‘The Nation Is Watching’: California Homeless Disaster Looms as Gov. Newsom Eyes Political Future
SACRAMENTO, Calif. — Driving through the industrial outskirts of Sacramento, a stretch of warehouses, wholesale suppliers, truck centers, and auto repair shops northeast of downtown, it’s hard to square California’s $18 billion investment in homeless services with the roadside misery.
Tents and tarps, run-down RVs, and rusted boats repurposed as shelter line one side of the main thoroughfare. More tents and plywood lean-tos hug the freeway underpasses that crisscross Roseville Road, and spill into the nearby neighborhoods and creek beds.
At one of the more established encampments, Daisy Gonzalez used canvas and carpet scraps to fashion a living room outside her cramped RV. Inside, Gonzalez took a quick hit of fentanyl, and turned to a mirror to apply a fresh face of makeup. As the opioid coursed through her body, her anxiety settled, her thoughts grew more collected. But she knows the addiction can’t end well and recounted a half-dozen failed attempts to get clean.
“I really need to get off this ‘fetty’ and stay clean, but it’s so hard out here,” said Gonzalez, 32, her eyes welling. She turned back to the mirror, finishing her eye makeup. “I want to get help and find a program, but there’s no treatment around here. It seems like nobody cares.”
Across California, homelessness is impossible to escape. Steep increases — Sacramento County saw a 67% rise in its homelessness count from 2019 to 2022 — have so far blunted unprecedented government efforts to fund housing and treatment for people living on the streets. And although some communities have made progress, statewide the gravity of the crisis has deepened.
Encampments have mutated into massive compounds proliferating with hard drugs and untreated mental illness. “Isn’t there supposed to be all this money and housing?” asked Gonzalez’s boyfriend, Joe Guzman, an ex-convict who enforces rules for their encampment. Guzman said he has experience in construction but can’t find a job because of a felony drug record.
“Everybody out here is using,” said Guzman, 38, checking their emergency stash of naloxone, an overdose reversal medication, on a brisk November morning. “What else are you going to do, especially when it’s this cold? You have to be numb.”
At its heart, California’s homeless emergency stems from a long-standing shortage of affordable housing. But it is also a public health crisis: The encampments are rife with mental health and addiction disorders. Rats and roaches are endemic, as are stagnant sewage and toxic camp smoke.
Gov. Gavin Newsom brims with frustration — and purpose and new ideas — when confronted with what has become an age-old question for California leaders: Why, for all the money and good intentions poured into helping people out of homelessness, does it look worse today than ever? Experts on homelessness say California stands out as the state that has done the most in recent years to address the issue, yet communities are struggling to make headway.
“Some people are demoralized,” Newsom said last summer, unveiling a strategy to fund housing for homeless people with mental health and addiction disorders. “Some people have, frankly, given up — given up on us, given up on the prospect that we can ever solve this issue. And I want folks to know that they shouldn’t give up.”
Newsom has muscled historic investments of public funds to combat the crisis, wresting a staggering $18.4 billion in taxpayer money in his first four years for initiatives directly targeting homelessness, a KHN analysis found. And more money is on the way: Spending is projected to grow to $20.5 billion this year.
As he wades into his second term as governor, the stakes are higher. He has signaled his ambitions for national office and speculation abounds that he’s positioning himself for a presidential run. He has cast himself as a vanguard for liberal values, taking out ads to goad the Republican governors of Texas and Florida for their conservative politics and publicly chiding fellow Democrats for being too meek in their response to the nation’s culture wars, including a right-wing assault on abortion and classroom speech on issues of race and gender.
On this national stage, California’s squalid tent cities loom as a hulking political liability, ready-made visuals for opponents’ attack ads. Newsom’s legacy as governor and his path forward in the Democratic Party hinge on his making visible headway on homelessness, an issue that has stalked him since he was elected mayor of San Francisco two decades ago.
And Newsom is recalibrating, injecting a new sternness into his public statements on the topic, something akin to “tough love.” He is enjoining local governments to clear out the unsanctioned encampments that homeless advocates have long defended as a merciful alternative in a state woefully short on housing options. And he is demanding that cities and counties submit aggressive plans outlining how they will reduce homelessness — and by how much — as a precondition for future rounds of funding.
“We have written checks, but we’ve never asked for anything in return,” Newsom told reporters in August. “That has radically changed. We mean business. It’s unacceptable what’s going on in this state.”
Newsom has set in motion a costly, multipronged battle plan, in many ways a grand experiment, attacking homelessness on multiple fronts. Through his brainchild “Project Homekey,” the state has plowed about $4 billion into converting dilapidated hotels and motels into permanent housing with social services. Billions more have been allocated to cities and counties to clear encampments and open additional shelters and supportive housing.
Separate from that, his controversial “CARE Court” plan seeks a novel approach to compelling people languishing on the streets with untreated psychotic disorders to get treatment and housing. It melds the “carrot” of a court-ordered treatment plan, to be provided by local governments, with the “stick” of the prospect of court-ordered conservatorship if people deemed a danger to themselves or others refuse to participate. Newsom allocated $88 million to launch the initiative, and state funding is expected to grow to $215 million annually beginning in 2025.
That’s on top of his CalAIM initiative, which over five years will invest roughly $12 billion into a blitz of health care and social services with the goal of improving health in low-income communities and averting the financial crises that can land people on the streets. This includes direct interventions like emergency housing assistance, as well as unconventional support like help with groceries, money management, and home repairs.
Philip Mangano, a longtime friend of Newsom’s who served as national homelessness czar during the George W. Bush administration, credited Newsom for using his political might to take on a seemingly intractable issue like homelessness after so many administrations ignored it.
“Yes, we are spending a lot of money, and yet the problem is getting worse,” Mangano said. “But look, the largest investment ever made in the history of our country, on homelessness, came from Gavin Newsom. He sees himself as responsible for taking care of the poorest Californians, and homeless people. I’ve known him over 20 years, and there’s no question that’s where his heart is.”
Still, putting the issue front and center is a serious gamble for someone with Newsom’s ambitions.
“Doing nothing puts him in peril, but doing something — he runs the risk of failing,” said Darry Sragow, a Los Angeles-based political strategist. “People want strong, tough leadership and progress on this issue, but if Gavin Newsom is going to make headway in reducing homelessness, he’s going to have to have a pretty stiff spine.”
Daniel Goodman slept on sidewalks, in a tent, or on a jail bunk throughout much of his 20s and early 30s. Now 35, he only in recent years committed to a regimen of psychiatric medication and counseling for schizophrenia, a condition he was diagnosed with at 24.
“I didn’t want to take medication for a lot of years; I absolutely refused,” he said, eager to discuss a change of heart that has enabled him to reclaim a life with his mom in a comfortable neighborhood in the Gold Country city of Folsom.
Tall, with a bright smile and rock-’n’-roll hair, Goodman said he was addicted to methamphetamines for a decade, self-medicating to calm the voice in his head he calls “the witch.” He panhandled, pushed shopping carts, and bellowed his agony in public fits of rage. It was a hungry, ragged existence during which he cycled from the streets to jail on charges of drunk and disorderly and then back to the streets.
His mom, Susan Goodman, in her form of tough love, eventually closed her home to him after his untreated illness devolved into threatening behavior, including stealing from her and a violent bout of vandalism during which he shattered every window in her house.
“I lived from second to second, and I didn’t have anything to eat or blankets, so I’d think, ‘What can I steal?’” Daniel said. “I put my mom through a lot.”
Her heart broken, Susan would seek out her son on the streets, bringing supplies to his tent. In 2019, after a particularly cold spell, he begged her to let him come home. She responded with an ultimatum: He could move back home if he agreed to get clean and stay on his meds.
Susan, a lawyer, is among thousands of parents who support Newsom’s CARE Court initiative. For years, families who have watched in despair as children or siblings lost themselves to untreated mental illness have petitioned lawmakers to make it easier to mandate conservatorship and treatment, and CARE Court is a major stride in that direction.
Eight counties, including Los Angeles, San Francisco, San Diego, and Riverside, have volunteered to launch the program this year. All 58 counties will be required to start programs by the end of 2024.
Newsom calls it a paradigm shift. Pushing the measure to passage meant standing against virulent opposition from civil and disability rights groups that argued people have the right to refuse treatment, and warned of a return to the horrors of forced confinement depicted in “One Flew Over the Cuckoo’s Nest.”
“There’s no compassion in stepping over people on the streets and sidewalks,” Newsom said as he signed the Community Assistance, Recovery & Empowerment, or CARE, Act into law last fall. “They need intervention — sometimes that’s tough.”
Some county leaders have also balked, saying Newsom is sentencing people to a system of care that doesn’t exist. They worry a crush of patient referrals will overwhelm county behavioral health systems. They say they need more money, more time, and funding streams guaranteed year after year.
“There isn’t enough treatment capacity. And we can write a prescription for housing, but the reality under CARE Court is we don’t have what it takes to fill that prescription,” said Michelle Doty Cabrera, executive director of the County Behavioral Health Directors Association of California. “It’s a matter of having the level of funding and housing that is going to help that person be successful.”
Newsom’s response to the pushback has grown heated. He points out that local governments already get billions every year to provide mental health services and that recent state budgets have included funding to expand the system of care.
“I’m exhausted by that — $15.3 billion we’ve provided,” Newsom said at a January news conference, referencing homeless investments over the past two years. The state has provided “unprecedented support,” he said, pounding his fist on the podium. “I want to see unprecedented progress.”
Dr. Tom Insel, who formerly led the National Institute of Mental Health and has served as an adviser to Newsom, credits the governor for bold efforts to direct resources and attention to the nexus of mental illness and homelessness. Research indicates roughly 1 in 20 Americans have a serious mental illness, but for unsheltered homeless people, it’s 1 in 4, Insel said.
He sees CARE Court as a “two-sided mandate,” making counties legally liable for providing services for people whose survival is at risk because of untreated mental illness while putting individuals on notice that they are responsible for accepting that help. Still, he worries the state’s homeless population is so overwhelming in scope, their isolation so entrenched, that it will be difficult to make headway.
“You can have all the clinics and all the medicines and all this good stuff to offer, but if people aren’t engaging with it, it’s not going to help,” Insel said. “And if there’s no relationship and no sense of trust, it’s just really difficult to engage.”
For Daniel Goodman, the return to mental health took both carrot and stick. Looking back, he can see his refusal to take his prescribed medication after being diagnosed with schizophrenia — he felt “freer” without it — set him on a dehumanizing spiral. A primal need for food and shelter led him to ask his mom for help. But without her “hammer” — the ultimatum — he would not have agreed to treatment. And without the medication, he said, no doubt he would be back on the streets, at the mercy of his vicious “witch” and scraping to survive.
“I’ve battled this question [of needing medication] for years,” he said, reaching for his mom’s hand in her sunlit living room. “I accept it now.”
If California is to make a visible dent in its homeless numbers, affordable housing presents the most daunting challenge. The state lacks the extensive shelter networks common in places with colder climates — an estimated 67% of people living homeless in California are without shelter.
And in recent decades, a mire of zoning restrictions and real estate development practices have transformed the housing market, jacking up rents and home prices and shrinking the options for low-wage workers. For every person moved off the streets, many others stand a paycheck or medical emergency away from losing their housing.
The longer people live on the streets, the more their health deteriorates. Addiction and mental health problems deepen. Chronic diseases advance.
“There’s almost nothing as destructive to health as homelessness, and there’s very little that the health care system can do to make up for it,” said Dr. Margot Kushel, director of UCSF’s Center for Vulnerable Populations at Zuckerberg San Francisco General Hospital. “You just fall apart.”
The arrival of covid-19 — and fears the virus would carve a deadly swath through shelters and encampments — gave Newsom an unexpected opportunity: open housing units in record time by throwing pandemic emergency funds at the problem and circumventing land-use restrictions and environmental reviews that can drag out approvals.
In 2020 he launched “Project Roomkey,” converting dilapidated hotels and motels into temporary housing for homeless people deemed vulnerable to serious covid infections. That morphed into a program to convert underused structures into permanent housing, and today the retooled Project Homekey has laid the groundwork for more than 12,500 housing units.
But much of that is one-time funding for start-up costs. If cities and counties want to participate, they are required to put up money for ongoing operations and services. And many have decided it costs too much to buy in.
“I really wanted to pursue a project, but it just doesn’t work for a lot of rural counties,” said Jaron Brandon, a supervisor in Tuolumne County, a forested province in the Sierra Nevada.
“Rural areas like ours have much lower tax revenues, and we had to figure out five years of funding, so when you start adding up all these costs and requirements, all of a sudden, we can’t afford to think big. It starts cutting into critical issues and basic services like funding roads and wildfire response and public safety.”
Cities taking part in Project Homekey find it’s hard to move fast enough when the newly homeless keep arriving. An estimated 172,000 people were homeless in California in January 2022, a nearly 13% increase since Newsom took office in 2019.
Sacramento Mayor Darrell Steinberg welcomes Newsom’s push to more aggressively reduce homelessness. He also sees the confounding reality on the ground. The city and Sacramento County have poured millions into new shelter beds and permanent housing, only to see the homeless count surge to 9,200 in 2022, thousands higher than two years prior.
“We have housed over 17,000 people — undeniable success” — in the past six years, Steinberg said. “But it’s not success in the eyes of the public, understandably so, because all we see out on our streets is increasing numbers.”
Steinberg asked himself: “How is it that we are successful in getting tens of thousands of people off the streets only to see the numbers grow?”
Jason Elliott, Newsom’s deputy chief of staff, runs point on homelessness for the governor. He said the question of how to close the homeless spigot is motivating them to think bigger and be more aggressive.
Clear out encampments, and at the same time connect people with housing and services. Steer more federal dollars into homeless response. Amend state land-use laws to enable counties to site and build housing faster. Turn the state Medicaid system, Medi-Cal, into a tool to combat homelessness by marrying health care and housing — for instance, funding the first and last month’s rent and asking insurers to work with landlords to find housing for homeless people.
Elliott rattled through a list of reasons he thinks explain how the problem got so entrenched. California is generous with benefits. Its climate is hospitable. The extraordinary cost of living. He also reinforced the administration’s prime strategy: It’s not just about more money, but forcing cities and counties to go harder at the problem with the resources they have.
“The most important thing that we have to do as a state is build more housing and get more people into services, and fundamentally that is a local government responsibility.” Elliott said. “Local government are the providers of behavioral health services, and they are the ones who choose whether or not housing gets permitted.”
As the administration takes its “just get it done” message across the state, those involved are keenly aware there’s a wider audience.
“There’s a broad sense in this country that we’re falling apart at the seams, and homelessness is part of the proof, to voters, that we’re falling apart. People want this problem fixed, and they want resolute leadership,” said Sragow, the Los Angeles strategist.
“The country is watching. Gavin Newsom has a record of getting out front on big national issues. Sometimes it works, and sometimes it doesn’t.”
KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.
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