San Diego's Independent Budget Analyst has said San Diego's method of funding two of Mayor Kevin Faulconer's key homeless initiatives is "unsustainable."
The comments made earlier this month were in reference to the city's three "bridge shelters," which are sheltering just over 600 people, and a storage facility in Logan Heights where people experiencing homelessness can keep their belongings. Both of those programs are operated by the San Diego Housing Commission, a public housing agency overseen by the mayor and City Council members.
The two programs are costing nearly $13.7 million dollars in the coming fiscal year, which starts July 1. Two and a half years after the shelters opened, they still have no stable funding source. Instead, the shelters and storage facility are paid for with the Housing Commission's reserve dollars and "one-time" federal funds that are not expected to be renewed each year.
Jillian Kissee, a fiscal and policy analyst in the IBA's office, told council members at a May 1 meeting on the mayor's proposed budget that the way the city has funded its homeless programs is concerning.
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"Continued support of these programs with the use of commission's property reserves is unsustainable," she said.
Property reserves come from the rent paid by low-income tenants who live in the apartment buildings owned by the Housing Commission. They are generally set aside for one-time expenses, such as upgrades and major repairs to those buildings or purchases of existing apartments to keep them affordable at below-market rents.
Kissee continued: "Also the current practice of backfilling the housing commission on an annual basis with limited or one-time funding is not a viable long-term strategy."
As the Housing Commission has spent its own money on homeless programs championed by the mayor, the city has used its own money to make up for the commission's expenses. It has done that with federal Community Development Block Grant funds, which are earmarked for improvements to low and moderate-income neighborhoods, and city funds dedicated to low and moderate-income housing.
Kissee said even with all that "backfilling," the city would have to give the commission an additional $13 million to completely make up for the homeless program costs.
"As these programs continue to be funded on a one-time basis, it is important to recognize the associated trade-offs and budget implications," an IBA report on the proposed Housing Commission budget reads. "It is unknown how long this funding strategy can be continued."
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In response to the IBA's concerns, mayoral spokesman Greg Block said in a statement: "Taking aggressive action to reduce homelessness is the new normal, which means we need new sources of funding to support these efforts. Mayor Faulconer has been fighting for years to create the first dedicated revenue stream for homeless and housing solutions, and San Diego voters will finally have the chance to create one when they go to the polls in March."
The March 2020 ballot measure supported by the mayor, hoteliers and labor groups would raise the city's hotel room tax to fund homeless programs, infrastructure and the expansion of the Convention Center.
Concerns about the long-term funding of the mayor's homeless initiatives are not new. Some council members voiced skepticism around the same time last year, and again in September when the council was asked to renew funding for the bridge shelters.
City Councilwoman Vivian Moreno said at the May 1 meeting the shelters and storage facility have depleted the city's resources for longer-term solutions to homelessness.
"I'm concerned that we're playing a financial shell game so we can pretend that these tent shelters and storage centers are free," she said. "They're not. We're paying for them with the money we should be spending on more affordable housing to prevent people from becoming homeless."
