California needs more oversight, not another homeless agency
By Sarah Downey | March 20, 2026
As California continues to struggle with homelessness, state leaders are rebranding the bureaucracy by rolling out a different agency with many of the same players and goals. This comes after a series of distressing audits (2024, 2021) and a court-ordered spending analysis. Far-reaching investigations still show a breakdown in accounting for billions in tax dollars going to help the unhoused.
California remains the state with the most homeless people, but now Gov. Gavin Newsom has cast a preliminary assessment of slowing growth as major progress and immediately announced new spending. But how does it balance when, after years of questions, the homeless population continued rising while billions were spent to solve the crisis?
Despite the U.S. Supreme Court’s 2024 Grants Pass ruling that found cities had authority to clear away homeless encampments, the number of California homeless sleeping in streets, tents or cars remains well over 100,000. A conservative number is $25 billion spent on the state’s homeless crisis, but Newsom has before estimated $40 billion.
Will the newly reformulated agency help address these deficiencies? It could be many months before results are in — and critics have long raised concerns about state spending on its homeless industry. After the Newsom administration was shown distressing findings by the California State Auditor, it has yet to implement recommendations to track how homeless policies are working and taxpayer funds are spent.
Newsom vetoed a homeless program accountability law, which had unanimous bipartisan support, then last summer announced the new California Housing and Homeless Agency (CHHA). It is scheduled to be fully operational by July, and planning in the Eaton and Palisades fire zones has already kicked off.
CHHA’s five sub-agencies include the California Housing Finance Agency (CalHFA), a new Housing Development & Finance Committee (HDFC), the California Interagency Council on Homelessness (CalICH), the Department of Housing and Community Development (HCD) and the Civil Rights Department (CRD). As part of the reorganization, the troubled Los Angeles Housing Services Authority (LAHSA) will transition to a new county organization.
Will all these alphabet departments boost efficiency? Or is it simply akin to rearranging deck chairs on the Titanic?
“I am pessimistic that this new agency will have a positive impact,” answered Wayne Winegarden, the Pacific Research Institute’s senior fellow in business and economics. “Because the restructuring does not change the state’s ‘housing first’ approach, nor does it change any of the regulations (e.g., the California Environmental Quality Act and local zoning regulations) that are causing California’s housing affordability crisis. Without these fundamental changes, the reorganization is merely cosmetic.”
Instead of fiddling with its bureaucracies, California needs to implement better oversight of current spending. Even as accountability has become a watchword, the grant awards to an evolving number of nonprofit organizations get more difficult to track down. For example, a state website for Proposition 1 — a $6.4 billion behavioral health bond narrowly passed by voters in 2024 — currently shows the bed capacity, but not the amounts going to each program.
A February report by the Legislative Analyst’s Office (LAO) also raised concerns that Prop. 1 funds haven’t gone to enough areas of demonstrated need. As CalMatters reported, Kress Community Healing Center was scheduled to open by winter 2025 with $18.4 million for 25 beds, but it does not yet appear operational. These types of bonds often fall short of promises. The publication looked back at a 2018 bond: “More than five years after California voters approved No Place Like Home, just 1,797 of the 20,000 homes promised for people living with mental illness had been built.”
By contrast, the Haven for Hope in San Antonio has helped 52,000 people exit homelessness since opening in 2010. The 22-acre campus with dozens of wraparound services is credited with helping decrease by half the number of homeless people sleeping on the streets of that Texas city. California has a similar operation in Tustin. Village of Hope run by the Orange County Rescue Mission opened at the former El Toro Marine Corps Air Station in 2008.
So what could the Prop. 1 funding eventually do? Without enough supervision, it might go to phantom projects. Or it could jump-start land acquisition followed by facility construction for hundreds of treatment beds, along with counseling and job training, like Father Joe’s Villages in San Diego. That is, if the state practices serious oversight. There’s reason for concern. A Westside Currentinvestigation found the state has spent millions on unused spaces.
Unfortunately, the state still is doubling down on a “Housing First” mantra — putting homeless people in permanent housing without individualized treatment plans. Housing-first policies fail to address the social problems that keep people homeless. The Haven of Hope San Antonio approach could be the type of innovation that California needs to try. “It seems to be able to provide comprehensive help that addresses the drivers of homelessness in a cost-effective manner. That is what California needs,” added Winegarden.
Perhaps California’s well-funded homeless programs could follow proven practices from other states. Rather than spending money on hotel rooms or shuffling the bureaucratic organizational charts, it could develop surplus land that the state already owns and build communities of hope and healing.
Meanwhile as Newsom distributes Homeless Housing, Assistance and Prevention Program (HHAP) funds to cities, there could very well be another affordable-housing measure on the ballot in November — this one asking voters to approve $10 billion. Without better oversight, it could all be for naught.