New Report Outlines $11.8B in Strategies to Tackle Bay Area Homeless Crisis

Bay Area Council, San Francisco Bay Area, RHNA, Substance Abuse and Mental Health Services Administration, Legislative Analyst Office
Courtesy of Bay Area Council

By Meghan Hall

Over the past decade, the Bay Area’s homeless population has rapidly expanded, and local policy and development has failed to keep pace. As the crisis continues to spiral, organizations throughout the Bay Area are working to evaluate just what is needed to successfully address homelessness in the Bay Area. A June report recently released by the Bay Area Council attempts to outline $11.8 billion in strategies that could alleviate the homeless crisis.

“This new study uses the latest figures to compare the Bay Area with its peer regions around the United States to pinpoint where exactly we’re failing,” explained Bay Area Council CEO Jim Wunderman at the report’s unveiling. “It compares the costs and benefits of various shelter and housing interventions needed to bring the era of mass homelessness in the Bay Area to a close.”

The Bay Area’s homeless population is growing at an alarming rate. Between 2017 and 2020, the homeless population grew by 6,878 individuals to a total of 35,118, meaning that the Bay Area now accounts for more than a quarter of the growth in total U.S. homelessness. Over the same time, the Bay Area’s homeless population increasingly struggled to obtain access to shelter: Those without access to shelter increased from 67 percent to 73 percent, the highest rate in the United States and a trend that the Bay Area Council describes as “especially alarming.”

“In the nine counties of the Bay Area…the homeless population is larger, less sheltered and growing faster than ever before,” said Adrian Covert, vice president of public policy with the Bay Area Council, and one of the authors of the report.

For the Bay Area Council, there are a number of reasons why homelessness is more pervasive in the San Francisco Bay Area. Chief among these is the correlation between the rate of homelessness and the regional housing shortage. Between 2011 and 2017, the Bay Area created 531,400 new jobs, but only approved 123,801 new housing units. 

The Bay Area Council notes in its report that the region has built “far fewer units over the past decade than it should have.” This shortage becomes even more apparent when observing data from the Regional Housing Needs Allocation (RHNA), which provides targets for housing growth at various income levels. Between 1999 and 2023, California is projected to have built 97,000 fewer units of affordable housing than recommended by the RHNA.

“I don’t think there is any question that had these units been built, we’d see less tragedy on our streets today,” emphasized Covert. “This has occurred over a record economic expansion, so that the Bay Area has less than one house for every four jobs…I cannot think of a better description of where the Bay Area’s past decade has been than congestion and displacement.”

A number of other factors have also heavily contributed to the Bay Area’s lack of shelter for the homeless, including federal disinvestment in housing affordability. The government’s investment into housing assistance has declined since the 1960s, and today the U.S. government spends about one-third of the level of support for affordable housing as it did in the 1960s.

The Bay Area Council adds that state and local services are disjointed and fail to focus on those who are at the most risk of becoming homeless. 70 percent of California’s extremely low income households–those who earn less than 30 percent of area median income–are classified as severely rent burdened. Often, these households spend more than 50 percent of their household income on rent, the highest rate in the United States. As a result, these households are less able to sustain through economic disruptions and are classified as one of the highest risk groups of becoming homeless. California policies typically prioritize housing for higher income households, with less than 10 percent of new homes developed between 2011 and 2019 catering to extremely low income households.

Additionally, California provides fewer emergency shelter beds compared to the size of its homeless population than any other state. Local prioritization of permanent housing, opposition to emergency shelters and even climate are just several factors that continue to exacerbate the disconnect between local, state and federal policy.

Finally, the Bay Area Council emphasizes the system and health barriers that the homeless population faces. Substance abuse and mental health issues also contribute to hoemelssness, with the Substance Abuse and Mental Health Services Administration estimating that 36 percent of sheltered homeless Americans suffer from mental illness, while 35 percent suffer from substance abuse disorders. In California, the Legislative Analyst Office estimates 23 percent of homeless Californians are severely mentally ill, while 17 percent struggle with substance abuse. In the Bay Area, 49 percent of homeless residents stated they were facing at least one health condition that could impact housing stability. 

“The relationship between mental health and homelessness often forms a negative feedback loop whereby an individual suffering a relatively treatable mental illness loses housing then, once homeless, suffers severe mental and physical decline that makes re-housing more difficult,” states the report.

Race also plays a role: people of color are more likely to experience homelessness than white Americans, and less likely to receive support to prevent homelessness from occurring. Despite making up for seven percent of the Bay Area’s population, African Americans and the Black community account for nearly 30 percent of the region’s homeless population. In Santa Clara County, Latinx households make up 25 percent of the general population but represent 43 percent of the county’s homeless population.

As a result, the solution to the housing crisis will need to be region-wide and multifaceted. The BAy Area Council emphasizes that timing remains key as jurisdictions, as well as the State of California, work to spearhead legislation and funding processes to address the homeless crisis.

 “Homelessnes does not respect jurisdictional boundaries, [so] the solution cannot either,” said Oakland Mayor Libby Schaaf in response to the report.

The Bay Area Council makes several recommendations that combined could significantly reduce the number of unsheltered homeless region-wide. Among these recommendations are a $20 billion state investment to expand Project Homekey, pulling from the State’s $76 billion budget surplus to make one-time investments into homeless services and emergency shelters. An additional $10 billion regional expansion of affordable housing and emergency shelters using the Bay Area Regional Finance Housing Authority. 

In the Bay Area specifically, $9.3 billion in one-time investments and $2.5 billion in ongoing investments–for an initial total of $11.8 billion–could be used for a variety of programs. A number of policies that can boost supply–such as those that encourage rather than hinder housing production and address anti-housing regulations–can be key. Additional subsidies for the most housing burdened populations and those at highest risk, will also be key. The Bay Area Council believes that the Bay Area has plenty of room to improve upon existing housing models at the regional, state and federal level and that quick action must be taken to prevent and resolve homelessness.

West Coast Commercial Real Estate News