California spent $24 billion on Homelessness. The Streets Look the Same

Despite continued expenditures by Sacramento, California has not achieved meaningful progress in addressing homelessness. Meanwhile, the allocation and use of funds remain opaque.

Over the past five years, California deployed more than $24 billion in state funds to address homelessness. The result: roughly 187,000 residents are still without shelter, the state still holds a quarter of the entire nation’s homeless population despite accounting for only 11 percent of its people, and not one agency in Sacramento can tell you, with confidence, where all that money went. That is not a metaphor. That is the documented conclusion of multiple state and federal audits.

In April 2024, a bipartisan team of California lawmakers ‚Äî senators from both parties ‚Äî requested an independent audit of homelessness spending. What the California State Auditor found was damning. The state had stopped tracking homelessness funding outcomes after 2021 and had no plans to resume. Enrollment databases contained fictitious client names. Billions were distributed to local governments with little accountability and no consistent performance metrics. In San Jose, an $8 million contract was renewed based on inflated data that overstated the program’s effectiveness. In San Diego, city officials simply didn’t track where the funds went.

In August 2024, a separate federal audit from the U.S. Department of Housing and Urban Development gave California’s Department of Housing and Community Development its lowest possible rating for fraud prevention, finding that $319.5 million in pandemic-era Emergency Solutions Grant funds had been left exposed due to what auditors called “disorganized” and “chaotic” anti-fraud policies. The agency failed to meet basic requirements for assessing fraud risk, detecting abuse, or responding to potential theft.

None of this is abstract.

In Los Angeles, a 2025 court-ordered audit by Alvarez & Marsal found that the LA Homeless Services Authority ‚Äî LAHSA, the joint city-county agency that served as the primary conduit for homelessness dollars across the region ‚Äî failed to properly track $2.3 billion in spending across a four-year period. The audit described “poor data quality,” “disjointed” service delivery, and a wholesale failure to monitor vendor contracts. In January 2026, a nonprofit contractor, Alexander Soofer, was arrested on charges of funneling $23 million in homeless service funds for personal use through an organization called Abundant Blessings. Federal prosecutors with the U.S. Attorney’s Office for the Central District of California have since formed a dedicated Homelessness Fraud and Corruption Task Force ‚Äî staffed by FBI agents, IRS Criminal Investigation, and HUD Inspector General staff ‚Äî to investigate what the U.S. Attorney called fraud, waste, abuse, and corruption across a seven-county footprint serving 20 million Californians.

This is what a broken system looks like from the inside.

Governor Newsom, who spent years publicly championing his administration’s homelessness response, proposed zeroing out the state’s primary homelessness fund ‚Äî the Homeless Housing, Assistance and Prevention program, or HHAP ‚Äî entirely in his January 2026 budget. After pressure from mayors and county officials, the Legislature floated restoring $500 million in the 2026-27 fiscal year. That would still represent a 50 percent cut from prior levels. No General Fund dollars are proposed for affordable housing. The 2026-27 May Revision adds bureaucratic requirements to access what little funding remains, without providing new resources to meet them.