Sacramento just got $32M for the homeless, through a state program that’s in jeopardy
The state of California this month sent $32 million in checks to Sacramento local entities to address homelessness — money the city and county has come to rely on receiving annually since Gavin Newsom became governor in 2019. But now the grant is in jeopardy.
Since the state launched the program, called the Homeless Housing and Prevention Grant, the city and county of Sacramento have used the money to help open large shelters along Stockton Boulevard, X Street, Meadowview Road, and Auburn Boulevard, as well as other services. Those and other Sacramento shelters now get over 3,500 people off the streets on any given night, a homeless census report released last week found.
Officials continue to rely heavily on HHAP to operate the shelters as well as open more, because despite the progress, with the shelters full on any given night, over 2,400 people still sleep outdoors in Sacramento County, the report found.
During a news briefing Thursday, Newsom pointed out several other initiatives aimed in part to address homelessness aside from HHAP, such as the passage of Proposition 1 and CARE court. Both of those programs are aimed to help homeless individuals who are experiencing severe mental health crises.
“HHAP is one of a dozen areas of support across the spectrum,” said Newsom, who his widely believed to be a top contender in the 2028 presidential race, during a news conference Thursday. “I’m empathetic to the challenges the mayors face, but also deeply prideful of the investments this administration has made to have their back and to get us back in the right direction on addressing the crisis of homelessness in the state of California.”
While the state also funds other homeless programs, HHAP is the largest external funding source the city of Sacramento receives to address homelessness, according to the city’s proposed budget document for the fiscal year that starts July 1.
The city this month received about $16 million in the sixth round of HHAP funds, according to a state web page.
“External funding, primarily from the (HHAP) program provide significant assistance for the city’s homelessness services programs,” the city’s proposed budget said. “Without additional external funding being received for FY2026/27, the city’s homelessness programming will need to be funded by prior year grant allocations and by General Fund support.”
General fund support will be difficult as the city is facing a $66 million budget deficit for the fiscal year that starts July 1, which is projected to worsen next year. That could put shelters on the chopping block. Planned new shelters for seniors, which can also be used as permanent housing, are already being reconsidered in order to address the budget deficit.
Sacramento County is also anticipating challenges if the program ends. The county just received its sixth-round HHAP check for $7.5 million, said Janna Haynes, a county spokesperson. Officials expect the next round to be “much less.”
The county still expects to be able to open the large $64 million Watt Avenue Safe Stay shelter later this year, because it’s using HHAP funds from rounds four and five, along with federal COVID 19 funds, Haynes said. That shelter, the largest Sacramento has ever planned, will include 275 shelter beds and 75 beds of weather respite.
But without future rounds, opening additional shelters may prove difficult.
“If the HHAP program ceases or continues to be reduced year over year, it will certainly decrease our available resources,” Haynes said.
Placer County entities received a total of $1.6 million from HHAP this month. The county plans to primarily spend its half on permanent supportive housing. The federal government will likely continue to cut funds to that type of housing, which often includes mental health and substance use services for formerly homeless adults, said Katie Combs Prichard
Sixth-round HHAP awards also included $6.7 million to El Dorado County entities and $2.2 million to Yolo County entities.
Unless legislators add additional homeless funding the coming weeks, homelessness could rise 20% across the state as a result of the reduced funding, according to a report from the National Coalition to End Homelessness.
“While HHAP has housed more people than ever before and scaled up the capacity and impact of local homeless systems, people continue to fall into homelessness faster than they can be rehoused, which has led to the continued visibility of the issue and narratives that homelessness funding is not effective, the report said. “The most effective path forward is to fully fund the HHAP and build on its demonstrated success, rather than abandoning California’s real but fragile progress. “
Ahead of Newsom’s budget proposal, the state Senate had proposed funding HHAP’s seventh and eighth rounds each at $1 billion, while the Assembly proposed funding HHAP 7 at $500 million and not issuing a HHAP 8. Legislators and Newsom will now go back to deliberating and adopt a final state budget by June 15.
Sacramento Mayor Kevin McCarty said he intends to join other mayors in lobbying the legislature in the coming weeks to increase the funding.
“Yes, we have and will continue to lobby the legislature,” McCarty, a former assemblymember, said in an email Monday. “We are pleased that the California Senate’s budget framework included the full $1B in HHAP funding. Full HHAP funding would allow us to build on the success of existing programs and continue to reduce unsheltered homelessness.”
This story was originally published May 18, 2026 at 4:39 PM.
