California faces deepening housing shortage and homelessness funding crisis

A white paper by the Berkeley Economy & Society Initiative attributes California's extreme unaffordability and rising poverty to an acute housing shortage created by decades of restrictive policies, including tight zoning, expanded environmental review under CEQA and Proposition 13. The report argues that growth limits have reduced housing supply, driving up costs for homes, energy and transportation, and that reversing the trend will require a dramatic increase in construction.

A separate audit by the Howard Jarvis Taxpayers Association finds that state and local governments have failed to manage homelessness spending effectively. California, home to less than 12 % of the U.S. population, accounts for over 24 % of the nation’s homeless, 42 % of chronic homelessness and 45 % of unsheltered individuals. Homelessness rose 35 % in the state from 2007 to 2024, while other states saw declines. The state auditor reported an inability to track $24 billion spent across 30 programs in nine agencies, and local initiatives in Los Angeles and San Francisco have missed targets, with housing unit costs far exceeding projections and funding mismanagement leading to program cuts.