California Gov. Newsom uses State of the State speech as call to action on homelessness

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California Gov. Gavin Newsom dedicated the majority of his State of the State speech to a series of efforts to combat the state’s homelessness and housing crises.

Both Newsom and Assembly speaker Anthony Rendon, who spoke before the governor, pointed to a deep division between the haves and have-nots in the state.

First, the governor ticked off all the different economic indicators demonstrating the strength of the state’s economy, which is ranked fifth largest globally.

"California today is an enterprising, modernizing, pluralizing, unionizing, nation-state of opportunity," Newsom said.

The state has paid down its wall of debt, shifted away from past practices of issuing debt to pay for operations and anticipates having $19.2 billion in reserves after the $222.2 billion proposed budget for 2020-21 is approved in July, Newsom said.

The state has created one in seven of the nation’s jobs since 2010 and has experienced 3.8% gross domestic product growth over the past two years, outpacing the nation, and it boasts the highest ratings in the state's history.

Moody's Investors Service upgraded the state’s general obligation bonds to Aa2 from Aa3 in October. Fitch Ratings upgraded the state’s GO rating in August to AA from AA-minus. The state holds a AA-minus rating from S&P Global Ratings. All have stable outlooks.

And yet, 151,278 individuals are homeless in California, according to the U.S. Department of Housing and Urban Development. Newsom said that number was 35,000 higher in 2015.

“Even at that peak, the state was not treating it with the seriousness it required,” Newsom said. “The crisis was not created overnight and it will not be solved overnight, but we have to replace California’s scattershot approach. We will be laser-focused on getting mentally ill people out of tents and into treatment.”

He asked lawmakers to support the request in his budget for $1.4 billion aimed at reducing homelessness. Of that figure, $750 million will create a new California Access to Housing and Services Fund to support rent subsidies and develop affordable units to provide more stable housing. Kaiser Permanente also announced it would donate an additional $25 million to the fund, which Newsom set up as a public-private partnership.

If approved by the Legislature, the funding would follow a plan to provide $650 million to communities this year to address homelessness. Through executive order, the governor has also tasked his administration with identifying excess state land and property that could be used for short-term emergency shelters. He also wants lawmakers to work on a plan to provide annual ongoing funding to deal with homelessness.

He had 10 travel trailers that had been used by the state during the Camp Fire delivered to a site in South Los Angeles this week. Another 90 trailers are to be distributed to sites throughout the state through the end of March. He also said that 280 state properties have been identified to be used to build permanent supportive housing.

Newsom gave a nod to talk about creating a “right to housing” in California without endorsing it. Instead, Newsom said he was proposing strict accountability, comprehensive audits and a do-it-or-lose-it policy to hold local governments responsible for results.

He reviewed laws enacted on the federal and state level that led to closing mental asylums in favor of community-based mental health systems that was never properly funded, before throwing out a bipartisan call to action.

“In a politically polarized world, liberals and conservatives blame one another for these failures,” Newsom said. “Historically speaking, both are right. It’s time to stop pointing fingers and join hands in a transformational solution.”

Though California Sen. Patricia Bates, R-Laguna Niguel, did not fully embrace tossing aside the partisan finger-pointing, as she partly blamed the problem for nine years of one-party control in the state, she said she appreciated his positive efforts to solve the crisis.

“I agree with him when he says we must match resources with results. His pledges to work on implementing accountability measures and partnering with local governments are steps in the right direction. We can build housing without destroying existing neighborhoods,” Bates said.

Let’s match our courage on homelessness with courage on housing supply, Newsom said.

“As a former mayor, look, I respect local control but not at the cost of creating a two-California class system. Not at the cost of imperiling the California Dream. And that’s what we are doing,” Newsom said.

Last year, the Legislature introduced and Newsom said he signed into law a streamlined permitting process for navigation centers statewide and exempted construction of homeless shelters from the environmental review process in the most populous cities. He wants to expand the law to all homeless shelters and affordable housing. He is also pushing for new models like motel and hotel conversions, and using prefab and tiny homes.

Newsom also proposed reforms to the Mental Health Services Act, so that funding focuses on street homelessness and those involved in the criminal justice system. He threatened to take funds back from local programs if they aren’t putting the money to work and will redeploy it to communities where it’s being put to work.

“We will be leveraging Medi-Cal as a tool to deal with mental illness and expanding mental health pilots statewide,” Newsom said. “Our healthcare system has been designed to treat some of our parts, not the sum or our parts, and that must change.”

He asked lawmakers to pass legislation to establish his homelessness fund now.

“We don’t have months. The public has lost patience. I have lost patience,” Newsom said. “It is time to muster the political will to meet this moment. The people of California are demanding bold actions.”

He also asked the federal government to be a partner, not by throwing out empty words and promises and then cutting funding to the Department of Housing and Urban Development by 15%.

Kudos to Gov. Newsom for continuing to allocate more funding and incentives to programs to alleviate homelessness and create more affordable housing, California Treasurer Fiona Ma said.

“I'm proud to work with Gov. Newsom’s administration to streamline state processes so that we can accelerate the delivery of an unprecedented $1.75 billion investment in last year’s budget to increase housing and $500 million annually for the state’s housing tax credit program that’s in this year’s budget.”

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