Funds generated by 2018’s Proposition C, which were held up until September by a court battle, are finally being disbursed for homelessness and housing services.<ins> (Kevin N. Hume/S.F. Examiner)</ins>

Funds generated by 2018’s Proposition C, which were held up until September by a court battle, are finally being disbursed for homelessness and housing services. (Kevin N. Hume/S.F. Examiner)

Supervisors authorize first use of Prop. C homelessness funds

2018 measure expected to generate $340 million annually focused on permanent housing solutions

Supervisors on Wednesday approved $79 million in spending on homelessness services from the first round of funding generated by 2018’s Proposition C.

After a debate between advocates for the homeless and city departments over how the new funds should be used, the Budget and Finance Committee largely approved a spending plan in line with the recommendations of an oversight committee.

Revenues generated by Prop. C, a business tax voters passed in 2018 to address homelessness, had been collected but not spent until now because of a legal fight over its validity. The measure was finally upheld in the courts in September, making $393 million available for allocation this fiscal year through the budget committee.

The measure, also known as “Our City, Our Home,” is expected to bring in $340 million annually starting in fiscal year 2021-22.

But the influx of funds comes as The City faces a $652 million deficit over the next two fiscal years, prompting concern from the advocates who fought for Prop. C’s passage that the money would be used to backfill underfunded existing programs instead of expanding services. Mayor London Breed this week ordered departments to propose budget cuts of 7.5 percent due to reduced city revenues.

Citing immediate needs, the Department of Public Health sought $30 million for street crisis response, intensive care management, expanded treatment beds and administrative support. The Department of Homelessness and Supportive Housing sought $64 million for affordable housing subsidies, shelter and hygiene programs, and homelessness prevention.

The Budget and Finance Committee on Wednesday ultimately approved the amount requested by DPH and $49 million for HSH after the department dropped a portion of its request.

Jennifer Friedenbach, executive director of Coalition on Homelessness and author of Prop. C, argued the initial proposals were against the spirit of the measure, which promised permanent housing solutions rather than those that would keep the revolving door of homelessness going.

Prop. C was written to designate half of the revenue collected for programs putting people directly into housing and a quarter for mental health and behavioral services. Up to 15 percent is to go toward preventing homelessness and up to 10 percent is for temporary housing and hygiene.

“We’re trying to use Prop. C for new exits, new ways out,” Friedenbach told the Examiner. “There’s an overemphasis on front-end or emergency or support services that don’t actually pay for getting people off the streets.”

The Our City, Our Home Oversight Committee, which includes people who have experienced homelessness, on Tuesday voted to amend aspects of the HSH proposal. The group instead sought to move funding for short-term beds to longer-term beds, add workforce development, fund the cost of extending shelter-in-place hotel lease extensions through July, and ensure care for those outside of the hotel placements. Several public commenters called for the recommendations to be followed.

As requested, HSH Interim Director Abigail Stewart-Kahn committed to searching for alternative funding sources to keep emergency shelters open to preserve about $5 million more of the Prop. C pot. Friedenbach said the committee would not oppose funding imperiled programs like the emergency shelters.

Kahn agreed to emphasize long-term fixes and to meet the oversight committee’s recommendation to fund just the first two phases of exits for shelter-in-place hotels while they determine what works best for permanent solutions from the new program. Doing so knocked down the reserve request from HSH to about $49 million.

“It’s still our preference to fund all phases,” Kahn told the budget committee. “The department’s ability to plan for a year would be very helpful indeed.”

The Department of Public Health agreed to move $7.7 million related to administrative costs and the behavioral health center to the purchase of a board and care facility like a hotel, which the oversight committee pushed for.

In the end, supervisors approved the funds to be released largely in line with the oversight committee recommendations. To Friedenbach, it meant the process set up by Prop. C worked as intended.

“We were able to shift the relationship with power that homeless people have,” Friedenbach said. “We have this opportunity to comprehensively change the way that homeless is addressed in San Francisco. It’s an opportunity we don’t want to miss.”

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