San Francisco Mayor Daniel Lurie is taking steps to redirect scores of millions of dollars meant for housing to instead pay for shelters under his “Breaking the Cycle” initiative.
The $88.5 million sought by Lurie represents around 30 percent of the $303 million that Proposition C is projected to generate in the upcoming fiscal year.
Lurie’s office has emphasized that unlocking these funds is crucial to addressing the crisis on the streets, a key focus of his tenure as mayor so far. The move would help cover the cost of 572 beds and fund 130 hotel vouchers for families.
On the campaign trail, alongside his pledge to build 1,500 emergency beds, Lurie promised to build 2,500 interim housing beds within two years. With his current budget, Lurie is effectively prioritizing his promise for shelter at the cost of housing.
During his budget remarks last Friday, Lurie said that fentanyl has changed the game and shifted priorities toward shelter and behavioral-health services. “We need to change with it,” he added.
Critics of the proposal, however, have warned that taking funds away from housing would further exacerbate the city’s shelter-to-housing pipeline. According to a March report from the Controller’s office, only 13 percent of people who exited the city’s shelters in 2024 transitioned to permanent housing. Lack of housing was a major reason for that.
“We must protect Proposition C funds, because they are already breaking the cycle of homelessness for hundreds of people in this city,” said Solange Cuba, who works with the Coalition on Homelessness.
The proposal was discussed during the Homeless Oversight Committee meeting on Thursday.
“The idea that we’re going to take millions of prevention dollars and shift them to shelter is backwards from what our goal should be, here,” said Commissioner Christin Evans, who added that she expects the move would lead to higher street counts of homeless people, particularly homeless families.
Should Proposition C funding that was supposed to go to young people be eliminated, “we’re just going to get full, and we’re going to bottleneck,” said Sherilyn Adams, the executive director of Larkin Street Youth Services.
Commissioner Sharky Laguana is more supportive of the ordinance. While he acknowledged the need for both more shelters and more permanent housing, he emphasized the difficult budget situation the city faces. “First things first: Can we help get people off the streets?” he said.
The ordinance to reallocate the funds accompanied Lurie’s $15.9 billion budget proposal, and proposes to use $88,495,000 of Proposition C money over the next three years.
The 2018 initiative was a gross receipts tax on businesses with total annual income exceeding $50 million.
About $60 million of those funds sought by Lurie were allocated but not spent (a term referred to as “unencumbered dollars”); Lurie is hoping to redirect the remaining $29 million from accrued interest.
Under the initiative’s mandate, the “Our City, Our Home” fund is split into different spending buckets. The largest bucket, 50 percent, is dedicated to permanent supportive housing. Out of that, about a third is allocated to permanent supportive housing for families, and a fifth is allocated to homeless youth.
This ordinance would remove these requirements for the $88.5 million. That would give Lurie more flexibility in how those dollars are spent, but advocates fear it would disproportionately hurt those the legislation is designed to help.
The remainder of Prop C funds are mostly dedicated to mental health services and homelessness prevention programs.
To pass, Lurie’s ordinance will require a supermajority — eight votes — from the Board of Supervisors.
“I think that the leadership of this city, with a lot of new people of good intent, needs to sit down and talk to the people that have done the work,” said former San Francisco homeless czar Bevan Dufty, now a commissioner on the seven-member Homelessness Oversight Commission that oversees the Department of Homelessness and Supportive Housing.
“I don’t take lightly an effort politically to change that commitment that the voters of this city made.”
Short term solutions like “gotta get them off the streets” don’t work without long term solutions: humans need homes. The people of SF must demand that funds aporopriated for housing be used exactly for that! Haven’t we had enough “whack-a-mole”?
No. The people voted on C for housing. The Mayor should not be able to shift that money without the people voting on it. Also the moderates of which Lurie is a part of fought Prop C. They shouldn’t have the right to shift the money for which it was intended.
So Mr. Republican Lite Lurie is showing his true Trumpian colors: ignore the will of the people, the majority of whom voted for housing and not shelter beds, so he can make his political promise come true. And of course now we’re in for a sky full of surveillance drones thanks to the billionaire boys club now running the City.
Also it never ceases to amaze me that people who have only the most supercial knowledge of homelessness in San Francisco feel free to offer their opinions based on nothing,to counter the conclusions of people who have studied this issue in depth for many years. If the Homeless Oversight Commission says that prevention is the only real route to ending homelessness, I believe them.
Prop C $$ invested in Permanent Supportive Housing will help our unaffordability crisis. Diverting Prop C $$ to shelters will help the Mayor’s attempt to succeed with a campaign promise.
NO! We need more low income housing, and more supportive Navigation Centers and long term Residential facilities so people can get into the low income housing once they get their lives back and find a job.
Laurie wants more overnight beds that will not help people find long term housing and that many will REFUSE to use.
Mayor Lurie’s proposal to take $89 million that was meant for housing and use it for homeless shelters instead just doesn’t sit right with me. It feels like a step backward. While shelters might offer a temporary roof, they are not a real solution to ending homelessness. A lot of people experiencing homelessness do not even want to go to shelters, and for good reason. They are often overcrowded, lack privacy, and can feel unsafe. I think most of us, no matter our situation, want our own space. A room with a door you can close, a bed that’s yours, and some peace and quiet, that is basic human dignity. Moving the money away from permanent housing and into shelters ignores that. It is frustrating that decision-makers with so much wealth and privilege can be so out of touch with what people actually need. Throwing more money at shelters will not fix the problem, it will just keep people stuck in survival mode. If we really want to see change, we should be building more affordable housing, not pouring millions into short-term band-aids.
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Thanks for reporting
Long term housing solutions in SF take a long time. The costs are some of the highest in the country.
Options must be looked at .
Looking to move and house persons on other places may be necessary Other cities may have job opporrtunities as well.
People should be offered temp shelter sooner then later .
Again , the united nations refugee camps around the world for six million persons at a fraction of the cost sf spends here .
In addition persons refuse shelter and housing.
It is time to try un refugee camp model at locations away from neighborhoods .
Centralize services etc . Can be setup quickly .
Maybe a portion of Golden Gate Park, presidio, Alemeda old naval base , old racetrack next to 580 east bay on property sf owns out by antioch
People who want shelter should be willing to take it whereever they can get it
You watch people will refuse . People will still complain. Take it or leave it . At least it was offered and there are no more excuses. They want to be in the Tenderloin where the drugs are.
The city cannot continue to allow persons to lay on the streets .
Offer a place if they refuse then they leave town or go to jail
I want to live in Beverly hills if i pitch my tent there then must they pay for my housing there ?
If people really want housing shelter they will appreciate and go where they can get it
Housing is not the answer to their problems
Get real
Those that oppose un refugee housing are elitist and wrong
It takes about $1m to build a new unit and a lot of money to operate it as PSH since we pay for tenants’ needs, the damage they cause, and counseling. At most, this funding would help 40 people a year if spent on PSH. Seems prudent to instead help 500 people a year with shelter beds.
Do you have any idea how expensive shelter beds are?
Do you know and would like to share?
Units cost $1m a pop – that is easily verifiable as you can look up project pro formas for these projects online. The article says about 500 beds cost $89m – so let’s just estimate and round up and say it’s $200k per bed.