Newsom Throws in the Towel on Homelessness

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A quick note before we get to the substance today’s post: I’m on the latest episode of Neon Liberalism, the podcast hosted by Liberal Currents associate editor Samantha Hancox-Li. I’m a fan of both Hancox-Li’s work in particular and Liberal Currents in general, so this conversation was a real pleasure. The topic of our conversation was hyperlocalism and the housing shortage, but we ended up going a bit further afield than that near the end.

If you enjoyed the conversation, you should consider subscribing to Liberal Currents and supporting a purveyor of high-quality independent opinion journalism. (Obviously, please also consider a paid subscription to this newsletter if you don’t already have one.)

And now, on with the show.

This is going to be another post where I heap opprobrium on Gavin Newsom. But before I get to that, I do need to give credit where credit is due: last week, the governor came out in favor of two much-needed reforms to the California Environmental Quality Act. SB 607 (Wiener) is the more complex of the two bills, but essentially it would make the CEQA review process a bit more efficient and less needlessly convoluted. AB 609 (Wicks) builds on an existing CEQA exemption for infill housing projects, making it more workable in the process.

Thank you @governor.ca.gov Newsom for proposing to include @buffywicks.bsky.social's AB 609 and @scottwiener.bsky.social's SB 607, exempting infill housing from CEQA, in the budget! The Governor's message today was strong:

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— California YIMBY (@cayimby.bsky.social) May 14, 2025 at 12:16 PM

If I understand Newsom correctly, then his administration will be incorporating SB 607 and AB 609 into what’s called a trailer bill — essentially one of the budget implementation bills that the legislature must enact alongside the actual budget bill. That should make it easier to get the CEQA reforms that Wicks and Wiener have proposed through the legislature intact.

Last week I dinged Newsom for his passivity when it comes to getting pro-housing bills through the legislature. His embrace of SB 607 and AB 609 is a welcome exception; given the timing, I can only assume he read last week’s newsletter, panicked, and decided to change course. The power I exercise through this newsletter is truly a solemn responsibility.

Having said all that, I have further grievances. Let’s get to those, shall we?

In a stroke of Blogger’s Luck, I published my post on Newsom’s governing style shortly before he made what can only be described as an extremely Gavin Newsom policy announcement. That very same day, he released a model anti-encampment ordinance and exhorted California cities to step up their efforts to clear homeless encampments.

As Emily Hoeven pointed out in the San Francisco Chronicle, there is, characteristically, less to all of this than meets the eye. Newsom’s announcement produced some headlines about how he was “getting tough” on homelessness, but it didn’t constitute a meaningful change of policy. The governor has been a fan of sweeps for a while now; by the administration’s own reckoning, the state department of transportation has cleared more than 11,000 encampments in the past four years. Further, Newsom already issued guidance urging local governments to dismantle encampments last year.

But if the model ordinance is essentially a press release masquerading as policy, then it’s a press release that needs to be understood in the larger context of California homelessness policy.

As I noted in my last post on Newsom, the governor has now presided over seven years of a steadily metastasizing homelessness crisis: while the usual caveats apply to the state’s point-in-time count figures, it is nevertheless noteworthy that they report a 44 percent increase in homelessness over the course of his tenure in office.

In 2021, it briefly seemed like the state might reverse the trend toward ever-higher levels of homelessness. The federal government had just delivered billions in emergency COVID-19 relief aid; income tax revenues, too, were unexpectedly strong given that everyone had expected a major recession. As a result, the state found itself with a lot of additional funding it could put toward re-housing people and providing them with whatever social services they needed to remain stably housed. Newsom’s office counts about $24 billion in spending on anti-homelessness measures over just a few years.

And that money did do quite a bit of good. Through the Homekey program alone, as I mentioned in my last post, the state created more than 15,000 units of housing for homeless people. Cities got an influx of flexible anti-homelessness funding through the Homeless Housing, Assistance and Prevention grant. From 2019 to 2022, San Francisco alone grew its shelter capacity by 24 percent.

But overall homelessness continued to climb. Some critics argued that this was because “Housing First” — the doctrine, which California pursued with fluctuating levels of commitment, that says you end homelessness by prioritizing getting people into housing — doesn’t actually work. But these critics were wrong: as I’ve written many times before (see here for an example), Housing First has been pretty thoroughly validated by a lot of high-quality research.

Instead, the state faced a twofold problem.

First, we weren’t getting value for money: high housing and land costs, bureaucratic red tape, insufficient oversight and lack of coordination between various state and local actors introduced a lot of unnecessary dead weight loss into the state’s anti-homelessness spending. (In an example that doesn’t involve state expenditures but is nonetheless revealing, an audit found that Los Angeles’s Measure HHH program might spend upward of $800,000 to produce a single unit of housing.)

Second, the state simply couldn’t keep up with the sheer scale of the problem. In the same publication where it reported a 24 percent increase in shelter capacity, San Francisco’s Department of Homelessness and Supportive Housing estimated that four city residents entered homelessness for every one they were able to rehouse. Even when the city had more resources for addressing homelessness than it had ever seen, “inflow” (the number of people becoming homeless) dwarfed “outflow” (the number of successful exits from homelessness).

In both cases, housing costs were the main underlying culprit. California’s homelessness crisis is a particularly malignant symptom of its housing shortage: as long as the shortage persists, the scale of the state’s homelessness problem while always overwhelm its Housing First programs, even as it makes operating those programs far pricier on a per-unit basis.

If the Newsom Administration had taken an active role in getting pro-housing reforms through the legislature, and if it had made more of an effort to enforce a comprehensive statewide homelessness strategy, then maybe the state could have gotten some more wins out of its pandemic-era cash windfall. But California’s Interagency Council on Homelessness is a small office with few tools to enforce coordination between state agencies and local jurisdictions; the governor and legislature have made little effort to convert the one-time windfall into a sustainable funding stream for homelessness programs; and Newsom has stayed pretty much AWOL from legislative fights over housing production, last week’s welcome show of support for CEQA reform aside.

Now that Newsom’s window of opportunity to make serious progress on homelessness has almost shut, he’s found a closing tactic: pass the buck to local governments. The state has done everything it can, he’s implicitly arguing, so now cities need to simply disperse the encampments within their jurisdiction.

While this maneuver is calculated to appear pragmatic and no-nonsense, it’s essentially an admission of failure. Encampment clearances won’t do anything to reduce homelessness; at best, they will shuffle unsheltered people around from one neighborhood to another. At worst, they will likely pose real health and safety risks to the people who reside in those encampments. But at least they make it look like somebody’s doing something, and that appears to be the whole goal.

As for actually doing the difficult work of putting California on a path to substantially reducing homelessness? I guess that will have to fall on the next governor.