Gov. Gavin Newsom is once again threatening to withhold homelessness funding from local governments that fail to show progress in reducing street homelessness.

During a virtual news conference on Monday, Newsom warned that cities and counties not meeting specific goals—such as clearing encampments and advancing housing projects—could lose access to future state homelessness grants. These funds are used to support homeless shelters, outreach programs, and encampment removals.

“At the end of the day, people want outcomes, and they want results for their money spent,” Newsom said.

This isn’t the first time Newsom has made such warnings. Last summer, he issued an executive order directing state agencies to collaborate with local governments on encampment sweeps and shelter placements. However, only a small portion of state homelessness funds have actually been withheld so far.

Newsom’s push places the responsibility for addressing California’s homelessness crisis squarely on local officials. “That’s where the federal and state vision is ultimately realized, at the local level,” he stated. Some local leaders, however, dismissed his remarks as political maneuvering, accusing him of unfairly blaming local governments.

“The governor’s threat to block future funding puts headlines above solutions,” said Graham Knaus, CEO of the California State Association of Counties. He argued that real progress requires cooperation at all levels of government, including the state.

Newsom’s announcement comes amid growing public frustration, fueled by an April state audit that found California’s lead homelessness agency had failed to track $24 billion spent between 2018 and 2023. A separate audit of San Jose’s homelessness spending revealed similar issues. During that period, the state’s homeless population surged 38% to over 181,000, growing to more than 187,000 in 2023. The Bay Area alone had approximately 38,800 homeless residents.

To improve transparency, the state launched a website on Monday to track county-level data on housing, homelessness, and mental health services. Metrics include completed housing units, shifts in homeless populations, and the number of people connected to services. Newsom said these indicators will influence future funding decisions.

Additionally, Newsom announced $920 million in new homelessness funding, with $760 million earmarked for future grants under stricter accountability rules. The remaining $160 million has been directly awarded to local governments.

In the Bay Area, only Redwood City received funding in this round, securing over $2.8 million to help close encampments. However, in recent years, cities and counties across the region have received hundreds of millions in state homelessness grants.