San Diego’s homeless population was fifth largest among major American cities last year, but its federal funding from a key source was dramatically less than cities with a fraction of the homeless population.

San Diego’s homeless population numbered around 8,500 last year, according to a one-day census taken in January 2014.¹ But Miami, which counted fewer than half as many homeless people, won double the $16.2 million in federal funds San Diego was awarded.

Chicago also received nearly four times as much homeless funding despite counting 2,000 fewer homeless people than San Diego.

The funding disparity from the federal Housing and Urban Development department lingers two years after a Voice of San Diego analysis highlighted the disconnect, prompting local, county and federal officials to lobby for updates to decades-old formulas that disadvantage San Diego among other western cities.

The pace of reform is slow. But HUD officials said they are working on changing the way it distributes the money.

Despite HUD’s delay, San Diego’s anti-homelessness crusaders have more spring in their step than they have for years. It’s been about a decade since the region began seriously considering novel, research-based approaches like “housing first,” which places people in apartments even if they have larger issues like mental illness or substance abuse, and “rapid rehousing,” which tries to patch the gaps that cause a person to lose his or her housing before weeks, months or years pass.

“We know what to do. We know what interventions work,” said Michael McConnell, a businessman who’s worked as a volunteer for more than two years on various local homelessness task forces. “It’s a matter of reorganizing what you have and filling in the gaps, but mainly it’s coordinating what you already have.”

Homelessness-Fighting Momentum

Recent developments add to McConnell’s optimism:

The city is poised to switch from its winter emergency tent approach to a more sustainable “housing first” strategy, aided by millions of dollars from the Housing Commission.

A much more robust leadership team weds business leaders and politicians with social service providers in a revamped network of homelessness fighters. The network has launched a new system for all of the agencies to use that help people find the right place to go for the needs they have — a long overdue centralized intake system.

San Diego was one of 25 cities chosen across the country for a grant toward ending chronic and veteran homelessness, and has in recent years received special technical assistance help.

And service providers, typically not prone to hyperbole, believe a surge of $6 million of extra Veterans Affairs funding over three years means San Diego has the resources it needs to house all of the veterans, at least, who are on local streets.

There are more hurdles beyond the HUD funding formula. This is the complicated problem of homelessness we’re talking about, after all.

A recent walk down C Street left City Councilman Todd Gloria, who chairs the newly revamped network, discouraged at the number of people he saw on the street.

“The numbers just visually seem to be going in the wrong direction,” he said. “But the answer is not to give up. The answer is we must double down.”

On Thursday, the nation’s pre-eminent thinkers on ending homelessness will convene for a conference in San Diego, it’s not unthinkable that San Diego’s homelessness approaches could be among those studied and implemented elsewhere.

“San Diego is very, very fortunate that the culture here is very cooperative and collaborative,” said Rep. Scott Peters. “On issues that can be solved by the community they end up getting taken up. No one’s waiting for the government to fix their problems. They’re actually trying to figure out what they can do. That’s a very San Diego approach that gives me optimism.”

Competitive Funding

The homelessness funding formula debate is tricky when you consider it from a national perspective. Should one community get a dramatic dropoff in funding because another counts more people sleeping on the streets in January?

Some communities that have seen their populations drop have said that would amount to a penalty for doing well.

“I can’t create homelessness in Boston to help homelessness in San Diego,” said Ann Oliva, HUD’s director of Special Needs Assistance Programs, which oversees its distribution of ending-homelessness money.

Homeless population vs. funding, 2014

Cities that want HUD funding send in a combined application from their network of service providers, called a Continuum of Care. In San Diego, this network encompasses the whole county. HUD uses geographic and demographic information to rate each network’s application, but many of the factors considered, like how many housing units were built before 1940, have attracted criticism for being indirectly tied to indicators of homelessness.

Those formulas mean San Diego starts out with a smaller amount of funding than some other cities, even when it consistently counts more homeless people.

But the formulas are going to be changed, Oliva said. HUD is working on different scenarios to publish soon to allow cities across the country to see how the rebalanced funding would look.

San Diego and L.A., whose federal representatives have been lobbying for reform, would likely be among the cities to benefit from a redistribution based on need.

A Bigger (But Still Round) Table

Where nonprofit service providers once made up the majority of the voices in the local Continuum of Care, now they number about 20 percent of the newly revamped group, Leslie said.

Government and business leaders round out the network, requiring some extra training as the group gets up to speed on complicated federal funding models.

“We’ve done a huge shift in a year, a tremendous shift in a year,” said Pat Leslie, a social work professor at Point Loma Nazarene University who has been involved in compiling the region’s application to HUD for years. “It is a new dance, finding the balance between all of the new players and retaining the wisdom and the efforts of the folks that have been in the trenches for a long time.”

One project lost in the shuffle was a proposal from the Veterans Village of San Diego, which didn’t catch an error in the numbers submitted from its programs in time to change its application. The local network stuck to its denial of the $200,000 grant, even though the corrected VVSD numbers showed success.

VVSD CEO Phil Landis said he found the decision “incomprehensible.”  But he, too, is optimistic about San Diego’s work on homelessness.

“We’re truly making great strides as a community. I take exception on this particular call … but it’s part of the learning process. I don’t think it’s a lack of compassion. I think they’re all learning as they’re going.”

Tying Funding to Need

While HUD mulls its formulas, the agency announced some $40 million in “bonus” money in the most recent round of funding.

And this marked a big change: Instead of just allocating it using the regular formulas, Oliva’s team came up with a system to weight the communities’ applications based on need.

“It was really our first big foray into taking a direct indicator of need and tying it to funding inside of the competition,” Oliva said.

HUD received more than 200 applications and only had funding for 25. Though San Diego scored in the highest “need” category, its proposed program through St. Vincent de Paul Village did not score highly enough to beat out the other cities.

There went a potential $2.4 million, and the chance to renew it in future years.

Oliva said the competition was very tight. “It’s not really anything against San Diego,” Oliva said. She declined to discuss specific shortcomings before HUD has a chance to speak with the local providers.

Peters, who’s been prodding HUD to change the formulas since he was elected to Congress, said the result was disappointing.

“We did not do as well as we needed to do,” he said.

Gloria said the local network is focusing on doing its best with the funding it gets while Peters and other members of San Diego’s congressional delegation focus on the federal lobbying. There is a different energy in local homelessness discussions than he’s seen in years, he said.
“We have to figure out what we can do with what we’ve got,” he said.