San Francisco is implementing a significant overhaul of its homelessness response system, shifting approximately $500 million in annual contracts with nonprofits to an "outcomes-based" model. Mayor Daniel Lurie announced the change on Monday, stating that public funds will no longer be disbursed without clear accountability for their effectiveness.
The Department of Homelessness and Supportive Housing (HSH) plans to re-award its multi-year contracts competitively between now and 2029. The new contracts will include language focused on "accountability" and tie funding directly to an organization's success in assisting homeless individuals and the broader community. "We are not going to continue spending $1 billion of taxpayer money on a failing system—we’re fixing the system so we can deliver the safe and clean streets every San Franciscan deserves," Lurie said in a statement.
According to the mayor's office, the transition aims to ensure contracts have a "clear purpose, stronger measures of success, and the resources and flexibility providers need to do their best work to move our clients out of homelessness," stated HSH executive director Mike Levine.
This initiative follows years of criticism regarding San Francisco's homelessness response and its outcomes. The city has historically contended with one of the highest homeless populations per capita in the United States. In 2024, San Francisco had 887 homeless individuals per 100,000 residents, a rate significantly higher than the national average, despite substantial spending on services.
Recent years have seen scandals and scrutiny of nonprofit organizations managing public funds for homelessness services. Earlier this year, Gwendolyn Westbrook, former CEO of the United Council of Human Services, was charged with allegedly misappropriating funds. An audit by the Controller’s Office in 2024 found that HomeRise, a major supportive housing provider, had spent taxpayer dollars irresponsibly on employee bonuses and social events. Investigations also uncovered serious safety failures at HomeRise properties, leading the city to cease funding for the organization.
These changes occur as encampments in the city have reportedly declined by approximately 85% since 2024, partly due to a Supreme Court ruling that has allowed West Coast cities to enforce anti-camping ordinances more readily. Neighboring cities, such as Berkeley, have also faced scrutiny for large homeless encampments near public spaces.