California Globe

Gov. Gavin Newsom just announced Thursday afternoon another $240 million is available from the Encampment Resolution Fund grant program – part of the $700 million two-year program – to close down homeless encampments and get people into housing and shelter.

But a quick look at the ERF program highlights a huge flaw: “Encampment resolution projects must be human centered, adhere to housing first, and be scalable and replicable for diverse communities across the state.”

“Housing First” is a ridiculous prerequisite leftover from the Obama administration, and solves nothing as the tiny home, apartment, hotel room or shed becomes a tiny crack house and is subsequently destroyed. Making projects “scalable and replicable for diverse communities across the state” is so absurd, Vice President Kamala Harris could have coined this phrase.

But getting down to the numbers, we see this:

“Over the past two years, the state has awarded $97.5 million in encampment resolution grants to close encampments and get people into housing and shelter, serving more than 2,800 people experiencing unsheltered homelessness in 26 cities and counties statewide.”

That comes out to $34,821.43 per homeless person. Where did the money go? How was the $34,821.43 spent on each homeless person? And if California is spending $34,821.43 per homeless person, is this why the homeless population is growing?

What is the Encampment Resolution Fund program?

The ERF Program is a $50 million competitive grant program available to assist local jurisdictions in ensuring the wellness and safety of people experiencing homelessness in encampments by providing services and supports that address their immediate physical and mental wellness and result in meaningful paths to safe and stable housing.

Projects also focus on sustainable restoration of public spaces to their intended uses while safeguarding the needs of the unhoused people seeking shelter.

The Encampment Resolution Program was authorized in Assembly Bill 140, authored by the Committee on Budget in 2021 (which usually means it’s from the governor’s office), creating “Encampment Resolution Program.” The bill established the Encampment Resolution Funding Program to assist cities, counties, and Continuum of Cares in ensuring the safety and wellness of people experiencing homelessness in encampments to do the following:

However, AB 140 is much larger than just cleaning up homeless encampments.

AB 140 also funds the “California Dream for All First Time Homebuyers Program,” as well as the “Homeless Housing, Assistance, and Prevention Program,” a $2 billion program funded over the next two years for local governments to combat homelessness. The first year only $1 billion will be spent:

• $800 million will go to cities, counties or continuums of care.
• $180 million of the funding available be set aside for awarding bonus funding for jurisdictions that achieve the outcome goals specified in their applications;
• $20 million of the funding goes to tribal applicants.

So far, none of the billions already spent on California’s growing homeless population has done little to nothing to actually help them. But it has enriched local governments, non-profit organizations and the union construction firms.

“California is leading the way on homelessness solutions,” Governor Newsom claims. “We have made unprecedented progress since 2019, building over 12,000 new homeless housing units through Homekey, and sheltering more than 60,000 people through Project Roomkey. Today, $240 million is up for grabs to make our streets cleaner and safer, and to clean up encampments and get people into housing and shelter.”

Except, Project Roomkey, a hotel service for homeless vagrants, costs more than $250 per night in many California cities. Even Motel 6 in San Francisco advertises $100 per night rooms. Motel 6 in downtown Sacramento advertises a $59 per night rate, the Globe reported Wednesday.

“Project Homekey provided local governments about $2.8 billion total to sustain 12,676 housing units across the state,” ABC 10 reported Wednesday. “Another round of Project Homekey funds, about $1.3 billion, will be dispersed beginning in 2023, according to the California Business, Consumer Services and Housing Agency.”

That’s nice. But ABC10 didn’t question the numbers. And those are staggering numbers to be spending on something which has produced such lousy results.

What else can $2.8 billion buy?

• Shell announced it will buy Nature Energy Biogas from hedge fund Davidson Kempner Capital Management for nearly $2.8 billion;
• The Estée Lauder Companies Inc. announced Tuesday that it has inked a deal to acquire the Tom Ford brand for $2.3 billion, in a deal that values the Tom Ford brand at $2.8 billion.
• Troubled crypto lender Genesis Global has outstanding loans of $2.8 billion on its balance sheet, with around 30% of lending made to related parties, including parent company Digital Currency Group, Bloomberg reported.

The governor is spending untold Billion$ of dollars on programs that don’t work and have no accountability. And Gov. Newsom has made it abundantly clear that he is in charge of handing out the billions… when he feels like it.

Project Roomkey is the governor’s plan started in April 2020 to pay hotels to house the homeless. Gov. Newsom says it’s been a wild success, and claims more than 60,000 people have been sheltered through Project Roomkey. But the expensive hotel rooms are not a permanent solution and many of the contracts have ended, putting thousands (60,000?) of homeless back on the streets.

According to a July 2022 study from Pacific Research Institute’s Wayne Winegarden and Kerry Jackson, the cost of providing rooms to about 1,800 homeless persons in Sacramento was almost $4,000 per room (emphasis ours). “And despite the project, Sacramento’s homeless population increased by two-thirds from 2019 to 2022, from 5,570 to almost 9,300.”

“Based on the homeless counts from the Department of Housing and Urban Development (HUD), the state’s homeless problem persists despite the billions of dollars of expenditures,” Winegarden and Jackson say in the study. “Worse, as reporting from Los Angeles, San Francisco, and the rest of the Bay Area demonstrates, Project Homekey is costly and rife with abuse and inefficiencies. The renovated housing units are plagued with violence and drugs indicating that Project Homekey is failing to address the core problems causing many people to fall into homelessness in the first place.”

The Globe will delve more deeply into Gov. Newsom’s Project Roomkey and Homekey spending. We’d like to know who is getting rich off of the  California taxpayers under this scheme. The bottom line is that Project Roomkey and Project Homekey have not done anything to solve or end homelessness, but they have allowed the governor to spread a lot of cash around the state.