Editor’s note: This post comes from CalMatters’ coverage of Prop 1 and previous funding measures. The original stories were written by Jocelyn Wiener, Marisa Kendall, Kristen Hwang and Erica Yee. The Frisc staff has added material specific to San Francisco.
There is only one state-level ballot initiative in next month’s election, Proposition 1, and it could have a profound effect in San Francisco.
The first part of this two-pronged California measure would authorize a $6.4 billion bond to drastically expand the state’s mental health and substance abuse treatment infrastructure, and emphasize more housing for people who have spent years unhoused.
The majority of the money, $4.4 billion, would be used to fund 6,800 in-patient and residential treatment beds across the state, according to the official ballot description. The remaining $2 billion would build up to 4,320 permanent supportive housing units — more than half set aside for veterans with mental illness or addiction disorders.
The second part of the measure would change the way counties spend existing mental health dollars and limit their flexibility. The new priority would be housing for people who are chronically homeless. (San Francisco, both a county and a city, would also fall under these requirements.)
The existing dollars come from 2004’s Mental Health Services Act, a 1 percent tax on personal income over $1 million. The tax has generated an estimated $26 billion for county mental health programs; it raised more than $3 billion just last year. It supports roughly one-third of the state’s mental health system.
The tax is not California’s only source of mental health revenue, but counties have come to rely on it to pay for many core services including outpatient care, school-based counseling, and crisis response teams.
Prop 1 would require counties to spend 30 percent of these dollars on housing programs, including rental subsidies and navigation services. Counties would have to spend half this money on people who are chronically homeless or living in encampments. They could also use up to one quarter of the money to build or purchase housing units.
Advocates say the spending reform and the new bond money are necessary. State Sen. Susan Talamantes Eggman, a Democrat representing Stockton, said last fall that the state’s mental health funding needs to address changes that have happened in the two decades since the act was first designed. Opponents say Prop 1 will shift money toward housing and away from outpatient care and crisis response.
Last-minute amendments to Prop 1 would also allow the money to be used on involuntary treatment facilities, which has drawn the opposition of peer and disability advocates. Paul Simmons, executive director of the Depression and Bipolar Support Alliance, said it will lead to “massive increases in involuntary and forced treatment.”
Why CARE matters
The fear of “involuntary treatment” is a reference to the CARE Court program that launched last year in SF and six other counties, with a statewide rollout this year. It’s meant as a path to treatment for people with schizoid disorders or dual diagnoses of schizoid and substance abuse disorders. Proponents say it’s not forced treatment, but refusal to participate could become evidence in a conservatorship hearing.
In a conservatorship, a judge appoints a guardian to manage the personal or financial affairs of someone deemed gravely disabled, or incapable of making decisions for themselves. Newsom last year signed SB 43, which expands the standards for grave disability to include individuals whose mental illness or substance use disorder inhibits their ability to keep themselves safe.
California faces a shortage of nearly 8,000 adult psychiatric beds, according to research from the RAND Corp. The shortage spans the spectrum of care, from immediate spaces for people in crisis to longer-term residential places. At the same time, demand for youth and adult mental health services and emergency department discharge to psychiatric care are at an all-time high.
More than 170,000 Californians are unhoused, the majority of whom live unsheltered on the streets. Mental health and addiction disorders are prevalent among homeless Californians; in a 2023 statewide study, 82 percent and 65 percent respectively reported experiencing these issues at some point in their lives. But the same study also shows that the root cause of homelessness in the Golden State is income loss and lack of affordable housing.
In SF, a 2022 count showed the overall homeless population was down slightly from 2019, but officials also estimated up to 20,000 sought access to housing and services over a year. The most recent biennial count took place on Jan. 30 and was, as always, an imprecise exercise.
Clearing the decks
Putting Prop 1 on next month’s ballot with no distractions was part of Gov. Gavin Newsom’s strategy. He championed combining the two laws into the measure. And the legislature went along by clearing the ballot of competing measures.
The last time California voters considered a multibillion-dollar housing bond, they passed it with room to spare. In 2018, the No Place Like Home initiative promised 20,000 new units of permanent supportive housing. More than five years later, the state has completed just 1,797 of those homes and is now projecting a total of 7,702.
Building affordable housing ‘takes way too long, and it’s heartbreaking when you’re seeing [homeless] people living in such horrible conditions.’
Andrea Osgood, Eden Housing chief of real estate development
Projects that would be funded by Prop 1 could face some of the same hurdles that have delayed construction of No Place Like Home units, developers and local officials say. Voters who agree with the concept of housing homeless people have killed proposals to build such housing in their own neighborhoods. Complicated financing rules and restrictions have delayed other projects, sometimes for years.
Molly Weedn, a spokesperson for the Yes On Prop 1 campaign, said in an email that the new measure would inject money into “proven, successful housing programs” and that there were provisions in the measure to speed up development.
No Place Like Home units are specifically for people with serious mental illnesses who are homeless; as part of the law, counties are required to provide the residents of these units with mental health and substance use treatment for a minimum of 20 years.
The pledge to use bond money to build 20,000 supportive housing units can be traced to a 2018 Legislative Analyst’s Office report, which estimated “half of the units would likely be completed within five years.” An analyst told CalMatters that estimate included other sources of affordable housing money, not just the $2 billion proposed by No Place Like Home. Key supporters of the measure who circulated the number widely in 2018 — and cited it in their arguments in the state’s official voter guide — did not return requests for comment.
One problem is that No Place Like Home awards make up a fraction, sometimes just 10 percent, of the total cost to build an affordable housing project, developers say. That means a developer often needs to come up with another half-dozen funding sources from different city, county, state and federal programs.
Complicating the issue further: the various funding streams aren’t always in sync, with different deadlines, different requirements, even different definitions of homelessness.
“It takes way too long, and it’s heartbreaking when you’re seeing people who are living in such horrible conditions,” said Andrea Osgood, chief of real estate development for Eden Housing.
Another challenge, Osgood notes: The cost of construction has gone up, sometimes jumping as much as 20 percent in a year. Insurance rates are climbing as well. As these costs increase, No Place Like Home funds get stretched thinner and can build fewer homes.
Meanwhile, neighbors can use California’s Environmental Quality Act to block and delay construction. Two of the 10 No Place Like Home projects proposed by Eden Housing were hit with CEQA lawsuits, Osgood said. One, in downtown Livermore, won nearly $6.5 million from No Place Like Home in June 2022. After years of litigation, the project still hasn’t broken ground.
Osgood said Prop 1 includes CEQA exemptions to facilitate development of supportive housing. It also requires more transparency: Counties will have to submit annual reports to the state outlining how money is spent. “With No Place Like Home there wasn’t a lot of accountability from the communities,” said state Sen. Eggman. “Now there will be measurements and outcomes to really be able to see what the community needs, what they have and what their plan is to make sure those resources are there.”
Congressional and state races
Prop 1 is the only state measure on the ballot, but there are state and federal primary races that will help decide California’s legislators in Sacramento and Washington come November.
The closest watched race is for U.S. Senate, where three Democratic House members — Barbara Lee, Katie Porter, and Adam Schiff — are vying for the top spot, among others, against Republicans Steve Garvey, a former Los Angeles Dodger, and businessman Eric Early.
The contest for the lower chamber of the Capitol isn’t as lively; Speaker Emerita Nancy Pelosi is running for reelection.
As for the Sacramento contests, state Sen. Scott Wiener is running for a third term in District 11. In his first seven years representing San Francisco, Wiener has been a driving force for more housing with state laws that have bolstered incentives for and fought local resistance to new construction.
In the Assembly, there are two races. Sup. Catherine Stefani, who represents SF’s Marina and other northern neighborhoods, is up against local political contender David Lee in District 19, which covers western SF as well as Daly City and Colma in northern San Mateo County. Incumbent Phil Ting is termed out.
In SF’s District 17, which covers the central and eastern neighborhoods of the city, incumbent Matt Haney is running for reelection.