California homelessness spending returns to pre-pandemic share of budget

California is spending less than half of 1% of its main state-controlled budget on homelessness programs this fiscal year, according to an analysis by the University of Southern California’s Homelessness Policy Research Institute. The finding underscores the gap between state leaders’ public focus on homelessness and the money directed to shelter, rental help and supportive housing.

The USC team, led by Benjamin F. Henwood, reviewed California budget documents and legislative analyses for fiscal years 2020 through 2026. It counted programs aimed specifically at preventing and ending homelessness.

The institute found that California is spending about $1.5 billion on homelessness programs in the fiscal year ending June 30, 2026. That equals 0.47% of the state’s $321 billion general fund, according to the USC analysis and California budget figures.

The share is almost unchanged from fiscal 2020, before the pandemic reshaped state finances. USC researchers said California spent about $1.1 billion that year on targeted homelessness programs, or 0.46% of the budget, without adjusting for inflation.

Pandemic boost faded

Gov. Gavin Newsom made homelessness the focus of his 2020 State of the State address, saying, “I know homelessness can be solved” and calling it California’s “cause” and “calling,” according to remarks published by the California Health Executives Association of California. Six years later, the state has an estimated 181,934 people experiencing homelessness on any given night, according to the U.S. Department of Housing and Urban Development’s 2025 annual homelessness assessment.

California did increase homelessness spending during the pandemic years, when state revenue swelled. USC’s analysis found the state committed about $5.8 billion in fiscal 2022, equal to 2.1% of the general fund.

Spending remained higher in fiscal 2023, at roughly $4.7 billion, or 1.6% of the general fund, the institute found. It then dropped to about $2.4 billion, or 0.82%, in fiscal 2024 and to about $1.7 billion, or 0.55%, in fiscal 2025 before falling back to 0.47% in 2026.

The rise in state spending did not immediately reduce homelessness, according to Henwood’s analysis. The institute said the rate of growth slowed compared with increases in the late 2010s, and CalMatters reported that California recorded a modest decrease in homelessness in 2025.

Voters rank homelessness as a top concern

Public polling cited by USC shows homelessness remains a leading concern for Californians. In a 2023 Quinnipiac University poll, 22% of registered voters in the state named homelessness as the most urgent issue facing California, the largest share for any issue.

A 2025 Politico and University of California Berkeley poll found that 58% of California voters said homelessness and housing was the area where state government most needed to improve. That was higher than any other policy area in the survey, according to the poll.

Federal and local money also funds homelessness work in California. The National Alliance to End Homelessness said HUD’s national homelessness assistance budget totaled $4 billion in federal fiscal 2024, while U.S. Treasury data put total federal spending at $7 trillion in 2025.

USC said about $700 million in federal homelessness funding reaches California each year through HUD’s Continuum of Care and Emergency Solutions Grant programs. Combined with state spending, that brings annual public funding to roughly $2.2 billion, still less than 1% of California’s total budget, according to the California Budget & Policy Center figures cited in the analysis.

Some local governments have added their own revenue. Los Angeles voters approved a $1.2 billion permanent supportive housing bond in 2016 and later backed sales taxes for homeless services, while San Francisco voters approved a business tax for homelessness programs in 2018, according to local measure records cited by USC.

This story draws on original reporting from Fortune.