Business & Real Estate

Sacramento region stands to gain ‘tens of millions’ for homeless people

Sacramento Mayor-elect Darrell Steinberg watched last week from the back of the state Senate floor as his former colleagues passed his $2 billion plan for homeless housing, potentially providing him with the issue and money to extend his influence beyond the city.

Steinberg said he hopes to see “tens of millions” of funding locally in the next few years for permanent homes through the legislation, which Gov. Jerry Brown signed last week. Some of that money could arrive early next year, within months of Steinberg taking office.

But technically Steinberg won’t have much say over how that windfall will be spent, or even how much the city will receive. The money will go to the county, which provides the majority of the region’s homeless services.

Steinberg isn’t deterred by that detail.

“I intend to lead personally on this issue,” he said after the vote.

He’s “confident” that he’ll be able to help “establish a new and heightened level of collaboration between the city of Sacramento, the county of Sacramento and our entire region. … We are going to go aggressively after our share of these couple billion dollars,” he added.

In recent months, the city has increased its homeless services, including $438,000 to keep some shelters open around the clock beginning as early as August and opening a mobile bathroom in the River District.

To acquire the new state funding, however, local leaders need to expand their thinking to include permanent housing. The state will push counties to use integrative models that incorporate units for the homeless and mentally ill into projects with mainstream and affordable housing, according to Ben Metcalf, director of the California Department of Housing and Community Development, which will administer the program.

That would allow the money to be combined with other private and public funds for greater impact, and potentially place the developments in more neighborhoods.

“There is a concern around facilities that feel institutional in nature,” Metcalf said. “The great news is when you look, these (integrated projects) are just delightful apartment buildings to walk into. You do not see neighborhood concerns.”

It could be hard for the state to find enough qualified projects unless counties take that wide-ranging approach, he added.

“I think that’s the only way we are going to be able to get all this money placed,” he said.

The Mercy Housing complex at Seventh and H streets in downtown Sacramento is an example, with 150 units and a mix of residents that include formerly homeless, those in need of mental health or substance abuse treatment and low-income renters.

“It’s a difficult package to put together, but theoretically it’s the best model,” said city homeless services coordinator Emily Halcon.

Sacramento will likely compete against as many as 12 large counties with populations greater than 750,000, including Alameda, Riverside and Orange. They will vie for about $700 million of a $1.8 billion pot likely distributed over four years.

Each county will submit proposals for specific projects. Small and midsize counties like Placer, El Dorado and Yolo will compete for their own pool of money. Any county that participates in the program is guaranteed a minimum of $500,000 each if they provide mental health services. The plan provides counties with additional funding to work on proposals; Sacramento will receive $150,000 for that purpose.

Metcalf said the “significant amount of money available” will likely mean that “just about any supportive housing project that Sacramento County can … reasonably put together … is going to get funded.”

Since the funds are tied to mental health requirements, another challenge for counties is coordinating various social services, such as counseling and treatment programs.

In Sacramento, the city and county have been trying to collaborate more on homelessness, but divisions remain. Steinberg’s biggest challenge may be unifying established bureaucracies, especially those outside his control.

Sacramento County Supervisor Don Nottoli said “it’s a plus for the community” to have Steinberg take a leadership role on the issue. But he cautioned that much of the work will be the responsibility of the county, making it important to “respect the roles” that the county and city play.

The county already struggles to coordinate services and housing through multiple departments that fail to communicate with one another.

To remedy that, the county recently hired Cynthia Cavanaugh as its first homeless services coordinator. She was instrumental in shaping the new state legislation as assistant director for homelessness and housing policy for the Department of Housing and Community Development.

“The ideas for the way the proposal was developed and the knowledge are from her,” said Marjorie Swartz, policy consultant for Senate President Pro Tem Kevin de León, who introduced the idea of the legislation with Steinberg in January.

Cavanaugh was not available for comment this week. She will begin her job with the county later this month.

Metcalf said having a “homeless czar” could be key to winning money. Counties “need to break their own silos … to be successful in competing for these funds,” he said.

Four large California counties that each have more than 5 percent of the total homeless population in the state – Los Angeles, San Francisco, Santa Clara and San Diego – won’t have to compete. They can receive a lump sum based on the size of their homeless populations. For Los Angeles, which has 41 percent of the nearly 116,000 homeless in the state, that could be close to $700 million. Sacramento has more than 2 percent of the state’s total with about 2,650 homeless people.

The new law isn’t a done deal.

It relies on funding from Proposition 63, Steinberg’s 2004 ballot measure that placed a 1 percent tax on personal income exceeding $1 million and tagged those funds for mental health services. It would generate $2 billion by selling bonds and then paying them off with Proposition 63 income tax revenue.

Two hurdles remain before those bonds can be sold.

The Legislature still needs to pass a bill laying out bond specifics.

If it does, the state will likely try to ward off litigation by asking the courts to rule on its use of Proposition 63 money for homeless housing. Critics have questioned whether Proposition 63 money could pay for something other than direct mental health services.

But for Steinberg, taking his idea this far proves he knows how to lead from behind.

When state senators passed the bill, it was Steinberg who received kudos and congratulations despite being a spectator. Sen. Fran Pavley hugged him. Sen. Bob Hertzberg kissed his pate. Hands were shook, backs were slapped.

Outside the chamber, a few feet from the offices he occupied while presiding over the Senate, Steinberg kept planning for goals beyond his purview but maybe not his ability if he can continue to leverage colleagues and connections.

“It’s the first step in making a real difference,” Steinberg said of the funding. “It’s the linchpin by which in Sacramento we can show the way in the state of California.”

Anita Chabria: 916-321-1049, @chabriaa