistance and Prevention program, AKA hap, and the critical role that it plays in our homelessness response system.

This hearing comes at a pivotal time for Oakland. We're preparing to release our homelessness Strategy action plan. Last night, it was presented before our homelessness Commission. It sets a clear goal, reducing unsheltered homelessness by 50% over the next five years. Let me be clear about this.

So a racial equity approach is really needed in homelessness decisions at all government levels. In order to achieve the universal goal of serving all unhoused residents, we need targeted strategies that meet the needs of unhoused and at risk populations that are chronically left behind.

So to achieve that goal, we must invest across the entire continuum of care to. There's no real silver bullet. Homelessness is driven by, like in many communities, structural imbalance between influx and outflow. Now, in Oakland, let me just give you paint a picture of who is disproportionately impacted by homelessness.

People experiencing homelessness represent 58% of countywide homelessness, whereas Oakland is approximately 21 or 22% of the entire county. But 74% of countywide homelessness population are black or African American. So you can understand the racial inequities stemming from many, many years of structural imbalance. Structural racism.

We help approximately 1500 exit to permanent housing each year, but roughly 2,500 people become newly unhoused annually. And nearly again, 59% of those who are becoming unhoused annually are black, which is a disproportionate rate compared to their 22% share of the city of Oakland's overall population.

Prevention is naturally not just the most cost effective homelessness intervention, but it's imperative just to achieve racial equity in the entire continuum of strategies. To turn the tide, we have to reduce the influx and accelerate outflow of homelessness. The most Effective way to end homelessness is to prevent it.

Oakland operates a nationally recognized targeted prevention program, but it must be scaled dramatically. Without stronger prevention investments, inflow will continue to outpace exits. HAPP currently maintains or sustains 802 interim housing beds and program slots serving approximately 1600 people annually. These include community cabins, emergency shelters, safe parking, transitional housing for youth and stabilization programs.

HAPP is one of the very few funding sources that supports operations, not just capital, capital dollars build housing operations, keeps the doors open, staffing, case management, which is extremely important, supportive services and housing subsidies. Because of HAPP investments, we have slowed the rate of growth growth in homelessness despite severe economic pressures.

We've strengthened cross Department coordination and we've aligned our work under a comprehensive 5.0 plan. One time or sharply reduced funding creates instability in a system that depends on continuity. Annual allocations don't align with multi year service contracts and delays in state agreement executions of course slow down the deployment of resources.

So round seven of the HAPP is significantly reduced. 802 interim housing beds serving 1600 people annually would be at risk. Prevention and outreach would shrink and progress toward our 50% reduction goal could reverse. Oakland continues. Excuse me.