2023-102.2 Homelessness in California
San José and San Diego Must Do More to Plan and Evaluate Their Efforts to Reduce Homelessness
Published: April 9, 2024Report Number: 2023-102.2
Audit Recommendations Disclosure
When an audit is completed and a report is issued, auditees must provide the State Auditor with information regarding their progress in implementing recommendations from our reports at three intervals from the release of the report: 60 days, six months, and one year. Additionally, Senate Bill 1452 (Chapter 452, Statutes of 2006), requires auditees who have not implemented recommendations after one year, to report to us and to the Legislature why they have not implemented them or to state when they intend to implement them. Below is a listing of each recommendation the State Auditor made in the report referenced and a link to the most recent response from the auditee addressing their progress in implementing the recommendation and the State Auditor’s assessment of auditee’s response based on our review of the supporting documentation.
Recommendations to City of San José
Recommendation 1
To ensure the effectiveness of its actions to prevent and end homelessness, San José should, by September 2024, finalize the annual goals in its city implementation plan on homelessness. The city should then follow its planned schedule for updating its implementation plan goals and for publicly reporting each fall on its progress toward meeting each goal.
Status:
Fully implemented
Date of implementation:
October 2024
60-Day Agency Response
This recommendation is underway. Due to timing factors, this report will be provided to City Council in October 2024.
6-Month Agency Response
The City’s Fiscal Year 2023-2024 Consolidated Annual Homelessness Report and the Annual Implementation Plan Update have been completed. This finalizes the City’s Fiscal Year 2024-2025 homelessness response annual goals. City staff will present the report to the City Council Neighborhood Services and Education Committee on October 10, 2024, and the report will be presented to the full City Council on November 5, 2024. City staff will continue publicly reporting its progress on goals and implementation annually in the fall.
Recommendation 2
To promote transparency, accountability, and effective decision‑making, San José should, by September 2024, publicly report in a single location, such as a spending plan, all of the federal and state funding it receives, as well as the local funding it allocates for reducing homelessness, including Measure E funding. It should also regularly monitor the amount of its unspent funding to ensure that it complies with any future spending deadlines and can adequately explain to the public the anticipated timing of its future spending.
Agency Response Status:
Not fully implemented
Date of Implementation:
10/31/2024
Evaluator Assessment Status:
Partially Implemented.
60-Day Agency Response
The City of San José has taken the necessary steps to implement this recommendation as evidenced in the current budget process.
Public Reasoning Behind Assessment
San Jose provided evidence showing that the city’s proposed 2024-25 budget included detail on the major components of the Housing Department and Parks, Recreation and Neighborhood Services Department’s budgets related to homelessness. However, it has not yet addressed all aspects of the recommendation, including publicly reporting on homelessness-related spending by funding source and the amounts of unspent funds. The city indicated to our office that it is working to provide additional detail on the Public Works Department’s homelessness-related spending. It also indicated that it intends to create a budget Appendix showing the spending on homelessness services by department, program, and funding source. This appendix would include a summary of unspent funding. We look forward to reviewing any additional documents as part of our review of the city’s six month response.
6-Month Agency Response
The City’s Fiscal Year 2024-2025 Adopted Operating Budget includes the “Homelessness Budget Fiscal Year 2024-2025 Funding Allocation” as an appendix document. This appendix provides a structural overview of homelessness programs within the City’s Neighborhood Services City Service Area across departments, core services, and budget programs. The budget breakdown of homelessness spending is provided in three ways:
1) High-level spending categories,
2) By department and budget program, and
3) By fund and budget program.
Each budgetary breakdown includes the amount of funding received but not yet spent. In subsequent years, the City’s Administration anticipates including expenditure actuals, which is not practical for this cycle since many new programs were established in Fiscal Year 2024-2025.
Following this submission, a supportive document (the appendix described in the response above) will be emailed to Chris Paparian, the California State Auditor’s staff member.
Public reasoning behind assessment
The city provided evidence that its 2024-25 budget includes detail on the amounts that the city has budgeted for homelessness programs in 2024-25 and the overall amount of unspent funding. However, the city has not yet provided evidence showing how much of the city’s budget came from each Federal, State, and Local source, or how much of unspent funding remains from each source.
Recommendation 3
To ensure that it effectively and transparently spends its funding to prevent and end homelessness, San José should do the following:
- Ensure that when it renews or enters into new agreements with service providers, it establishes clearly defined performance measures.
- Require that beginning by September 2024, staff at least annually document an overall performance review and assessment of the effectiveness of each service provider based on the performance measures in the agreement and other expectations that San José has set.
Agency Response Status:
Not fully implemented
Date of Implementation:
8/30/2025
Evaluator Assessment Status:
Pending
60-Day Agency Response
This work is in process. The Housing Department Grants Management Team has implemented a pre/post-assessment process. Additionally, the Housing Department is reviewing neighboring jurisdictions’ practices and proactively contracted with an outside firm, The PUN Group, LLP, in February 2022 to train staff and complete contract monitoring. As of spring 2024, The PUN Group, LLP, is also conducting pre- and post-risk assessments, which will be an ongoing practice. (Pre-risk assessments are completed at the start of all agreements. Post-risk assessments at the end of the agreements.) The Housing Department will also begin implementing site visitation and monitoring to ensure service provider compliance and efficient and effective delivery of services in accordance with the performance metrics to be included in each service provider contract.
6-Month Agency Response
Operationalizing New Standard Practices
The Housing Department’s Grants Management staff established a new standard practice under the Housing Department’s new implementation strategy by operationalizing a pre- and post-award risk assessment process, which will be conducted for all future service agreements.
As of date, Grants Management staff have completed pre-award risk assessments for all new service agreements for Fiscal Year 2024-2025.
Grants Management staff will continue their practice of conducting annual performance reviews and assessments by early August for service agreements that end on June 30 and within 60 calendar days for service agreements that do not start/end based on the fiscal year cycle.
Learning from Neighboring Jurisdictions’ Practices
The Housing Department is a member of a Community Development Block Grant Coordinators Working Group led by the County of Santa Clara’s Office of Supportive Housing, which convenes neighboring jurisdictions monthly to share information and discuss housing and funding topics. Grants Management staff will maintain their membership in this working group to foster strengthened collaboration and shared learning opportunities.
Compliance and Monitoring Team
Grants Management is creating an internal Compliance and Monitoring team to conduct all monitoring activities, analyze all risk assessments, and review all quarterly reports submitted for service agreements.
Quarterly Performance Review of Service Agreements
The Grants Management team and the Homelessness Response Division’s internal data team will review and analyze quarterly (based on the fiscal year calendar) performance review reports from grantees to monitor service providers’ progress toward meeting their performance goals and ensure the timeliness and accuracy of data reporting in accordance with Assembly Bill 977.
Recommendation 4
To better assist people experiencing unsheltered homelessness, San José should, by September 2024, develop performance measures to evaluate the effects of the city’s public health and safety programs related to unsheltered homelessness listed in Table 6. An example of such a performance measure is a reduction in the number of public health incidents occurring at encampments. San José should publicly report on the effects of its actions in its annual homelessness report.
Agency Response Status:
Not fully implemented
Date of Implementation:
3/9/2025
Evaluator Assessment Status:
Partially implemented
60-Day Agency Response
As noted in the City of San José’s Response Letter to the State homeless audit, the City of San José has already established trash and other services to support people with basic needs. While there may be general health benefits, the programs, though not designed as public health and safety interventions, have a clear impact on public health and safety. As noted previously, the added cost burden of developing performance measures and an evaluation model for such interventions (if possible) would take away from resources to provide these much-needed services.
As to safety, the City of San José provides public safety services to all people who reside within the city limits without regard to whether a person has a home or is experiencing unsheltered homelessness. While the City of San José is in the process of evaluating how to increase safety in a variety of settings, there is not currently a “public safety program” focused solely on people experiencing unsheltered homelessness, and therefore, there is no additional update for this recommendation.
Public Reasoning Behind Assessment
The city claimed that it fully implemented the recommendation. However, the city appears to indicate in its response to the recommendation that it will not take steps to implement the recommendation. We stand by our recommendation and look forward to the city’s response at six months.
6-Month Agency Response
The City’s Fiscal Year 2023-2024 Annual Homelessness Implementation Plan Update report provides updated outcome goals for the City’s BeautifySJ Encampment Management Program, which provides critical services to unsheltered residents, including trash and biowaste services, clean-ups, and abatements. City staff will present the report to the City Council Neighborhood Services and Education Committee on October 10, 2024, and the report will be presented to the full City Council on November 5, 2024. City staff will continue publicly reporting its progress on goals and implementation annually in the fall.
Additionally, the City is collaborating with the County of Santa Clara, including the County’s Public Health Department, to strengthen coordination related to unsheltered homelessness, similar to the cross-agency collaboration and coordination conducted for the Shigella public health outbreak.
Public Reasoning Behind Assessment
The city provided evidence showing that it has created certain performance measures related to certain health and safety programs, as described in its response.
Additionally, the City is collaborating with the County of Santa Clara, including the County’s Public Health Department, to strengthen coordination related to unsheltered homelessness, similar to the cross-agency collaboration and coordination conducted for the Shigella public health outbreak.
Recommendation 5
To ensure that it equitably provides homelessness services to all demographics, San José should immediately begin requesting monthly citywide demographic data from the county of Santa Clara to determine which demographic groups are overrepresented among people who are experiencing homelessness and which groups are underserved by specific program types. San José should take actions as needed to address demographic disparities, such as performing additional outreach or other appropriate actions to meet the needs of underserved groups.
Status:
Not fully implemented
Date of implementation:
3/29/2025
Evaluator assessment status:
Pending
60-Day Agency Response
This work is in process. We will begin requesting a monthly data draw from the County of Santa Clara on August 1, 2024, and will use the Housing Department’s Racial Equity Impact Team will coordinate with the Homelessness Response and Policy Divisions on actions, policies, and programming deliverables to address any disparities uncovered in our data to improve outcomes for historically impacted communities.
6-Month Agency Response
In early September 2024, the City coordinated with the County of Santa Clara’s Office of Supportive Housing to obtain regular data reporting on homeless resident demographics. The coordination of this data review and analysis has been added to the Housing Department’s Social and Racial Equity Work Plan, and City staff will align the data review cycle with the Grants Management team’s quarterly (based on the fiscal year calendar) performance review of service agreements. The Housing Department’s Policy and Compliance Division will support the Homelessness Response Division in conducting this data review and analysis consistent with the City’s 2023-2031 Housing Element’s H-10 strategy, “Racial and Other Bias of Protected Classes in Homeless Shelter and Supportive Housing Systems,” which overlaps with this State homelessness audit recommendation regarding obtaining and analyzing data to research and address any potential findings of demographic disparities in residents experiencing homelessness that are being served by different housing options. This is ongoing work, effective immediately in light of the State homelessness audit, the execution of the Housing element, and our collaboration with the County of Santa Clara.
Public Reasoning Behind Assessment
The city provided us with an example of the data on demographics it is receiving from the County of Santa Clara. These data show the demographics of people experiencing homelessness, but do not include information on the demographics of people served by specific program types. Without that level of detail, the city will not be able to identify which groups are underserved by specific program types.
Recommendation 6
By September 2024, San José should develop goals for contributing to the building of permanent housing for people experiencing homelessness that align with its implementation plan for meeting the goals of its CoC’s action plan. By the same date, the city should also formally adopt a policy for identifying and approving suitable locations for interim housing. In addition, it should develop plans for meeting its goal of having one interim housing facility in each city council district, likely by pursuing the construction of interim housing at the additional locations it has already identified.
Status:
Not fully implemented
Date of Implementation:
7/31/2025
Evaluator assessment status:
Pending
60-Day Agency Response
This is in process. As a part of the mission and implementation of the City of San José’s Housing Element Plan, as adopted by the Mayor and City Council, and the City’s Implementation Plan of the Community Plan to End Homelessness, the Housing Department has developed and implemented production plans annually. Through its various policies and programs, the City of San José continues to support the development of various new permanent supportive housing and rehabilitation of housing for extremely low-, very low- and low-income individuals and families as further memorialized in the City’s upcoming Fiscal Year 2024-2025 Operating and Capital Budget. In addition, the City of San José will continue to examine opportunities to geographically invest in emergency interim housing solutions throughout San José, in alignment with its stated goals.
6-Month Agency Response
The City is focused on delivering 1,089 units of safe parking, supportive outdoor sleeping, and emergency interim housing by July 31, 2025. In addition to this targeted work, the City is creating 1,600 units of permanent supportive housing in partnership with the Santa Clara Housing Authority and County of Santa Clara’s Office of Supportive Housing, with 40% of the City’s Measure E funds helping solidify funding allocations for extremely low-income residents. Furthermore, the City will strengthen its strategic approach to reaching our housing goals by developing updated underwriting guidelines in collaboration with our Santa Clara County partners.
Recommendation 7
San José should immediately begin monitoring the utilization data from its interim housing facilities and ensure that the data are complete and accurate. The city should take necessary action to remedy any issues it identifies.
Agency Response Status:
Not fully implemented
Date of Implementation:
7/31/2025
Evaluator Assessment Status:
Pending
60-Day Agency Response
This is in process. The Housing Department tracks utilization through the Homeless Management Information System and comprehensive data gathering and analysis from the contracted service providers. In order to ensure that the data is complete and accurate, the City of San José started implementing comprehensive data analytics and exploring additional systems and tools needed to enhance data collection and analytics.
Public Reasoning Behind Assessment
The city provided documentation that it has begun the process of monitoring utilization rates at its interim housing facilities.
6-Month Agency Response
The Homelessness Response Division currently tracks utilization rates of emergency interim housing units on a weekly basis; however, staff are continuing to explore options to develop an additional data module that directly integrates with the County’s HMIS database system to increase efficiency and reduce the administrative burden of tracking this information across several data module tools.
Staff have started developing data-tracking tools and mechanisms to increase the frequency of tracking utilization rates from weekly to daily and capture occupancy and unit turnover rates. Additional time is required for further research, development, and integration.
Recommendations to City of San Diego
Recommendation 8
To promote transparency, accountability, and effective decision‑making, San Diego should, by September 2024, publicly report in a single location, such as a spending plan, all of the federal and state funding it receives and the local funding it allocates for reducing homelessness. It should also regularly monitor the amount of its unspent funding to ensure that it complies with any future spending deadlines and can adequately explain to the public the anticipated timing of its future spending.
Agency Response Status:
Fully implemented
Date of implementation:
October 2024
Evaluator Assessment Status:
Fully implemented
60-Day Agency Response
This recommendation has been implemented with a comprehensive spending plan on homelessness by department and funding source documented in the Fiscal Year 2025 proposed Budget Volume 1, which can be found on pages 44- 50. This document will be updated in the Approved Budget Volume 1, based on the final budget passage approved by the San Diego City Council in June. This document is transparently located on the City’s website, sandiego.gov/finance/proposed. Additionally, this spending plan is monitored on a quarterly basis as part of the City’s quarterly budget monitoring process. Through this process the Homelessness Strategies and Solutions Department (HSSD) provides a memorandum to the City Council to highlight any variances in homelessness programming and funding sources. Each department is responsible for preparing and providing their department’s budget monitoring, which is consolidated by the Department of Finance and presented to Council on a quarterly basis.
Public Reasoning Behind Assessment
The city’s 2025 budget is publicly available and includes budgeted expenditures of state, federal, and local funding. However, it does not provide information about the amounts of unspent funding. For example, the 2025 budget identifies HHAP spending and the amount of HHAP funding received by the city, but does not identify the amount of unspent HHAP funds that the city has.
6-Month Agency Response
This recommendation has been implemented with two actions: 1) a comprehensive spending plan on homelessness by department and funding source has been documented in the Fiscal Year 2025 Adopted Budget Volume 1, which can be found In the Citywide Overview on pages 46- 52. This document is transparently located on the City’s website, sandiego.gov/finance/adopted. 2) this spending plan is monitored on a quarterly basis as part of the City’s quarterly budget monitoring process. Through this process the Homelessness Strategies and Solutions Department (HSSD) provides a memorandum to the City Council to highlight any variances in homelessness programming and funding sources. In response to this audit recommendation the City incorporated a table in the year end performance memo which highlighted the balance of grant funds remaining in each multi-year grant fund. This memo and year-end report has been released on October 9th, 2024 by the Department of finance. Each department is responsible for preparing and providing their department’s budget monitoring, which is consolidated by the Department of Finance and presented to Council on a quarterly basis including in the year-end performance report.
Recommendation 9
To ensure that it effectively and transparently spends its funding to prevent and end homelessness, the city should do the following:
- Ensure that when it renews or enters into new agreements with service providers, it establishes clearly defined performance measures.
- Require that beginning by September 2024, staff at least annually document an overall performance review and assessment of the effectiveness of each service provider based on the performance measures in the agreement and other expectations that San Diego has set.
Status:
Partially implemented
Date of Implementation:
11/30/2025
Evaluator assessment status:
Partially implemented
60-Day Agency Response
This recommendation is in progress. HSSD is reviewing and assessing outcome measures that would be appropriate for agreements with service providers. Outcome data for fiscal year 2024 will be utilized to inform outcome measures for fiscal year 2025 and will collaborate with the San Diego Housing Commission to ensure measures that can be tracked are incorporated into each agreement.
Annual performance reviews and assessments are currently in progress. In fiscal year 2023, HSSD added new positions with the specific function of performance monitoring. These positions have been filled and formal documentation efforts for tracking operator performance are already underway. Additionally, one additional vacant position is in the process of being filled which will oversee data and analysis of performance more broadly across programs in the system. The new position will be responsible for tracking program data on a monthly basis, analyzing trends, and providing recommendations on how to improve program activities and outcomes, as necessary. It is anticipated this position will be filled by fall of 2024.
6-Month Agency Response
This recommendation is in progress.
HSSD has reviewed and assessed outcome measures that would be appropriate for agreements with service providers. Outcome data for fiscal year 2024 was utilized to inform outcome measures for fiscal year 2025 and works with the San Diego Housing Commission to ensure measure outcomes are tracked are incorporated into each agreement.
An annual performance reviews of all contract outcomes for all contracts was performed in September 2024, with a assessment of effectiveness based on outcomes currently underway, to be completed this fall. These outcomes are also tracked on a monthly basis and reviewed with program operators on a quarterly basis.
Public Reasoning Behind Assessment
The city provided an example of a contract with updated performance measures that were clearly defined. Recommendation will remain partially implemented until the city provides evidence an overall performance review and assessment of the effectiveness of its service providers.
Recommendation 10
To better assist people experiencing unsheltered homelessness, San Diego should, by September 2024, develop performance measures to evaluate the effects of the city’s public health and safety programs related to unsheltered homelessness listed in Table 7. An example of such a performance measure is a reduction in the number of public health incidents occurring at encampments. San Diego should publicly report on the effects of its actions.
Agency Response Status:
Will not implement
Evaluator Assessment Status:
Will not implement
60-Day Agency Response
Will not implement. The County of San Diego is lead on public health matters for the region.
The City’s contracts related to services for individuals experiencing unsheltered homelessness do include performance measures that are reported on to the Homelessness Strategies and Solutions Department. While specific targets for each measure have not been identified, the data for each performance measure is tracked to understand the effectiveness of City-funded programs and where there may be areas to increase support or make programmatic improvements. The department has also included Key Performance Indicators in the fiscal year 2024 Adopted Budget which includes metrics related to outreach strategies. Moreover, the department has amended its Key Performance Indicators in the proposed fiscal year 2025 budget to include metrics on shelters, safe parking, and safe sleeping, in addition to outreach services.
Additionally, starting in Fiscal Year 2025, the Environmental Services Department will use the following Key Performance Indicator for its Sidewalk Sanitizing program:
- Perform sidewalk sanitation services on at least 9,600 City blocks each fiscal year to reduce the potential presence of pathogens, bacteria, and communicable diseases.
6-Month Agency Response
The County of San Diego is lead on public health matters for the region.
The City’s contracts related to services for individuals experiencing unsheltered homelessness do include performance measures that are reported on to the Homelessness Strategies and Solutions Department. While specific targets for each measure have not been identified, the data for each performance measure is tracked to understand the effectiveness of City-funded programs and where there may be areas to increase support or make programmatic improvements. The department has also included Key Performance Indicators in the fiscal year 2024 Adopted Budget which includes metrics related to outreach strategies. Moreover, the department has amended its Key Performance Indicators in the proposed fiscal year 2025 budget to include metrics on shelters, safe parking, and safe sleeping, in addition to outreach services.
Additionally, starting in Fiscal Year 2025, the Environmental Services Department will use the following Key Performance Indicator for its Sidewalk Sanitizing program:
– Perform sidewalk sanitation services on at least 9,600 City blocks each fiscal year to reduce the potential presence of pathogens, bacteria, and communicable diseases.
Public Reasoning Behind Assessment
We stand by our recommendation that the city should develop performance measures to evaluate the effectiveness of the city’s programs focused on public health and safety. Although the city indicates it disagrees with the recommendation, some of the actions it describes in its response appear to align with the intent of our recommendation.
Recommendation 11
By September 2024, San Diego should develop plans for siting and building the permanent housing it has identified that it needs for people experiencing homelessness. The plans should specify the amount of funding necessary to build the housing, as well as possible funding sources.
Status:
Not fully implemented
Date of Implementation:
2026
Evaluator Assessment Status:
Pending
60-Day Agency Response
This recommendation is in progress. The City agrees that plans for siting and building permanent housing should be created, and staff are working on an Affordable Home Development Master Plan. However, due to resource constraints, the timeline for the completion of this work is projected to be in 2025 instead of by September 2024. Please note that this work may not be completed until 2026 due to delays in state funding that had previously been anticipated through the REAP 2.0 grant program. When completed, the Master Plan will provide a comprehensive plan to utilize City-owned property to develop homes for people of all incomes in all communities that are best served by transit and amenities. The Master Plan will reduce development costs and expedite housing construction on public land.
Additionally, the Master Plan will identify potential shelter sites to address the urgent need for increased shelter capacity for people experiencing homelessness. This Master Plan will expand upon the work and analysis completed in the City’s existing Comprehensive Shelter Strategy, published in June of 2023, which provided an analysis of existing sheltering options and the type and quantity of shelter beds needed in our region.
6-Month Agency Response
This recommendation is in progress. The City agrees that plans for siting and building permanent housing should be created, and staff are working on an Affordable Home Development Master Plan. However, due to resource constraints, the timeline for the completion of this work is projected to be early 2026 instead of by September 2024. Please note that this work may not be completed until 2026 due to delays in state funding that had previously been anticipated through the REAP 2.0 grant program. This funding agreement will be executed by the end of October which will enable the work to commence. When completed, the Master Plan will provide a comprehensive plan to utilize City-owned property to develop homes for people of all incomes in all communities that are best served by transit and amenities. The Master Plan will reduce development costs and expedite housing construction on public land.
Additionally, the Master Plan will identify potential shelter sites to address the urgent need for increased shelter capacity for people experiencing homelessness. This Master Plan will expand upon the work and analysis completed in the City’s existing Comprehensive Shelter Strategy, published in June of 2023, which provided an analysis of existing sheltering options and the type and quantity of shelter beds needed in our region.
