This story was originally published by CalMatters. Sign up for their newsletters.
When Gov. Gavin Newsom vetoed a bill last month that would have supported sober homeless housing, his reason left many scratching their heads.
Newsom said Assembly Bill 255, which would have allowed cities to use up to 10% of their state funds to pay for “recovery housing,” was unnecessary. That’s because using state funds for sober housing is already allowed, the governor said. He said “recent guidance” makes that clear.
That was a big surprise to Assemblymember Matt Haney, who had spent the past two years working on the bill Newsom was now saying had been moot all along. Haney had been under the impression that California’s “housing first” rule — which dictates that homelessness programs offer housing to people regardless of their sobriety, mental health, employment, etc. — meant sober housing wasn’t eligible for state funds.
When CalMatters asked about the “recent guidance” that allows the state to fund sober housing, the governor’s office sent a link to a 20-page document. No one CalMatters spoke to had ever seen that document before. Neither had Haney, anyone in his office, or the other stakeholders involved in his bill, including the service providers trying to build more sober housing, he said.
While the document was dated July, 2025, it wasn’t published online until Oct. 2 — the day after Newsom’s veto.
“I think it’s a terrible bureaucratic failure,” Haney said of the lack of communication. Having the state and the Legislature work together, rather than on separate parallel policies, would have saved everyone time and resources, he said.
“Why didn’t anybody say anything over the course of two years,” Haney asked, “not just to me, but to the cities, counties and providers who desperately wanted to open these beds?”
The California Interagency Council on Homelessness, which has been working on the document since late 2024, put the blame on Haney’s office for not reaching out. A preliminary draft was publicly available earlier this year as part of a February council meeting, said Executive Officer Meghan Marshall.
The new sober housing guidelines come at a time when the state is facing political pressure from some facets to shift its approach to homeless housing – both to embrace drug-free housing and to turn at least some of its focus from permanent housing that accepts everyone to temporary shelter that may come with strings attached.
A group of legislators, city housing staffers and nonprofits recently took a trip to San Antonio, Texas to tour a massive homeless shelter there, and returned with ideas on how to beef up California’s shelter capacity — which some on the trip say has been neglected as a casualty of California’s strict preference for long-term housing. Meanwhile, President Donald Trump’s administration has signalled that it will shift federal money away from permanent housing and into temporary shelter, while also imposing conditions such as sobriety. California might have to get on board with that agenda, or risk losing federal funds.
While few California Democrats are supportive of anything Trump does, the continued prevalence of encampments on the streets has convinced some that the state should change its tactics.
“We need to break the logjam of the dogma that says that only permanent housing is acceptable,” said Sen. Catherine Blakespear, a Democrat from Encinitas. “Because what we’re de facto saying is that people are going to stay on the streets until we’ve built enough permanent housing or market-rate housing, and neither is on track to meet the need anywhere in the near term.”
But that push has some service providers worried that, in an environment where homelessness funding keeps getting cut, focusing on sober housing and temporary housing will mean less money for the permanent housing that ends people’s homelessness.
“The current trend shifts away from solving the actual lack of a home and focuses on some people’s associated issues,” said Jennifer Loving, CEO of Destination Home.
The debate over sober, temporary, or permanent housing doesn’t address the underlying income inequality that causes many Californians to lose housing in the first place and prevents their being able to afford housing afterward.
The deal with sober housing
California has required state-funded homeless housing be “housing first” since 2016, meaning it gets people into a permanent home as quickly as possible without forcing them to jump through additional hoops. The idea is that once someone is safely housed, it becomes much easier for them to get sober, find a job or take care of other issues.
Haney argues the model prevented the state from funding sober housing, which he said could be lifesaving for people who are overcoming an addiction and don’t want to live next to neighbors using drugs.
The new state guidance says sober housing can be housing first, if it’s done right. It must be the client’s choice to get sober and live in recovery housing, and they must have other local options that don’t require sobriety. In addition, sober housing providers can’t evict someone for relapsing. If a client decides they no longer want to live in sober housing, the provider must connect them to another housing option.
The guidance is more permissive than Haney’s bill. While the bill would have capped state funding on sober housing at 10%, the state guidance has no limit. But Haney worries it’s too strict in other ways. If housing providers can’t evict someone for using drugs or alcohol, they can’t run effective sober housing, Haney said.
“There are some questions as to whether anyone is actually going to step up and do this under the guidelines as written,” he said.
The state guidelines come with no money to open new sober housing beds.
Without extra funding, as more money goes to sober housing, that means less money for low-barrier housing, said Loving, who worries that shift will move the state backward. Sober housing and drug testing were the norm in the 1980s and 1990s, but people still overdosed in those environments, she said.
“Drugs were always present, even in sober living environments,” Loving said. “And that did not increase our housing outcomes. What increased our housing outcomes was the availability of actual houses for people to transition into.”
Temporary or permanent housing?
Several dozen California legislators, city housing workers and nonprofit providers traveled to Texas last month to visit a massive homeless shelter in San Antonio. Haven for Hope fits about 1,500 people on one 22-acre campus — meaning that almost anyone in the city who wants to can sleep indoors. Most of those people are required to stay sober in order to keep their spot, and healthcare, counseling and other services are offered on site.
That program is a sharp contrast from the “discouraging results” of California’s homelessness strategy, said Sen. Dave Cortese, a Democrat from San Jose who went on the trip. He’s frustrated with what he sees as California’s neglect of temporary shelter. New programs such as Newsom’s Homekey only fund permanent housing. So did the Measure A affordable housing bond in Santa Clara County.
Long-term housing is the only way to resolve someone’s homelessness, which is why it has been the gold standard in the state. But it can take years to build, and voters aren’t always patient.
“If you push all your chips to the middle of the table on permanent supportive housing, you start to lose your constituency because constituents are coming by in their cars every day and seeing more tents and more illegal encampments,” Cortese said. “And their thought process is, ‘I thought we just put a billion dollars into eradicating homelessness. What’s going on? Why is it getting worse?’”
Land is scarce and expensive in California, which would make it hard to replicate a shelter as large as Haven for Hope. But city staff in San Jose are looking into whether some version of it can be done there, said Housing Director Erik Soliván, who was on the Texas trip.
While it may seem unusual for the Golden State to look to Texas in search of advice on social services, Californians have been awed by Haven for Hope for years. CalMatters wrote about the phenomenon in 2023.
The Texas shelter has made some changes since then. About 1,600 people slept in the shelter in 2023, and the facility served 85% of the city’s homeless population.
But even that giant facility couldn’t hold everyone. The space was overcrowded, with hundreds of people sleeping on the floor on mats inches apart. Haven for Hope had to pause enrollments and put new rules in place to limit who can come in. In the last fiscal year, the population was down to an average of 1,453 people per night. About 60% of those are in a program that regularly conducts drug and breathalyzer tests.
California will have to do more to embrace that style of shelter if it doesn’t want to get left behind by the federal administration, said Elizabeth Funk, founder and CEO of shelter provider DignityMoves, who went on the Texas trip.
The Trump administration appears poised to divert money away from permanent housing and into temporary housing that comes with sobriety and other requirements. But we won’t know the extent of that change until the government shutdown ends.
“The federal government is going to come down with a bunch of money for things that don’t allow drug use,” Funk said, “and that needs to fit in our system.”