The California Way on homelessness is a blueprint for what not to do

It’s always painful to see homeless encampments on Christmas Eve.

Is this the best we can do? Doesn’t anyone have a better idea than throwing billions of tax dollars at nonprofit organizations to poke around asking troubled people if they’re ready to accept services yet?

In fact, the Trump administration has a better idea. Two of them.

In Trump’s first term, his administration offered states a waiver from a provision in a 1965 law that stripped the funding from state mental hospitals. The Medicare and Medicaid Act signed by President Lyndon Johnson had something in it called an IMD exclusion. It meant no federal reimbursement would be paid to states for mental health care in any facility with more than 16 beds. The then-modern idea was to stop institutionalizing mentally ill people by blocking federal funding for “Institutions for Mental Disease.”

Today the largest mental health facility in the United States is the Los Angeles County jail system.

Along with being a barbaric and disgraceful method of caring for people with severe mental illness, jails are not a long-term option. People are eventually released. How many are living in those tents you drive past on Christmas Eve?

During Trump’s first term, the Centers for Medicare and Medicaid Services informed state Medicaid directors that they could apply for a waiver from Medicaid’s IMD exclusion. That would allow federal reimbursement for mental health or substance use disorder care provided in a mental health hospital or other large facility.

But California has preferred to fund small “community” facilities with 16 or fewer beds that are not intended for long-term, in-patient care.

The next time you hear a public official declare that there are “not enough beds” for troubled people who need mental health care, remember that California has chosen to limit facilities to 16 beds. A provider that wants more beds must pay to construct another building. If using any public funds, they’ll likely have to pay significantly more for a “skilled and trained” union construction labor force receiving the “prevailing wage,” because that’s political self-preservation for elected officials, always the top priority in California public policy.

Currently the Trump administration is taking aim at another disastrous policy, the “Housing First” mandate for publicly funded homeless housing. “Housing First” is a requirement in California law, and it means free or subsidized housing may be not be offered on the condition of sobriety or participation in sobriety programs, or job training, or acceptance of mental health and other services.

The Trump administration announced in November that it will reduce funding for “permanent supportive housing” of this type and shift more funding to shelters and interim housing. The share of federal Continuum of Care funds for homeless services allocated to permanent “Housing First” units will drop from about 90% down to 30%, and more funding will be shifted to alternative solutions to help people off the streets sooner.

Lawsuits were filed immediately to block the change. Many more Christmas Eves may come and go while people in tents wait for developers, construction unions and nonprofit organization executives to secure their cut of billions in federal funding. It would be a tragedy if anybody’s boat was repossessed on Christmas.

Earlier this year, Gov. Gavin Newsom vetoed Assembly Bill 255, which would have allowed state funds to be used locally to pay for housing reserved for people who are sober and in recovery. Newsom’s veto message said “supportive recovery residences” must get their funding “within the Housing First framework.” That means the operators of the housing must allow drug users to live there.

This week, Newsom announced $52 million in grant funding for 38 projects that “support housing, infrastructure improvements and address homelessness” in 20 counties. The pre-Christmas news release bragged that “California is a leader in producing positive results” in the “national crisis of housing and homelessness,” and claimed “Governor Newsom is creating a structural and foundational model for America.”

Preventing in-patient mental health care and blocking funds for sober-living residences is no model for America or anywhere else.

The Trump administration is trying to reverse failed policies that have left people to die on the streets. That would be a Christmas gift for the ages.

Write Susan@SusanShelley.com and follow her on X @Susan_Shelley