From the federal government on down, the focus — and the funding — has long centered on moving homeless people directly into permanent housing. The problem with that strategy, as Funk sees it, is there simply aren’t enough affordable homes available, and building new units takes years and can cost $1 million per door.

DignityMoves’ solution: temporary tiny home shelters, which can be erected in months for as little as $50,000 a unit. So far, the San Francisco-based nonprofit has developed five tiny home sites totaling 450 beds across California cities including San Jose and San Francisco. It has 11 more sites in the pipeline.

But despite offering supportive services, such sites sometimes struggle to place people in permanent housing, with some residents ending up back on the street. We spoke with Funk about why she believes DignityMoves’ “interim housing” model can still be a crucial solution to combat homelessness. The conservation has been edited for length and clarity.

Q: How does DignityMoves develop tiny home sites at a low cost?

A: We borrow vacant land that somebody might have plans for someday. It can be either private or public, so the land cost is zero. And that’s already half of the problem. The other reason we can do them cost effectively is because the state has declared an emergency. And if cities declare a shelter crisis, as San Jose has (and many) cities in California have, then it allows us to use more reduced building codes that are life-safety, but not a lot else. So we don’t have to do underground foundations. We don’t have to trench the utilities. We don’t have to plan for 100-year storms. And then the third one is we buy modular units from various manufacturers. Heck, you can buy a unit at Home Depot these days. So, relocatable cabins on borrowed land and emergency building codes, and wow, all of a sudden, you’ve cut a few zeros off of the cost to construct.

Q: How are the sites funded?

A: In some cases, especially in cities, like for instance, San Francisco — which was kind of stuck in the old thinking and felt like any money they spent on anything that’s not permanent was a waste of resources — our first community there was fully funded by philanthropy. Then we walked everybody through it, and they loved it. And now the city has adopted it, and is doing it on their own budget. Cities can come up with that capital money. The expensive part is then the ongoing operations and supportive services. And we know the single biggest gating factor to cities adopting this model is how hard it is to pay for the services. And so we spend a lot of our energy helping find sources for that funding.

Q: How does DignityMove’s “interim housing” differ from traditional group shelters?

A: Traditionally, shelter is meant more than anything to be a place to get out of the elements. And shelter tends to be what we call congregate, which is for cost efficiency, lots of bunk beds in a group, in a warehouse-type facility. It works to get you out of the rain, but it doesn’t work to help people rebuild their lives, because they’re still unstable. In the old world, where we had plenty of housing coming online, permanent housing, it was fine to have shelter, and then you get either back on your feet or you go to permanent supportive housing. But now that housing is so expensive to build, there’s this missing gap, and interim housing has developed in the middle as an alternative.

Q: How can tiny homes stabilize people’s lives?

A: It makes it much more likely that they’re in a mindset where they can then start to listen to the supportive service and start thinking forward. And you just can’t when you’re still in survival mode. We learned in eighth-grade science that when you’re in fight-or-flight mode, the blood literally doesn’t even go to the logical parts of your brain. Of course, you can’t figure out getting a job — even in a group shelter, where you’re still worried you’re leaving tomorrow, and you’re trying to figure out where you’re going to go next. It’s not until you’re stable and safe that now you’ve got a chance to start thinking about rebuilding and actually applying for a job or skills training.

Q: Why have cities only recently begun to embrace tiny homes?

A: There are such deep-seated commitments to permanent housing as the only dignified and safe solution. And that’s because we only measure how many people get to permanent housing. Well, those can be your metrics, they’re not mine. My metrics are whether people are on the streets and whether we’re allowing them to degenerate to the point of chronic homelessness.

Q: But tiny home sites sometimes limit how long people can stay, correct?

A: It takes some creativity to get around time limits. We certainly don’t want somebody to stay forever, but it’s based on the funding sources and availability. It shouldn’t be expected to be six months. If there’s not the supply of permanent housing, we need to let go of those time limits. So we’re really advocating for being more open-minded with that, too. And quite frankly, what blows people’s minds is some people don’t want that permanent apartment yet. Some people prefer this living, and that needs to be okay.

Q: Critics argue that shifting scarce affordable housing funding toward temporary tiny homes is a shortsighted strategy. How do you respond to that argument?

A: The truth is, we do need more permanent housing. That is the reason we have homelessness. But the reality is, today, we’re not going to get it low enough. And we’re not going to build enough of it fast enough in order to solve this problem. The analogy I use is, if you see somebody have a car accident, you run over, you take your T-shirt off and wrap it to help the bleeding. Even if your T-shirt is dirty, right? You’re not sanitized, you didn’t stop to see if this place on the freeway is designated as an emergency zone, you’re just going stop the bleeding. And then they can get to the hospital where they can have surgery that saves their life.

Five things to know about Elizabeth Funk:

1. Funk started her career as a product manager for the first Microsoft Word program.

2. She was an early employee at Yahoo.

3. She describes herself as a steadfast optimist.

4. She was an early pioneer in what is now called “impact investing.” Her Dignity Fund connected investors with entrepreneurs in developing countries.

5. She’s a single mom of two kids who remains committed to her work.

Name: Elizabeth Funk

Occupation: CEO of DignityMoves

Education: Stanford University, bachelor’s in economics and international relations. Harvard University, Master of Business Administration.

Born and raised: Kansas City

City of residence: San Francisco

Age: 54

This week, California Insurance Commissioner Ricardo Lara revealed more details about his plan to stabilize the state’s faltering home-insurance market. In exchange for allowing insurers to raise rates based on the growing threat of climate change — long an industry demand — companies would agree to expand coverage in parts of the state with the greatest wildfire risk.

Those areas would include vast swaths of the North and Central coasts, the Sierra Nevada Mountains and most of far Northern California. In the greater Bay Area, insurers would be required to write more policies in Marin, Napa and Santa Cruz counties, as well as parts of San Mateo and Sonoma counties and a sliver of Santa Clara County.

ZIP codes (red) and counties (yellow) where insurers would be expected to expand coverage:

Insurers would also have to offer new policies for fire-risk homes in more urban areas such as the Oakland Hills and Los Gatos.

“We are addressing this crisis of insurance availability head-on,” Lara said in a statement.

In recent years, insurers have ended coverage for hundreds of thousands of policyholders in fire-prone areas such as Wine Country and the Santa Cruz Mountains. Homeowners unable to find traditional policies have been left to buy into the exorbitantly expensive FAIR Plan, the state’s insurer of last resort.

Meanwhile, some of the largest carriers, including State Farm and Allstate, have stopped writing new home insurance policies anyhwere in California. That means less competition between insurers, likely contributing to recent rate spikes.

Lara’s plan aims to entice insurers to cover more homes by allowing them to justify overall rate increases using complex modeling programs that calculate the future risk of disasters. Currently, the state insurance department requires insurers to determine rates based on historical damages, which the industry argues has kept rates too low in many areas to offset the risks of worsening fire seasons. All other states already allow insurers to use forward-looking “catastrophe modeling,” and many have higher rates than California.

In return, insurers must work to collectively cover 85% of homes across designated fire-risk areas.

The state selected the areas by identifying fire-prone ZIP codes where more than 15% of homeowner policies were covered through the FAIR Plan, as well as ZIP codes where incomes are low and insurance premiums are high. It also identified counties where more than 20% of policies are considered high risk due to fire danger.

Outside of those areas, insurance companies must also take many homeowners in more urban areas who are currently on the FAIR Plan.

Seren Taylor, vice president of the Personal Insurance Federation of California, an industry group, said that he expects many insurers, who negotiated much of the plan, to agree to the deal. What’s less clear, Taylor said, is whether State Farm, which has the most policies in the state, would start writing new coverage as it already has such a large portion of the market share at around 20%.

“I would expect everyone else will be in a position where they can grow and take advantage of this,” Taylor said.

Earlier this year, State Farm said it was working with regulators on the proposed regulation but had no plans to resume writing new policies. It said it would “evaluate the need for any additional business actions as market conditions change.”

Consumer advocates, meanwhile, are pushing back hard on the proposed reforms, arguing that the use of catastrophe modeling would lead to unfair rate hikes through an opaque and potentially discriminatory process.

They’ve also raised concerns that smaller insurance companies and new carriers entering the market would be exempt from some requirements. And they suggested the insurance department might be unwilling to enforce the new coverage mandates after an initial two-year period to phase in the changes.

“After two years, if insurance companies can say they can’t meet their goals the commissioner can just move the goal posts,” Carmen Balber, executive director of Consumer Watchdog, said in a statement.

Insurance department officials refuted the claim, citing the agency’s authority to reject proposed rate increases and revoke the ability to use catastrophe modeling by companies that don’t follow through on their coverage responsibilities.

“We have strong enforcement tools under existing law to hold insurance companies accountable, and we will,” said agency spokesperson Michael Soller.

The department plans to hold a June 26 virtual workshop to gather public input on the proposal. The agency has the final say on the plan, which it intends to approve by the end of the year.

All the developer asked of the council? Permission to accept up to $90 million in state financing to cover construction costs.

Yet a 4-1 majority of councilmembers rejected the request, reasoning the project would concentrate too much affordable housing in the suburban East Bay city’s central business district. Instead, they encouraged Idaho-based Pacific West Communities to develop the complex as mostly market-rate apartments, which wouldn’t receive subsidies.

“I’m not helping my community by shoving all affordable housing in one single location,” Councilman Dominic Aliano said before voting down the financing request.

In explaining their decision, which could effectively kill the project, councilmembers pointed to at least three large housing projects the city has approved in recent years to add more than 300 affordable units downtown. They argued that allowing more low-income housing in the area would risk depriving the neighborhood of a healthy mix of residents from all backgrounds. At the same time, some members said, other parts of the city aren’t receiving their fair share of affordable homes.

“To me, that’s not equality in housing,” said Aliano, whose district includes the proposed project at 1650 Ashbury Dr. near the Concord BART station.

State regulators, however, disagreed with that assessment.

In a June 10 letter to the City Council, the state housing department wrote that by denying the financing, the city may have violated fair housing regulations and its state-mandated commitment to approve affordable housing. The agency reminded local officials it has the power to enforce state housing laws, evidenced by a string of recent lawsuits it filed against Southern California cities, including Huntington Beach, Anaheim and Fullerton.

State regulators have sent similar warning letters to other Bay Area cities, notably Woodside, which tried to skirt a recent state housing law by declaring the uber-wealthy Silicon Valley suburb a mountain lion sanctuary.

The council’s decision on the Ashbury project comes as the state is pushing cities to plan for more affordable housing in wealthier neighborhoods that have long locked out low-income residents and households of color — an effort councilmembers cited as a rationale for denying the financing.

In a letter to the developer’s attorney, Concord City Attorney Susanne Meyer Brown reiterated that the council believed it was following the state’s direction to avoid a “concentration of affordable housing units in a lower resource area.” Experts agree that past housing segregation — even when not established by law — has fueled cycles of poverty and inequality nationwide.

City officials said they are reviewing the state’s letter.

Plans for the Ashbury project call for units to be affordable for households earning between 30% and 70% of the East Bay’s typical annual income, between $46,700 and $108,990 for a family of four. Those households would typically pay around 30% of their income on rent.

Housing advocates, meanwhile, described the council’s decision to stall the project in the face of an intensifying affordable housing crisis as “baffling.” In Contra Costa County alone, more than 30,000 households need low-income rental housing, according to researchers with the nonprofit California Housing Partnership.

“It’s hard to imagine too many scenarios where any city in this state is not bending over backward to approve as much affordable housing as possible,” said Louis Mirante, a housing policy expert with the pro-business group Bay Area Council.

By 2031, the state is requiring that Concord approve 5,073 new housing units citywide, with more than half affordable to low- and middle-income residents. The city is also in the process planning a massive, decades-long redevelopment project at the former Concord Naval Weapons Station that could add more than 12,200 homes, including thousands of affordable units.

But during the May 28 public hearing on the Ashbury project, Concord councilmembers echoed a familiar refrain: They supported more housing, just not in this specific neighborhood. Some also raised concerns that allowing the state to subsidize the project may not be the most effective use of taxpayer money.

Others worried that the affordable project, which would likely be exempt from property taxes, could mean less money for city coffers at a time of budget uncertainty and advocated for a taxable market-rate project. Moreover, some said, the downtown could use more affluent residents to patronize local businesses.

Pacific West Communities, which develops around two dozen affordable projects in California each year, secured initial approval from city planning officials on the Ashbury project in February. But to pay for construction, the developer is counting on up to $90 million in state tax-exempt bonds, which would give it access to low-interest financing.

While the bonds would come at no cost to Concord, the City Council has the final authority to sign off on the financing plan. If the council doesn’t change its mind and approve the plan by a June 24 deadline, the bonds and the project could be in jeopardy.

Instead, councilmembers expressed their support for the developer’s backup proposal, which includes 163 market-rate apartments and just 20 units for low-income renters. But that project hasn’t gotten the necessary initial approval, and given high interest rates for construction loans and other economic headwinds, its viability is far from certain.

“There’s no guarantee we’d have a lender,” said Pacific West Executive John Nicolas. “They could be without any housing at all.”

HomeFirst, one of Santa Clara County’s largest homeless service providers, announced in March that it would cease operating the county-owned shelter, saying that continuing to run the 145-bed site “within a framework that perpetuates misinformation” would be a distraction from its other work in cities including San Jose and Mountain View.

In response, the county Board of Supervisors last month unanimously agreed to hand over the shelter to the Santa Clara-based Bill Wilson Center in July. The nonprofit is set to receive a two-year contract worth up to $5 million. Once the new provider takes over, the facility at 999 Hamlin Court will transition from sheltering single adults to homeless families.

County officials said they couldn’t find a qualified operator willing to serve homeless adults in a group shelter. Officials said most established local service providers now prefer to operate shelters with private rooms that offer residents more privacy and stability than traditional congregate sites like Hamlin.

However, officials said the Bill Wilson Center is prepared to continue sheltering some single adults through June 2025 as the county works to move current residents at the site to other shelters or housing. Officials estimate there will be around 70 to 80 residents still living there by the time the nonprofit takes over next month. The maximum-stay limit at the shelter is currently 120 days, though residents can ask for extensions.

As the transition gets underway, supervisors this week directed county staff to develop a plan to add more shelter beds in the northern part of the county to offset the loss of shelter space for adults in Sunnyvale.

“The question is, with Hamlin no longer serving single adults, where will they go?” said Supervisor Otto Lee, who represents Sunnyvale, before voting to approve the plan this week.

The county found itself scrambling to find a new shelter operator earlier this year after HomeFirst informed officials it planned to stop managing the facility. This was just days before supervisors appeared ready to accept county homelessness officials’ recommendation to renew the nonprofit’s shelter contract.

Ahead of the vote, supervisors had asked county staff to review the discrimination allegations, which the local NAACP chapter and other community advocacy groups brought to light last fall. Staff responded that no shelter residents or employees had filed discrimination complaints with the county or state and federal civil rights agencies.

The Milpitas-based nonprofit forcefully and repeatedly denied the discrimination claims.

But at county public meetings and in local news reports, five former shelter employees publicly accused HomeFirst of wrongfully firing them after altercations with shelter residents or allegedly violating shelter policies. They claimed non-Black employees involved in similar incidents kept their jobs. Advocates also claimed Black shelter residents at the site had been repeatedly discharged for minor incidents and left to fend for themselves on the street.

During Tuesday’s public meeting, advocates raised fresh concerns about the shelter’s shift to a new service model, including the loss of beds for homeless adults and the county’s decision to pause accepting new adult residents at the site.

“We’re only going to have more elderly, disabled unhoused people as rents keep increasing far faster than Social Security,” said local advocate Kathryn Hedges.

County officials said that as the facility transitions to a family shelter, it could accept some new adult referrals later this year based on bed availability. But those residents would still likely need to leave by June 30, 2025.

As of last year, Santa Clara County had an estimated 9,900 homeless residents, about 1,220 of whom were people in families with children, according to the latest official count. County officials said most homeless families were staying in shelters.

Supervisor Joe Simitian urged county homelessness officials to work hard to find a solution that doesn’t hinder efforts to help homeless people, regardless of their situation.

“We don’t want to get to a zero-sum game where we’re pitting homeless families against homeless individuals,” he said.

Since 2020, the city has developed six tiny home sites with around 500 beds. Three upcoming locations will help add more than 700 new beds. The facilities provide rent-free units, some with private bathrooms, as well as shared kitchens and even community gardens.

But people aren’t meant to stay forever. The goal is to help them move to permanent housing, generally in about six to nine months. As the city faces a severe affordable housing shortage, however, not everyone finds lasting homes.

According to city data, only about half of the roughly 1,380 residents who’ve moved through the “interim housing” sites over the past three-plus years have transitioned to permanent housing, and results varied widely between sites.

One tiny home site for families with children on Evans Lane in South San Jose is outperforming the rest, with nearly eight in 10 residents finding housing upon leaving. As San Jose pushes to build more tiny homes to bring many of its estimated 4,400 unsheltered residents off the street, what can the city learn from Evans Lane?

Local officials attribute the site’s success to a collaboration between San Jose and Santa Clara County to offer services that create a clear pathway to housing. Unlike at other tiny home shelters, Evans Lane residents have access to a countywide program that connects homeless families with federal housing vouchers, rental assistance and help finding low-income apartments.

“The reason why that site is doing better than others is because we have had more resources for families,” said Consuelo Hernandez, director of Santa Clara County’s Office of Supportive Housing, which oversees the program.

On a recent afternoon at Evans Lane, the squeals of children pushing scooters and skateboards along the path between the 48 boxy tiny homes pierced the whooshing hum of the neighboring Almaden Expressway. One resident sat at a picnic table in the community courtyard, recalling nights when she and her now teenage son and daughter were left with nowhere to go but the city’s parks.

“For me to see how comfortable they are now and how good they are resting — they shower, I make sure they do chores, it makes me feel good,” the woman said. “Because I know that they have nothing to worry about today.”

The family moved into Evans Lane about eight months ago after the woman completed a stay at a sober living facility. Working with a case manager provided by the site’s nonprofit operator, she said she finally has enough stability and support to find a steady job and an affordable apartment.

From Evans Lane’s opening in 2021 through the beginning of May, 243 of the 316 residents who left the site found housing — the most of any of the city’s tiny home facilities. At three other sites, residents found housing between around 40% and 50% of the time. Another site had a meager 29% success rate.

At one East San Jose tiny home site, which restricts residents to six-month stays because it’s on state property with stay limits, only 51 of the 284 residents who left moved to lasting homes, about 18%. Other sites don’t have set time limits, though city officials said they are considering capping such stays.

Across all the facilities, around 300 people moved to other shelters, hospitals, jails or other temporary locations. Nearly 400 residents, close to 30%, returned to homelessness or unknown locations.

San Jose Mayor Matt Mahan said that in addition to pooling resources with the county, Evans Lane sees consistently better outcomes because it offers services tailored to a specific subpopulation, in this case, families, who are referred to the site through a nonprofit hotline. For example, site staff help families enroll children in school and coordinate transportation to class.

“Evans Lane is just an exceptional success story that we need to closely study and replicate in other places,” Mahan said.

Although many tiny home residents struggle to find housing, Mahan contends that interim solutions, including safe overnight parking lots, are still more welcoming alternatives to traditional group shelters that lack privacy and generally have higher placement rates to housing. Even so, Mahan said he also wants the city to add more congregant shelters and start opening sanctioned encampment areas for homeless people cleared from city waterways.

Mahan also contends tiny homes are a relatively fast and cost-effective way to bring homeless people indoors, crediting the sites for an 11% drop in the city’s unsheltered population last year. After securing approval, tiny home sites can be constructed in six to eight months at a cost of about $65,000 a unit, he said. Building new affordable apartments, meanwhile, takes years and can cost $1 million each.

As San Jose and other cities — including Oakland, San Francisco, Sacramento and Los Angeles — increasingly turn to tiny homes amid mounting frustration over street homelessness, some homeless advocates contend shifting too many resources toward shelter options is a shortsighted strategy that will end up costly in the long run.

Next year, San Jose expects to spend $25 million on its portfolio of tiny homes. And if the city follows through on plans to add 784 more beds within the next 18 months, officials estimate the cost of operating the sites could balloon to $70 million by 2028. Facing a $50 million budget shortfall, the city is considering a controversial plan to divert either $8 million or $19 million from its roughly $36 million in annual affordable housing development funds to help cover next year’s tiny home costs.

More funding challenges could lie ahead. At the state level, Gov. Gavin Newsom has proposed discontinuing $1 billion in annual homelessness grants sent to cities. And county officials say their supply of federal housing vouchers, after getting a boost during the pandemic, is now running low.

Jennifer Loving, CEO of the Silicon Valley homelessness solutions nonprofit Destination: Home, said that to solve the crisis, more permanent housing investment is needed by all levels of government.

“If we don’t focus on increasing the supply of housing that is actually affordable for people who need it,” she said, “there’s not enough tiny homes in all the land to deal with the onslaught of people who can’t afford the rent.”

Price has accused Farmers and multiple affiliated companies of lowballing homeowners on the cost estimates to rebuild their properties — meaning policyholders lack enough coverage to replace their homes in the event of a wildfire or other disaster.

The carriers make up 15% of the state home insurance market, according to the DA’s office. It was unclear how many Bay Area homeowners have Farmers policies.

Price, who’s facing a recall campaign in response to growing crime concerns, said the lawsuit aims to ensure the companies offer fair and accurate replacement cost estimates so homeowners can make informed decisions when buying a policy. The complaint also seeks civil penalties of up to $2,500 for each violation of state regulations and other consumer protection laws.

“The relationship between an insurer and the homeowner is necessarily one of unequal knowledge, expertise, information, and bargaining power, with homeowners depending on the insurance company to act in good faith,” Price said in a statement this week.

Farmers called the allegations “simply incorrect” and maintained it does not seek to provide low replacement cost estimates.

“We intend to discuss this with the DA’s office,” the company said in a statement. “We look forward to addressing these concerns and defending our position.”

The complaint against Farmers, filed last month in Alameda County Superior Court, did not name any victims of the alleged scheme. A spokesperson for Price declined to answer questions about the suit. It was unclear why the district attorney’s Consumer Justice Bureau singled out Farmers in the complaint.

In addition to Farmers, the complaint names the Fire Underwriters Association, Fire Insurance Exchange and Mid-Century Insurance as defendants.

The lawsuit comes amid increasing turmoil in California’s insurance market as insurance providers, citing more frequent catastrophic wildfires, have ended coverage for tens of thousands of homeowners in fire-risk areas, including the East Bay Hills, Santa Cruz Mountains and Wine Country. Last year, State Farm and Allstate paused writing new policies anywhere in the state, where strict regulations keep premiums low compared to other parts of the country.

To quell the unrest, state regulators have embarked on a yearlong overhaul of home insurance rules and pricing. The goal is to allow providers more latitude to raise premiums to account for the threat of climate change while extracting commitments to extend coverage in fire-risk areas.

The California Department of Insurance said it’s not involved in Price’s lawsuit but has received the complaint and is reviewing the allegations.

Price said she hopes to help level the playing for homebuyers by forcing Farmers to consider more factors about a “home’s actual features and characteristics” when determining replacement estimates instead of “some hypothetical home that suits the insurance company’s bottom line.”

Price took aim at the software that companies use to calculate the estimates, alleging it relies mainly on general information like a property’s zip code. Her office alleged using the software to generate lower cost estimates saved the companies $44 million over a year.

The consumer advocacy group Consumer Watchdog, a frequent critic of the insurance industry’s use of algorithms to set premiums and policies, said it was “glad to see insurance companies’ unchecked use of big data and claims technology get a closer look.”

But Emmi Ensign, president of Golden Benchmark, an insurance brokerage in Livermore, questioned whether Price has a clear understanding of how the insurance industry operates. She said the estimates generally already take into account various factors such as square footage, the number of stories a home has and the cost of new construction. Homeowners can also ask to pay for additional coverage to mitigate the risk.

“It’s not like we’re flying by the seat of our pants with what the replacement costs are,” Ensign said.

She added, however, that when homeowners renew their policies, the plans don’t always fully account for increases in construction costs. She said insurance companies, agents and homeowners all bear some responsibility for knowing the risk and updating coverage if needed. Construction costs have soared in recent years amid inflation, material and labor shortages and supply chain issues.

This is the second time Price has sued a major insurance company. Last month, she filed suits making similar claims against auto insurers, including Progressive and the United Services Automobile Association.

Frustrated Bay Area mayors and city councilmembers say the new planning requirements are needlessly confusing and that regulators have been slow to review the plans that have been submitted. They argue the convoluted process is leaving some cities vulnerable to unfair penalties for failing to get state approval.

Auditors will now examine whether the state is doing enough to help local governments satisfy the requirements and plan for many more homes than ever before.

“We do have an affordable housing crisis, and the vast majority of cities are doing their best effort to help, but there has been inconsistent guidance,” said state Sen. Steve Glazer, a Democrat from Orinda. He’s pushed for some new housing laws and programs, but he has received mixed reviews from housing advocates.

In a letter to the Joint Legislative Audit Committee, which approved the audit last week, Glazer wrote the complaints he’s received from cities — which he declined to identify because they have not all received approval for their proposals — point to “structural problems” in how the state reviews the every-eight-year plans, dubbed “housing elements.” While the audit will not be legally binding, he hopes it can “reveal the sources of these problems and how to cure them for current and future review processes.”

A 2022 audit of how the state sets goals for the number of homes different regions are expected to approve found errors in the process, which may have led regulators to underestimate the housing need in some areas and overestimate it in others. While the state completed some of the audit’s recommendations for calculating future housing goals, the review did not lead to any legislative reforms.

Ahead of the new audit, Glazer raised concerns that cities still waiting to get approval are now subject to penalties such as losing state funding, less time to complete mandatory zoning reforms and the dreaded “builder’s remedy,” which could force local officials to accept massive housing projects.

More than a year after Bay Area cities and counties were supposed to finalize their plans, almost 30% have still yet to get state approval. Most are smaller cities that haven’t received much scrutiny on past plans. San Francisco and Oakland won approval shortly after last year’s Jan. 31 deadline. San Jose didn’t get approval until the start of 2024.

Pleasanton Vice Mayor Julie Testa, a vocal critic of the state’s push to build, said the 32 Bay Area jurisdictions without compliant plans are evidence of serious flaws in the review process. Testa said that before Pleasanton received approval last summer, it was sometimes difficult to get a timely response from reviewers. She said local planners were often left guessing how to meet the housing element requirements.

“It is absolutely a moving target,” Testa said.

Meanwhile, housing advocates said that as recent laws made the planning process more stringent, state and regional officials alerted cities about the new requirements while offering additional training and other resources.

“Many cities ignored it and just thought they were going to do the same thing they’ve always done,” said Mathew Reed, director of policy with the Silicon Valley pro-housing group SV@Home. He said a backlog of half-baked housing element drafts for regulators to review likely contributed to delayed review times.

For its part, the Department of Housing and Community Development said in a statement that it’s proud of its work to “ensure that communities plan for their fair share of housing.” It took credit for an increase in homebuilding in recent years, though high interest rates and other economic factors have since stalled new construction.

Every eight years since 1969, the department has required cities and counties to submit housing plans that describe how to accommodate a specific number of single-family homes, condos and apartments across a range of affordability levels. But during recent cycles, most jurisdictions haven’t come close to hitting their low- and middle-income housing goals.

To help reverse that trend, the state is now asking local officials to do much more meticulous planning to meet their latest housing targets, which in some cases are double that of the previous cycle. That includes proving sites identified for future homes have a realistic chance of development and providing specifics on programs to streamline the local permitting process.

In 2021, the state also created its Housing Accountability Unit to crack down on local officials skirting state housing laws and flouting the planning process. Last year, the unit and the state attorney general sued Huntington Beach for failing to develop a housing element. In March, a judge stripped the city of some of its authority to block new housing projects.

The newly approved audit is set to begin this fall, but it’s unclear when it could be finalized. A high-profile audit of the state’s homelessness spending released last month took more than a year to complete.

Last week, the city’s planning commission, citing concerns about the project’s design, voted to push back a decision on an affordable housing complex at 555 Kelly Ave. The developer has said that if project plans aren’t finalized soon, it could mean losing out on the public funding needed to start construction on the $43 million project.

“This delay is egregious and jeopardizes the well-being of Californians,” Newsom said in a statement Thursday.

The governor, who’s made boosting housing construction a top priority, said the state’s Housing Accountability Unit — formed in 2021 to crack down on local officials who skirt state housing laws — is “reviewing the city’s actions and will take all necessary steps to hold Half Moon Bay accountable if the project does not move forward.”

During a public hearing last week, commissioners said that while they support building more farmworker housing, they needed additional time to ensure the project fits within the city’s state-mandated plan for development along the coast. Among the main concerns are the project’s height and parking plans.

In an interview Thursday, Mike Ferreira, a former Half Moon Bay mayor who served on the planning commission in the 2000s, said commissioners have had little chance to discuss the project after hours of public comment at recent meetings, including from dozens of farmworker advocates who showed up in support.

“Why wouldn’t they be given the time to discuss all the options?” asked Ferreira, noting the city donated the land for the complex. “This project has been in the works for the past couple of years. Suddenly, it draws the governor’s attention if there’s a one-week spillover when you have years in the process.”

The January 2023 mass shooting in Half Moon Bay shined a light on the uninhabitable conditions farmworkers endure throughout San Mateo County, bringing a sense of urgency to an issue for which activists have long sought attention. The tarp-covered shacks and flimsy trailers at the two farms where the shooting occurred — Concord Farms and California Terra Garden — have been condemned, and workers relocated to temporary housing.

A worker who lived on one of the farms, 67-year-old Chunli Zhao, is accused of killing fellow farmworkers and is now facing seven counts of murder and one count of attempted murder. He pleaded not guilty to all charges in February.

Plans for the 555 Kelly complex for senior farmworkers predates the mass shooting. In 2022, nonprofit developer Mercy Housing and ALAS, a nonprofit that supports Latinos in Half Moon Bay, presented the initial plans for the project, which has since increased from four to five stories.

Commissioners asked whether the developer could move parking space underground, but Mercy responded that it would be too costly. The developer also said that requests for changes to office space at the complex were a nonstarter since some of the project’s public funding is contingent upon providing on-site property management and support services.

Mercy currently has the majority of funding lined up for the project, but it’s also relying on federal low-income tax credits to complete the build. The developer must get the city’s sign-off on the project to apply for those subsidies, and the complex could be delayed a year if the developer misses the July 2 application deadline.

The planning commission’s decision comes as the state has passed a slew of laws in recent years to speed up the local approval process for new projects in hopes of alleviating California’s chronic housing shortage.

However, not all of the streamlining legislation applies to sensitive coastal areas, which are tightly regulated by the California Coastal Commission. A controversial state law set to go into effect at the start of next year will loosen some development restrictions for affordable housing projects in coastal areas.

The governor’s office did not say what laws the planning commission could be violating in waiting to approve the project. But it noted the Housing Accountability Unit has worked with local governments to approve “more than 23,000 units of housing that otherwise may not have been built.”

Last year, the unit also worked with the state attorney general to sue Huntington Beach for failing to develop a state-mandated plan to meet its future homebuilding targets. In March, a judge stripped the city of some of its authority to block new housing.

The Half Moon Bay Planning Commission is set to discuss the farmworker housing project next at a meeting on Tuesday.

After pledging to hold local governments more accountable for solving homelessness, Gov. Gavin Newsom is throwing his support behind a bill that would require cities and counties to plan for potentially hundreds of thousands of new affordable homes for California’s very poorest residents.

The requirement would be part of the every-eight-years housing plans that cities and counties already must send to the state for approval.

“This new approach will require locals to better account for the needs of the lowest-income households and people experiencing homelessness,” Newsom said in a statement.

Currently, local governments must plan to meet specific homebuilding targets set across a range of affordability levels, with the lowest level being for residents earning less than 50% of an area’s typical income. Assembly Bill 3093 would split that category into three new levels between 0% and 50%.

In Santa Clara County, 50% of the typical annual income is $62,450 for a single person, according to the state housing department. If the bill went into effect today, the county’s lowest affordability level would be for those earning between $0 and $19,050. (The upper income limit would increase for larger households.)

Residents of affordable housing typically pay no more than 30% of their income on rent, though the amount can vary.

The new rules would apply to the next round of housing plans, which Bay Area localities must finalize by 2031.

Under the current plans, the Bay Area is supposed to permit about 441,000 new homes — roughly half of them for low- and middle-income residents — over the remaining seven years of the present cycle. Early results show the region is behind schedule in meeting that ambitious goal.

Newsom’s support of the bill follows new accountability measures he announced last month to ensure local governments are getting homeless people off the street and connected with services.

Should the bill pass, a team within the state’s Housing Accountability Unit will be tasked with assuring that cities and counties plan for more extremely low-income homes and supportive housing for homeless people. Last year, the unit worked with the state attorney general to sue Huntington Beach for failing to develop a housing plan. In March, a judge stripped the city of some of its authority to block new housing.

But even when jurisdictions satisfy the state’s planning expectations, that doesn’t mean affordable housing automatically gets built. With public funding severely oversubscribed, most local governments haven’t come close to hitting their affordable housing targets during recent eight-year cycles.

The bill, introduced by Democratic Assemblymember Chris Ward of San Diego, is still in the early stages of the committee process. It’s next set to go before the Assembly’s Committee on Housing and Community Development.

Correction: May 14, 2023 An earlier version of this article incorrectly reported the figure for 50% of Santa Clara County’s typical annual income.

In addition to funding ongoing efforts such as building more tiny home shelters and providing outreach services, the money could help launch entirely new programs — from managed tent encampments to bus tickets to reunite homeless people with loved ones — in hopes of bringing many of the city’s estimated 4,400 unsheltered residents off the streets.

“Homelessness in San Jose is a humanitarian, fiscal, and environmental crisis that requires bold action,” said Mayor Matt Mahan, who’s in charge of steering the budget process, in his annual spending message.

The homelessness plans are outlined in the city’s latest budget proposal, released last week. Officials will continue to refine the budget before the City Council approves it in June. Here are four of the key plans:

Sanctioned tent encampments

At the direction of state environmental regulators, the city is developing an ambitious $27 million plan to move about 1,000 homeless people from its creeks and rivers over roughly the next year. Without enough shelter beds for everyone, officials are exploring setting up sanctioned tent encampments or “safe sleeping sites” for about 500 of those unhoused residents.

Mahan has cited a city-run managed camp in San Diego, which provides individual tents and basic security and sanitation, as a successful model. However, a sanctioned encampment in Sacramento that offers few services is under threat after the local district attorney labeled the site a public health hazard and sued the city to close it.

There’s also legal uncertainty about whether sanctioned encampments constitute the “adequate shelter” cities are expected to offer before clearing unmanaged camps. The U.S. Supreme Court, however, has signaled it may overturn that requirement in a decision set for next month.

The city is still determining what the sanctioned camps could look like and where they may go. Setting up the sites could cost between $18,000 and $40,000 per tent, or between $9 million and $20 million in total, according to the budget proposal. The spending plan also highlighted cost concerns and noted the city might only be able to provide minimal services.

“Homeward Bound” 

City officials are proposing setting aside $200,000 for a pilot program that would pay for transportation and relocation expenses to reunite homeless people with friends or family within or outside the city.

San Francisco has a similar program, which has helped thousands of people since starting in 2005. In recent years, however, it’s been mostly sidelined as the city has focused on other homelessness efforts, including building supportive housing.

While homeless advocates sometimes dismiss such programs as “Greyhound therapy,” the budget proposal calls for closely tracking whether people find loved ones and secure a safe place to stay.

But how many would want to take advantage of the program, dubbed “Homeward Bound,” is unclear. Despite the commonly held belief that California cities like San Jose are a magnet for homeless people from across the country, an estimated 85% of unhoused residents in Santa Clara County were already living in the county when they became homeless, according to the most recent official survey.

Expanding “no return zones”

As the city adds more tiny homes, RV safe parking lots and other temporary shelter options, officials also want to establish more “no return zones” in areas where they’ve cleared encampments and moved people indoors.

The city has already employed this strategy along the Guadalupe River downtown. Now, officials are discussing banning camping along more waterways and other areas where encampments have posed serious health and safety hazards.

Additionally, the budget proposal calls for creating no-encampment areas within two blocks of every planned and existing tiny home facility, safe parking lot and managed encampment, in part to convince residents to accept the sites in their neighborhoods.

The proposed budget would allocate almost $1 million next year for city parks employees and police to establish and enforce no return zones around the city.

More tiny home shelters

Erecting tiny homes and cabin shelters has been one of San Jose’s top homelessness priorities in recent years, and next year will likely be no different.

Currently, the city operates six tiny home or cabin shelter sites, totaling more than 500 units, with three new facilities in the pipeline to add hundreds more beds.

Excluding state and federal grants, the city estimates it will spend around $25 million on the sites next year. The proposed budget recommends covering those costs by shifting $8 million from Measure E, a property transfer tax that mostly goes toward affordable housing.

Another $16.6 million in Measure E funds would be spent on clearing waterways, sanctioned encampments and other homelessness efforts, leaving $11 million for housing. But some homeless advocates have argued using most of the money for shelters and other temporary solutions is a shortsighted strategy.