Reynolds Rap

Break out the ruby slippers and the flying monkeys

With the millions San Francisco spends on homelessness, we should be living in the Land of Oz
San Francisco currently spends around $800,000,000 on homelessness. Photo:

When I interviewed Chris Megison, the co-founder and CEO of Solutions for Change (“Meet the man who runs a homeless program with a 93 percent success rate,” Reynolds Rap, Sept. 2018), he had harsh words for the way San Francisco handles its homeless crisis, including financially. “There shouldn’t be a single person
left in that city who says it’s about more money,” Megison said. Yet, here we are, facing Proposition C on the November ballot. Should it pass, companies with revenue above $50 million per year would receive an average half-percent tax increase. According to proponents, Prop. C will raise around $300 million a year for more homeless services, or, as the Associated Press recently put it, “doubling what San Francisco spends on homelessness.”

That $300-million-a-year figure gets tossed around a lot. San Francisco Chronicle columnist Heather Knight wrote about it recently (“What it really costs to help the homeless,” Aug. 24, 2018), but the article came off more like a PR piece for Jeff Kositsky, director of the Department of Homelessness and Supportive Housing. With Kositsky’s eager input, Knight broke down last year’s $305 million, which included “some small amounts spent by other departments.” Kositsky gave his usual spiel: Of the $250 million HSH spent, two-thirds went just to keep the formerly homeless housed; 11 percent went for administrative costs and capital spending; 17.6 percent on temporary shelters; 3.2 percent on street outreach; and 2.2 percent on health services; leaving $57 million for the homeless you see on the streets. Knight divided that by a wonky 15,000 homeless who need city help “at some point” and deduced the city spends $3,800 per person per year. Officially, the city says of the 7,499 homeless people recorded in 2017, about 58 percent, or 4,353 people, were marked as unsheltered. The other 3,146 were designated sheltered — but that doesn’t mean we’re not still paying for them.

If you think Knight’s numbers seem low, you’re not alone. In fact, I spent the past two months pouring over budgets, articles, emails, transcripts, and anything else I could get my hands on trying to come up with a realistic dollar amount San Francisco is spending annually on homelessness. One thing became very clear: No one really knows the exact number because there’s no centralized tracking system. The city’s budget and legislative analyst’s office prepared the most recent “Performance Audit of Homeless Services in San Francisco” for the Board of Supervisors on June 13, 2016. That was just a month after the late Mayor Ed Lee appointed Kositsky, so while the report references HSH, a new audit is definitely warranted (District 2 Supervisor Catherine Stefani has called for a new audit, which should be available in early 2019). For now, the 2016 report, which is fairly comprehensive, is the best reference that exists. When I added the numbers in the 2016 budget analysis to the HSH budget and to the numbers found in other and more current sources (like the fire department), I came up with roughly $800,000,000 spent on homelessness annually in San Francisco.

Can the city really be spending that much? Grab a cup of coffee and let’s crunch the numbers.


As of the 2016 audit, the city was spending $37,694,624 per year on homeless outreach and responses to homeless-related incidents. The majority of the spending went to the San Francisco Police Department for responses to “quality of life” calls from residents that rarely resulted in citations or arrests. Despite frequently being the first point of contact, police officers were “unable to provide referrals for homeless services.”

Curiously omitted from the 2016 report is the San Francisco Fire Department. In a 2015 New York Times article (“San Francisco Firefighters Become Unintended Safety Net for the Homeless”), reporter Sarah Maslin Nir pointed out that Engine 1 (“based in the South of Market Street neighborhood and includes in its catchment the gritty Tenderloin neighborhood”) was the busiest fire engine in America — yet just over 1.5 percent of its runs involved fires. With a budget of more than $330 million, SFFD responded to more than 136,000 incidents. Firefighters expressed frustration with “frequent flyers,” like a man they’d responded to between 300 and 500 times over a few years. This past February, the Fire Commission asked for additional funding to cover $100 million in annual homeless ambulance subsidies.


One of the most contentious issues at City Hall is the large number of nonprofit providers receiving millions from the city — and their complete lack of oversight. In fiscal year 2014–15, $175,641,009 went to 61 community groups, yet there is no universal system in place to track their performance. On the other hand, some of the groups have budgets much larger than what they get from the city, so that $175 million-plus is probably far lower than the actual amount spent on the homeless by those organizations.


The authors of the 2016 audit caution frequently that San Francisco needs to get a stronger grasp on spending and procedures. “Despite a significant allocation of funds to homeless services, the City does not conduct formal needs assessments of the population to ensure that services align with needs,” they say when referencing the $186,109,496 of General Fund revenue spent in fiscal 2014–15 on programs that “serve at least 50 percent homeless clients” — a 23 percent increase from fiscal 2012–13 expenditures. In the most recent audit, the Human Services Agency spent $62,334,442, while the Department of Public Health clocked in at $123,775,054.

In a response to the report, HSA senior staff acknowledged that while “a significant portion of the City’s General Fund expenditures for housing placements for the homeless have been allocated to permanent supportive housing … it is not the appropriate exit plan for all homeless individuals, and the cost of mismatch is high.” HSA’s own analysis showed “high turnover for individuals placed in permanent supportive housing over a three-year period.” In the study of 1,818 adults over fiscal years 2010–11 and 2011–12, 50 percent had left their original housing placement as of the end of fiscal 2014–15. Within HSA’s Master Lease program, where HSA contracts with nonprofits to enter into leases with private owners of Single Room Occupancy hotels, 66 percent of individuals left. HSA confirms that some of those people “increased their use of homeless services, emergency/urgent care, or jail time after leaving their placement compared to the three-year period before housing placement,” but also admits they only track exits from the project level, and client-level reasons for leaving are unknown. In layman’s terms, that means they can’t track the homeless once they leave a city-funded “permanent housing” situation.


In an interview with NBC Bay Area’s Investigative Team, Director of Public Works Mohammed Nuru said San Francisco currently spends $30 million cleaning up after the homeless, including feces and needles. That’s half the 2016–17 “Street Environmental Services” budget of $60 million, which has doubled over the past five years. The city also added a Poop Patrol, yet another department with more big salaries (poop scoopers make over $71,000 plus $113,000 in benefits) devoted to the homeless.

You can’t talk about funding for homelessness without mentioning philanthropy. In 2017, Tipping Point, a respected nonprofit organization that raises millions each year to fight poverty, donated $100 million in privately raised funds (founder and CEO Daniel Lurie said he had commitments for $60 million of it in only six months). Then there are the tech titans like Salesforce founder and CEO Marc Benioff, who have raised more than $30 million to “end family homelessness by 2019.”


Remember, the most recent analysis of homeless spending came before the Department of Homelessness and Supportive Housing led by Jeff Kositsky. In the 2016 report, the authors say that plans for the department were modeled on similar agencies in other cities, including New York. Interestingly, they also say that during the course of their audit, New York City announced it would “revert back to its previous model for homeless service administration — bringing the homeless department back under the purview of the Human Resources Administration (similar to San Francisco’s HSA) — primarily to eliminate administrative redundancies and ensure better coordination for clients to access benefit programs.” They warn, perhaps prophetically, that policymakers in San Francisco “should be mindful of these results, documented in a comprehensive operational review, as they finalize the plans for the new department.”

Considering the most recent audit hails from 2016, and homeless spending has increased exponentially since then, the city officials I spoke with said my total sounded “about right” (and there wasn’t even an ounce of shock in their voices). One thing is certain: If Proposition C passes, San Francisco will be spending around a billion bucks a year on homelessness. Break out the ruby slippers and bring on the flying monkeys, because for that price I expect the Land of Oz, replete with glitter and rainbows.


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