California has seen a recent nine percent drop in unsheltered homelessness. This statistic may not seem exceptionally significant, but it is nonetheless a massive accomplishment for the state with the highest population of unsheltered homeless individuals in the country. Yet, for the first time in fifteen years, the homeless population has significantly dropped in the state, and not without massive funding, policy reforms, and innovation.
California’s recent drop in homelessness contrasts with a period of national increase. This demonstrates the effort of California officials, specifically Gov. Gavin Newsom, in fighting the homelessness problem, which has been a central issue in California for decades.
If homelessness has been such a major issue for so long, why did it take so long for the numbers to decrease? The short answer: a housing shortage.
California is one of the most unaffordable states in the country, and decades of structural barriers have resulted in a massive housing shortage. This creates a reality in which only those with enough money can afford housing, and in California, “enough” is over 30 percent higher than the average income. On top of unaffordability, the immense wealth inequality in California further shrinks the population that can afford housing.
Two consequences arise from California’s housing shortage: a high population of circumstantially homeless individuals and a mass movement out of the state. According to the Public Policy Institute of California, California lost about 1.3 million residents to other states between April 2020 and July 2025. Residents of low-to middle-income areas are more likely to leave the state and can expect to save about $700 a month on average in housing costs outside of California. However, in recent years, the state’s population has been slightly increasing. According to Vanguard, “the state’s modest rebound is colliding head-on with a decades-long failure to build homes at the pace that growth demands.”
The population growth seen beginning in 2023 is not an indication of increased housing supply or affordability, but rather makes these issues worse. California’s population growth has come from a surge of immigrants after the pandemic-era restrictions on immigration ended, and the birth rate has exceeded the death rate. This increase in population is despite a consistent movement of people from California to other states. With a newly growing population, the issue of homelessness — rooted in unaffordability and the housing shortage — requires attention.
In March 2024, Californians narrowly passed Proposition 1, a policy championed by Gov. Gavin Newsom. Proposition 1 aims to expand the scope of homelessness treatment facilities, both in capacity and treatment type. Proposition 1 authorized $6.4 billion in bonds for behavioral health treatment facilities and supportive housing to invest more into mental health and substance abuse support for homeless individuals, and create 6,800 residential treatment beds and 26,700 outpatient slots. It also aims to reform the Mental Health Services Act (MHSA), reallocating existing tax funds to prioritize those with the most serious mental health needs, including more of the homeless population.
Proposition 1 passed with an unusually narrow margin, based on fundamental concerns rather than inter-party disagreements. As a historically prominent issue in California, homelessness has again and again been targeted by public officials. California spends billions of dollars every year on the issue of homelessness, and yet little tangible progress has been achieved in the past decade. This causes hesitation from voters who have reason to doubt the legitimacy of claims that their tax dollars will reduce homelessness, and $6.4 billion, as Proposition 1 unlocked, is a long-term taxpayer debt. The proposed shift in mental health funding priorities also raised concerns that a prioritization of extreme mental health cases may exacerbate homelessness by reducing prevention measures.
The Skid Row Action Plan, which was granted $15 million by Gov. Newsom, is an example of successful local implementation of state funding. The mission of the Skid Row Action Plan is to provide expanded housing opportunities and medical and behavioral care to those living in Skid Row while respecting and preserving its culture and community. Among the services offered through the Skid Row Action Plan are expansion of access to health and behavioral healthcare and the creation of a Harm Reduction Health Hub that “increases the safety and well-being of those who use drugs through holistic support.” In addition to the Skid Row Action Plan grant, Gov. Newsom approved $98 million in Encampment Resolution Grants to programs targeting homelessness in 17 counties, and is projected to help over 2,700 people beat homelessness. As one of the densest homeless populations in California and even the United States, Skid Row serves as a valuable opportunity to observe homelessness mitigation strategy effectiveness as a model for the rest of the state and the country.
About 70 percent of homeless people suffer from a mental health disorder, and 33 percent struggle with substance abuse. Proposition 1 has made strides in increasing the number of homeless individuals who receive mental health and substance abuse care. However, mental health and substance abuse challenges are just two root causes of homelessness, which is also driven in some unquantifiable part by California’s high rate of poverty, wealth disparity, and overall unaffordability. Even for those not struggling with mental health and substance abuse challenges, California’s crippling housing shortage can make it impossible to afford to live in the state.
The 9 percent decrease comes from unsheltered homeless in California, meaning that many of California’s housed are still living in homelessness treatment facilities: a first step toward decreasing the total number of homeless individuals.
While this record 9 percent drop may not reflect total homelessness, it may actually indicate a positive and efficient policy shift driven by Gov. Newsom. Proposition 1 confronts this complexity of housing the homeless by prioritizing interim housing. Proposition 1, alongside California’s Homeless Housing, Assistance, and Prevention (HHAP) program, addresses this through the creation of Homekey+. Homekey+ is an affordable housing program with services dedicated to addressing behavioral health challenges.
Rather than tackling the issue of homelessness at the surface level by simply getting people off the streets, Proposition 1 reflects a more holistic approach — and given the data, a successful one. Two key contributors to California’s longstanding homelessness problem are affordability and mental health. By focusing budget allocation on interim housing and behavioral and mental health support, Proposition 1 has helped California buck the national trend with a decrease in unsheltered homelessness, a hopeful indicator of a net drop in homelessness for the state.
Featured Image Source: Los Angeles Times