Sacramento slated for $16 million in homeless funding. How will it be used?
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- Sacramento will receive $16M in homeless grants, a 40% drop from last year.
- City plans to prioritize interim housing, cutting $2M in prevention funding.
- Officials anticipate further state cuts and push for clearer prevention metrics.
Decreased state money for homeless services could lead Sacramento to spend less on prevention services even as more residents in the region enter homelessness than exit it.
The funding reduction, which is tied to the county’s Point-in-Time Count, comes from the latest installment of state Homeless Housing, Assistance and Prevention grants. Sacramento is expected to receive about $16 million from the grant — 40% less than the year before.
In response to the decreased funds, the city has proposed a new budget for using the grant.
“We’re trying to prioritize keeping our existing shelter beds open so that we don’t lose capacity,” said Sacramento’s City Housing Manager Ya-yin Isle at Tuesday night’s City Council meeting.
Most of the money — about $11 million — would continue to go to congregate and non-congregate interim housing programs. The remaining funds would be split among the development of permanent housing projects, shelter programs for homeless youth, administrative costs and the homeless management information system.
Under the proposal, the city would eliminate the $2 million previously slated for prevention services. Such funding decisions remain tentative to change, said Brian Pedro, director for the Department of Community Response, on Tuesday.
The proposed elimination comes as the region is in a six monthslong trend of more people entering homelessness than exiting, according to Sacramento Steps Forward, one of the regional entities for supporting homeless people. In June, the organization’s online database estimated there was a net increase of 504 people entering homelessness.
“Until we are doing much more with respect to prevention, we are not going to make the kind of progress we need to make on behalf of the people we care about,” said Councilmember Roger Dickinson.
Dickinson, who acknowledged the difficulty to create a budget with such decreased funding, pushed for a conversation on what “prevention” means and how to measure it.
“My observation is it hasn’t happened yet, and I can’t find much, if any, evidence that it’s happened anywhere along the line,” he said.
The city had known about reduced homeless funding since February, when the state released its projections for the HHAP grants. The latest allocation is tied to the county’s most recent Point-in-Time Count, a biennial survey of sheltered and unsheltered people experiencing homelessness.
Sacramento County’s 2024 report, which has been contested, estimated a 41% reduction in unsheltered homelessness. As of that survey, roughly 6,600 homeless people live in the area’s shelters, streets and in vehicles.
Collectively, the region is estimated to receive nearly $32 million — about half of which will go to the city of Sacramento. Last year, the city received $27 million.
Another reduction of up to 50% is anticipated in the next round of state grants, said Isle.
“Now, we have to do more with less,” said Councilmember Lisa Kaplan.
As part of expected reductions, the city has spent the last year reworking its contracts with homeless service providers. The new deals have led to reduced staffing at some congregate shelters and a focused effort on building interim housing micro-communities.
Last week, the city announced another 135 tiny homes would be added to the Roseville Road shelter. The homes are expected to be ready for move-in by late November.
Mayor Kevin McCarty, who has spearheaded the effort for more tiny homes, reiterated his desire on Tuesday for the city to focus on “interim housing solutions.”
“It may be an unpopular comment here, but I’m not always sold on prevention. … We can’t do everything,” McCarty said. “We’re a reality check. The math doesn’t add up for us to have a little bit of everything. I think that we need to just double down and listen to what our constituents are saying.”
The City Council will discuss strategies on reducing street homelessness at its Sept. 16 meeting.
This story was originally published August 13, 2025 at 7:00 AM.
