Youth Spirit Artworks’ transitional housing site is one of numerous Oakland programs that rely on the funding Gov. Gavin Newsom has paused. Credit: Pete Rosos

Oakland homeless shelters and programs serving hundreds of unhoused people are in jeopardy following an announcement Thursday by Gov. Gavin Newsom that he’s pausing $1 billion in funding promised to cities. 

Newsom said he’s withholding money from the Homelessness Housing, Assistance and Prevention (HHAP) grant program until cities come up with more effective plans for addressing homelessness.

“Californians demand accountability and results,” he said in a news release. “Everyone has to do better – cities, counties, and the state included.”

The surprise announcement has local leaders and advocates worried.

Oakland has been counting on more than $24 million from this latest, third round of HHAP, which has been one of the primary sources of funding for the city’s homelessness strategy over the past few years. In June, the City Council approved a plan to spend the HHAP-3 dollars on several of its “community cabin” shelters, RV parking sites, an emergency group shelter, and hygiene services at encampments. 

“The loss of HHAP funds will result in an immediate reduction in shelter capacity, with people losing shelter and returning to the streets,” said City Administrator Ed Reiskin in a statement.

Mayor Libby Schaaf said in a statement that she’s “perplexed how delaying HHAP funds advances our shared goals.” 

In order to receive HHAP-3 funds, cities were required to submit “action plans” explaining who is served by their homelessness systems, other resources used, and goals for programs. Newsom said the cities’ submitted plans would collectively reduce homelessness in the state by 2% by 2024, which he said wasn’t enough. He said he will “convene local leaders in mid-November” to come up with better strategies. 

“Oakland followed the state’s process exactly as instructed, so we hope this pause will incorporate our front-line wisdom and improve upon last year’s process,” Schaaf said in her statement.

Oakland officials were planning to use this round of HHAP money to pay for programs offering a total of nearly 700 beds. On any given night, this would serve far more than 2% of the city’s estimated 5,055 unhoused people. However, a recent audit of Oakland’s homelessness programs found that many are failing to meet their goals for moving participants into permanent housing and others aren’t being tracked.

Newsom’s announcement comes just a few days before voters will decide whether to reelect him. Writing at CalMatters, Emily Hoeven said Newsom’s decision “seems to serve as an implicit reminder to Californians,” leading up to the election, “that he isn’t the only one responsible for the state’s ballooning homeless population.” 

Leaders of other Bay Area cities also expressed dismay and confusion about the move.

San Francisco Mayor London Breed criticized Newsom for creating “more hoops for local governments to jump through without any clear explanation of what’s required.” 

Oakland’s homelessness services rely on other funding sources in addition to HHAP, including local tax and bond measures and COVID-19 relief money from the state and federal governments. 

With Caltrans conducting a major closure of Oakland’s largest encampment, on Wood Street in West Oakland, the city is using $8.3 million from the state to set up a new cabin site there for displaced residents. Those encampment grants come from a different pot of money than the HHAP funds, so this week’s decision does not endanger those plans. 

However, this summer Newsom threatened to rescind that award as well.

Natalie Orenstein covers housing and homelessness for The Oaklandside. She was previously on staff at Berkeleyside, where her extensive reporting on the legacy of school desegregation received recognition from the Society of Professional Journalists NorCal and the Education Writers Association. Natalie’s reporting has also appeared in The J Weekly, The San Francisco Chronicle and elsewhere, and she’s written about public policy for a number of research institutes and think tanks. Natalie lives in Oakland, grew up in Berkeley, and has only left her beloved East Bay once, to attend Pomona College.