California Voter-Approved Prop 1 Funds Deliver More Affordable Homes

A new program aimed at tackling homelessness in California has achieved a milestone, California Gov. Gavin Newsom announced.

Newsom announced more than 2,900 permanent supportive homes funded by the voter-approved Proposition 1-backed Homekey+ program to provide stability for Californians with behavioral health challenges.

“When California voters approved Proposition 1, they made clear that they wanted meaningful action to address homelessness and behavioral health challenges. We heard them, and we’re delivering on that promise — reducing homelessness and providing our most vulnerable residents with the care they need. Every Californian deserves a safe place to call home, especially the veterans who have bravely served our country. They deserve our support, our commitment, and the opportunity to live with dignity and stability,” Newsom said in the announcement.

Newsom also announced awards of $115 million in Prop 1 funding to create hundreds of new affordable homes in five communities throughout the state.

Meaningful Action

The state said that when California voters approved Proposition 1, they made clear that they wanted meaningful action to address homelessness and behavioral health challenges.

According to a release from the state, Newsom began repairing a system that had suffered from decades of neglect, beginning with then-Gov. Reagan’s administration, when state hospitals were closed and no adequate alternative was provided, leaving people most in need of help to fall into the criminal justice system or homelessness.

The state said the governor’s foundational model to reverse homelessness is creating real results that will have positive impacts for generations to come.

Since launching in 2024, 2,905 permanent supportive homes have been awarded through Homekey+, with 828 of these homes for veterans, who face a disproportionate rate of homelessness, according to the state. Since 2019, the precursor to Homekey+, which is known as Homekey, created nearly 16,000 interim and permanent homes across the state and served 30,000 people.

The state’s announcement builds on years of work to address housing and homelessness, including annual residential construction increasing 50% since 2018 and California experiencing the largest numerical reduction in unsheltered homelessness of any state – a 6.8% decline.

Newsom announced another five new Homekey+ projects with 329 homes, including 168 of those reserved for California veterans.

The announcement follows Newsom’s signature on a new package of housing and homelessness legislation to accelerate construction, cut unnecessary red tape, expand housing options, and connect homeless individuals with recovery-oriented housing.

Advancing Affordable Housing

Modeled on Newsom’s successful Homekey program and administered by the California Department of Housing and Community Development (HCD), Homekey+ is the latest tool in a comprehensive strategy to address housing affordability and homelessness. California officials said the state is seeing the results of those cumulative actions, with its first year-over-year reduction in unsheltered homelessness in 15 years.

HCD issued the first Homekey+ awards less than six months from the Notice of Funding Availability, with groundbreakings taking place by December 2025. Work on acquisition and rehabilitation projects is often underway less than five months from award, with the first projects nearly due to complete construction and begin leasing up.

“California’s significant investments through Homekey+ have funded nearly 3,000 affordable and supportive homes for Californians,” said Tomiquia Moss, Secretary of the California Housing and Homelessness Agency. “These Homekey+ units will be a lifeline and the start to a stable future for Californians experiencing homelessness – including veterans – resulting in stronger communities for many years to come.”

A Place to Call Home

“Reaching the $1 billion mark in Homekey+ awards is a remarkable milestone, but the true measure of this investment is what it means for veterans and their loved ones,” said Lindsey Sin, Secretary of the California Department of Veterans Affairs (CalVet). “It means more veterans can find a place to call home and receive the support they need to move forward. This achievement also reflects what is possible when state agencies and communities work together toward a shared goal. CalVet is proud to partner with the Department of Housing and Community Development and our partners across California to make sure California’s veterans have a safe and stable place to live.”

According to the state’s release, more than 1.2 million adults in California live with a serious mental illness, and one in 10 residents meet the criteria for a substance use disorder, greatly increasing their odds of experiencing homelessness.

Proposition 1 of 2024 is addressing the state’s mental health systems with a $6.4 billion Behavioral Health Bond for housing, services, and treatment for veterans and others experiencing homelessness. When fully awarded, the state said Proposition 1 bonds are estimated to fund 6,800 residential treatment beds and 26,700 outpatient treatment slots for behavioral health.

Roughly $1.03 billion in Proposition 1 bond funds were made available through Homekey+ to cities, counties, housing authorities, and tribal entities for permanent supportive housing projects serving veterans.

Another $1.11 billion was made available for projects serving all target populations, through a combination of Proposition 1 bond funds and Homeless Housing, Assistance, and Prevention program funds, the state said.

“With today’s awards, Homekey and Homekey+ have now funded homes that will serve more than 200,000 Californians experiencing the greatest need,” said Gustavo Velasquez, HCD Director. “It is tremendously rewarding to know we can help create the foundation for a life of stability lived off the streets and connected to care and services.”

Local Investments, Real Results

The awards announced will create 329 affordable homes through $115.2 million in Homekey+ awards:

• The City of Yuba, in partnership with Habitat for Humanity of Yuba/Sutter, Inc., will create 138 new homes across four buildings with a Homekey+ award of just under $40.6 million. Known as Merriment Village Apartments Phase II, the Yuba City project will reserve 70 units for veterans facing homelessness with a behavioral health challenge, with supportive services and property management on site.
• The City and County of San Francisco, in partnership with Swords to Plowshares, will rehabilitate an existing 63-unit apartment building, with 44 homes with supportive services for veterans facing homelessness with a behavioral health challenge, thanks to a nearly $18.7 million Homekey+ award.
• The County of Riverside, in partnership with Wakeland Housing and Development Corporation, will receive the gap funding needed to build the 80-unit Camino Terrace with a $16.2 million Homekey+ award, with 35 of those units designated for the Homekey+ population — including 28 for veterans.
• The Housing Authority of the County of Santa Barbara, in partnership with Surf Development Company and Thompson Housing, LLC, will receive the gap funding needed to build the 49-unit Brisa Encina community in Lompoc thanks to a nearly $20.9 million Homekey+ award. Of those homes, 19 will be reserved for veterans experiencing homelessness with a behavioral health challenge.
• The County of Los Angeles, in partnership with Hope the Mission, will fund the acquisition and rehabilitation of a former Los Angeles motel into the 62-unit Casa Bella development with an $18.8 million Homekey+ award. The development will include 61 permanent supportive homes for Californians experiencing homelessness with a behavioral health challenge—including seven homes for veterans—in addition to one manager’s unit.

California’s Behavioral Health System

In 2019, Newsom announced that addressing the homelessness and mental health crises would become a new state priority — making him the first Governor to launch a statewide strategy to address these challenges.

Today, across California, individuals with untreated psychosis are 10 times more likely to experience homelessness and 16 times more likely to be incarcerated, the state said.  

Through Governor Newsom’s work, California is repairing its behavioral health continuum – building new treatment facilities, expanding the workforce of care, establishing new programs to address unique needs and get people help and shelter, providing vital funding to communities, and creating stronger accountability measures and expectations to ensure everyone is doing their part.

California said it has awarded $6.6 billion in behavioral health infrastructure funding to support 535 new facilities, 9,570 beds, and 44,863 treatment slots statewide.