California’s Devastating Homelessness Spending Audit – And What It Means for Shasta County

The state released a long-awaited audit of California’s homelessness spending yesterday, confirming our worst fears. Worse than funding ineffective programs, the state hasn’t even been collecting sufficient data to determine if the spending is helping. The same is true for the 2 cities they included in the audit: San Jose and San Diego.

Further, the California Interagency Council on Homelessness (ICH) “has not aligned its action plan to end homelessness with its statutory goals,” such that “it lacks assurance that the actions it takes will effectively enable it to achieve those goals.”

What are the results of this appalling act of mismanagement?

$24B spent in 5 years while the number of homeless increased 20% from 151,278 to 181,399.

The data the state does have shows that 86% of placements statewide moved people into interim housing rather than into permanent housing – and only 13% of the exits from interim housing placements resulted in permanent housing placements. In short, the approach we’re directing most of those without homes to isn’t working.

How do we let our government get away with this? How could we possibly be ok with the state not tracking how they’re spending our money?

To bring it closer to home, we could ask the same questions of our county:

  1. What have we spent on homelessness over the last 4 years?
  2. What outcomes has the spending produced?
  3. Are the individual programs and services we’re funding effective? Are they cost-effective?
  4. Do we have a coherent plan for reducing homelessness that we have aligned our actions to?

I’ve been paying close attention to this issue in Shasta County for about a year now – and I can’t answer any of these questions. If we can’t answer these questions, we have no chance of making last progress on this issue.

Before we approve this year’s county budget, I hope the current supervisors ask these questions about the past year and the upcoming year.

I am encouraged that the United Way (which manages our Homelessness Management Information System) appears poised to make progress on data quality and comprehensiveness. I discussed my data request with them last week and hope we’ll see some of that data soon.

You may get tired of me beating the drum of outcomes, measurement, and program effectiveness – as I wrote about it 2 weeks ago too – but without these elements in place, we will continue to spend more money while our problems get worse.

It’s time Shasta County leads the way on this!


Here are 2 other comments on the audit:

1 – Shortcomings of Their Analysis of of Cost-Effectiveness

Two of the 5 state programs considered for evaluation were deemed “likely cost-effective.” Project Homekey, which focuses on converting existing buildings into housing units for people at risk of or experiencing homelessness, was determined to be likely cost-effective because the cost to convert existing buildings into housing units was less than the average cost per unit of new affordable housing construction. 

What this simple analysis fails to address is whether people occupied these converted housing units, which people occupied them, and what it costs to maintain and operate these units relative to new construction. If the goal of Project Homekey is simply to create more housing units, then it was successful and cost-effective, but if it was to get people off the streets, then we don’t know enough to determine its effectiveness.

The analysis of the other program deemed likely cost-effective – CalWORKs Housing Support Program – also seems lacking. The Housing Support Program spends $12,000-$22,000 per household in financial assistance to families at risk of becoming homeless. They compare this cost to previous studies showing that the average cost to taxpayers of one person experiencing chronic homelessness is $30,000-$50,000. 

What they don’t share is what percentage of the recipients who remained in their homes vs. the percentage who ended up homeless despite the financial assistance. If for example, half of the people ended up homeless anyway, then the cost per outcome is twice their projection ($24,000-$44,000) because you’d be paying all recipients but only preventing homeless in half the situations. 


2 – Effectiveness of “Interim Housing”

Earlier, I relayed the stats in this audit showing the poor outcomes achieved by those placed in interim housing. The state classifies 3 types of housing as interim housing: emergency shelters, transitional housing, and safe haven (supportive housing for those with severe mental illness). 

Without launching into a full review of the evidence for/against interim housing, it is worth noting that local micro-shelter communities are achieving much higher success rates. For example, while the numbers served are still very small, the United Way is achieving an 87% placement rate into permanent housing in the micro shelters on South Market. 

I share this to clarify that not all interim housing is ineffective. When combined with the proper oversight, case management, and wraparound services, it can be an important step into permanent housing.