California: Following 9% drop in unsheltered homelessness, Governor Newsom announces new investments to create more shelter and services — with stronger accountability
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Jan 16, 2026

Following 9% drop in unsheltered homelessness, Governor Newsom announces new investments to create more shelter and services — with stronger accountability

What you need to know: California is driving the first statewide drop in unsheltered homelessness in over 15 years. Today, Governor Newsom is announcing $419 million in HHAP funding to expand housing and services across the Bay Area, Los Angeles, and San Diego — alongside billions in Proposition 1 funding.

SAN FRANCISCO – As the Trump administration attacks public programs and seeks to slash funding for homelessness, Governor Gavin Newsom continues to advance effective programs that have led to California's recent 9% reduction in unsheltered homelessness. Today, the Governor announced new state support for local communities with more than $419 million for San Francisco, Los Angeles and San Diego as part of the state's Homeless Housing, Assistance and Prevention (HHAP) program. HHAP funding helps local programs end homelessness through supportive services and permanent and interim housing.

This adds to funding from Proposition 1, advanced by the Governor and the Legislature and approved by voters in 2024, to help local communities provide vital care and housing for those with mental and behavioral health needs. Governor Newsom is the first Governor to have prioritized new housing, homeless, and mental health programs, and is turning around the impacts of this national crisis impacting California, leading the first reduction in unsheltered homelessness in more than 15 years.

"We put Proposition 1 on the ballot because Californians are demanding we do more to confront the mental health crisis and the homelessness emergency head-on. Voters gave us the tools and we are putting them to work, delivering treatment, housing, and real support, and proving that this state can lead the way on a challenge facing the entire nation.

Our state investments have launched critical programs for local communities. Together, we're breaking cycles of homelessness that took decades to create — and we're doing it with urgency, compassion, and accountability."

Governor Gavin Newsom

More support. More accountability

HHAP is a multi-year grant available to local communities to create permanent housing, sustain interim housing, and accelerate proven local interventions. The Newsom Administration, in partnership with the Legislature, made historic investments into the program, with nearly $5 billion appropriated through current and previous rounds of HHAP to support local jurisdictions in promoting housing stability and reducing homelessness.

Today's announcement awards the first funding from HHAP Round 6, with a total of $419 million to the Los Angeles, San Diego, and San Francisco regions. The awards announced today represent three of 42 regional applications submitted for HHAP Round 6, with additional awards expected in the coming months.

HHAP Round 6 builds on enhanced accountability measures and responds to the Governor's call to ensure funds have the greatest impact for Californians experiencing homelessness. These measures include requirements that grantees have and maintain a compliant housing element, prioritization for communities designated as "pro-housing," and mechanisms to claw back funding from local governments that fail to demonstrate progress. For more information about how your community is performing in addressing housing, homelessness, and mental health care, visit www.accountablity.ca.gov.

In addition to the remaining funds from HHAP 6, there is a seventh round of HHAP totaling $500 million planned for the coming budget year, contingent on enhanced accountability and performance requirements. HHAP Round 7 will expand existing accountability metrics to ensure grantees make meaningful investments in housing solutions and adopt housing policies that will increase downstream housing supply, a critical tool in preventing future homelessness.

"In San Francisco, we are changing our approach to homelessness to get people off the streets and on a path toward stability. In December, we reached a record-low number of encampments—down 44% from 2024. But we can't do this alone," said Mayor Daniel Lurie. "The resources provided by the state are crucial—whether that's Prop 1, HHAP dollars, or funding to make sure our freeway on-ramps and off-ramps are clean. I want to thank Governor Newsom for helping make that progress possible. We have more work to do, but we are now on the right track, and with strong partnerships and continued investment, we will keep moving forward."

The awards today as part of the first allocation from HHAP 6 include the following investments:
  • San Francisco City and County and the Continuum of care serving the city and county— $39.9 million to sustain operations and services for two semi‑congregate shelters and three navigation centers through June 2029—serving more than 600 adults and 75 youth nightly—with additional support for the San Francisco Online Navigation and Entry System.
  • Los Angeles County, the cities of Los Angeles and Long Beach, and four Continuums of care that serve Glendale, Long Beach, Los Angeles City and County, and Pasadena — $328.8 million to fund operations and services for interim housing (including for youth), services in permanent supportive housing, rapid rehousing and time‑limited subsidies, and encampment resolution efforts
  • San Diego County, the City of San Diego, and the CoC serving the city and county — $50.9 million to fund existing emergency shelters and expand emergency shelter capacity—including through hotel/motel vouchers—in addition to significant investments in permanent housing solutions (rental subsidies, flexible housing resources, extended rapid rehousing, and prevention/diversion).

This adds to state investments to help local communities address homelessness since 2019 which have included the launch of the first-in-the-nation Homekey program that has created nearly 16,000 homes across 250 projects and reached over 172,000 Californians; $2.25 billion through Homekey+ to serve individuals with mental health or substance use challenges and veterans; $1 billion in Encampment Resolution Funds to provide services and housing to help 23,000 individuals across 120 encampment sites transition from homelessness.

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Treatment, not tents

Today's event, at the Friendship House in San Francisco, also highlights key investments through Governor Newsom's Prop 1. More than 1.2 million adults in California live with a serious mental illness, and 1 in 10 residents meet the criteria for a substance use disorder. Additionally, shortages of behavioral health treatment sites contribute to rising rates of homelessness and incarceration among people with mental health disorders.

Prop 1, is transforming California's mental health systems with a $6.4 billion Behavioral Health Bond for housing, services, and treatment for veterans and people experiencing homelessness. When fully awarded, funding from Proposition 1 bonds is estimated to create 6,800 residential treatment beds and 26,700 outpatient treatment slots for behavioral health.

Friendship House has operated residential and outpatient substance use disorder programs for more than half a century and serves more than 5,000 community members annually, with a particular focus on Native American communities. The organization was recently awarded $31.4 million from Proposition 1,  Round 1, Behavioral Health Continuum Infrastructure Program (BHCIP) to help build a new "Village SF Wellness Center" at 80 Julian Avenue. The project will offer holistic and culturally significant services and house 60 residential substance use disorder beds, 107 mental health outpatient slots and 100 wellness slots. This is critical funding for a $92 million, six-story building that will contain four floors of treatment and recovery services.

In addition to BHCIP funding, Prop 1 also creates new supportive housing through Homekey+. Approximately $1.033 billion in Proposition 1 bond funds are currently available through Homekey+ to cities, counties, housing authorities, and tribal entities for projects serving veterans. Another $1.11 billion is available for projects serving all target populations, through a combination of Proposition 1 bond funds and Homeless Housing, Assistance, and Prevention (HHAP) program funds.

Increasing affordability

The homeless crisis cannot be solved without creating more housing, and making housing more accessible for Californians. This week, the state announced that the application period for the California Dream for All program, which provides up to 20% down payment assistance to first-generation homebuyers, will begin accepting applications on February 24. The program has helped thousands of Californians access their first home, and potential applicants should begin preparing their applications now. Learn more at calhfa.ca.gov/dream.

Reversing decades of inaction on homelessness

In 2019, during his first State of the State, Governor Newsom announced the state would begin focusing on the homelessness crisis — becoming the first Governor in history to make this issue a top statewide priority. Through new programs and funding, California is now outperforming the nation in turning around the decades-in-the-making homelessness crisis.  While homelessness continues to increase nationwide, in 2025, California reduced its unsheltered homeless population by 9%.

Governor Newsom is creating a structural and foundational model for America:

✅ Creating shelter and support — Providing funding and programs for local governments, coupled with strong accountability measures to ensure that each local government is doing its share to build housing, and create shelter and support, so that people living in encampments have a safe place to go. This week, through a $77 million investment from the California's cap and invest program, Los Angeles announced the expansion and redevelopment of the largest public housing project in the region, the Jordan Downs Project.

✅ Addressing mental health and its impact on homelessness — Ending a long-standing 7,000 behavioral health bed shortfall in California by rapidly expanding community treatment centers and permanent supportive housing units. In 2024, voters approved Governor Newsom's Proposition 1 which is transforming California's mental health systems. When fully awarded, funding from Proposition 1 bonds is estimated to create 6,800 residential treatment beds and 26,700 outpatient treatment slots for behavioral health care.

✅ Creating new pathways for those who need the most help — Updating conservatorship laws for the first time in 50 years to include people who are unable to provide for their personal safety or necessary medical care, in addition to food, clothing, or shelter, due to either severe substance use disorder or serious mental health illness. Creating a new CARE court system that creates court-ordered plans for up to 24 months for people struggling with untreated mental illness, and often substance use challenges.

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✅ Streamlining and prioritizing building of new housing — Governor Newsom made creating more housing a state priority for the first time in history. He has signed into law groundbreaking reforms to break down systemic barriers that have stood in the way of building the housing Californians need, including broad CEQA reforms.

✅ Removing dangerous encampments — Governor Newsom has set a strong expectation for all local governments to address encampments in their communities and help connect people with support. In 2024, Governor Newsom filed an amicus brief with the Supreme Court defending communities' authority to clear encampments. After the Supreme Court affirmed local authority, Governor Newsom issued an executive order directing state entities and urging local governments to clear encampments and connect people with support, using a state-tested model that helps ensure encampments are addressed humanely and people are given adequate notice and support.

In August, just a year after he issued an executive order urging local governments to better address encampments, the Governor announced his SAFE Task Force to address encampments in California's ten largest cities. In just a few months, the task force has addressed encampments in San Francisco, Los Angeles, Long Beach, Sacramento (https://www.gov.ca.gov/2025/12/23/governor-newsoms-safe-task-force-partners-with-sacramento-to-clear-encampment/), and Fresno (https://www.gov.ca.gov/2025/10/24/governors-safe-task-force-and-local-partners-clear-homeless-encampments-in-fresno-and-san-diego/) — connecting dozens of people with shelter.  Since 2021, Caltrans has removed more than 19,000 encampments on state right-of-way and collected approximately 354,000 cubic yards of litter and debris.

Housing and homelessness (https://www.gov.ca.gov/category/content-types/housing-and-homelessness/), Press releases (https://www.gov.ca.gov/category/press-releases/), Recent news (https://www.gov.ca.gov/category/recent-news/), Top story (https://www.gov.ca.gov/category/top-story/)

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