More than 70 people crowded into the Board of Supervisors’ chamber at San Francisco City Hall on Wednesday afternoon, with many asking the city to spend more money on long-term housing for low-income residents.
At a Budget and Appropriations Committee hearing, supervisors Chyanne Chen, Shamann Walton and Connie Chan grilled officials from the Department of Homelessness and Supportive Housing and the Mayor’s Budget Office about the department’s proposed budget, loss of emergency housing vouchers and shelter beds, and plans regarding funding for long-term rental subsidies.
The city is facing uncertainty regarding potential federal and state funding cuts and reports that San Francisco plans to close some permanent supportive housing sites. In mid-February, Mayor Daniel Lurie directed the Department of Homelessness and Supportive Housing to reduce its general fund spending by $4 million to free up unrestricted money for other departments. His office instead asked the department to supplement its budget with funds from Proposition C, a 2018 voter-approved business tax that sets aside funding for combating homelessness.
This use may not be in line with the spirit of the tax. “Prop C was really intended to expand the system, not compensate for issues on the general fund,” Gigi Whitley, the department’s chief of finance and administration, said at a Feb. 13 meeting of the Homelessness Oversight Commission.
The Department of Homelessness and Supportive Housing’s adopted budget for fiscal year 2025-2026 was $785.6 million. The department has requested $728 million for FY 2026-2027, and an additional $709.6 million the following year. These figures do not account for the general fund reduction.
City officials said the proposed budget reductions were not meant to cut services and that their focus was on “strengthening and right sizing the housing portfolio to improve outcomes for tenants,” said Shireen McSpadden, executive director of the department. That means targeting long-term housing subsidies to specific populations, improving service models, supporting tenant stability and creating more voluntary pathways for people to move on when they’re ready, she said.
District 10 Supervisor Shamann Walton and District 1 Supervisor Connie Chan pointed out that the city is expecting a surplus of revenue from Proposition C and suggested using those funds to increase services. The city is anticipating a $68 million surplus for this fiscal year.
“Less dollars lead to less services,” Walton said. “And that’s problematic when there is a surplus and resources from Prop C.”
Responding to questions from supervisors, Sophia Kittler, the mayor’s budget director, said the mayor’s office would probably spend more Proposition C money than the department had submitted in its proposal, but added that the city still faced “a general fund crisis, and so we are still hoping that we will reduce the general fund support in the department.”
The mayor’s budget proposal is due June 1.
Uncertain long-term housing funding
The hearing began with advocates, nonprofit leaders and researchers stressing the importance of permanent supportive housing and long-term rental subsidies that help people exit homelessness.
“Our research shows that PSH helps people successfully leave long episodes of homelessness, build stability and get the support that they need to thrive,” said Ryan Finnigan, deputy director of Research for the Terner Center for Housing Innovation, using an acronym to refer to permanent supportive housing. “Many PSH properties face a shortage of operating funding, however, which contributes to poor outcomes for residents, staff and for properties.”
Chaotic changes to federal funding and executive orders affecting permanent supportive housing and emergency vouchers have made once-stable living situations uncertain for thousands of tenants in San Francisco who rely on them.
Federal funding for an emergency housing voucher program is set to run out at the end of this year and the Trump administration has no plan to backfill it. People who rely on that funding for housing spoke about their experiences and called on the city to allocate $39 million of the $400 million that it had set aside to use in the event of federal cuts.
Ms. Zhen, a single mother of two children who earns about $1,200 a month, said receiving an emergency housing voucher in 2022 changed her life: “We finally had a more stable and safe place to live. I felt a little bit lighter. I could start learning English and work on improving myself. I also want to build a better future for my children.”
But since hearing that her voucher might end, she said she has been worried and scared every day.
“I don’t know where the three of us will go when the time comes,” she said. “The truth is, without help, low-income immigrant families like ours may become homeless again.”
Asked about backfilling funding for the vouchers, Kittler said, “I candidly have not thought about this specific issue myself in a few weeks.”
“I’m not sure where we sit right now,” she said, “but it is a priority to keep people housed.”
The Trump administration also proposed major changes to the way municipalities apply for federal homelessness funding, including caps on what percent of funds could go toward permanent supportive housing. Congress stepped in to raise the cap for these programs, but it remains much lower than the percent of funding allocated in previous years.
Meanwhile, California has reduced funding for its Homeless Housing, Assistance and Prevention program from $1 billion last year, to $500 million this year, and city officials said they do not yet know San Francisco’s allocations.
Advocates and service providers also said the city should fully fund the annual cost of doing business increases for community-based organizations and leverage healthcare funding from sources such as Medi-Cal for supportive services.
“We face difficult choices this year, but these choices represent opportunities to make positive impacts that will be felt for years to come,” said Colleen Rivecca, director of policy and planning and community organizing at the Tenderloin Neighborhood Development Corporation. “Investments and solutions are more cost effective than using our jails, emergency rooms and emergency systems as our homelessness response. Permanent supportive housing can provide the stability and cost savings in the long run, but only if it’s sufficiently resourced.”
