SF, San José Mayors Push to Fund Shelters as Pressure Builds on Encampments

A growing number of California mayors are pushing for a realignment of homelessness spending toward shelters and temporary housing in the face of political pressure to clear encampments and deliver visible reductions of people experiencing homelessness.

But that shift has a trade-off: In a world of limited and often dwindling local dollars, more money for short-term solutions means less funding for permanent housing.

This dynamic has led to pitched budget battles this month in the Bay Area’s two largest cities, with Mayors London Breed in San Francisco and Matt Mahan in San José pushing for more voter-approved homelessness dollars to go toward temporary housing.

The mayors are grappling with the legal reality that making housing available is a prerequisite for clearing tents — and they are bolstered by advancements in the quality of temporary shelters they can offer residents living on the street.

“We certainly need housing at all levels of affordability that will require public subsidy — not disagreeing with any of that,” said Mahan, who was dealt a setback this week when his homelessness spending plan was voted down by the city council.

“But as long as we have thousands of people living and literally dying on our streets, I think we have to lean into the faster-to-deploy, more cost-effective solutions for getting people into a safe, managed environment with the privacy and stability that they need to take advantage of supportive services,” he said.

The pressures driving this pivot are familiar to mayors across the state and the nation. Thousands of unsheltered residents are suffering and dying on city sidewalks, and homelessness in California has risen since the pandemic at a higher rate than elsewhere in the country.

For Breed, the shift is a political response to worsening street conditions. In her budget reveal at the end of May, she proposed a controversial move to help fund temporary shelters for unhoused adults by reallocating funding meant to build housing for families and young adults.

“The goal is to shift it towards what the needs are. And so that includes housing, it includes shelter because we need to immediately get people into a place to help decide where they belong,” Breed said.

In Los Angeles, Mayor Karen Bass defeated a more pro-shelter opponent in last year’s mayoral election. But she has turned to temporary units and hotels as a way to ameliorate street homelessness.

In Sacramento, city officials are scrambling to implement a voter-approved measure requiring a certain level of shelter capacity. And hours after San José’s vote, the city council in San Diego approved an encampment ban that will necessitate an expansion of shelter beds.

“We are seeing interest in the quick-build, particularly, because I think to really address the dangerous encampments, to try to do it as quickly as possible, you need this kind of mid-term or interim approach,” said Michael Lane, state policy director at SPUR, a Bay Area think tank.

“I think that’s why you’re seeing some of these fights at the local level, because that is a relatively new development over the past few years to really say, yes, we need all of this,” he said.

Lane shares in the consensus that cities need investments in permanent as well as temporary housing. But debates in San José and San Francisco have centered on limited pools of tax dollars dedicated to reducing homelessness.

In that context, a dollar spent paying for an affordable apartment complex can’t be used for a shelter bed. And then, there’s the politics: Both Mahan and Breed are up for reelection next year and face “tremendous pressure” to ensure their city streets are clear of homelessness, Lane said.

On Tuesday, Mahan’s homelessness spending plan ran into heavy opposition from members of the city council, who instead opted to approve a more modest reallocation toward temporary beds. Nevertheless, Mahan said that conversations with fellow mayors have led him to believe a broader “rebalancing” of homelessness spending priorities is underway.

“I believe this is a trend across the state,” he said. “I suspect that we will see federal, state and county sources shift toward the solutions that are faster and more cost-effective and help us scale solutions.”

Also informing the mayors’ moves: the changing nature of shelter beds and the length of time people can stay in them.

San José has opened six interim housing sites that bear little resemblance to traditional congregate shelters. Instead of a cot in a large room, residents of the city’s emergency interim housing units can stay for months — and sometimes longer — in a prefabricated apartment, often with a private bathroom and on-site supportive services. When Breed announced her homelessness funding plan in May, she did so at the site of a tiny-home village on Gough Street.

San Francisco mayor looks to redirect money for youth

In San Francisco, the permanent housing funds that Breed wants to tap come from a hard-fought pot of money intended for youth and families.

The 2018 ballot measure known as Proposition C, the Our City, Our Home tax, got just under a two-thirds majority vote to pass, opening it up to legal challenge — even after the effort got major financial backing from Salesforce CEO Marc Benioff. The measure eventually won out, and it taxes businesses making more than $50 million to raise an expected $300 million annually, half of which was earmarked for permanent housing by voter mandate.

Facing a $780 million budget shortfall over the next two years, however, Breed’s new budget proposes the city reallocate roughly $60 million of Proposition C funding over the next two years — money that was intended to build permanent homes for young people age 18–24 who are experiencing homelessness, or families with children.

Now, that funding may pay for the expansion of hours at two city homeless shelters, add 350 slots for temporary rental assistance and 75 units of supportive housing for adults, maintain the operation of a program helping people who live in oversize RVs to repair their vehicles, and to help fund a Bayview small-cabin shelter site.

Sherilyn Adams, executive director of Larkin Street Youth Services, a service provider focused on unhoused youth, said the city already under-spends on young people as well as “transitional age youth,” who are between 18 and 25.

There were roughly 1,100 people under 25 years old living on San Francisco’s streets during the last point-in-time count.

“The reason there are people living outside is because we have insufficient housing stock for young people. That only gets worse if we don’t bring on any new interventions” like building more housing, Adams said.

On KQED’s Forum in early June, Breed defended her budget reallocation, saying there aren’t any sites in San Francisco that have been identified yet to build housing for transitional-age youth. But Adams said that’s an easily fixable problem.

“Not having a building identified for transition-aged youth, so that they could allocate or use the existing Prop. C funds, does not mean that there’s not young people sleeping outside. It means you didn’t find a building. Unallocated is not the same as unneeded,” Adams said.

Legal and national pressures on mayors 

Part of the push for California mayors to favor shelters over permanent housing is the result of legal constraints. The 2018 Martin v. City of Boise federal appeals court decision bars locales from clearing out tent encampments if they don’t have enough shelter to offer.

San Francisco doesn’t have enough shelter placements for the number of people experiencing homelessness in the city, which in December prompted U.S. Magistrate Judge Donna M. Ryu to place an injunction against encampment sweeps.

Building more temporary shelters, then, is a pathway to gain the legal go-ahead to conduct more encampment sweeps.

So while California is home to 30% of the U.S. unhoused population, the shift in funding allocation to favor temporary shelter is a national one.

Eric Tars, legal director of the National Homelessness Law Center, said in addition to the push being seen in Democratic California cities, many red states are contemplating the adoption of model legislation to put more funding toward short-term housing.

“When you have that increased street homelessness, in particular, you get this pressure for increased short-term, quick-fix kind of solutions. People want folks out of sight, out of mind. And so our elected officials are under pressure to kind of get those quick results,” Tars said.

While he doesn’t think shelters are unnecessary — far from it — he does think the budget reallocations are shortsighted, and will actually increase homelessness rates in the long term.

Budget challenges ahead sharpen the debate

Advocates involved in homelessness policy expect the tug-of-war between permanent and temporary housing to intensify — infusing future debates over shrinking local budgets and any attempts to bolster city coffers with new tax or bond money.

In San Francisco, long-term budget projections are far from rosy. The Mayor’s Office confirmed its budget proposal still has structural deficits that will remain in future years and has large amounts of deficits plugged by one-time funding sources. The San Francisco Board of Supervisors is expected to debate the budget with the mayor throughout June and put forward a compromise budget proposal by July.

The debate over homelessness spending in San José hinged on money created by Measure E, a voter-approved tax on expensive home sales in the city. Mahan proposed spending $40 million in Measure E funds on short-term solutions such as prefabricated homes and parking lots for RV dwellers. When that plan was voted down, he joined a council majority to support putting $29 million toward those interim programs — leaving the largest share of city homelessness dollars for permanent housing.

David Low, director of policy and communications for the nonprofit Destination: Home, said those funds are vital for the half-dozen permanent affordable housing projects awaiting Measure E funding next year.

“We have affordable housing projects ready to go, and without that funding, we will see further delays, increased costs, at a time we can afford neither, or the very serious risk that some of these projects will all fall apart together,” said Low, a former senior adviser to San José’s previous mayor, Sam Liccardo. “So it’s that real-world trade-off and that real-world opportunity we have to build more affordable housing that we don’t want to lose.”

Those trade-offs are likely to dominate future budget discussions across the region and state, particularly as cities grapple with diminished general fund resources, said Lane, with SPUR.

The push and pull between permanent and temporary housing will animate discussions about state housing aid from the Legislature and Gov. Gavin Newsom. And the fight could be a key factor in determining the shape of a regional housing bond that could go before Bay Area voters next year.

“To show that we actually have a way that we can move people from off the streets ultimately into permanent affordable housing … interim and mid-term types of solutions have to be a key part of that,” Lane said. “And I think that the voters will expect to see that as well.”

Tomiquia Moss, CEO of the nonprofit All Home, sees the injection of new revenue as an opportunity to break the growing homelessness policy binary. Her organization works with elected officials, businesses and nonprofits across the Bay Area to promote regional strategies to reduce homelessness. At the core is a belief in concurrent investments in both temporary and permanent housing, in addition to aid for renters.

Tax and bond measures are no easy lift, particularly across a nine-county region. But Moss, who previously worked for Mayors Ed Lee in San Francisco and Libby Schaaf in Oakland, said such an initiative could unlock that full portfolio of solutions — and unite the factions of homelessness spending around a single cause.

“That, to me, is where you are growing the pie,” Moss added. “You are not robbing Peter to pay Paul. You are increasing resources for the entire region.”