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Lack of PSH Supply
Not everyone experiencing homelessness will need permanent supportive housing, but there remains a significant gap between the availability of PSH in California and the number of people experiencing chronic homelessness.
A lack of federal and state funding for affordable housing overall—including for permanent supportive housing—is the biggest barrier to addressing the state’s homelessness crisis.
The limited funding that is available is also overly complicated to obtain and administer. Developers who want to build permanent supportive housing need to pull together financing for construction, services, and operations from multiple sources, many with different application timelines and regulatory requirements. While this is true for all affordable housing, it’s worse for PSH. This increases development costs and extends how long it takes to get projects off the ground.
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Increase the Supply of PSH
State and local governments should continue to prioritize investments in increasing the number of permanent supportive housing units, as well as pursue innovative solutions to building them more quickly.
The state's Homekey program, which provided capital for localities to purchase under-utilized hotels and apartment buildings for PSH, provides one innovative model. Research has shown that Homekey created permanent supportive housing units faster and cheaper than new construction. Not only did the program provide over $3.3 billion in new funding, it also enabled expedited approval from local cities and sidestepped NIMBY challenges that can otherwise stall affordable housing projects. Investing in models like Homekey, and ensuring that they have sufficient funding to support long-term operations, could help increase the supply of PSH.
Insufficient funding and staff to provide person-centered care
Building the housing is just one piece of the puzzle. Housing developers also need funding to sustain high-quality housing and hire staff who can provide residents with supportive services. Often, this long-term funding support for operations is harder to access, or insufficient in the face of rising costs.
Research has shown that a lack of sufficient funding for resident services and operations can undermine the efficacy of permanent supportive housing. A recent Terner Center study found that residents were less likely to engage with supportive services when the property was underfunded and understaffed, and that this was associated with worse resident outcomes.
Staff also reported experiencing stress and burnout when they do not have adequate resources to meet residents’ complex needs. This, coupled with low wages, can also lead to high turnover rates and vacant positions, which can lead to gaps in support and undermine residents’ trust.
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Increase Funding and Capacity to Provide Supportive Services
State and local governments should ensure that permanent supportive housing properties have the resources needed to cover supportive services and operating expenses (such as on-site staff and property maintenance). Jurisdictions will need to increase funding for operations and services, as well as boost wages and expand training in trauma-informed care. The state should also continue to invest in strategies that unlock health care dollars for housing and supportive services, building on the work being done through CalAIM—California Advancing and Innovating Medi-Cal—an ambitious initiative to reform Medi-Cal and better address the social determinants of health.
Bureaucratic hurdles to getting people housed
A range of bureaucratic barriers make permanent supportive housing difficult to navigate for residents and staff. Units can remain vacant for months due to administrative hurdles and complicated intake processes.
Matching residents to available permanent supportive housing units is particularly complex and time-consuming. Because PSH is funded by a patchwork of federal and state programs with very specific eligibility criteria, staff must find residents who meet those criteria exactly. This may mean, for example, an unhoused veteran who is eligible for a permanent supportive housing unit funded by the Veterans Administration may not be able to be matched with one right away, even while other units in the city sit open.
In addition, people experiencing homelessness must prove their eligibility for PSH by providing ID or proof of citizenship, yet they often lack a safe place to store important personal documents. They might also need to prove eligibility multiple times. These administrative hurdles add up.
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Reduce Bureaucratic Barriers
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During the COVID pandemic, many government agencies relaxed documentation requirements and allowed people to self-certify their income or housing eligibility. This reduced barriers to entry and allowed people to access housing more quickly. The state should work with federal agencies to reduce documentation barriers for moving into a permanent supportive housing unit (for example, by allowing individuals to move in with a grace period while they meet the certification requirements).
Federal and state governments should also expand funding and technical assistance to improve coordinated entry systems, which are centralized local systems for prioritizing and matching people to the available housing and services that align with their needs. This will allow people to be placed more effectively in properties with the necessary supportive services.
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