California: Governor Newsom announces billions of dollars for behavioral health treatment facilities and services for seriously ill and homeless thanks to Prop 1
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May 12, 2025

Governor Newsom announces billions of dollars for behavioral health treatment facilities and services for seriously ill and homeless thanks to Prop 1

What you need to know: Thanks to Prop 1, today's funding is estimated to create over 5,000 residential treatment beds and more than 21,800 outpatient treatment slots for behavioral health and will build upon other major behavioral health initiatives in California.

Sacramento, California – Governor Gavin Newsom announced $3.3 billion in grant funding today to create over 5,000 residential treatment beds and more than 21,800 outpatient treatment slots for behavioral health care services and will build upon other major behavioral health initiatives in California. Administered by the California Department of Health Care Services (DHCS), the Proposition 1 Bond Behavioral Health Continuum Infrastructure Program (BHCIP) Round 1: Launch Ready awards will significantly expand access to care for Californians experiencing mental health conditions and substance use disorders, including those experiencing homelessness.

Today's awardees can be found HERE.

"Californians demanded swift action to address our state's behavioral health crisis when they voted for Prop 1 in March 2024. Today, we're delivering our biggest win yet. These launch-ready projects will build and expand residential beds and treatment slots for those who need help. Whether it's crisis stabilization, inpatient services, or long-term treatment, we're ensuring that individuals can access the right care at the right time."

Governor Gavin Newsom

When full awarded, funding from Proposition 1 bonds is estimated to create 6,800 residential treatment beds and 26,700 outpatient treatment slots for behavioral health and will build on other major behavioral health initiatives in California.

Kim Johnson, Secretary of the California Health & Human Services Agency: "Today marks a critical milestone in our commitment to transforming California's behavioral health system. Through these awards, we are investing in bold, community-driven solutions that expand access to care, promote equity, and meet people where they are. These projects are a reflection of our values and vision for a healthier, more compassionate California."

Michelle Baass, DHCS Director: "This is a generational investment in California's behavioral health future. We are not just building facilities. We are building hope, dignity, and pathways to healing for thousands of Californians. These investments will significantly enhance our state's capacity to provide timely, effective care for individuals in their own communities."

Why this matters

The Bond BHCIP Round 1 awards will help to create a comprehensive behavioral health system, ensuring that individuals can access the right care at the right time, whether it be for crisis stabilization, inpatient care, or long-term treatment. As part of the state's goal to reduce mental health crises, increase the availability of services, and support community-based solutions, these investments are vital in ensuring the long-term sustainability and accessibility of behavioral health services.

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Through BHCIP, DHCS has competitively awarded grants to construct, acquire, and expand properties and invest in mobile crisis infrastructure for behavioral health. Proposition 1, passed in March 2024, increases funding opportunities to expand BHCIP to serve even more Californians with mental health and substance use disorders through infrastructure development.

Bigger picture

California's Mental Health for All initiative is modernizing the behavioral health delivery system to improve accountability, increase transparency, and expand the capacity of behavioral health care facilities. BHCIP supports the creation, renovation, and expansion of facilities that serve individuals with mental health and substance use disorder needs, with a focus on crisis care, residential treatment, and outpatient services. DHCS has already awarded $1.7 billion in BHCIP competitive grants.

There is a 7,000-plus behavioral health bed shortfall in California, contributing to  unmet needs among people experiencing homelessness who have mental illness and/or substance use disorders. Bond BHCIP funding is estimated to create 6,800 residential treatment beds and 26,700 outpatient treatment slots for behavioral health and will build upon other major behavioral health initiatives in California. This investment will help address the behavioral health bed shortfall.

What comes next

Today's announcement represents the first of two Bond BHCIP funding rounds. The second round, Bond BHCIP Round 2: Unmet Needs, will provide over $800 million in competitive funding awards for behavioral health treatment facilities and is open to all entities. Interested entities are encouraged to apply after the Round 2 Request for Applications goes live as soon as later this month.

Additionally, the Department of Housing and Community Development (HCD) will oversee up to $2 billion in Proposition 1 funds to build permanent supportive housing for veterans and others who are homeless or at risk of homelessness and have mental health or substance use disorder challenges.

Learn more

For more information about Bond BHCIP Round 1: Launch Ready, please visit the BHCIP website. Additional guidance on Bond BHCIP Round 1: Launch Ready and Round 2: Unmet Needs is available here. Visit the Behavioral Health Transformation webpage for updates and resources, including recordings of regular public listening sessions.

Today's awardees can be found HERE.

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