Hey.

Good afternoon.

The meeting will come to order.

Welcome to the April 29, 2026 meeting of the Budget and Appropriation Committee.

I am Supervisor Connie Chan, Chair of the Committee.

I'm joined by Vice Chair Supervisor Matt Dorsey and members, Supervisor Danny Sauter, Supervisor Shaman Walton, and Supervisor Shaiyan Chin.

And I want to thank Jeanette Eganov from SFGov TV for broadcasting this meeting.

Mr.

Clerk, do you have any announcement?

Thank you, Madam Chair.

Just a friendly reminder.

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Place Room 244, San Francisco, California 94102.

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And should any member of the public require a listening device, please see our operation staff stationed outside the doors to assist.

And with that, Madam Chair, that concludes my announcements.

Thank you, Mr.

Clerk.

And um, and with that just want to make sure that we keep the quorum throughout today.

Um, and just in case for the public comments that we are going to keep to one minute.

Okay.

Uh and so with that, um Mr.

Clerk, please call item number one.

Yes, item number one is our hearing.

One second.

I'm sorry.

No problem.

Item number one is our hearing of proposed changes to the budget impacting homelessness and supportive housing systems to examine the following.

The importance of housing first, uh, outlines for any housing or for homeless people in the pipeline, plans to decommission permanent uh supportive housing and the impact on systems, loss of beds over the past two years, and impact on plan closures, looming and determined threats to state and federal funds for housing coming up in the next two years, and outlines of any cuts to homeless programs and housing in fiscal year 2026-2027 and 2027 to 28 budget.

Reductions to budgets that impact on host people, and the outline for an investment plan for a mental health services act budget proposal and proposed 2018 proposition C, Howard City, our home investments.

Madam Chair.

Thank you.

And with that, I am going to turn this hearing over to Supervisor Cheyenne Chin, as she is the lead sponsor of this hearing.

And Supervisor Chen, the floor is yours.

Thank you, Chair Chen.

Colleagues, thank you for allowing me to join you this afternoon.

Homelessness is a challenge for many jurisdictions across the country and the globe.

In the United States alone, more than one million households experienced it homelessness in 2022.

And this excludes those living on the street who were never able to access shelter.

In San Francisco, we experienced this crisis acutely.

We also have a long track record of proven solutions, expertise, and public inter public investment to build funds.

At the same time that rents have risen, we have seen a rampant jobs loss across multiple industries, and the city has made policy and budget decision that have started the development of affordable housing.

They prioritized it the funding of homelessness prevention dollars, and has politicized an issue that is both complex and experiences nationwide.

The cost of homelessness is high between hospitalizations and medical treatment, police intervention and in cost solutions, and the cost of emergency shelter, homelessness, it's an expensive and complicated problem to solve.

A study from the National Center of Biotechnology Information at the National Institutes of Health indicated that housing first programs decrease homelessness by 88% and improve housing stability by 41% compared to treatment first programs.

Clients in stable housing experiences better quality of life and sh and show reductions in hospitalization and emergency department use.

And yet we still need to work to make sure that we have a complete menu of housing options for those in need.

In San Francisco, last year, approximately 8,000 members of intactive families with minor children experienced it homelessness.

Almost as many people identify in the past point in time to count.

In 2024, our coordinated entry system had approximately 17,000 and house state clients seeking for housing.

There's a long way to go to meet the needs of those experiencing homelessness in our city.

And I'm grateful that we are joined today by some of our local providers, the mayor's budget office, and the Department of Homelessness and support and supportive housing.

With that, I would like to ask for uh Mr.

Ryan Finnegan, Deputy Director of the Research from the Turnan Center for Housing Innovation at UC Berkeley to start us off.

Mr.

Finnegan, hi, thank you so much.

Umigan.

I'm the deputy research director at the Turner Center for Housing Innovation at UC Berkeley.

Uh, and thank you for the opportunity to briefly share some of our research on permanent supportive housing or PSH with you today.

Uh so our research shows that PSH helps people successfully leave long episodes of homelessness, build stability, and get the support that they need to thrive.

When adequately staffed and resourced, PSH is responsive to residents' needs and provides opportunities for residents to build community and cultivate a sense of belonging.

Many PSH properties face a shortage of operating funding, however, which contributes to poor outcomes for residents, staff, and for properties.

In properties with operations funding constraints, residents were less likely or less able to participate in supportive services, avoid rent arrears, and stay housed past the first six months of moving in.

Operations funding constraints also contribute to staff shortages and burnout, as well as deferred maintenance, which undermines the condition of the property.

Our current research estimates that among permanent supportive housing properties that are at least 10 years old and located in major uh California cities, approximately 40 to 60 percent of the properties are experiencing a negative cash flow each year.

This includes properties in San Francisco, but San Francisco is not alone.

PSH properties in many places face common challenges like a scarcity of secure operating subsidies, a difficulty of matching people and properties effectively through coordinated entry systems, and decreases in rental uh occupancy in some properties.

Finally, we are finding that cuts to permanent supportive housing, as could happen through potential changes to the federal continuum of care program have ripple effects throughout local homelessness systems.

As people are uh frozen from entering permanent supportive housing due to the fear of funding cuts, there are limited opportunities for people to move from shelter and outreach programs and into permanent housing solutions.

As a result, undermining the effectiveness of permanent supportive housing through decreased funding or decreased capacity of the system leads to lowered effectiveness for other essential programs in local homelessness systems, including interim supportive housing and supportive services.

I'll pause there because I believe that's my time, but I'm happy to answer any questions that you might have.

It looks like we don't have questions for you.

Um thank you so much, Deputy Director Mr.

Finnegan.

Thank you.

Uh, next, may I ask the People's Budget Coalition from the Coalition of the Coalition of Homelessness, uh Jennifer Friedenbach and also uh from TNDC, uh Tender One Neighborhood Development Corporation, uh calling Riveka to be ready.

Thank you.

Hi, good afternoon.

My name is Jennifer Friedambach.

I'm here representing People's Budget Collaborative and also work at the Coalition on Homelessness.

I'm kind of pitch hitting for Shakima Straker who is sick today.

So what we're gonna do is just walk you through some basic causes of homelessness in the U.S.

and here in SF, the major threats homeless people are facing, and then spend some time talking about solutions.

And we're just trying to get our slides up here.

So it'll be the second slide once you get it out.

You can think about homelessness as the tail of two acts that follows the two mass episodes of homelessness in the United States.

The first, of course, being the Great Depression, which was then addressed by investing in housing and passing the housing act that guaranteed housing for poor people in the United States, not just housing but decent housing.

And you fast forward to 1983, and housing funding is slaughtered.

Federal housing dollars are cut by about 76% between that period of 78 to 83.

And by 1988, the United States fully withdrew from its commitment by eliminating the housing act altogether.

Within years and years of being for with years and years of being forced to live on the streets without a home, homeless people's health deteriorates medically, the trauma of homelessness itself drives up addiction and mental illness rates, and local municipalities turn to police and unsuccessful attempts to manage the street crises, really frankly wasting millions that could have could be spent on housing.

By 2024, 1.4 million households in the United States had experienced homelessness over the course of that year.

1.4 million.

The federal disinvestment in housing over the past 45 years has driven homeless rates steadily up as rents have risen.

So here in SF, so go to slide three.

So here in SF, sadly, many of those same bad policy decisions are being replicated.

Well, not just in SF, but in the at the federal level as well.

So what about SF?

We did a number of things that have contributed to homelessness here and really uh contributed to disparities among who uh experiences homelessness.

Actually, the same year the Federal Housing Act passed in 1937, San Francisco started to raise the Fillmore and eventually tearing down 2,500 Victoria, primarily occupied by African Americans, closing 800 black-owned businesses under the guise of urban renewal.

We also tore down hundreds of SROs to make way for the Moscone Center in 1980.

Our once flourishing mental health system was devastated with changes to disability insurance, realignment in the state of California, and the loss of boarding cares.

By modern day, we've lost about 4,000 beds and boarding care facilities.

While redlining became illegal in 1968, its legacy meant many African Americans were not able to accumulate wealth.

And today landlords continue to discriminate, and African Americans face higher rates of eviction.

Public housing was rebuilt under Hope 6, but many of those units were lost over 120, and many of the tenants were unable to move back in.

All of this contributed not only to our African American population plummeting, but driving many African Americans into homelessness.

African Americans are five times more likely to experience homelessness.

Today we are seeing modern day attempts to red line once again.

All right.

So here we have an illustration of the bed loss.

At the start of the Lurie administration, we had 1,019 semi and non-congregate shelter beds for single adults.

Beds that serve folks who don't do well in congregate settings.

Next slide.

You see here in red that beds are being lost, a new loss of nearly 50%, even when you account for beds being added, out of 1,019 semicongregate and non-congregate beds, only 527 will be remaining next year.

Next slide.

The 920 emergency housing voucher households in San Francisco were notified their subsidy will be ending in October.

Congress added funding to cover only about a third of them or so.

Meanwhile, HUD McKinney is expected to cut about 25 million in existing permanent supportive housing operations.

Lurry is planning on decommissioning about four PSH sites, and about 12,000 households are waiting for housing and coordinated entry.

So after painting the picture, I'm now going to turn it over to Colleen Rebecca of TNDC.

Hello, I'm Colleen.

I work at TNDC.

I'm the director of policy planning and community organizing.

And I'm also on the steering committee of people's budget coalition.

And so I wanted to start off with some definitions just to sort of ground us in what we're talking about when we talk about housing first and permanent supportive housing.

With housing first, people experiencing homelessness are connected to a stable home as quickly as possible.

And with that stability of a home, the services that they need, services that can reduce negative behaviors, increase increase health stability, increase income, or connect to benefits can be successful.

Without the stability of a home, those services don't have a chance of being successful, but within permanent supportive housing, they do.

And that's part of the what housing first means.

It's an evidence-based practice that is supported across the political spectrum.

And it's also affects a flexible approach that can be tailored to meet the unique needs of tenants within permanent supportive housing.

Federal, state, and local governments all recognize that housing first is an evidence-based practice, and there's a large volume of domestic and international studies spanning decades that show evidence that housing first effectively ends homelessness.

Next slide.

Permanent supportive housing on the permanent side.

Permanent housing means the housing is not temporary or time limited.

It's a core component of the stability needed to ensure that tenants' services needs can be met.

Support services are offered, they're flexible, they're tailored to what the tenants need, and they include health care, mental health care, substance use treatment, overdose prevention, connection to benefits, and social supports, and community building between tenants.

Services are voluntary and permanent supportive housing.

That means that tenants won't be evicted for refusing to participate in services, and they won't be forced to leave their housing just because they haven't been able to achieve certain treatment goals.

Permanent supportive housing works for even the highest need populations of people experiencing homelessness.

It reduces emergency room visits, hospitalizations, psychological emergency services, and prevents returns to homelessness for tenants.

In San Francisco and throughout California, we're seeing that permanent supportive housing operating costs sometimes are either increasing or they don't meet need.

Sometimes there's property damage and maintenance that can increase insurance costs.

And then we also have higher costs to pay, recruit, retain, train staff who are able to work effectively with our tenants that have complex needs.

It costs more to operate PSH when tenants have experienced really complex health needs and the trauma of being on the streets.

Next slide.

They're felt by communities and they're felt by housing providers.

In some permanent supportive housing units, the cost to operate a unit actually exceeds the operating subsidy and service subsidies that are provided.

Despite these challenges, permanent supportive housing as a homeless intervention strategy is widely widely successful.

But it's important to focus on the reality that the impacts of underfunding are very serious.

And these impacts can be prevented with adequate investment.

But permanent supportive housing deficits can lead to negative outcomes for tenants, like move outs, rental arrears, and returns to homelessness.

Operating deficits can also lead to challenges for permanent supportive housing staff in the form of turnover, burnout, and inadequate pay.

They lead to financial instability for housing providers with the need to self-fund deficits from organizational reserves.

And they can lead to the erosion of public trust and permanent supportive housing, not because the model doesn't work, but because it's not adequately resourced to be successful.

And now we're going back to Jenny.

But I will be back.

And so right now we have a situation where our current prevention investments are still falling short.

But if we were to have a system that was focusing on inflow, what that would mean is we would have less homelessness, we'd have a smaller shelter population, we'd have a smaller street population, and fewer units would be needed to solve homelessness.

But today for every one homeless person house, three become homeless, according to the last point in time count.

Next slide.

This next piece is just an example of a shelter focus.

So with the shelter focus, if we, you know, we put all our eggs in the basket in shelter, let's say.

So you see this short-term success.

But then the second year, what happens when you do the modeling is the homeless population on the street balloons.

Shelters become less efficient because they're not turning over.

And so you want a system where the shelters are turning over rapidly.

Um why?

Because health outcomes of shelter are still bad, and also because shelters in San Francisco, if you compare it to uh a scattered site subsidy, for example, um, cost the same.

And so next slide.

So this next piece is when you do a deep investment in housing.

Again, this concept of all your eggs in a basket.

In that situation, you have a much more efficient system.

Why?

Because the shelter beds turn over.

You know, you start seeing those turnovers up over seven times a year, um, and you basically have a street population that stays small, you have a shelter population where you're very briefly in shelter, and then you're able to move over into housing.

Um, and so that's what they consider.

So the most efficient systems pair a deep investment in prevention with a deep investment in housing.

Next slide.

So, you know, we talked earlier about the federal government cutting housing, driving homelessness up.

In San Francisco, we got kind of tired of it, right?

We were like, hey, we're gonna take this into our own hands.

So we passed an initiative in 2018 called our city our home.

Um it far surpassed what we promised voters.

There has been hiccups, though.

The measure was held up in court for two years, the worldwide pandemic hit, revenue fell, but now it's back up and it creates this amazing opportunity again.

Next slide.

So while we promised um uh voters 4,000 units, we've added 5,620 units.

Um, over 8,420 people have been housed, and over this is the really exciting part, 2,800 children.

So really important.

Over 31,000 households have received prevention services, 82% positive outcomes, 33,000 clients receive behavioral health services, um, including intensive case management, and I think Supervisor Dorsey will be happy about this.

444 treatment beds added.

Um in the past five years, propsy funding has meant over 4,000 people been able to get be sheltered, and we're able to do new innovative stuff like tiny homes and non-congregate.

Next slide.

Has homelessness been solved?

No.

We were careful not to promise that.

Some other cities have done similar local revenue initiatives like LA, Santa Clara County.

But if you compare to other West Coast cities, and remember what homelessness is up on the West Coast.

Why?

Because of rising rents, right?

Direct correlation.

So if you compare to other West Coast cities who have also suffered from rising rents who have not done a local revenue measure, you see a wild difference.

So in 2022, coming out of the pandemic, Portland saw a 20% increase in their homeless population.

San Diego saw 22%, and the San Francisco population decreased.

In 2024, in the pandemic pandemic recovery, SF saw a modest 7% increase from 2022, while Portland saw a 67% increase, San Diego a 26% increase.

Next slide.

So homelessness is solvable.

You know, you have to be smart, you've got to expand what's working, and you have to hear from homeless people first.

And they'll tell you what you know what works for them.

And so first, we want to maximize the proxy revenue.

We also need to protect against Trump cuts.

Emergency housing vouchers were a huge success, but you know, they're they're being cut.

Um PSH has a 97% success rate, but it's underfunded.

We need to address chronic PSH underfunding.

Next slide.

So we could use propsy revenue today with our revenue to expand 500 new outcome-driven housing subsidies for families, families in SRO, youth, seniors, people with disabilities, and adults.

Next slide.

These are all really smart results-oriented solutions for San Francisco.

And now we're going to close out and I'm going to turn it back to Colleen.

So one of our recommendations is addressing the chronic underfunding and permanent supportive housing.

And we can do that this year.

The first recommendation is fully funding the annual cost of doing business increases that are equivalent to actual cost increases, so that we aren't seeing any more the um operating deficits.

We can eliminate operating deficits for our permanent supportive housing units by right-sizing subsidy levels for all units with operating deficits.

And that can create some of those better outcomes that we talked about earlier.

The third thing is utilizing health care funding for supportive services through a coordinated strategic approach that includes housing providers.

Allow Medicaid billing for tenancy sustaining services for all tenants who are eligible for Medicaid, whether they were referred into their unit through coordinated entry or another referral source.

And there's not another slide, but I just have a conclusion concluding statement.

Addressing homelessness and responding with solutions that create long-term stability is a key policy priority for San Francisco.

We face difficult choices this year, but these choices represent opportunities to make positive impacts that will be felt for years to come.

Investments and solutions are more cost effective than using our jails, emergency rooms, and emergency systems as our homelessness response.

Permanent supportive housing can provide the stability and cost savings in the long run, but only if it's sufficiently resourced.

We can make decisions this year that sufficiently resourced these vital systems and the people who work to make them successful.

Thank you.

Thank you.

Thank you.

Thank you, Colleen.

Now may I have the mayor's budget office, Director Sophia Killer.

Thank you.

Good afternoon, members of the budget and appropriations committee.

Thank you, Chair Chan, for having me.

My name is Sophia Kittler.

I am the mayor's director of the budget.

I don't have a presentation today.

I think my role is to talk a little bit about some of our budget instructions as it pertains to homelessness writ large and supportive housing in particular.

So in the mayor's budget proposal, we asked for uh the Department of Homelessness and Support of Housing at a high at a financial level to help us find four million dollars of general fund savings.

In their proposal, they did so by um moving uh by kind of doing a source swap to free up general fund for us without any service impacts.

Um the other thing we had kind of asked all of our departments to do was to comb through a number of their programs and find things that are not core to their departments, and we have been an ongoing dialogue with um the department as to which of those things might fall into that category, and I think that they will talk about that in a little bit.

Things that they had said this might not be core to our services, and we may or may not disagree and may um add those things back.

Those are actually not budget impacts so much as contract realignments.

Um in general, um, trying to anticipate some questions, so feel free to jump in any time.

Um we are not at this point assuming that we will need an ad that we are going to seek out an additional um rearrangement of proxy buckets for lack of a more technical term.

We were very fortunate and very appreciative that this body granted us um in this upcoming in budget year the ability to move 19 million dollars across different funds.

Um we believe we will be taking advantage of that, but we do not believe we will be seeking additional authority.

Um and then a few things on just kind of like principles of how we are approaching the the homelessness budget.

Um and I'm gonna try and really walk a line in like budget instructions versus like policy, uh, because I think they are the experts on on the policy, and I wouldn't want to speak for them.

Um that resonate a lot from the the presentations from both the Turner Center and the People's Budget Coalition is when we look at our permanent supportive housing portfolio, the effects of that long-term underfunding.

I think the city can be really proud of the capacity that it has built and brought online over the last 10 years.

Um but that emphasis on capacity increase has kind of stretched our providers really, really thin.

And what we are trying to do as we look through that is um in a moment where we will have increased proxy revenue.

How do we not continue doubling down on capacity, but rather start to figure out how to stabilize our providers, how to stabilize the network, um, and how to move individuals into places where they the building itself has the appropriate supports and has the appropriate capital infrastructure to serve the people it needs.

Um so those are some of the policy issues we are working through.

Um I'm happy to answer any questions.

We are obviously you you have seen my um my flow chart of where we are in the budget.

We are we are kind of working through with the department on what that looks like, and we we look forward to bringing you a final budget on June 1st, but I'm happy to answer any questions.

Thank you, Darth uh Killer.

I do have a quest a few questions.

What is your plan on the HESPA recommendations for our city, our home funds, including the 500 additional housing subsidy for TA seniors and adults?

Um we are still evaluating those proposals.

Um in general, I think uh subsidy like subsidy-based housing is something that I think is is really useful as opposed to kind of trying buying bringing on additional assets.

Um I think looking at the full spectrum of of flex pool, um, thinking about how we backfill um you know any threats to emergency housing vouchers or any other continuum of care funding is something that's really important to us, and we want to be able to do that again without bringing on a number of additional buildings that we cannot maintain to add to that, and again, all up for deliberation right now.

I think the um emphasis on Tay and family in particular is something that has that really families in particular has really kind of aligned with our push on um large vehicles and trying to figure out how we move families out of um out of large vehicles where they we have heard, you know, we have heard from people they do not want to be in shelters, they do not find shelters to be safe, so it is a rational decision to try and stay in um a place like a large vehicle, and we want to move them out of those spaces and into subsidized housing.

Great.

Uh you also mentioned that uh we are not seeking additional popsy money.

At this time at the times.

So is that mean that uh we are planning to honor the spending category and big pop in POPSE?

At this point, we do not that that is our my current plan.

I nothing is done until I introduce the budget.

Great, thank you.

Um I'm also aware of a budget request to backfield the emergency housing vouchers, and how's the mayor's budget office thinking about this request?

Yeah, I think that's a really important issue.

Um we had started to think about this last year actually, when the when the first kind of hit came through, and and um the department was incredibly responsive and and worked very quickly to come up with um a pool sh for when I believe we expect a number of emergency housing vouchers to fall off in December of 2026.

I candidly have not thought about this specific issue myself in a few weeks, so I'm not sure where we stand right now, but it is a priority to keep people housed.

I would say from a budget principles perspective, making sure that that people maintain their housing, particularly people within our system is a priority for us.

Thank you.

And I also heard I um in terms of like long-term investment, uh, our plan is to stabilize the current providers, uh, not to expand capacity.

Uh, besides this too, you know, uh is there other creative way, any new initiative, new initiative that you are in the way of planning thinking for the next physical year, and if there are any new initiative, how much would they cost, and how would they, you know, how would you fund it?

Uh we look forward to discussing that when we introduce a final budget.

Okay, thank you.

And I see um Supervisor Walton also have a question for you, Dr.

Killer.

Thank you so much, Supervisor Turney.

Uh Director Killer, just what with the availability of proxy dollars.

I'm trying to understand why.

You're asking or the department is having to include a 10 million dollar decrease.

So I think what we are seeing from them is not a decrease in their overall budget, it was a decrease in their general fund support.

And so what that is is an increase in props C and a decrease in the reliance on the general fund, which frees up general fund money for our other priorities.

Right.

So why do they have to give up two million dollars?

I think that they are it is a color of money question.

I don't think they could not give up dollars, but then we would need to find that 10 million dollars elsewhere.

And one thing that Props C and the large increase in revenues that we are seeing, particularly this year, affords us is the ability to shift sources for programming in the department without having a service problem.

And so that allows us to take that money and put it somewhere else so that we don't need to cut an additional ten million dollars in a different department.

But we did have an increase in props.

We did have an increase in proxy, yes.

Okay.

Um I'm still not understanding what I have to give up to.

Okay, so it's like I'm gonna do a shoddy job.

But if you say that like this is what their budget was last year, this is propsy and this is general funds.

Right.

And effectively what we're doing is we've seen so much more props C that we can bring down the general fund without the total amount going down.

And so that basically they are reducing the amount of general fund funding by using a small portion of the additional propsy revenue so that we maintain all of the services that we had before, but free up additional money for OEWD's workforce, for HSA's um food programming, so that we can kind of not have to cut that same money elsewhere when we have the flexibility within HSH's budget.

So it's a policy choice.

It is a policy choice.

And the idea is to preserve services as they currently are, and that would allow us to preserve additional services in other departments.

Thank you.

Thank you.

Thank you, Director Killer.

May I now have Director Shrewen Mespatin from Department of Homelessness and Supportive Housing.

Good afternoon, Chair Chan, committee members.

My name is Sheree McSpadden.

The exec I'm the executive director for the Department of Homelessness and Support of Housing.

Want to thank you for the opportunity to come before you today and update you on the HSH budget proposal and our work.

So this budget is organized around a simple but urgent goal.

Breaking the cycle of homelessness by moving people more quickly from the streets into effective care and then into stable exits that can be sustained over time.

That means we are focused on core strategies.

First, reducing system inflow by strengthening prevention, problem solving, and early interventions, so fewer people enter homelessness in the first place.

Second, accelerating street to care by improving outreach, shelter access and connections to health, behavioral health and recovery supports.

And third, accelerating care to exit by making sure shelter and housing programs are not just places people stay, but pathways to stability.

Underneath all of this is a fourth priority.

Strengthening the system and our finances.

Given the city's budget challenges, we have to be disciplined about investing in what works, improving what is an underperforming, and ensuring every dollar is tied to better outcomes for people experiencing homelessness and for the city as a whole.

This slide here highlights several places where the proposed budget protects core services and continues targeted investments, even in a very constrained fiscal environment.

First, we are maintaining key investments for families and young adults, including the multi-year expansion of scattered site housing through our city our home.

The budget also preserves prevention and housing investments, including rapid rehousing, shallow subsidies, and supportive services tied to permanent supportive housing coming online through the MOCD pipeline.

Second, we are continuing to leverage CalAIM revenue for housing navigation, tenancy support, and housing deposits.

And we are adding targeted investments like transitional rent to help clients bridge into housing as well as medical respite resources in partnership with the Department of Public Health.

Third, the budget funds known cost increases for LOSP support of services and provides a modest cost of doing business increase for community-based providers, 1.4% in year one and 3% in year two.

Finally, we are sustaining shelter capacity by finding other contract reductions in and internal efficiencies.

This budget does not do everything we would want, but it protects the backbone of the system while advancing investments that help people move from homelessness to stability.

This slide provides high level, the high-level overview of HSH's proposed 26 to 28 budget.

Overall, the department is projecting a decrease of about 7% in the first year from $785.6 million to $728 million, and an additional decrease of about 2.5% in the second year.

It's important to note that the majority of this change is driven by revenue shifts, particularly the planned spend down or loss of one-time sources like propsy fund balance and state grants, not a proportional reduction in services.

On the general fund side, we were decreasing by about $9.1 million in year one, largely because we are able to offset general fund costs with new revenue, including CalM Cal aim related funding.

And in year two, the general fund increases back toward a more level base as those one-time offsets roll off.

We are proud that this proposal meets the mayor's budget targets while maintaining critical services across the homelessness response system.

To do that, we are leveraging revenue aggressively, reallocating costs where appropriate, and identifying efficiencies so we can protect shelter, housing prevention, and core operations in a very challenging budget environment.

This slide shows HSH's proposed budget by expenditure category, including grants programmatic projects, salaries and benefits, professional services, interdepartmental services, and materials and supplies.

A few important points to highlight.

First, the decrease shown in grants does not represent a straight reduction to services.

At about $14 million of the year one change is a technical adjustment, shifting certain city-owned and leased site agreements from grants to professional services based on guidance from the city attorney.

That is why you see a corresponding increase in professional services.

Second, the remaining changes in grants and programmatic projects are largely tied to revenue changes, including the planned spend down of one-time state HAP funding and technical adjustments related to CalAM expenditures.

Salaries and benefits increase modestly due to mandatory salary and fringe cost increases.

Interdepartmental services also increase slightly, driven by citywide work order costs for services like technology and health partnerships with DPH.

Overall, this slide reflects a budget shaped by revenue shifts, technical accounting changes, and fixed cost increases, not a wholesale reduction in the core service system.

This slide shows how HSH's proposed budget is programmed by service area across the two budget years.

The overall picture is steady.

The majority of our funding continues to be invested in housing with the next largest share supporting shelter and crisis interventions.

That reflects the core structure of the homelessness response system, helping people move from homelessness into safe, stable housing, while maintaining the emergency shelter and crisis response capacity needed to meet immediate needs.

You will see some slight shifts between the two years.

Those are largely due to one-time breaking the cycle interim shelter funds that are included in fiscal year 26-27 and then fall off in 27-28.

At this point, those shifts do not reflect a planned service change.

I also want to note that while it is not shown directly on this slide, roughly 12% of our programmatic investments support young adults, and roughly 12% support families.

When HSH was created, those investments were closer to 6% for each population.

That growth reflects the impact of our city our home funding and our continued focus on preventing and ending family and youth homelessness.

Finally, these numbers do not yet reflect the transition of outreach functions to DPH, which I will discuss later in the presentation.

Unlike in previous years, our department submission does include our proposal for using OCO funds.

This slide gives a reminder of when this passed, imposed a homelessness gross receipts tax with revenue dedicated to increasing housing prevention and services for people experiencing homelessness.

And I know you have already heard about that.

You can see tax code requires revenue to be allocated in certain formula with at least 50 percent toward permanent housing, 25 percent toward mental health, and a few caps, 15 percent for prevention and 10 percent for shelter and hygiene.

And this slide summarizes HSH proposed our city our home budget.

The main point is that the proposed OCO budget maintains and sustains prior year investments so we can continue current service levels.

That includes updating operating budgets at city-owned permanent supportive housing sites as one-time home key grant funding winds down, as well as one-time rehabilitation investments needed to preserve those projects.

We are also in a stronger position than in pre in prior years because OCO revenue has come up in higher than budgeted over the last two fiscal years.

That means the gap between the spending plan and available revenue is smaller than we previously anticipated.

We have been using one-time fund balance and interest earnings to maintain service levels, and it is encouraging to see revenue beginning to better align with the system's ongoing needs.

The proposed budget also includes one-time funding previously appropriated by the board for the mayor's breaking the cycle initiative, focused on interim housing and recovery-oriented shelter.

Program funding for that initiative ends in fiscal year 27-28.

And finally, the one new OCO enhancement in this proposal is funding for 100 adult rapid rehousing subsidies intended to support clients connected to the city's large vehicle response.

This slide shows the department's total proposed OCO spending plan as of February when our proposed budget was submitted, reflecting that approximately $369 million in fiscal year 27 and about $330 million in fiscal year 28.

The spending plan for both fiscal years is supported by budgeted revenue, which includes gross receipts, tax revenue, interest, and budgeted fund balance.

The spending plans in both years are also supported by prior year fund balance, which fund the rapid rehousing expansion programs funded in the last two budget cycles, and the one-time rehab costs at city-owned PSH sites.

The year-over-year reduction in the spending plan is due to the drop-off of breaking the cycle funding and shelter in fiscal year 28, 27 million dollar reserve for emergency housing vouchers in fiscal year 27, included in the housing categories, and one-time rehab costs for city-owned sites, PS PSH included in the fiscal year 27 spending plan.

As revenue is projected to come in higher since this was submitted, we expect additional OCO investments in the mayor's phase of the budget process.

Sure.

So I do see that.

Can you go back to the previous slide?

I do see that homelessness as prevention.

Uh, it's actually an increase from 70.5 to 71.

So there are some money increased, and what kind of prevention program are we allocating those funds to?

It's just the cost of doing business adjustment.

It's just the cost of great, thank you.

Thank you.

Thank you.

Okay, so HSH's FTE count of 247 staff in the fiscal year 26 adopted budget includes homeless oversight commissioner positions and 15 FTE grant-funded positions.

The proposed fiscal year 27 budget includes additional salary savings to balance technical position adjustments, with attrition set at 5.37 FTE.

At the time of our budget submission, HSH projected $2.1 million in salary savings for fiscal year 25-26 based on the impacts of the hiring freeze.

Position changes reflected in the proposed budget include adjustments to converting a public service aid to a receptionist position to meet the mayor's return to office requirements and make our headquarters at 440 Turk accessible to the public, and three cost neutral changes to job classifications to create better efficiency within HSH divisions at no cost of the budget.

Since the submission of our proposed budget in February 2026, there have been a few changes to staffing that are not reflected in this slide, and that I'll talk about next.

So, in order to deliver a citywide balanced budget, the mayor's office directed all departments to fund to find reductions by reducing positions citywide.

For HSH, this resulted in a reduction of eight vacant general fund positions.

While losing any positions is a challenge, we are thankful that we were able to meet these reduction targets without any layoffs.

As part of this process, citywide hiring freeze went into effect on March 27th.

Last week, Mayor Lori announced the consolidation of street outreach under the Department of Public Health, and this will result in a transition of positions, both filled and vacant from HSH to DPH.

This slide reflects the direction we are taking with shelter and crisis intervention across HSH and DPH.

The goal is not to reduce shelter access.

The goal is to make sure every bed we fund is safe, effective, and connected to a pathway out of homelessness.

That means we are expanding more specialized and higher quality options, including family shelter, interim housing with stronger case management, and recovery and treatment oriented settings for people who need a higher level of support.

It also means prioritizing environments that help people stabilize and move forward.

Shelter should not be just a place to sleep.

It should be a place where people can connect to care, address barriers, and move toward housing or other appropriate exits.

And at the same time, we have to be clear-eyed about sites that are not delivering strong outcomes, whether due to low engagement in services, safety concerns, or a mismatch with client needs.

In those cases, we will work to improve, repurpose, or wind down programs as needed.

This next slide shows the city's net increase in shelter, transitional housing, treatment, and residential care capacity since the beginning of calendar year 2025 through April 1st, 2026.

Overall, the city has added a net 221 treatment and residential care beds, including crisis stabilization, treatment initiation, recovery, and step-down settings.

These are critical additions because they create more appropriate options for people with acute behavioral health, substance use, or medical needs.

At the same time, the city has added a net 187 shelter and transitional housing beds for people experiencing homelessness.

That includes emergency shelter and transitional housing, with notable additions like urgent accommodation vouchers, Gerald Commons, Hope House, and James Baldwin Place.

It is important to note that these are not, these are net figures.

They account for both openings and closures.

And we reconciled the data across HSH and DPH to avoid double counting beds that support people experiencing homelessness.

The larger point is that we are not simply adding capacity, we are also reshaping capacity so that the system better matches client needs, including converting some shelter beds into higher acuity and treatment-oriented models.

This slide shows how significantly San Francisco's shelter inventory has grown over time.

Since 2021, the city has nearly doubled its year-round shelter and transitional transitional housing capacity dedicated to people experiencing homelessness, growing from about 2,600 beds in to nearly 5,000 beds in 2026.

These figures reflect April inventory each year and exclude seasonal and overflow beds.

So this is the core ongoing capacity in the system.

The key takeaway is that even as we evaluate and reshape parts of the shelter system, San Francisco has substantially expanded its overall emergency shelter and transitional housing footprint over the last several years.

And then this slide shows the proposed shelter budget across the two budget years.

The decrease from 2627 to 2728 is largely because the FY2627 includes one-time breaking the cycle funding through our city our home that was not available in 2728 at the time HSH submitted its proposed budget in February.

So the year-over-year difference should not be read as a planned reduction in shelter access.

It reflects the timing of one-time funding and how it was budgeted.

We do expect the shelter shelter allocation to be updated as part of the mayor's budget, which will be published, as you know, on June 1st.

And across our system of care, San Francisco does not rely on a single intervention to address homelessness.

There is a place for a variety of interventions and diversity across our portfolio, and it's essential to meet the diverse needs of our community.

We operate a full continuum of care, prevention, outreach, shelter, interim housing, permanent supportive housing, and recovery and treatment oriented settings.

Each part of that continuum plays a distinct role.

For some people, permanent supportive housing is the right long-term solution.

For others, the most effective intervention may be prevention, rapid rehousing, transitional housing treatment, or shorter-term stabilization.

The key is matching people to the right level of support at the right time.

Shelter and outreach are critical entry points, but the goal is always to connect people to the next step towards stability, health, and housing.

As you can see here, San Francisco has continued to expand its housing inventory over time.

Since 2021, the city's housing portfolio dedicated to people experiencing homelessness has grown from about 11,700 units or slots to nearly 15,800 in 2026.

That includes site-based permanent supportive housing, scattered site permanent supportive housing, and other housing interventions like rapid rehousing and housing ladder.

The shelter and crisis response outlined earlier in my presentation are only one part of our system.

San Francisco has also made sustained investments in permanent and flexible housing solutions that help people exit homelessness and remain stable over time.

This slide shows the permanent supportive housing pipeline that MOCD is advancing in partnership with HSH.

In total, there are about 1,500 new supported housing units in the pipeline for people exiting homelessness, including adults, families, transitional age youth, older adults, and veterans.

That includes 746 units recently added to the portfolio, 182 units currently under construction, and another 626 units in active pre-development.

San Francisco continues to invest in long-term housing solutions while also ensuring those units are connected to the services people need to stay housed.

So this slide shows how HSH funds the housing portfolio across multiple sources, including general fund, our city, our home, and state and federal funds.

HSH continues to braid these funding sources together to sustain permanent supportive housing, scattered site housing, rapid rehousing, and other housing interventions.

You'll see the housing budget is slightly higher in fiscal year 27-28 than in 206-27.

That increase is driven by the 3% cost of doing business adjustment for community-based providers, master lease cost increases at permanent supportive housing sites, and supportive services for new sites coming online through the Mo CD housing pipeline.

This reflects our continued commitment to maintaining and expanding housing stability for people exiting homelessness.

And then this slide is an important one because it reflects both our continued commitment to permanent supportive housing and our recognition that this cannot be business as usual.

Permanent supportive housing remains one of the most important tools we have to end homelessness.

And we are continuing to fund new housing and services through MOCD through the Mosidi pipeline.

At the same time, the homelessness response system cannot solve the affordable housing shortage or the long-term behavioral health needs on its own.

So our focus is on strengthening and right sizing the housing portfolio to improve outcomes for tenants.

And that means targeting PSH to the populations it serves best, improving service models, supporting tenant stability, and creating more voluntary pathways for people to move on when they are ready.

Through moving on 2.0, we want to create more flow in the system while expanding other interventions like prevention, rapid rehousing, treatment, recovery, and interim housing.

The goal is not to step back from housing.

The goal is to make our housing investments stronger, more effective, and better matched to client needs.

And then just moving on to prevention.

This slide highlights the role prevention plays in reducing homelessness before it starts.

Through March 31st, HSH funded prevention providers have supported almost 1,200 unique households in fiscal year 25-26, with more than $6 million in flexible financial assistance for housing related expenses.

We are seeing fewer households served this year compared to last year, which appears connected to the broader affordability challenges households are facing in San Francisco.

In response, the emergency rental assistance program made several changes, effective February 2026 to improve reach, including expanded eligibility for families returning to ERAP, higher income limits, lower documentation thresholds, and adjusted rent burden standards.

The goal is to make prevention more accessible and flexible so we can help more households remain safely housed.

Prevention continues to be funded primarily through our city, our home, which reflects the role OCO plays in helping people stay housed and produce reducing pressure on the homelessness response system.

The general fund share remains relatively consistent at about 12% in both years.

Overall, the proposed prevention budget is stable.

$76.9 million in fiscal year 26-27 and $77.4 million in fiscal year 27-28.

This allows us to continue prevention investments, including flexible financial assistance and targeted supports for households at risk of homelessness.

And then this slide highlights two major areas of uncertainty in our budget.

Federal continuum of care or COC funding and future state homeless housing assistance and prevention or HAP funding.

For the two year budget, we are assuming relatively flat federal funding, but that is still to be determined.

Congress now requires HUD to release the 2026 COC NOFO in June.

And we will be watching closely.

San Francisco relies on COC funding, primarily for permanent supportive housing and rapid rehousing.

If HUD shifts more funding away from existing housing renewals, that could create a significant risk for roughly 1,000 units of rental assistance or permanent housing.

On the state side, we are not programming additional HAP funding at this time.

The governor's January proposal does include another round, but at about $500 million statewide, which is rough roughly half of prior levels.

We do not yet know San Francisco's allocation.

So while some later changes may appear large, they are not service cuts in this proposed budget.

They reflect the fact that we are not assuming future state revenue until it is confirmed while continuing to plan for the potential funding gaps ahead.

I swore I'm almost done.

As you likely heard, the city plans to transition all city funded street teams under the Department of Public Health.

The city originally used the Department of Emergency Management to quickly stand up a more integrated street team structure and improve coordination across departments.

That model has now reached a steady state, and this is the right time to place operations in a permanent home that reflects the long-term nature of the work.

Street crisis is often a health crisis involving behavioral health, substance use, and chronic medical needs.

DPH is best positions to contour outreach directly to treatment, stabilization, medication support, and ongoing care coordination.

This transition is a sign of progress, not failure.

It reduces fragmentation, clarifies accountability, and creates more flexible deployment of street teams based on current need, hot spots, and emerging trends.

Most importantly, it should improve outcomes by helping people move more consistently from street outreach into shelter, health care, behavior behavioral health services, and long-term stability.

Effective July 1st, HSH outreach staff and contractors that support street team functions would move into DPH's operational structure.

That includes approximately 11 HSH staff positions and three outreach contracts.

The intent is to streamline oversight and strengthen alignment between the outreach and health care while preserving service continuity for people being served.

Existing contracts are expected to remain in place with amendments used to complete the departmental transfer.

What stays the same is also important.

HSH remains the lead department for shelter and housing.

So while outreach becomes more health anchored under DPH, HSH will continue leading the shelter and housing connection and housing connections people need to move off the street and towards stability.

I just want to thank you for your time, and we are here to answer any questions you may have.

Thank you, Director Ms.

Baden.

Can you go back to site number five?

I have some questions on the numbers.

Slide number five.

The posted fiscal year 26 to 28 HS8 budget.

Okay, thank you.

So I see that uh on 25 to 26 compared to uh department requests, uh the second column 26 to 27.

I see that programmatic projects.

It has a 51 per 51 percent reduction.

And I also see that uh on professional services, that's about 14.3 percent increases.

Can you talk a little bit about you know the reduction with the services increase for the professional services?

How is that uh continue to create impacts for the department and the services that we or the goal that we're trying to achieve for the department?

Sure, I'm gonna ask our interim uh deputy director to answer those questions.

Thanks.

Good afternoon, honorable committee members.

Dylan Schneider, interim deputy director for administration and finance.

Um as we noted, the change that you're really seeing between the uh programmatic projects and professional services is about 14 million dollars that um are for city owned or leased sites, and we needed to put those under contracts, so that's why they move from programmatic programs into the professional services.

None of that reduction reflects any reduction in services.

It's simply just a swap of the agreement type and how that's showing up in our budget.

Great.

Thank you for that clarification.

And can you both one of you speak a little bit more about how housing first strategy have successfully uh in addressing the housing needs of unhoused it in San Francisco?

Sure.

So as you know, we have had a strategy of really acquiring and building a lot of new housing over the past few years.

Um that's been we we've how we are now housing more people in housing and shelter in some of our new models than we ever have.

And so I think you know, as I've said repeatedly throughout my presentation, permanent supportive housing is really important.

It will continue to be very important in the whole portfolio of the services that we have, and we are also adding in some new models to really respond to um community needs.

So for instance, we have added very recently recovery shelter, we have um added recovery transitional housing, and those are really popular models, and we want to continue thinking about what we need in the portfolio to best serve people.

So we're not moving away from really important tools like permanent supportive housing.

Um we absolutely want to get people off the street and into shelter and housing.

That will not change.

Great.

Oh, thank you.

And this is related to slide number 13 regarding the shelter and crisis intervention capacity across San Francisco number.

Can you clarify the timeline?

Uh this net bets added since the beginning of the year or since last year, January 2025.

Yeah, go ahead.

The timeline for what you're seeing on slide 13 is the beginning of calendar year 2025 through April 1st of 2026.

Do you have a breakdown of how many new bets added for this year for 2026?

I don't have that in front of me, but I'm happy to get that and bring that back to you.

That'd be great.

Thank you.

Um and then regarding the shelter inventory over time, can you also clarify uh when this number when this number is off?

Does the 4,099 4,996 number include the laws of the shelter inventory from the Adante and the Monarch Hotel closures?

That would be slide um 17.

Oh no.

Um 14 Um This Inventory reflects April inventory of every year.

I don't have the exact date in April, but for 2026, that number would reflect you know the current inventory as of that month.

And so that should reflect you know any sites that had either closed or opened before April 2026.

And that we yes, and so supervisor, that would include the monarch and the adante closures.

Okay.

So for uh it's I just want to make sure that um Supervisor Walton and Dorsey, are your number I are your question related to shelter and and housing inventory?

Otherwise, I have more questions.

No, can't go.

Google, okay.

Okay, thank you.

Uh, how many sites-based uh PH PSH projects have opened this year to account for the 400 unit increase in 2026?

The 400 increase that it's in slide 17, sorry.

Supervisor, we'll have to get that answer for you.

Okay.

Uh any of the units reflected in 2026 projected, or are those all open and functional units as currently?

I believe these should all be open and functional units, as this is not reflecting the future pipeline.

Okay.

Uh, what is the timeline for the pipeline?

And over how many years are we talking about for the site-based permanent supportive housing pipeline?

We can get the exact number of years for you.

Um it's definitely over a few years.

Okay.

It's more than three, and I don't know exactly what the number is, but we will absolutely get that for you.

And I don't know exactly what the number is, but we will absolutely get that for you.

Okay.

And on the graph, we also see that uh uh under construction category, it's quite low.

And do we know why?

It's page 18.

Fly 18.

Um yeah, I mean I think it's it's a lack of funding.

Microfunding.

We really have been in the process, as you know, over after COVID, we had a lot of resources at our disposal.

Um we you know, we definitely were very aggressive in bringing on new things, and you know, we don't have the same resources that we had then.

Then do we have plans to have additional units to come online?

If we do have plans, and what are the plans?

So the additional units we have online are the ones that I talked about that are in our pipeline.

Those are those are all in the works.

Okay.

Um what about uh for ODL contracts?

Now we go.

Um there are there is a contract for legal services that has become controversial.

Can you please speak to the contract and explain how the provider was chosen?

Sure.

So um we have generally HSH does not fund legal services.

We do, however, fund prevention services, and we are really excited to start thinking about how to use legal services as prevention.

Um we are about, as I think we've been talking about this for a couple of years, the department is about to go out with a new multi-year procurement plan, and we will be procuring all of our services, prevention included, over the next couple of years.

Um, you know, this is what we promised the board.

We have to have all of that done by 2029.

And so we will be going out full on for prevention services, you know, starting from scratch next year.

We did really want to get some prevention dollars into the community.

Um so we asked one of our providers to take on the role of providing prevention services that that organization is planning on working with some of the other providers to make sure that they're doing the best they can across the community because we know we've got providers who are really good in certain communities, and so we've been working on that.

Um, you know, it simultaneously the mayor's office of community development had cut civil legal services, and so it became it felt like a crisis to our providers.

Um we are working very closely with the mayor's office and Mo CD to figure out how we can support these providers as best we can.

I think there's a lot of opportunity to do that, and we've been talking um we met with the full group last week.

We're gonna be meeting with them in another couple weeks.

Um so that's where we are.

Great.

Thank you.

And I I think um I held two out of hearing.

I really want to uplive um the budget, but it's really the value of San Francisco, and I think equity is really important.

Uh did the department conduct any equity study um in the services area to make sure that we're not duplicating existing services?

And also we're not disproportionately impacting um neighborhoods.

Can you repeat that question?

I'm not sure I understood it.

Uh, did we do any equity study?

We have done, we have done quite a bit of equity work.

We've done a lot of studying about who gets into housing, who gets into shelter.

Um we are happy to present you with one of the studies that we recently did.

Um one of the pre presentations that we did for the commission, um, if that would be helpful.

But yes, we've spent a lot of time looking at that and adjusting our practices as a result of what we found.

It's really important.

You mentioned housing.

What about the general legal services that the general legal services we know?

Because generally we do not we don't serve, we don't do general legal services, we do prevention services, and so that's a different thing, and we are looking at equity in the services that we fund.

Great.

And then uh what performance metrics do we use uh so that the provider are measured will be measured against.

So we're happy to share those with you.

I can't name them off the top of my head, but we do have those and we're happy to share them.

Okay.

Thank you.

That's all my question.

Thank you so much.

Thank you.

And Supervisor Walton.

Thank you, Chair Chan.

Um does the emergency housing voucher program end, or the when do we lose the funding?

2027 I believe it's 2027, Supervisor.

So we're good the rest of this fiscal the rest of this year.

Um and then I know we have a disproportionate amount of folks that are living in District 10 on vouchers.

Um what's the breakdown if ethnically?

It's very high.

I don't remember exactly what the percentage is, but our focus really was on folks from District 10.

And so can you get it?

Okay.

Thank you.

And you can, I mean, you don't have to have that exactly right now, but I would say that.

But it's but it's high.

So and have you spent all of your propsy money?

No.

I mean, for you mean for emergency housing vouchers specifically?

Just period.

No.

And would you say we have a surplus in proxy money?

Yeah.

Oh, thank you.

It may make you Sophia Kittler for the mayor's budget office.

So one thing that has happened this year, particularly with the March updates, was that um based on our previous revenue projections, we had been using a lot of leftover fund balance to kind of cover fiscal cliffs that happened both in the budget and in the next couple years after that.

In the March update, we saw such a huge increase in particularly in the first year of with with kind of like the spike of business tax gross receipts that we had seen.

We see a big push in revenues in the gross receipts tax and in the propsy tax that basically like pushes out all of the one-time reserves we had been previously assuming.

And so from a revenue perspective, like we are now much more stable in the departments.

We are kind of covering all of the uses we have already identified.

And what we have is a huge fund balance that we used to be planning to spend down, but now are not like now will not be needing to spend down as fast.

So we do have a proper surplus.

So we have a bunch of we have a one-time surplus.

We do not have a lot of room on the actual like ongoing revenue.

How much is the surplus?

Um I would have to get back to you.

Sixty.

Is it more than huh?

68?

It's more than 10 million dollars?

It is more than 10 million dollars.

So going back to my original question, why is the department cutting anything?

I so I think this is what I'm saying.

The department isn't cutting anything, supervisor.

They're reducing or unless I can't read, I'm sorry.

I won't I want to make sure I can read.

No, I'm sure you can read.

I I am clearly not explaining myself correctly.

Yeah, because in my opinion, with the props C surplus, and I know we set aside 400 million dollars.

Why do are they cutting anywhere?

And they are cutting it.

So we have to do that.

Because I see the budget going down from last year.

Absolutely.

So there's a couple that's a thank you.

I have not explained this properly.

So there's a couple things.

First, there was a bunch of money that we programmed from general fund last year that we did not use.

And so they are giving back, I think around $9 million one time of general fund funding that we had expected to use, and we do not currently have a plan for because we have so much propsy revenue.

So again, the general fund money is coming down.

The other thing that is kind of tricky about the um HSH budget is how we have budgeted because of this like huge fund balance that we've had for period of time, particularly like from the lawsuit.

Um we have certain ongoing programs or kind of medium-term programs like rapid rehousing, where it is a five-year, for example, five, three-year um subsidy.

We have historically assumed all of that in a single year and said like we have a hundred million dollars of spend and we're going to appropriate it all in the first year of the budget and then spend it down over time.

So we still have all five years of that planned for, but the from a budgeting perspective, it falls off like a cliff after the first year.

And so it looks like it looks like it is a decrease in the budget, but it is not a decrease in services, and it is not a cut.

It is a it a one-time revenue that is going away.

I I it is it is a it is an incredibly non-transparent way of budgeting, and it is something that we have been thinking about, but it is really driven by the long-term balance that we had instead of kind of like the ongoing revenues.

Yeah, I mean, but and the numbers are in front of me.

I mean, the tables are in front of me.

We've shown reductions in several categories.

So the money is going down, but the services are not being cut.

I'm sorry.

I I sorry to interrupt.

I just want to say um could uh Department of Homelessness Support Housing show your slide 28 on screen right now.

Sorry, Supervisor Walton, please continue.

As you can see the revenue forecasts, so yeah, I'm just trying to understand because less dollars lead to less services, and that's problematic when there is a surplus and resources from propsy.

I mean, I know we'll be coming back and having more conversations, but it's just not making sense to me.

I I I fully understand and I I realize I am not explaining it as clearly as I can.

I'm trying to think about how to do that better.

But I believe what we are seeing in the reduction of a budget from one year to another is one time things coming out of the budget.

So for example, if we spend a lot of money in the HSH budget acquiring a building, that would be have been appropriated in a single year.

It would not show up in the budget in the second year.

Um that would not be a service reduction.

That would just be we are spending less money.

Um so I think similar we do that a couple across a couple of programs.

We have put a lot of capital investments through HSH in in individual things.

And so I it is it is less money, but I do not agree that it is a service reduction.

It is not our intent to reduce services.

So but it does seem like then if it's not a service reduction, we could be doing more because we have money.

And since we're not losing services, but we have surplus, we could actually be doing more to address homelessness.

It is not our intention to leave money on the table.

It can be both.

Like you can't have it both ways.

When we have had one-time money, we have spent it.

We got more than one-time money in this case.

At this point, what we have is a lot of one-time money.

We have a lot of money left over because we had a lawsuit and we never spent money and resources are still available.

We had a build-up of money from the lawsuit, and then as the forecasts from the controller's projection, we have all we have plans to use one-time money and then not needed to use as much of it as we anticipate.

And I appreciate your responses, Director Kiddler, but I don't understand why you keep saying one-time money.

But I know we'll be having more conversations.

Thank you, Supervisor.

Supervisor Dorsey.

Thank you, Chair Chan.

Um I want to talk a little bit about um housing first.

And I I am grateful that the People's Budget Coalition um noted that housing first is a flexible approach that can be tailored to meet um unique needs of individuals.

Um I agree.

And I think uh uh my work with HSH shows that um I think we all do.

Uh we're looking for ways that we can um make this work for the people it serves.

Um I would note that um this Board of Supervisors twice supported resolutions in support of state legislation that um Assemblymember Matt Haney authored um that would have unrestricted 20 up to 25 percent of housing first dollars at the state level um to support recovery housing and drug-free housing options within a housing first framework.

Um actually I'm gonna be um I'm in the process of drafting now, I will probably introduce next week um a resolution, a third resolution for his new try at that.

Um I believe that is AB 2893.

Umfortunately, last year I know that even despite going through the legislature unanimously, um Governor Newsom unexpectedly vetoed that.

Um it's my understanding that they're in good conver having some good conversations on the policy now, and we should have hopefully good news this year that we'll unlock um some PSH funding under housing first.

Um the position of Assemblymember Haney and me and Barack Obama's um HUD and Joe Biden's uh SAMHSA is that housing first is not inconsistent with drug-free or recovery housing options.

Um I would just read from the Obama era guidance in 2015.

HUD strongly encourages CLCs, continuums of care to adopt a system-wide housing first orientation that removes barriers whenever possible and that addresses the housing needs of people at all stages of recovery when operated in a manner consistent with this guidance, recovery housing may not be in conflict with this approach so long as entry into the program is based on the the choice of the program participant.

And I know this is true of the State of Oregon, which is also has a housing first model that allows for these options.

In San Francisco, we actually do have I would I don't know if it's a pilot or sort of a test case uh at 1174 Folsom Street that in that we did, I know there was, you know, we had some negotiations about this, that reflects a drug-free supportive housing option that is within the housing first framework.

Importantly, this is not recovery.

This is just drug-free supportive housing, meaning legal intoxicants are are fine, but there is a an addendum and agreement that this is an illicit drug-free residence.

I wanted to ask, and I know that with the I know that there's regular reporting that's on a certain calendar, but I wanted to ask um maybe ahead of time if you have any reports on how 1174 is doing.

Because I'm getting good, you know, the anecdotally, I'm hearing good things from neighbors who are, you know, quite had a lot of objections about stuff coming.

But if if you have um a perspective on how that site is doing, you would be interested.

I'd be interested in the.

Yeah, I mean, I think generally it is doing well.

Okay.

I would agree.

Would it be possible if to get um I don't know if there's, you know, I know that there are reports on evictions overdoses, I think 911 calls for service.

I don't know if there would be possible to accelerate that or get sort of a mid-year check-in on where we are with 1174.

Um I will say for, you know, there's sometimes I I represent this is a part of my district that has really been traumatized by the shelter in place hotels.

And I think we as we as we recall it was pitchforks and torches on this, but I think we got to a better place.

But I will say I'm very impressed with the with the department and with the provider abode.

Um I I'm hearing good things, and I I'm hoping that that will bear bear it out because I think it's a successful test case.

Um the other thing that I wanted to ask, and we, you know, you may recall that we had a hearing on safety um issues that were sometimes playing out within neighborhoods where there were objections.

One thing that I really am in agreement with with the providers is I think we are asking permanent supportive housing to solve problems that it wasn't intended to solve.

I think uh sometimes we as a city, we as a board, mayors, you know, I think this isn't unique to this department or the nonprofit providers who work in this space.

Sometimes we can um set our partners up and departments up for failure and then blame them for failing.

Um it's really not fair.

In your judgment, is there a way that we should be looking at how we're funding permanent supportive housing that makes sure that we're accounting for some of the security issues that may play out.

And I will say just for for example, and you've heard me say this before.

I hear from providers, and I'm sensitive to it, that we're not funding them to provide security services or ambassador services or things like that.

But from my perspective, being on this budget committee, if we're sending police officers there twice, twice a day, we're spending money on security.

We're just spending it badly.

We're spending it's it's one of those sort of an ounce of prevention would be, I think, worth a pound of cure.

And I think we would all be rather having this money go to the provider so that we're better addressing the needs of um people in you know, in that they're serving to avoid having sort of these 911 calls play out.

So I'm just thinking thinking it what what could we do to set providers up better?

And should we be changing the math on this?

That listen, we need to allocate a certain more money based on how many people are there than we're doing it right now, so that we're doing it better and setting our nonprofit partners up for success and your department up for success.

Sure.

All good questions.

I um so I just want to say first that I mentioned earlier that we are about to embark on our multi-year procurement plan.

Part of the whole, I mean several reasons.

One of them is we should be procuring these services on a regular cadence.

I mean, that really hasn't happened with a lot of these contracts.

Um a lot of the legacy contracts that came to the department when it was formed, and there are a variety of reasons why it hasn't happened yet.

But part of the reason for doing that in addition is to write size um some of the rate setting, right?

So paying rates that more meet the needs of the provider communities and the services that they are dressed desperately trying to provide for folks who need them.

Um that's one thing that I think will make a difference, and it does change the math.

I mean, I think, you know, either we'll end up with a smaller portfolio or the board and the mayor's office will decide to fund higher levels, you know.

That'll happen in the next few years.

Um the other thing that we're also doing is working much more closely with the Department of Public Health.

So HSH and DPH are working on really understanding the acuities that we're seeing in PSH and and working together to decide what is it that we need to do for folks who really aren't thriving in PSH.

There's so many different reasons.

I mean, it's not just drug use, it's like dementia, like people are aging in place.

There's so many things that are happening.

And so how do we segment those things and look at what people really need and provide extra supports where they're needed?

Yes, that's probably gonna cost more money, although it also means that maybe we have different buildings that are different used differently for the populations that we're seeing.

Um I think that's I mean, I think that's really the most important thing is this new and very strong collaboration across departments to really look at the needs.

HSH is good at setting up shelter and housing.

I mean, that's what we do.

We work, we do contracts, we work with all of our providers.

We don't have all of the expertise that DPH has when it comes to some of these other issues.

And so that partnership and um strengthening partnership has been really important.

So those are two things that we're doing.

Um the other is that we're really looking at the security needs across our portfolio where we're going to be working with our providers just to say, okay, like what is the what do we need generally?

I mean, we've kind of been doing something different where we've been like, okay, this is a hot spot, let's put something there.

But really, what do we need to stabilize the buildings and make the providers feel like they're safe to provide the services?

Um, so we're working on that as well.

Sure.

Thank you.

Um could I have the controller's office or maybe or director Kitler to confirm for me for the slide 28 that presented by the department on specifically the OCO fund revenue forecast.

And so the forecast here is indicating that for um just this current year that you actually are seeing your projected at more than 68 million dollars than what you have budgeted.

Is that correct?

Um so yes, the the way I read this is that propsy revenues are projected to come in at 68 more million dollars more in the current year and 93 million dollars more in the budget year.

Um that does not include previous fund balance that has not been spent down.

Yeah.

So I mean, I think that the question's kind of I want to pick you back on what Supervisor Walton kind of indicated.

I mean, if knowing that there is actually a revenue forecast, I in my opinion, just looking at it, it's a significant increase.

Um what is then why?

Why the why the I I'm not too sure if it's really a service reduction, um, but but maybe it is.

I so I I think a couple things.

First, there's a timing question.

The March updates came in well after the department submitted their budget, right?

Um, and and so there's a there's a timing difference between what we had been previously assuming, and that is what mayor phase is kind of looking at this revised revenues, looking at their proposals, deciding whether or not we like their proposal, whether or not we do, in fact, want to reduce what their reductions are.

Um but then also I I do think we don't want to and and on the proxy money, I I just want to be very clear.

I do think like I am a believer, and speaking for myself is as a as the budget director not having conferred with any of my colleagues.

I I believe this is what I would call like a big push of theory of economics issue, right?

Like there's a certain amount of things that need to be sustained ongoing, and then there's a certain amount of policy where like the more money you spend sooner, if you spend it well, it it helps make the problem go away so you don't need to spend so much in the future is the hope, right?

And I think that what we're trying to figure out is is what are the interventions that could really help kind of create that step change in what the long-term operating needs are, and how do we how do we spend one time one-time money, not which is not to say that we can only spend it in one year, but but that is not recurring revenue, money that you have once and then it goes away.

Um, how do you spend that in a way that you bring down long-term costs or bring town bring down the acuity or kind of figure out all of those pieces?

And that is what we are working through right now.

And I think that this is this is what I really want to emphasize about mayor phase is like we have more money than we knew knew we did in proxy.

Um we will probably spend more money than the than the um departments submitted in January because of that additional money.

Um we still have a general fund crisis, and so we are still hoping that we will reduce the general fund support in the departments and more than offset that with propsy dollars.

Um, there is a general fund baseline.

We will of course respect the general fund baseline, but I think the degree to which there is wiggle room there that is allowed within the buckets of proxy and and kind of fits neatly into one of those boxes, like we we want to solve the problem.

Does that I don't know if I'm kind of speaking at too high of an altitude.

Well, I I mean I think I can only speak for myself.

I'm here to articulate um my approach and philosophy in this is that I do believe the best way to solve homelessness is actually to prevent it from happening in the first place.

And so it means that in my opinion, is also to increase subsidies, particularly a rental subsidies, uh, and of course, at that rapid rehousing portion of things.

Um, we have conversation about whether it's the initial two years or expanded to five years for some of these families, just seeing how the federal cuts it's coming.

Um, in my opinion, I think that um it is it would be good to have those conversations about investing in housing.

I think it's consistent to housing first policy um and be able to have those conversations.

But that's that's what I would I'm gonna advocate for.

Uh as you will come before this body again for budget, um, and recognizing as supervisor and supervisor walleton has indicated, not only that we're seeing the projection of the revenue increase for proposition C.

Um, we we also know that uh the one time uh saving that we now have from Airbnb lawsuits, which is roughly about 100 million dollars, which we put on reserve from last fiscal year, uh anticipating the potential payout.

Now that we don't have to, we just approve that settlement literally last Tuesday.

So I think there's some there's a more than I I mean now we're already talking about 168 million dollars of wiggle room.

I want to be on the record about that.

Um so I don't have any more question.

Um I know that uh supervisor chin is actually uh wearing two hats at the same time as LAFCO chair, which I'm very grateful for, trust.

Um and so she will be returned shortly.

Um, but I think that she can probably ask more questions when she returns.

Um if I don't see any name on the roster at this moment, I would like to open that this up to public comment.

And as a reminder, we have set right at the beginning of the meeting that we're anticipating as I want to be able to hold the quorum uh and that we will limit public comments to one minute.

Yes, we are now opening public comment.

If we have any members of the public who wish to address this committee regarding this item number one, um the chair did announce that we are limiting public comment to one minute.

And uh as announced earlier on, we do have uh interpretive service for the services for those who need it.

And as we settle in, if we could have our first speaker, please.

Uh Jordan Voshlewski, she day.

Two things can be true at once.

It is true that if PSH is decommissioned, no ten should end up in the streets or shelters, and that there should be a right to remain coupled with just transitions out to bit similar or better housing.

But also, some of these PSH SROs are such spartan shithes that no tenant would miss it if they had a chance to move somewhere better.

When select tenants from the squalorist Baldwin were transitioned to the well many garland it manity garland, it was a 35 to 40 percent cost savings per capita per year.

When it comes to jamming us in small bathrooms, rooms without bathrooms, the math ain't mathing anymore.

I say this as a commissioner meritus of the SRO task force.

I'd love to see the beginning of the end of SROs being uh the norm for PSH and the wholesale expansion of scattered site PSH would do more to address drug issues than Dorsey and Souter's bullshit ass drug free housing act.

To all those who hate housing first and harm reduction, I yield my time.

Fuck you.

Hi supervisors, my name is Lucasilla.

I'm with the Coalition on Homelessness.

Um I wanted to speak briefly in regards to the shelter numbers.

Um I you know, I don't know the department figures, and we didn't get down into the specifics of which shelters they closed and with they were how many UAVs they were counting those hotel vouchers.

Um but I just want to emphasize the sheer number of closures.

Um we've got quite a bit.

It is the the open shelters, which were named by the director, the commons, um James Baldwin Place, and Hope House only account for a hundred and eighty-one beds.

We have closed the Cova Hotel, the Bayview Vehicle Triage Center, the Mission Cabins, the Monarch Hotel, and the Adante, all within January 1st, 2025 and April 1st, 2026, which was the period that they were quoting from.

That's a total of 373 beds lost.

So I just want to emphasize without these non-congregate shelter beds, which are some of the best sorts of shelter beds that we can have for homeless folks.

That means less folks are coming in off the streets.

If we have an RV ban and other criminalization efforts, prioritizing those shelter beds, that's for those shelter beds.

Next speaker, please.

Hi, Supervisors.

My name is Yong Yule.

I hope to get your support to allocate 39 million from the 400 million reserved to backfield 6200 of these vouchers for the next two years.

It was only after we received the EXTree voucher that we are able to move into a standard home.

Since then, my children's health and development have improved a lot, and my younger son's language skills have clearly gotten better.

However, my family still faced many challenges.

The truth is without help, low-income immigrant families like ours may become homeless again.

So today I sincerely ask the city and all of you for help.

We really need this help.

A stable home is not just a place to live.

Thank you much for your comments.

Next speaker.

Thank you much for addressing us, company.

Hi, supervisors.

My name is Yen Jing Xiao.

I hope to get your support to allocate 39 million from the 400 million reserved to backfield 6200 of these vouchers for the next two years.

That was the first time I felt a little bit of hope in my life.

But now that hope is being taken away.

He can barely move on his own.

Every day I take care of him and also work a lot of part-time jobs to support our family.

We rely on food stamps, Medical, and EX3 just to survive.

Without this housing support, we truly have no other way to continue.

Going back to an SL is almost impossible for us.

The rent of an SL has increased to an amount that we can no longer afford.

So all these fear, anxiety, and hopelessness I carry by myself.

Sometimes I don't know how much longer I can hold on.

I sincerely ask you to support us.

Please help families like ours, the most vulnerable, so we can have a chance to keep living.

Thank you.

Next speaker, please.

Okay.

Hi, supervisors.

My name is Peiling Hu.

I hope to get your support to allocate 39 million from the 400 million reserved to backfield to 6200 of these vouchers for the next two years.

I am 68 years old.

I live with my daughter and my 14-year-old granddaughter.

My health has not been good.

I have had kidney surgery and have not fully recovered.

Because she also takes care of me and my granddaughter.

She can only work part time and earns about 1.5K a month.

With this income, we have to pay for daily living expenses and medical costs.

Every expense is very heavy for us.

We were really lucky to receive housing through the EXV program.

It gave us uh it gave our vulnerable family a stable place to live, but now we have learned that this support will end soon.

Since that moment, we have been living with worry and fear every day.

If we lose this help, we truly do not know where we can go.

With my daughter's income, it is impossible to afford rent in today's market.

Without housing support, we may face homelessness.

I am older and in poor health.

My granddaughter is still growing.

We cannot handle this kind of hardship.

Today I stand here to sincerely ask that you to please support family like ours and provide the help we need.

Thank you.

Thank you much, Pelinho.

Next speaker.

Hi, supervisors.

My name is Xiaoping Zhu.

I urge the city to allocate 39 million from the 400 million reserve to cover the gap for 6200 housing vouchers over the next two years.

I'm a mother in a family of six.

I'm speaking today because low-income immigrant families like mine truly depend on EH3 housing assistance.

Since we were told last October that this support may end in 2026, I have been living with constant anxiety.

We live in an SO for eight years.

My children ate and did homework on the bed during the pandemic.

They had to attend online classes in that tiny space.

Now that we have finally moved out and thought life was stabilized, but we are again at risk of losing our housing support.

We fear our children returning to that life.

Thank you.

Exclusionary housing is dangerous when housing is only for people who are sober compliant or easy to serve.

The people with the highest needs are the first to be pushed out.

Does not create safety.

It creates more homelessness, more overdoses, more emergency room visits, more incarceration, and more death.

More death equals less people to care for.

Permanent supportive housing and harm reduction did not enable me to fail.

They helped me to survive long enough to become who I am today.

A stable mother, a working professional, a community advocate, and someone who gives back to the city every day.

Thank you much, Asignany Lacayo, for addressing his committee.

Next speaker, please.

Hi, Supervisors.

Um as a result, there's tremendous variance between different programs.

Certain uh ones are uh perform well for their community inside and the neighborhood outside.

Uh others do not.

Um to state that we cannot have different programs for people of different needs.

Um doesn't make any sense to me.

Uh, I'd also like to applaud the department for closing some and opening some.

I think if you see both, that demonstrates intelligence.

If you see only closing or only opening, that uh that indicates that an ideology is at play and people are not engaged with the reality of how these programs operate on the ground.

Thank you.

Thank you much, Alex Lutham.

Next speaker.

Hi, Supervisors.

Marnie Regan, Larkin Street Youth Services, Chair of Hespa, D1 resident.

I urge the full funding of HESPA's FY2627 plan to keep San Franciscans housed and to house our neighbors without homes.

Our budget proposal stabilizes more than 400 households through flex pool and housing ladder subsidies.

We endorse using the board's reserve to prevent a thousand households from losing their homes and becoming homeless.

We're asking the city to backfill 144 critical shelter beds and restore cuts to specialized job centers for 800 households, supporting job readiness and compliance with new SNEP work requirements beginning June 1st, so people don't go hungry.

Thanks.

Thank you much, Martin Regan.

Next speaker, please.

My name is Alex Barrend.

I'm a resident of the city.

Um there are a lot of basic rights that our current status quo denies effectively denies poor people like me.

Um let me put that another way.

There's a de facto denial of the basic right to housing for more and more working folks and poor folks like me.

Um and this isn't a new uh idea that housing is a right.

I'm glad you mentioned presidents, um, Mr.

Dorsey, because none other than Franklin Delano Roosevelt, and for most of the last hundred years, the Democratic Party has explicitly designated housing as a human right.

You don't have to have you shouldn't have to have enough money to benefit from housing first.

So if you're well if you're well enough off, you get housing first.

If you're well enough off, you get harm reduction.

Speaker's time has expired.

Thank you much, Alex Barnes for addressing this committee.

Next speaker, please.

Hi, supervisors.

Good afternoon.

My name is Miguel Carrera.

Um I want to try to speak in first about uh the problem we're facing in San Francisco.

So we have uh 900 families, people who is going to obviously in October 3.

We have to work it on to make sure these people is not a victim and don't convert or make more homeless people in San Francisco.

We already have enough homeless people.

Second thing, we have a three thousand homeless children in San Francisco School District.

You have to remember.

So we need to we need to find money to find housing for these children's who is in the school San Francisco School District.

So we have a budget proposal for 500 subsidies this year.

This is a solution.

So we're looking for solutions.

We need to solve this problem, and we need to work in together to solve this problem.

So please support all by you this year.

So it's subsidies for families, for youth, for seniors, and prevention.

Thank you so much.

And thank you, Miguel Carrera.

Next speaker.

Hi, Erica Wang, uh District 11 resident and leader with showing up for racial justice, San Francisco.

I'm here in strong opposition to Supervisor Dorsey's sobriety for housing proposal because it is a cruel, backwards and deeply irresponsible attack on housing first and harm reduction.

Let's call it what it is, a punishment policy dressed up as public safety.

It would tell San Francisco that people who are struggling with addiction do not deserve housing.

That is the same failed logic that has pushed people deeper into crisis for decades.

Addiction is not a moral failing.

It is a health issue shaped by biology, stress, trauma, racism, and environment.

People struggling with substance abuse to deserve housing, care, and treatment, not stigma punishment or eviction.

Permanent supportive housing exists to keep people alive, stabilize them, and give them a real path forward.

This measure would gut the very model that for medical and social service professionals around the world have supported because it works.

We need to be honest that this is not a radical uh solution.

It would retreat us into stigma, shame, and coercion.

Thank you much for addressing this committee.

Next speaker.

Jennifer Raviv, I'm a middle class resident of D8, and I'm also part of the leadership of Surge San Francisco showing up for racial justice.

I'm here in solidarity in strong opposition to proposed cuts to survival services, including those providing permanent supportive housing, or hopefully.

Lots of numbers have been thrown around today.

I want to zoom out just a teeny bit.

We have 58 billionaires living in San Francisco.

Together, these billionaires are hoarding 217 billion dollars.

That's in 2025.

That's one-tenth of one percent of that hoarded wealth is 217 million dollars, more than enough to fund critical people serving programs.

It's ridiculous to propose cuts to survival programs within these conditions.

Please stop acting like we don't have the money.

It's clear that many city leaders have made the choice to cater to the whims of billionaire class over the survival needs of our most vulnerable people.

It's heartbreaking that I have to remind them that these are human beings, friends, moms, dads, children, aunties, uncles, real people will be harmed.

Some have spoken directly today to you about the impact these cuts would have on their lives.

These cuts are malicious murder.

Thank you much for addressing this committee.

Next speaker, please.

Can I use the wolf vision?

Should I push power?

Now it's on the afternoon, supervisors.

My name is Sean Auckland, a resident and board member with the Soma West Neighborhood Association.

I am heartened to see a future pipeline of these important services.

But I'm here today to remind you, those sit remind you in the city of its legal obligations here.

As is on the screen, affirmatively furthering fair housing requires the city to overcome patterns of segregation and disparate living.

This law applies equally to housing, PSH, and homeless shelters and services.

This is state-funded segregation.

Continuing to renew sites in hyperconcentrated areas is material inconsistent with your fair housing obligations and can trigger the revocation of your housing element.

This is not only for those neighborhoods, it is for the people that we claim to help.

They experience better outcomes when placed in well-resourced neighborhoods.

Some of you here on this committee do not host any beds.

Thank you.

And thank you for addressing this committee.

Next speaker.

Hello, Supervisor Chen.

You've called this hearing under the banner of supporting housing first.

But your own district tells a very different story.

So looking at your district in the outer mission, Ocean View, Mayor said, Ingleside, and Excelsear, you have, Supervisor Chen over here, you have zero, zero HSH beds and less than five percent of affordable housing.

Now let's compare that to SOMA, where I live, and Soma has over 1,000 HSH beds and 24% of its housing is affordable.

This imbalance is exactly why the HCD complaint was filed against the city by the Soma West Neighborhood Association.

It's easy to say that your housing first when it's not in your district and not your lived experience.

In this hearing, if this hearing is truly about supportive housing systems of care, then equity must be part of that conversation, starting with relocating HSH, DPS, DPH housing and services from SOMA to your district.

Anything short of this of this scream of inequity and Supervisor Chen, hypocrisy.

Speaker's time has expired.

And before I call the next uh speaker, friendly reminder to those addressing this committee in public comment.

You are to direct your comments to the committee as a whole and not towards uh a specific member.

And with that, next speaker, please.

Hello.

Um I'm a resident of the THC housing clinic.

Um the law already is pretty clear with Olmstead and uh Green versus Superior Court in 1974.

We already have rights that have established that allow for a lawful program that allows us to exist and not be homeless.

So I don't really think that's really in question.

To me, what's strange is is I didn't really hear a clear answer as to what threat to our housing has actually been established, but there's a lot of people in this room, and apparently did some people did some homework so we could have a conversation about that.

So I don't want to ask an AI, but I can't get a human being to give me a straight answer.

I love this city, and I've never spoken in front of one before.

But I'm doing it out of respect and I love you guys.

My dad died in twenty-two, and I have had no one ever.

My whole life is strangers.

So I'm not entitled to the help, but I'm about to get on my feet right now.

I couldn't have done it without you.

So thank you.

Much next speaker, please.

My name is Rebecca Don Wu, and we love the Jefferson.

And um I am at the Jefferson SRO.

And um thank you for your interest in um looking into this, researching this, and finding out clear answers.

I do not believe I did not understand the clear answers by the um the director of budget.

Um there are the SROs going to be closed down or not.

Some have already been done.

So what exactly is happening?

There needs to be a clear statement on the um the mayor's website and clear statements here so that we can understand that clearly.

Um perhaps we need to do records requests.

I know that I will be filing a writ um of mandate, which I can do, and um to determine what's happening and um and reviewing this.

The budget deficit has gone down.

So it's it's uh a lot of this is uh very confusing as well.

Okay, thank you.

Thank you much, Rebecca Donru.

Next speaker.

Um several years ago I lost my job due to symptoms of my disability.

Uh and eventually I lost my housing too.

Um I was couch surfing for about six months before I finally got accepted to an SRO.

It is far from ideal, but it was finally a place of my own and with stable housing.

Um it took a long time for me to finally get back on my feet.

Um, but having that stable permanent housing was crucial in my mental recovery.

And now I have a full-time job that I love and I do a really great job there.

And another way to has been lifted off of me.

Like I finally have some kind of income.

Um I can start to pay back the debt from when I was homeless and unemployed.

Eventually I'll probably be able to even afford my own housing, but now I'm scared of losing my housing again.

Um this would destroy my stability and my hopes for the future.

I don't know how I'd pay off my debt if I'm like going back to a place where I can barely afford rent.

Um I don't know what would happen to my mental health, and I don't know how I'd possibly keep my job uh that I love right now.

So please take care of the SROs.

And thank you for addressing this committee.

Next speaker, please.

Oh, good afternoon, supervisors.

My name is Kyle.

I'm here in support of Supervisor Matt Dorsey's legislation to expand drug-free housing options.

These programs are meant to be a pathway to stability and improved health, but right now the outcomes show that we still have a lot of work to do.

Residents deserve real choices, including the option to live in drug-free environments.

This means investing in models that better integrate housing with behavioral health behavioral health services, recovery support, and accountability.

Thank you for your time.

And thank you much, Kyle.

Next speaker.

Good afternoon.

My name is Jack.

San Francisco spends hundreds of millions on permanent supportive housing.

Yet roughly a quarter of over deaths are happening inside the very facilities meant to help people recover.

That's because there's a lot of people.

That's not a system working and we can't remain with the status quo.

I support Supervisor Dorsey's push to expand drug-free housing.

Of the 9,000 supportive housing units in this city, only 42 are drug-free.

As someone who has personally witnessed the pain of loved ones affected by substance abuse, people aren't just fighting for housing on our streets, they're fighting for their sobriety.

Are people getting healthier?

Are conditions improving?

If not, we must do better.

We must rethink our plan and we must see who the plan is benefiting.

Thank you.

And thank you.

Next speaker.

Good afternoon.

My name is Robbie, and I'm here because I also support Supervisor Dorsey's push to expand drug-free housing.

People in recovery deserve a real chance to rebuild their lives.

And quite frankly, right now our system simply isn't giving that chance to all in need.

If someone is fighting to stay sober but lives in an environment where drug use is happening around them, we are not setting them up for success.

With barely any drug-free units in the entire city, we are not offering meaningful choice.

Expanding drug-free supportive housing isn't about punishment.

It's about giving people the supportive environment they need to succeed in recovery and stay housed.

Thank you.

Thank you, Robbie.

Next speaker.

Good afternoon, committee.

Griffin Lee here, representing Connected SF.

Let's start with the budget.

San Francisco per resident pays roughly $20,000 per year compared to cities in California, such as Los Angeles, San Diego, and uh and San Jose per resident at paying roughly five to seven thousand dollars per year.

Over the last year, we've seen little progress, some progress.

But what's worked in the past or what's been implemented in the past is not worked.

We need to right size the budget, support the mayor in cuts.

That's why we turned over a lot of the board in 2024.

And we need to expand as as the last three said direct-free housing.

Thank you very much.

Thank you, Griffin Lee.

Next speaker.

Hi, I'm Zach.

I'm an RV resident and community organizer.

Uh if we actually want to solve homelessness, we expropriate the landlords and establish universal uh public housing and support so uh social housing and guaranteed jobs to everybody.

Um but as to the items today, um we need to add more uh housing availability to um the families and single adults.

Uh these RVs right now, we've got 50% of people being placed outside of county, so much for our city, our home.

Um, and they also only get one option as opposed to uh people on coordinated entry who get three, and we also have a number of people who are waiting for um permanent support of housing who are elderly and disabled.

So we need to expand those too.

Please items those in the budget.

Thank you much, Zach.

Next speaker.

Good afternoon.

I am Virginia Chung with open door legal civil legal services have uh too often been overlooked as a first line of prevention for both homelessness and the first number one driver of homelessness, which is domestic violence.

But access to justice is exactly that.

A first line of defense and early intervention and a stabilizing force that keeps families housed safe and together.

Legal aid must be accessible to everyone regardless of income because it prevents crisis and further instability.

Today our baby office has a three-month wait list, clear evidence that the need already exceeds capacity.

And this is personal to me.

My own pa non-English speaking parents experienced wage theft and eviction, and they didn't have the supports that they needed.

San Francisco has a chance to ensure justice for all by investing in prevention.

I urge you to protect and preserve funding for civil legal services as a smart, cost-effective investment in stable communities.

Thank you.

And thank you for addressing this committee.

Next speaker.

Good afternoon, supervisors.

My name is Sierra Sparks.

I'm also with Open Door Legal.

I wanted to briefly address the questions around Open Door Legal Homelessness Prevention Grant.

We've become unfortunately aware that this award has raised some concerns.

And at the time, when MOHCD's investment in civil legal services is under pressure and underfunded, it's understandable that the organizations across the field are feeling the strain.

But it's important that we don't let that pressure turn into competition in a way that limits what we can achieve together, especially when there are additional props C resources available.

Open Door Legal has not been invited to the meetings with our peer works, but we would genuinely welcome the opportunity to be included with the other LSOs.

We believe strongly in working alongside our partners and growing in the overall pool to resources rather than competing over what exists today.

And as in question, if there's any need for data, if you know our executive director, Adrian, he will provide it.

Thank you much, Sierra Sparks.

Next speaker.

Good afternoon, supervisors.

Dr.

Megan Rohr from Compass Family Services and co-chair of the local homeless coordinating board.

Um stand here in support of the HESPA recommendations.

Also very grateful of all the conversations we've been able to have with the mayor's office and with HSH and looking forward to a budget that maximizes every single dime that can be put into homeless services, particularly into prevention, right sizing contracts, and having security that providers need.

That this population for every one family that exits a family shelter, four more add to the family shelter waiting list.

Right now, more people are in need of services.

It's about an average of 379 families, which is 990 individuals.

For every family shelter space you have, you're also housing about uh 3.5 children.

Of course, there's not a point five child, but you know what I mean.

Um think of them not just as households as you'll get in some of the numbers you'll get from HSH, but think of them as full of the process.

Thank you, Dr.

McNore.

Next speaker, please.

Good afternoon, supervisors.

My name is Cody Keene, and I'm with the uh supportive housing provider network.

Um thank you for the opportunity to speak today.

I want to emphasize something that we know from both data and lived experience, and that is when adequately resourced permanent supportive housing works.

It stabilizes people, reduces strain on emergency systems, and provides a real pathway out of chronic homelessness.

It is one of the most effective tools we have, and continued investment in PSH is essential.

To that end, I want to speak to how we think about budget strategy.

In previous years, the city has used surpluses and parts of the budget in thoughtful and strategic ways.

That approach has allowed programs to remain stable even in uncertain fiscal environments.

As you consider current and future budgets, I urge you to consider uh continue using surplus funds in strategic ways, like to offset uh cost of doing business decreases, maintain service levels, and invest in infrastructure that keeps programs like PSH successfully.

But thank you much.

Next speaker, good afternoon, board of supervisors.

My name is Jessica Hernandez.

I am a policy associate at Compass Family Services.

Um I'm here.

I'm also the chair of HESPA Family the Family Committee, and I'm here to support all the HESP recommendations.

And I also wanted to speak on behalf of the black families who are disproportionately represented.

33% over Compass regular regular clients are black, but there's 56% of black families living in vehicles.

Providing equal access to services to families is crucial to guarantee a safe exit from vehicle to housing stability, especially since many of these families already face a lot of barriers and challenges in their daily life while living in a small vehicle.

Many might not qualify for any resources or services, leaving in them, leaving them without an option.

There's a lot of fears.

If you're self-enforcement, if you're so uh CPS involvement, for example, we know of a mom with the five-year month old that um uses the same vehicle they slip in to write share to earn a little bit a little bit of income for the family.

Um at Compass Family Services, we've conducted a series of focus groups.

And if you want more information, we would love to share that.

Thank you much.

Thank you.

Thank you, Jessica Hernandez.

Next speaker.

Good afternoon, supervisors.

My name is Javier Cortez.

I'm the program manager at Casa Bonanza A PSH site here in San Francisco.

Everyone has a story here where we're we're talking about kind of just championing our levels of poverty.

And I ask you, and I'm I'm asking you to hear them because at this point, these actions are oppressing, and it's not fair for the neighborhood or what it deserves, and it deserves justice.

That's all.

And thank you much.

Next speaker.

Hi, my name is Leah.

I'm a 10-year resident of Soma West.

First, I want to say I support different housing offerings, including drug-free.

People trying to get sober deserve to have access to a sober environment.

Second, if supervisors are going to advocate for more low barrier housing, they should be ready to welcome it into their neighborhood instead of concentrating it in poor communities like Soma West and Tenderloin.

60% of the city's services are in SOMA and Tenderloin, while the West Side and Northern parts of the city have almost no supportive services.

Third, as someone who lives in Soma West, I can confirm the conditions around and inside supportive services are often very bad.

The city and nonprofits need to figure out how to operate its current facilities well, consistently, so that they can integrate into the broader community.

Right now we do not have clear performance standards for service, and that needs to change.

Underperforming facilities need to be reformed.

Thank you.

And thank you, Leah.

Next speaker.

Hello.

I just like to ask everyone why are we here?

Why are we asking these people permission to survive and get housing and food, etc.?

It's because we have a social contract with our government that life is better with them in place than without it.

They will provide and make sure we survive with the appropriate amount of housing and food and other care and services we need.

However, as our government, as I believe we are witnessing, is breaking this social contract more and more and more.

For our own fucking survival.

Whatever the solution is, it needs to get the wealthy and billionaires out of government, period.

Thank you much for addressing this committee.

Next speaker.

Good afternoon, supervisors.

My name is Alejandro Nunio, service provider with Mission Action.

Reducing and eliminating the opportunities for our unhouse brothers and sisters will definitely take their health away.

So the discussion needs to be instead of reducing and eliminating, it's about expanding services that will help their lives stabilize and for many of them to survive.

Thank you.

And thank you much for your comments.

Next speaker.

I work with Coalition of Homelessness.

And I'm here today to ask you to support the HESPA asks.

And also I'm here today to talk about the families living in SROs that are overlooked most of the time and they don't have like the services that they need because they're um but they're facing a lot of difficulties.

They don't have a kitchen, they don't have a bathroom, they have uh numbers of children seen site in really bad conditions in poor environments.

This affects families thrive.

Um I've seen the solution.

I've seen how people can thrive with a subsidy going out of these places.

And I ask you today to allocate 2.7 million to move 50 families from SROs that are still living there and they still need to be help.

And unfortunately, these families are not able to get access to resources because they're not in the least for homelessness uh families, so they cannot access to uh coordinated entry services.

So just to remind you of that, thank you.

And thank you.

Next speaker, please.

Good afternoon.

Um committee, thank you for creating this space.

Um I am John Stefan.

I'm a humanitarian and community development worker.

Uh I worked full-time for 13 years overseas doing public health interventions to vulnerable communities, and then I moved to San Francisco nine years ago to support our vulnerable communities here, mostly our unhoused neighbors.

And the question I have is do we have a collective imagination that we want to build a community where all of our San Franciscan community members can be housed?

One percent of our community members live outside.

It's not a matter of funding.

Well, there is a restriction of funding, but are we willing to put and prioritize our city funding to a core human right of housing?

Do we have the imagination for that?

If so, please support ESPA's budget desk.

Thank you.

Thank you much, John Speed.

Next speaker.

Good afternoon, supervisors.

My name's Kira Warner.

I'm a San Francisco resident.

Um I would like to urge you against any budget cuts regarding the homeless supportive services.

I've spent a lot of time in the past four months in close um friendship with a lot of people living outside in the hate, and I just see that housing is a basic human right that should not be denied to anyone.

Um I would like to remind you of the importance of compassion and love and remembering that these people are humans who deserve to be sheltered whether or not they're sober.

Thank you.

Thank you very much, Gary Warner.

Next speaker.

I'm a disabled law student and currently homeless.

This budget is not fiscal necessity.

It is a political choice that prioritizes the comfort of the billionaire class over the survival of me and my neighbors.

The department's own data reveals a catastrophic 50% net loss and shelter capacity for single adults, slashing beds from 2019 down to just 492.

This justification for these cuts is non-existent.

The March update shows that propsy revenue is $93 million higher than initially budgeted.

We are sitting on the surplus while planning to decommission four PSH buildings.

Speaker's time has expired.

So this is the last call.

If we have yet to address this committee and you wish to do so, kindly line up now.

Next speaker.

Hi, I'm Anya Warley Zigman with the People's Budget Coalition.

Appreciative of Supervisor Chen for holding this hearing and for asking a lot of important questions and Supervisor Walton for pointing out that this is supplanting this is happening that is happening.

They are taking an increase in dollars that we raised in opposition to many of the folks who are now allocating the dollars of Prop C and using that to not increase services in homelessness, but to allocate general fund money elsewhere, namely for the 14%, 10%, and 15% increases in law enforcement.

We are direct budgets are choices, and we are directly diverting funding away from homeless services, away from permanent supportive housing, and away from shelter and into mass arrests and into policing.

And our system is breaking down, and things are only going to get worse on the streets, in jails, and in our court systems as a result of this overcrowding.

Thank you.

And thank you much for addressing this committee.

And seeing nobody or seeing no other speakers, Madam Chair, that completes our queue.

Seeing no more public comments, public comment is now close.

What is your will, Supervisor Chen?

I just want to thank uh the People Budget Coalition, the Mayor's Budget Office, and also HS for coming uh to present.

Uh I don't have photo comments.

We can just file the hearing.

Actually, ahead of that motion.

Uh I don't believe we excuse Member Bandelman from this meeting yet.

If we could uh My apologies.

Um a motion to excuse President Mendelman.

Second.

Second by Vice Chair Dorsey, a roll call, please.

And on that motion by Chair Chan, seconded by Vice Chair Dorsey, that member Mendelman be excused from attending today's meeting.

Vice Chair Dorsey.

And Dorsey, I.

Member Sauter.

Soder, aye.

Member Walton.

Walton, aye.

Member Chen.

Aye.

Chen.

Aye.

Chair Chan.

Aye.

Chan, I we have five eyes.

The motion passes.

And uh with the motion proposed by Supervisor Chin that this hearing be heard and file and second by Supervisor Walton and a roll call, please.

And on that motion by Member Chen, seconded by Member Walton, that this hearing be heard and filed.

Vice Chair Dorsey.

Dorsey, aye.

Member Sauter.

Sauter, I.

Member Walton.

Walton, aye.

Member Chen.

Chen, I.

Chair Chan.

Aye.

Chan, I.

We have five eyes.

The motion passes.

And Sir Clark, do we have any other business before us today?

Madam Chair, that concludes our business.

The meetings adjourned.