California’s Newsom Touts Record Homeless Aid Ahead of Recall

(Bloomberg) -- California Governor Gavin Newsom signed legislation allocating an unprecedented $12 billion over two years to address homelessness, a highly visible problem that his opponents are seizing upon in the recall election.

Speaking at an event in Sonoma County on Monday, the first-term Democrat touted the investment as the largest-ever response to the state’s crisis, with funds aimed at building new housing units and cleaning up city streets and freeways. More than a quarter of the nation’s homeless population lives in California, with most of them living outdoors rather than in shelters.

Even before the coronavirus pandemic, homelessness was increasing and home construction was falling short of needs in a state with half of the country’s 10 most expensive residential real estate markets.

“I’ve been in office 30 months,” Newsom said in a phone interview. “This issue has been decades in the making,” he said, adding “we’re just getting wound up here, and I’m looking forward to executing on our strategies over the next few weeks and months.”

Having that kind of time will require Newsom to survive the Sept. 14 gubernatorial recall election. A simple majority of yes votes on the ballot would result in his ouster. Voters will also pick a replacement from a slate of about 40 candidates. The person with the most voters -- even if less than 50% -- would become the next governor.

Newsom’s opponents have criticized his approach to homelessness, with reality-television star Caitlyn Jenner releasing grim ads showing stark images of sprawling encampments and trash. Another, YouTube personality Kevin Paffrath, has vowed to call in the National Guard to move unhoused people.

Newsom said his administration is approaching the chronic problem as a crisis. “That urgency is met with a permanency of framework -- meaning, it’s not out of sight, out of mind,” he said. “We’re looking at addressing the root causes and those are myriad, but behavioral health being top of them.”

One of the pillars of the legislation is $5.8 billion to expand a program called Homekey that converts hotels and motels into permanent housing. That program, launched mostly with federal virus relief funds, created more than 6,000 units within six months during the pandemic. Part of that allocation will go specifically to housing with behavioral health services.

Other aspects include:

• $2 billion to local governments to address homelessness
• $1.8 billion to affordable housing projects
• $565 million to stabilize homeless families
• $30 million for a new tax credit to provide incentives to businesses to hire unhoused people

During the event, Newsom said that the legislation starts to make up for Ronald Regan’s “infamous first budget” in 1967 as California governor, which dismantled services helping those with mental health or addiction problems. “This is the most historic commitment to right the wrongs of the past,” said Newsom.

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