San Francisco homeless nonprofit was ‘irresponsible’ with $240 million of taxpayer money, showering staff with pay bumps, in latest scandal to rock California’s charity housing sector
Auditors have blasted a San Francisco homelessness nonprofit for being “careless and irresponsible” with $240 million in taxpayer money, in the latest scandal to rock California’s bloated charitable housing sector.
HomeRise, one of the city’s leading providers of homeless housing, “misused” funds, lacked financial controls and engaged in other practices that “increased the risk of fraud,” according to a scathing city report.
It’s the latest in a slew of revelations about waste in California’s so-called “homelessness-industrial complex” — a gravy train of financiers, officials and shelter owners who would rather suck up public money than solve the problem.
Adam Andrzejewski, CEO and founder of transparency watchdog OpenTheBooks, on Monday slammed HomeRise, which manages 1,500 units in 19 properties with an annual budget of $34 million.
Homelessness rose 6 percent last year to more than 180,000 people in California, federal data shows
This HomeRise project in Mission Bay, San Francisco is home to 140 adults who come from the streets
The city’s current agreements with HomeRise include more than $240 million in disbursements, including $110 million in loans to develop or upgrade properties, $90 million for operations, and more than $40 million in grants for support services.
“It is unclear exactly how much of the $240 million in grants, loans and subsidies was misused,” Andrzejewski said.
“But what is clear is that this company should never have been entrusted with public funds.”
The Department of Homeless and Supportive Housing and the Mayor’s Office of Housing and Community Development requested the audit in 2022 after discovering problems with HomeRise’s books.
They hired Sjoberg Evashenk Consulting to investigate the finances.
Auditors found “improper, imprudent or questionable expenditures” by HomeRise that violated rules on using city dollars for fundraising, paying employee bonuses and providing staff lunches and gifts.
Early last year, the nonprofit had 118 active credit cards in use, many with limits of more than $10,000 that could easily be abused, auditors said in their report, released earlier this month.
They also discovered that HomeRise was giving out “signing bonuses” to employees who had been with the nonprofit for years.
One employee got a raise of $87,000, or 74 percent, in just nine months, they found.
Mayor London Breed says the city’s homelessness system needs more “transparency and oversight.”
Other controversial charges included $12,500 for a social event.
The big payouts came even as the nonprofit lost millions of dollars because its poorly managed buildings sat vacant.
In July 2023, two of the buildings in the gritty Tenderloin neighborhood were about a third vacant.
Vacancies not only lost business revenue, but “also represent missed opportunities to provide permanent, supportive housing to the unhoused,” accountants said.
Accountants said the charity was poorly managed and suffered from ‘alarming turnover’.
But instead of cutting off city funding to HomeRise, city agencies were instead urged to strengthen oversight of their contracts with the nonprofit.
“The city has an interest in HomeRise remaining a viable housing operator for its existing tenants and a developer of low-income housing in the future,” accountants said.
Democratic San Jose Mayor Matt Mahan struggled to convince residents of his plan for a secure homeless camp in their neighborhood
Janéa Jackson, who took over as CEO of HomeRise in mid-2023, has said she is addressing the nonprofit’s financial problems.
HomeRise has overhauled its budgeting process, including reducing the number of credit card users to 30.
The HomeRise scandal comes as California faces a crisis of homelessness and vagrancy.
Homelessness rose 6 percent last year to more than 180,000 people in California, federal data show.
Since 2013, the numbers have exploded by 53 percent.
Nearly 28 percent of the nation’s entire unhoused population is in the Golden State.
Earlier this month, angry residents in San Jose screamed Mayor Matt Mahan when a town hall meeting turned nasty.
The Democrat and former technology entrepreneur wanted to build a semi-permanent homeless camp near their multimillion-dollar homes.
Also this month, auditors analyzed California’s failed attempts to address the problem
The state spent $24 billion tackling homelessness over the past five years but failed to track whether the money was helping the growing number of unhoused people, their damning report said.
Properties in San Jose near the planned homeless camp regularly change hands for more than $3 million
It criticized the state’s homelessness czars for spending billions on 30 programs between 2018 and 2023, but no data was collected on why the money failed to address the crisis.
It confirmed what is clear to many residents: that tent camps and troublesome vagrancy in big cities are bad and getting worse.
More than two-thirds of American adults say homelessness has gotten out of control and officials should move those sleeping rough to tent camps outside cities, according to a recent DailyMail.com/TIPP poll.
Our survey found that 67 percent of Americans are fed up with the country’s rapidly rising number of homeless people and want mayors to take drastic action to address the scourge.
More than 650,000 people were recorded as homeless by the federal government in its annual 2023 snapshot, released in January – a 12 per cent increase from the previous year.
Officials in Portland, Los Angeles, Las Vegas and other cities have responded to public anger over homelessness in recent months by dismantling makeshift shelters and relocating people.
More than two-thirds of Americans say homelessness, which rose 12 percent last year, is out of control
Scenes of homeless drug addicts stumbling on sidewalks and fears of violence and petty crime have become a national political issue, with former President Donald Trump making it part of his campaign platform.
In a video op homelessness released by his campaignTrump said “hard-working, law-abiding citizens” were sidelined and had to “suffer at the whims of some deeply sick people.”
He promised to “ban urban camping” and create “tent cities” on “cheap land” for the homeless, which will be staffed with doctors and social workers to help people address systemic problems.
Yet homeless people and their advocates say the cleanup and relocation policy is cruel and a waste of taxpayer dollars. The answer, they say, is more affordable housing, not a crackdown.
However, our survey of 1,401 adults found that tough policies resonated with a large share of US voters – with more than two-thirds saying they were in favor of resettlement camps.
Respondents who were democratically oriented were eager to resettle unhoused people. More than 74 percent of them wanted the homeless to move, compared to 64 percent of Republicans and 62 percent of independents.