California has poured $24 billion into addressing its homelessness crisis over the past five years, yet the state has failed to consistently track whether this massive investment has made a dent in the problem, according to a state audit released.
The audit paints a troubling picture of a state grappling with one of the nation’s most persistent challenges. With an estimated 171,000 homeless individuals—accounting for roughly 30% of the U.S. total—California’s streets are lined with makeshift tents that disrupt businesses and communities from San Diego to San Francisco. Despite the billions spent across more than 30 housing and homelessness programs between the 2018 and 2023 fiscal years, the state lacks the reliable data needed to determine why the crisis persists in many cities.
“This report concludes that the state must do more to assess the cost-effectiveness of its homelessness programs,” State Auditor Grant Parks wrote in a letter addressed to Governor Gavin Newsom and state lawmakers.
The audit zeroed in on five programs that collectively received $13.7 billion in funding, according to CBS News.
Only two were deemed “likely cost-effective.” One, a $3.6-billion initiative central to Newsom’s homelessness strategy, converts hotel and motel rooms into permanent housing at an average cost per unit that is at least 2.5 times cheaper than constructing new homes. The other, a $760-million housing assistance program, provides low-income families with $12,000 to $22,000—depending on the county—to prevent eviction, a bargain compared to the estimated $50,000 the state spends per person once they become homeless.
However, the remaining three programs, which have consumed $9.4 billion since 2020, could not be fully evaluated due to insufficient data. The lack of oversight and metrics has left lawmakers and taxpayers in the dark about whether these efforts are yielding results.
California’s homelessness crisis remains a flashpoint in the nation’s most populous state, where soaring housing costs and economic disparities have fueled a growing population of unhoused residents. The audit’s findings are likely to intensify calls for greater accountability as the state continues its costly battle against an issue that shows little sign of abating.
