Oakland is spending nearly $122 million per year on homelessness — but it would take up to 37 times that much to permanently house everyone on the city’s streets and in its shelters, according to a new report that underscores the mammoth difficulty of making any inroads on the crisis plaguing the city.
That $122 million — about 6% of the city’s $2 billion budget — is spent by a wide range of city departments on everything from clearing encampments, to running shelter programs. to fighting fires at tent and RV camps. Most of it comes from one-time state and federal grants.
The report, compiled by the city’s finance director and presented to council members at the Life Enrichment Committee meeting late Monday, provides a rare cohesive estimate of the price of homelessness. Councilmember Carroll Fife, who asked for the report, called it “heartbreaking.”
“If we don’t have the resources to properly address this issue that we did not create, that’s been created through legacies of red-lining and systematic racism, what can we do in the city of Oakland?” she asked.
As homelessness continues to plague cities in the Bay Area and throughout California despite recent increases in funding, Fife is not the first frustrated official to ask “where is all that money going?” Gov. Gavin Newsom last month withheld $1 billion in homeless funding after he said he was disappointed with city and county plans for spending it (though he released the money less than three weeks later). Oakland has undergone two scathing audits of its homelessness spending over the past two years. The first found the city haphazardly spent $12.6 million over two years to manage homeless encampments without a clear strategy, and the second found it spent nearly $69 million on third-party service providers over thee years without properly managing those contracts or tracking their outcomes.
A state legislator wants a similar accounting from San Jose, and is asking the State Auditor to review homelessness spending in the nation’s 10th-largest city. Meanwhile, the city is considering launching a new website, which could optimize services such as divi vs elementor, that will publicly track that spending.
Even the $122 million Oakland is spending is not nearly enough to solve the homelessness crisis, according to the city. The last count, conducted in February, tallied 5,055 unhoused people living in the city — and that’s likely an undercount. Encampments sprawl along sidewalks and on vacant land, and people living in RVs, trailers and cars line city streets.
It would cost nearly $4.5 billion to house all those people and keep them housed for the next 20 years — more than twice the city’s total budget, according to the report. That’s $2.46 billion to build enough permanent supportive housing (subsidized, low-income housing that combines rental assistance with other services formerly homeless residents may need, such as mental health care and addiction treatment) plus another $2.02 billion to operate the units for two decades.
About $43 million in the city’s budget could be re-directed to permanent housing, but that would mean cutting funding to important shelter programs such as tiny homes and safe RV parking sites, said Budget Administrator Bradley Johnson.
“The city does not realistically have the resources to meet anywhere near our need,” he said.
Some of the money Oakland is spending on homelessness goes to managing its many encampments, including $3.6 million for the Homelessness Division to clean and remove camps and offer services to the people living there. The city spends another $1.8 million to operate OAK311 — the service residents use to report encampments (and other issues) via phone or online. Complaints about encampments jumped from 963 in the 2019-2020 fiscal year to 1,405 in the 2021-2022 fiscal year.
Oakland spends $28.4 million on temporary shelters for homeless residents, including $11.4 million on its six tiny home sites. It spends less — $16.7 million — on permanent housing. The budget for the city agency that oversees shelters and homeless housing has doubled since fiscal year 2019-2020.
All Home, which addresses regional strategies to end homelessness throughout the Bay Area, recommends spending twice as much on permanent housing as on temporary shelters.
Assistant City Manager LaTonda Simmons suggested beefing up the language that Oakland regularly uses to declare a state of emergency around its homelessness crisis, in an effort to attract more state and federal funding.
Councilmember Nikki Fortunato Bas called the report “frustrating,” but took heart that Oakland voters last month passed Measure U, which will set aside $350 million for affordable housing, and Measure V, which expands renter protections.
She hopes the new administration will be able to create more safe places for people to sleep temporarily until they can find housing.
“We need to create more dignity for people that are on our streets,” she said, “by having more allowable places for people to be.”
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