San Diego homelessness progress at risk as state funds stumble
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Critical state funding to tackle San Diego's homelessness crisis is up in the air again this year, a development city leaders warn will put progress at risk.
Why it matters: Grant money from the state made up nearly a third of the city's homeless budget last year, according to city officials.
State of play: California cities, counties and regional homelessness groups have been receiving "one time" grant money through the Homeless Housing, Assistance and Prevention (HHAP) program since 2019.
- For several years, the state awarded about $1 billion overall annually.
- That changed last year when the Legislature approved no new HHAP funding due to its budget shortfall.
- Gov. Gavin Newsom has proposed restoring the program in the upcoming budget, but at about half its previous size.
- Future money will also come with more strings attached, forcing cities and counties to improve conditions and prove they're using the money wisely or else lose the funding, CalMatters reported.
The big picture: San Diego uses the money for shelter operations, safe parking sites and other services, director of government affairs for the city of San Diego Walt Bishop told Axios.
- The program has been the "breadwinner for our homeless funding" over the last five or six years, he said.
- The HHAP funding cuts create "the risk that we could lose momentum right when we need to accelerate our successes," Mayor Todd Gloria said at his recent State of the City address, calling on the next governor to make it a permanent part of the state's budget.
- "We need to stop treating HHAP like a short term fix and instead elevate it to the dependable ongoing resource that this crisis demands," Gloria said.
Zoom in: The state allocated about $51 million to the San Diego region in the latest HHAP rollout, including about $26 million for the city.
- Bishop said San Diego welcomes new accountability measures, noting that the city meets all the requirements, including with its "pro-housing designation" based on affordable housing production, encampment policy and declining homelessness numbers.
By the numbers: Homelessness dropped nearly 7% across San Diego County and by 14% in the city in 2025, according to the annual homeless census.
- The county's homeless population was 9,905 in 2025, including 5,866 in the city.
Yes, but: Local housing officials and advocates also warn that the region could struggle to maintain its progress if it loses this state funding, on top of federal program cuts, the U-T reported.
- "We are running out of options at a rapid pace, and every intervention that people are familiar with — almost all of those are coming to an end in the next one to three years," Ryan Clumpner, a San Diego Housing Commission board member told the U-T. "And there's really no plan for what we'll do after that."
- The city is working to reduce its reliance on state funding on several fronts, including by allocating revenue from the Measure C hotel tax hike to homeless programs.
Threat level: With the anticipated reduced HHAP state funding, San Diego could potentially close at least one single adult and senior shelter (about 130 beds) and two shelters for youth (67 beds), according to Bishop.
- It could also be forced to eliminate its family reunification program (which connected about 540 individuals to housing in fiscal year 2025) and cut out diversion funding, which helps people stay out of shelters and find permanent housing, he said.
What we're watching: Gloria, Bishop and other officials from California's biggest cities are continuing to fight to secure the state money and move away year-to-year funding to make it a permanent item in the state budget.
- "If you have that certainty, you can also do things like negotiate better contracts and plan better, which also lowers costs," Bishop said. "You're getting more efficiency and accountability out of the program."