Will California’s Homeless Housing Strategy Change?

from Marissa KendallCalMatters

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When Gov. Gavin Newsom vetoed a bill last month who would support sober housing for the homeless, his cause has left many scratching their heads.

Newsom said Assembly Bill 255which would have allowed cities to use up to 10% of their state funds to pay for “recovery housing,” was unnecessary. This is because the use of government funds for a sober home is already permitted, said the governor. He said the “latest guidance” made that clear.

That came as a big surprise to Assemblyman Matt Haney, who had spent the past two years working on the bill, which Newsom said has been controversial all along. Haney was under the impression that California “first home” A rule — which dictates that homelessness programs offer housing to people regardless of their sobriety, mental health, employment, etc. — meant that sober housing was ineligible for government funds.

When CalMatters asked about the “latest guidelines” allowing the state to fund sober housing, the governor’s office sent a link to 20 page document. No one CalMatters spoke with had seen this document before. Neither did Haney, anyone in his office or the other stakeholders involved in his bill, including the service providers trying to build more sober housing, he said.

Although the document was dated July 2025, it was not posted online until October 2, the day after Newsom’s veto.

“I think it’s a terrible bureaucratic failure,” Haney said of the lack of communication. Having the state and legislature work together rather than on separate, parallel policies would save everyone time and resources, he said.

“Why didn’t anyone say anything for two years,” Haney asked, “not just to me, but to the cities and counties and providers who were desperate to open these beds?”

The California Interagency Council on Homelessness, which has been working on the document since late 2024, accused Haney’s office of not reaching out. A preliminary draft was publicly available earlier this year as part of a February council meeting, Executive Director Megan Marshall said.

The new sober housing guidelines come as the state faces political pressure from some quarters to change its approach to homeless housing — both to embrace drug-free housing and to shift at least some of its focus from permanent housing that accepts anyone to temporary shelter that can come with conditions.

A group of lawmakers, city housing officials and nonprofits recently took a trip to San Antonio, Texas, to tour a massive homeless shelter there and came back with ideas on how to increase shelter capacity in California — which some on the trip said had been overlooked as a casualty of California’s strict preference for long-term housing. Meanwhile, President Donald Trump’s administration has signaled that it will transfer the federal money from permanent housing and into temporary shelter while imposing conditions such as sobriety. California may have to join this program or risk losing federal funds.

Although few California Democrats support anything Trump does, the continued proliferation of street encampments has convinced some that the state needs to change its tactics.

“We need to break the logjam of dogma that says only permanent housing is acceptable,” the senator said. Katherine BlakespearDemocrat from Encinitas. “Because what we’re de facto saying is that people are going to stay on the street until we build enough permanent housing or market-rate housing, and neither of those are going to meet the need anywhere in the near future.”

But that pressure has some service providers worried that in an environment where homelessness funding continues to cutfocusing on sober housing and transitional housing will mean less money for permanent housing that ends homelessness for people.

“The current trend is moving away from solving actual homelessness and focusing on the issues that are relevant to some people,” said Jennifer Loving, CEO of Destination Home.

The sober, temporary, or permanent housing debate does not address the underlying income inequality that causes many Californians to become homeless in the first place and prevents them from being able to afford housing afterward.

The sober housing deal

Since 2016, California has required state-funded homeless housing to be “housing first,” meaning people will be placed in a permanent home as quickly as possible without forcing them to jump through extra hoops. The idea is that once someone is safely housed, it becomes much easier for them to get sober, get a job, or take care of other issues.

Haney argued that the model has prevented the state from funding sober housing, which he says can be a lifesaver for people who are overcoming addiction and don’t want to live next door to drug-using neighbors.

New state guidelines say sober living can be a first home if done right. It must be the client’s choice to get sober and live in recovery housing, and there must be other local options that do not require sobriety. Also, sober housing providers cannot evict someone for recidivism. If a client decides they no longer want to live in sober living, the provider must connect them to another housing option.

The guidelines are more permissive than Haney’s account. Although the bill would cap state funding for sober housing at 10 percent, state guidelines have no cap. But Haney worries it’s too strict in other ways. If housing providers can’t evict someone for drug or alcohol use, they can’t effectively run sober housing, Haney said.

“There are some questions about whether anyone will actually step up and do this under the guidelines as written,” he said.

State guidelines come without money to open new sober living beds.

Without additional funding, as more money goes to sober housing, that means less money for low-barrier housing, said Loving, who worries the change will set the state back. Sober homes and drug testing were the norm in the 1980s and 1990s, but people still overdosed in those environments, she said.

“Drugs were always there, even in a sober environment,” Loving said. “And that didn’t increase our housing outcomes. What increased our housing outcomes was having actual houses for people to move into.”

Temporary or permanent housing?

Several dozen California lawmakers, city housing workers and nonprofit providers traveled to Texas last month to visit a massive homeless shelter in San Antonio. Shelter for Hope houses about 1,500 people on a 22-acre campus — meaning almost anyone in the city who wants to can sleep indoors. Most of these people must remain sober to keep their place, and health care, counseling and other services are available on site.

This program is a stark contrast to the “disheartening results” of California’s homelessness strategy, they said Senator Dave CorteseDemocrat from San Jose who went on the trip. He is frustrated by what he sees as neglect of the temporary shelter in California. New programs like Newsom’s Homekey only finance permanent housing. So did Santa Clara County’s Measure A affordable housing bond.

Long-term housing is the only way to resolve someone’s homelessness, which is why it’s the gold standard in the state. But construction can take years, and voters aren’t always patient.

“If you push all your chips toward the middle of the table on permanent supportive housing, you start losing your constituents because the constituents come in their cars every day and see more tents and more illegal encampments,” Cortese said. “And their thought process is, ‘I thought we just put a billion dollars into ending homelessness. What’s going on? Why is it getting worse?”

Land is scarce and expensive in California, which would make it difficult to replicate a shelter as large as Haven for Hope. But city staff in San Jose are looking into whether some version of it could be done there, said Housing Director Eric Sullivan, who was on a trip to Texas.

While it may seem unusual for the Golden State to turn to Texas for advice on social services, Californians have admired Haven for Hope for years. CalMatters wrote about the phenomenon in 2023

The Texas shelter has made some changes since then. About 1,600 people slept in the shelter in 2023, and the facility served 85% of the city’s homeless population.

But even this gigantic facility could not accommodate everyone. The space was overcrowded, with hundreds of people sleeping on the floor on mats inches apart. Haven for Hope had to pause enrollments and institute new rules to limit who could enter. In the last fiscal year, the population dropped to an average of 1,453 people per night. About 60% of them are in a program that regularly conducts drug and drug testing.

California will have to do more to adopt this style of shelter if it doesn’t want to be left behind by the federal administration, said Elizabeth Funk, founder and CEO of shelter provider DignityMoves, who went on the Texas trip.

The Trump administration looks poised to divert money from permanent housing to temporary housing that comes with sobriety and other requirements. But we won’t know the extent of that change until the government shutdown ends.

“The federal government is going to spend a bunch of money on things that don’t allow drug use,” Funk said, “and that has to fit into our system.”

This article was originally published on CalMatters and is republished under Creative Commons Attribution-NonCommercial-No Derivatives license.