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City funnels billions of dollars to homelessness nonprofits without requiring performance reviews

“Homelessness is not designed to be solved. It is designed to be perpetuated. It is to treat the problem, not solve it.”
— Former mayor Willie Brown in the CNN documentary “What Happened to San Francisco?” 

I have been a critic of San Francisco’s multibillion-dollar homeless and “harm reduction” industries for nearly two decades. In numerous columns, I opined about the absolute failure of the players involved like the Coalition on Homelessness (COH). Their mantra, like all “housing first” advocates, is “We just need to build more housing.” Ironically, the very people saying that — from COH founder Jennifer Friedenbach to her mouthpiece Christin Evans to some very wealthy tech honchos — have the money to “just build more housing” — Friedenbach comes from an almond dynasty, while Evans’s father is in Big Oil and owns a $12 million home in San Francisco. 

The hypocrisy is palpable. 

Then there’s Salesforce CEO Marc Benioff who helped Friedenbach and Evans push through Prop. C in 2018 to raise millions for “homeless services” by increasing taxes on large businesses. The Our City, Our Home Oversight Committee (OCOH) was set up to make sure the funds are “effectively and transparently used,” but Prop. C’s biggest lobbyist, Friedenbach, was appointed to the committee by the Board of Supervisors. 

In May 2023, the Homeless Oversight Commission launched to oversee the incompetent Department of Homelessness and Supportive Housing (DHSH) and “receive advice and recommendations from OCOH on the administration of Proposition throughout C funds.” Guess who the Board of Supervisors appointed as one of its commissioners? Christin Evans. 

According to their website, San Francisco spent nearly $300 million in OCOH funds in Fiscal Year 22-23 and added “1,191 units of capacity.” Apparently, that’s homeless industry jargon for housing. So, let me get this straight: with a budget of $300 million the “All we need to do is build more housing” folks added less than 1,200 units of housing? 

“Permanent Housing is a central component … with at least 50% of the Fund allocated for this service area,” the website explains. During fiscal year 2022-2023, the city expended $94 million on acquisition of new buildings for use as permanent supportive housing, and expended $57 million in housing operations. Overall, the city funded 2,909 units of housing capacity across “several types of housing,” including “783 net units of capacity added in FY22-23.”

Wait. What? A net 783 units of housing? If Tim Cook ran Apple into the ground the way city officials and their nonprofit partners have done with San Francisco, he would be kicked to the curb. 

In a critical 2020 performance audit of the DHSH by the Budget and Legislative Analyst, the department’s coffers had $364 million — an 80% increase since its inception under the late Mayor Ed Lee in 2016. And the results? Between 2017 and 2019, the number of people without permanent housing grew by 30%. As of that March 2020 audit, DHSH had contracts with 59 providers for 350 programs with total funding in fiscal year 2019–20 of $240.6 million.

So where is all this money going? A lot of it slides into the pockets of executives. For example, harm reduction nonprofit HealthRIGHT 360 (HR360), which ran the now defunct “Linkage Center” had total revenue of $145,646,363 in 2022 with over 40% of it going to “other salaries and wages.” They also spent over $2 million in executive compensation, with nine officers making between $234,000 and $312,450 annually.

What’s HR360’s impact on San Francisco? Like with OCOH and the dozens of other nonprofit providers, the proof is in the streets — which means, well, bring back the Tim Cook analogy.

STATE HASN’T ANALYZED HOMELESS SPENDING SINCE 2021

A critical statewide audit released in April says California doesn’t have current information on the ongoing costs and results of its homelessness programs because the agency tasked with gathering that data — the California Interagency Council on Homelessness — has analyzed no spending past 2021. Three of the five state programs the audit analyzed, including the state’s main homelessness funding source, didn’t even produce enough data to determine their effectiveness, or lack of. 

Gov. Gavin Newsom allocated a mind-blowing $24 billion to address homelessness in California during the last five fiscal years, and anyone in San Francisco when Newsom was mayor knows he has been promising to solve the crisis for over 20 years. What did the state get for their money? A larger scale San Francisco, with nine agencies administering over 30 programs with such poor tracking there is no way to evaluate performance. 

Most troubling is that one-third of those who left placements funded by the Homeless Housing, Assistance and Prevention program left for “unknown” destinations, according to the auditor’s analysis of round-one funding in Los Angeles, San Diego, Santa Clara and San Francisco counties. That matches San Francisco’s budget and legislative analyst’s office “Performance Audit of Homeless Services in San Francisco,” prepared for the Board of Supervisors on June 13, 2016 (the last time such an audit was done), which cautioned the city needed 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,” the report states.

In response to that report, the Human Services Agency (HAS) 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% 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 (SRO) hotels, 66% of individuals left. HSA confirmed that they only tracked exits from the project level, while client-level reasons for leaving are unknown. 

What does this mean for candidates vying to become San Francisco’s mayor in November? Each must pledge to audit the entire homeless industry, from top to bottom. Mark Farrell told me in an interview that he would shut down OCOH and move funds out of the control of Friedenbach and friends. “Coalition on Homelessness and all the nonprofits have controlled the narrative for the past five and a half years — it’s time to take our city back. We need to get people the help they need, and I don’t believe those decisions should lie with the Coalition on Homelessness,” he said.

Daniel Lurie, whose nonprofit Tipping Point has donated to COH in the past, says his administration would “rapidly build adequate shelter beds, connect people with services, and clear the encampments” (something Farrell has also promised to do).

As for current mayor London Breed, that’s the encampment outside your room. During her five and a half years on the job, she has funneled billions to the homeless industry without financial audits or performance reviews. How did that working out? Time to bring back the Tim Cook analogy.

Follow Susan and the Marina Times on Twitter: @SusanDReynolds and @TheMarinaTimes.

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