Folsom resident, Assemblyman Josh Hoover continues push for spending oversight, accountability
As California continues its battle against homelessness, a new report from the Legislative Analyst’s Office (LAO) raises major concerns locally and abroad about the state’s $900 million Encampment Resolution Funding (ERF) program, citing a lack of transparency, measurable outcomes, and delays in spending.
Despite billions of dollars allocated in recent years to housing and homelessness initiatives, the number of people experiencing homelessness has reached record highs, and there is little evidence to show that these funds have made a meaningful impact.
With an additional $100 million proposed in Governor Gavin Newsom’s 2025-26 budget for a fifth round of ERF funding, the LAO is urging lawmakers to pause further spending until the state can demonstrate that the program is achieving its goals. The report highlights that while California has funneled billions into various homelessness programs, roughly 70% of ERF funds remain unspent, and no data has been provided on whether the program is effectively transitioning individuals from encampments into permanent housing.
“Governor Newsom and the Supermajority have now spent $37 billion taxpayer dollars on homelessness over the past 6 years 2019,” said Folsom resident and California District 7 Assemblyman Josh Hoover, who has been vocal about the need for oversight of the state’ homeless spending. “California’s homeless population was just over 151,000. Today it is 187,000.”
California has the highest homeless population in the country, and the numbers continue to surge. In January 2024, the state’s point-in-time count recorded 187,000 individuals experiencing homelessness, a 24% increase since 2019 and the highest number ever recorded. Nearly two-thirds of these individuals were unsheltered, living in places such as sidewalks, freeway underpasses, and parks.
However, experts continue to suggest that even this figure is an undercount. The Homeless Data Integration System (HDIS), managed by the California Interagency Council on Homelessness (Cal ICH), tracks individuals who receive homelessness services. In 2023 alone, 337,000 people were recorded as experiencing homelessness, a number that had already reached 310,000 by September 2024. These statistics suggest that the total number of people affected by homelessness throughout the year is significantly larger than single-day counts suggest.
Since 2019-20, California has dedicated roughly $37 billion to housing and homelessness programs, a mix of state General Fund allocations, special funds, voter-approved bonds, and federal dollars. The Department of Housing and Community Development (HCD) and Cal ICH have been the primary recipients of these funds, with broad mandates to create affordable housing and support individuals at risk of or currently experiencing homelessness. However, despite this historic level of investment, the number of people without housing has continued to climb.
The LAO report indicates that while California has dramatically increased its financial commitments, there is little accountability in tracking how effectively these funds are being used. The ERF program, which has received nearly $1 billion over four rounds of funding, is a key example of how state money is being allocated without clear metrics for success.
The Encampment Resolution Funding (ERF) program was created in 2021-22 as a targeted effort to assist local governments in resolving homeless encampments and transitioning individuals into housing. Unlike traditional encampment sweeps, where individuals are simply removed from public spaces without long-term solutions, ERF aims to provide resources such as outreach services, case management, emergency shelter, and permanent housing options.
Since its inception, the program has undergone four funding rounds. In 2021-22, the state allocated $50 million to the program, followed by an additional $300 million in 2022-23, $400 million in 2023-24, and $150 million in 2024-25. An additional $100 million is proposed in the 2025-26 budget, which would bring the program’s total funding to $1 billion over five years. However, the LAO report warns that there is still no clear data on whether the program is working.
ERF Spending: $600 Million Remains Unspent
Despite its large budget, the ERF program has struggled to spend its allocated funds. The LAO report found that as of December 31, 2024, grantees had spent only $258 million out of the $856 million awarded, leaving 69.9% of the funds unspent. Much of the funding that has been used has gone toward interim sheltering solutions, rather than permanent housing. The slow pace of spending raises questions about whether local jurisdictions have the capacity to effectively use ERF grants or whether the program’s design is contributing to bottlenecks in implementation.
Lack of Data: Little Evidence of Program Success
Although ERF was designed to transition people into housing, there is no publicly available data on how many people have successfully exited homelessness through the program. The LAO report highlights that while ERF grantees collectively set a goal of transitioning 20,000 individuals into housing, the state has not provided any information on whether those placements have occurred. Furthermore, there is no data on how many encampments have been fully resolved through ERF grants.
To address this transparency gap, HCD has announced plans to launch a new public dashboard to track program progress. However, the agency has not provided a timeline for when this dashboard will be available, leaving lawmakers and the public in the dark about the effectiveness of the program.
LAO Recommendations: Delay Further Funding Until More Data Is Available
Given the lack of clear evidence that ERF is meeting its goals, the LAO is recommending that lawmakers hold off on approving the Governor’s proposed $100 million expansion until the state provides more comprehensive reporting on the program’s impact. The Legislature is expected to receive grantee reports by April 2025, which could offer more insights into ERF outcomes. Until then, the LAO suggests using spring budget hearings to press state agencies for updates on program performance and the forthcoming data dashboard.
Despite the concerns outlined in the LAO report, the state continues to distribute ERF funds. In February 2025, a $3.2 million grant was awarded to the Merced City and County Continuum of Care to address homelessness in the City of Atwater. The grant will fund outreach services, interim housing, housing navigation, and rental assistance. While local officials have praised the funding, it remains unclear whether the initiative will lead to long-term housing solutions.
As lawmakers weigh Governor Newsom’s $100 million expansion request, they face a critical question: should California continue pouring money into programs without proven results, or should it demand greater accountability before allocating additional resources?
Hoover, like others, isn’t pleased with the findings that have come out in the latest report. In a conversation with Folsom Times he shared that he is introducing a new bill to be considered to address the topic in a different way than the previous bipartisan legislation he authored last year that was vetoed by Newsom.
“I have introduced AB 1432 that will be in print in the next few weeks. It gets at two of the most important barriers on homelessness,” said Hoover.
“First, a lack of accountability over spending. This year our bill will require nonprofits at the local level that receive state funding to report back to local and state governments on the outcomes of their programs, Hoover explained. “Second, it provides more flexibility outside of California’s “housing first” limitations and would allow state funding for local programs that require sobriety programs as a prerequisite for participation. Those programs currently do not qualify for state funding, which is one of the key reasons a lot of the state’s spending isn’t working.”
The debate over ERF funding is part of a larger conversation about whether California’s approach to homelessness is working. The state has invested tens of billions of dollars in housing and homelessness programs, yet the number of people experiencing homelessness continues to grow. The lack of clear outcomes from the ERF program only adds to concerns that state funds are not being effectively utilized.
To gain a deeper understanding of California’s Encampment Resolution Funding program and the Legislative Analyst’s Office findings, readers can access the full report at https://lao.ca.gov/Publications/Report/5007.
