As California’s homeless population continues to grow, a new report on Project Homekey and the billions spent so far analyzes how the Newsom administration’s program is helping people at-risk and the cost to state taxpayers.
The report, Project Homekey Provides No Way Home for California’s Homeless, was released late last month by the Pacific Research Institute.
“The early results show that the state has spent billions of dollars, yet the numbers of homeless continue to rise,” co-author Wayne Winegarden, senior fellow in business and economics at PRI, said in an email response to the Northern California Record.
“Even in the 2022 homelessness survey data, 8 of 10 localities with the largest homeless populations are still seeing large increases in homeless,” Winegarden said. “Spending billions of dollars while the problem worsens argues that the ROI on the money spent has been negative.”
Winegarden noted there are some people that the program has moved off the streets, but there are many more who have not benefited long-term.
“Many homeless have cycled through the program and are back on the streets; too many have faced violence or have died from drug overdoses in Project Homekey facilities – these are terrible failures,” Winegarden said. “From the taxpayer perspective, the program is excessively costly on top of being ineffective. As a result, taxpayers are paying to address a problem but must still live with the adverse consequences from that problem. It creates a lose-lose proposition for taxpayers.”
The report explains that Project Homekey is a manifestation of the housing first philosophy for addressing homelessness.
“Housing first posits that creating a stable home is the best platform to help homeless who are suffering from mental illness or addiction -- a large share of California's homeless,” Winegarden told the Record. “The problem arises because the problems of mental illness and addiction make creating a stable home difficult. Plus, the important mental health services are not prioritized. When the excessive costs of the program are then considered, it is unsurprising that the treatment services that should be the top priority are not being adequately provided. The result that the Project Homekey programs are ineffective is unsurprising.”
Despite the record amount of dollars spent on the crisis, homeless encampments are still present in cities and towns across the state, and court action has prevented some of the efforts to clear them.
“Good intentions are often misguided and Homekey is an example of that,” co-author Kerry Jackson, a fellow with the Center for California Reform at PRI, told the Record by email. “What looks like help is often an indulgence that perpetuates whatever problem needs a solution.”
As addressed in the report, there are a number of ways state policies have failed, but none so ruinously as housing first; many homeless individuals trying to stay clean haven’t been able to because Project Homekey doesn’t prioritize addiction treatment.
“Housing first never addresses the causes of homelessness, which are primarily addictions and mental illnesses,” Jackson said. “Another way to look at it is 'housing first and nothing else.' Because that’s where it stops. Housing first also draws people from outside to what some researchers call the ‘homeless system.’ There’s a strong attraction to free permanent housing.”
The answers officials have relied on for decades are not answers but further complications; in other states, other programs have done more with less.
“California policymakers need to look outside the state for innovative programs that work, innovations that have shown success, pilot programs that have promise,” Jackson said. “The California way isn’t working.”