San Francisco Budget Committee Hearing on Homelessness and Supportive Housing Budget – April 29, 2026

The Budget and Appropriations Committee, chaired by Supervisor Connie Chan and including Vice Chair Matt Dorsey and members Danny Sauter, Shamann Walton, and Shaiyan Chin, held a hearing to examine proposed changes to the budget affecting homelessness and supportive housing systems. The hearing featured presentations from the UC Berkeley Terner Center, the People's Budget Coalition, the Mayor's Budget Office, and the Department of Homelessness and Supportive Housing (HSH), followed by extensive public comment. No binding votes were taken; the hearing was heard and filed.

Public Comments & Testimony

• Dozens of speakers addressed the committee. Several tenants and advocates urged the city to allocate $39 million from a $400 million reserve to backfill Emergency Housing Vouchers (EHVs) for 920 households facing subsidy end in October 2026. Speakers described the stability vouchers provided and fear of returning to homelessness.
• Multiple speakers expressed strong opposition to Supervisor Dorsey’s proposed “drug-free housing” expansion, calling it a punishment policy that undermines housing first and harm reduction. Others supported drug-free options, arguing they give people in recovery a real choice and that only 42 of 9,000 supportive housing units are drug-free.
• A representative from the Coalition on Homelessness noted that non-congregate shelter closures (Cova Hotel, Bayview Vehicle Triage Center, Mission Cabins, Monarch Hotel, Adante) totaled 373 beds lost between January 2025 and April 2026, while the department cited a net increase of 187 shelter and transitional beds in the same period.
• Several providers and residents from SOMA West called for equitable distribution of supportive housing, noting that 60% of city services are concentrated in SOMA and the Tenderloin while the west side has few. A speaker filed a fair housing complaint over segregation.
• Personal stories included a previously homeless worker who credited stable SRO housing for their recovery and job; a mother of six who feared returning to an SRO; and a law student currently homeless who called budget cuts a political choice, not a necessity.

Discussion Items

• Ryan Finnegan (UC Berkeley Terner Center) presented research showing that permanent supportive housing (PSH) reduces homelessness by 88% and improves housing stability by 41% compared to treatment-first models, but 40–60% of older PSH properties in major California cities face negative cash flow due to operating funding shortages. Cuts to federal Continuum of Care funding would ripple through the system, reducing shelter turnover.
• Jennifer Friedenbach and Colleen Rivecca (People’s Budget Coalition) highlighted that federal housing funding was cut 76% from 1978–1983, driving homelessness. In San Francisco, they reported a loss of nearly 50% of semi- and non-congregate shelter beds for single adults (from 1,019 to 527) under the Lurie administration. They noted 920 EHV households will lose subsidies in October, and HUD cuts may affect $25 million for PSH. They urged fully funding cost-of-doing-business increases, right-sizing subsidies to eliminate operating deficits, and using healthcare funding (Medicaid) for supportive services.
• Sophia Kittler (Mayor’s Budget Office) said the mayor’s proposal asked HSH to find $4 million in general fund savings via source swaps without service impacts. She stated the city will not seek additional Prop C (Our City, Our Home) fund reallocations at this time, but will use the $19 million reallocation authority already granted. She confirmed a large one-time Prop C surplus (over $10 million, with estimates up to $68 million in current year and $93 million in budget year from March revenue updates). The surplus is from higher-than-expected gross receipts tax and fund balance from the lawsuit period. She argued the budget reduction from year to year is not a service cut but reflects one-time spending falling off.
• Shireen McSpadden (HSH Director) presented the department’s proposed $728 million budget for FY 2026-27 (down 7% from FY 2025-26 adopted). She stressed the budget protects core services, maintains shelter capacity, and includes a 1.4% COLA in year one and 3% in year two for providers. The decrease is largely driven by revenue shifts (one-time state/federal funds ending) and a technical accounting change moving $14 million from grants to professional services. She showed a net increase of 221 treatment/residential care beds and 187 shelter/transitional beds since January 2025. The PSH pipeline includes 1,500 future units, though only 182 are under construction due to funding constraints. She addressed the consolidation of street outreach under DPH, moving 11 HSH staff and three contracts. On legal services contracting, she said HSH does not typically fund legal services but is exploring prevention-based legal aid; a controversial contract with one provider is part of a multi-year procurement plan.
• Supervisor Walton questioned why HSH is reducing its budget when Prop C has a surplus. Director Kittler reiterated that the reduction is in general fund support, offset by Prop C revenue, and is not a service cut. Supervisor Walton and Chair Chan pressed on the potential to invest more in subsidies, especially for families and prevention.
• Supervisor Dorsey discussed housing first, noting it is flexible and can include drug-free/recovery housing. He cited a test case at 1174 Folsom Street (illicit-drug-free supportive housing) and asked for mid-year performance data. He raised the issue of underfunding security in PSH, arguing that spending on police responses could be better used for preventive on-site security.

Key Outcomes

• The hearing was heard and filed by a 5-0 vote (with Supervisor Mandelman excused).
• No binding decisions were made, but the committee signaled intent to advocate for increased funding for prevention, rental subsidies, and backfilling EHVs using the Prop C surplus and other one-time funds.
• Chair Chan noted the city now has an additional $100 million from the Airbnb lawsuit settlement, plus Prop C revenue increases, creating substantial fiscal room.
• The mayor’s final budget is due June 1; further hearings and negotiations will follow.