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.New State Audit of Homelessness Spending to Target San Jose

California lawmakers propose audit to assess the cost-effectiveness of state homelessness programs and spending

music in the park san jose

The state has spent billions of dollars on homelessness in recent years. So why is the crisis statewide and in San Jose getting worse instead of better?

The need for more affordable housing as a solution to growing numbers of unhoused citizens has been a key issue for Democratic Sen. Dave Cortese for years, first as a San Jose council member and then as a Santa Clara County supervisor.

The first-term state senator was a co-sponsor of the $950 million Measure A, approved by Santa Clara County voters in 2016, which has lagged behind its projections of affordable housing construction.

As the local bond money timeline stretches further into the future, Cortese and other legislators are increasingly impatient with continued homelessness, despite spending billions in state money.

So he is leading a bipartisan effort this spring to fund a first-of-its-kind, large-scale audit of the state’s homelessness spending.

Responding to Gov. Gavin Newsom pleas, the Legislature has allocated $20.6 billion toward housing and homelessness since 2018-19, reports CalMatters, based on data from the Legislative Analyst’s Office. The independent news service reported that the number of unhoused people in the state has increased by nearly a third—to more than 170,000 as of last year.

That discrepancy prompted Cortese and Republican Assemblymember Josh Hoover to request State Auditor Grant Parks to analyze multiple state homelessness programs in an attempt to improve California’s response.

The proposed audit also will zero in on two cities: San Jose, and one other to be named.

Hoover told CalMatters, “It’s important to figure out where are we investing that is not getting a return on investment. And we need to stop spending money on the programs that are not working.”

The $743,400 audit would analyze state spending in San Jose and assess the cost-effectiveness of as many as five state homelessness programs, including one of Newsom’s favorites, Project Homekey, which has funded some projects in Santa Clara County.

CalMatters reported that the audit was approved unanimously in the state’s legislative audit committee last month, will take about 5,000 hours of staff time and is likely to be completed by October.

The news service reported the audit will focus on several questions, including these:

  • How many people received services between 2020 and 2023?
  • How much funding have San Jose and the other city received, and how has it been spent?
  • How much of that money went toward administrative costs instead of services?

San Jose officials say they have used state funds effectively and efficiently, and have been transparent in their work.

Cortese’s proposed audit isn’t the first time California’s homelessness response has come under scrutiny. Earlier this year, the Interagency Council on Homelessness found the state spent nearly $10 billion on homelessness between 2018 and 2021 and served more than 571,000 people. But despite that effort, most of those people still didn’t get a roof over their heads.

And in 2021, a state audit of five local governments found that they did not always comply with federal regulations or follow best practices when responding to homelessness.

The new audit will be an “entirely different animal,” Cortese said, as it will go deeper into the state’s spending. Legislators hope it also will make specific recommendations as to how ineffective programs could be improved or even cut—something the Interagency Council’s report didn’t do.

It’s no surprise that Republicans would continue their critique of the governor’s spending. But the recent involvement of Cortese and other Democrats signals the politics have shifted.

For example, Assemblymember Luz Rivas, a Democrat from the San Fernando Valley, is pushing her own accountability bill. Assembly Bill 799 would force the state to set specific goals for reducing homelessness, while also allowing funding to be reallocated away from local agencies that fail to meet their goals.

“We get asked by our constituents,” she said. “They ask, ‘Where is this funding going to? Is it really being used effectively?’”

barry holtzclaw, managing editor sanjoseinside
Barry Holtzclaw
Three decades of journalism experience, as a writer and editor with Gannett, Knight-Ridder and Lee newspapers, as a business journal editor and publisher and as a weekly newspaper editor in Scotts Valley and Gilroy; with Weeklys Publishing since 2017. Recipient of several first-place writing and editing awards, California News Publishers Association.


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