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 slammed a homelessness nonprofit in San Francisco for being ‘careless and irresponsible’ with $240 million of taxpayer money, in the latest scandal to rock California‘s bloated charity housing sector.
HomeRise, one of the city’s main providers of homeless housing, ‘misused’ funds, lacked financial controls and engaged in other practices that ‘heightened the risk of fraud,’ says a damning 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 funders, officials, and shelter owners more keen on swallowing public funds than solving the problem.
Adam Andrzejewski, CEO and founder of the transparency watchdog OpenTheBooks, on Monday slammed HomeRise, which runs 1,500 units across 19 properties on a $34 million annual budget.
Homelessness jumped 6 percent to more than 180,000 people in California last year, federal data show
This HomeRise development in Mission Bay, San Francisco, houses 140 adults who are getting off the streets
The city’s current deals with HomeRise cover more than $240 million in payouts, 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’s unclear exactly how much of the $240 million grants, loans, and subsidies was misused,’ Andrzejewski said.
‘But what is clear is that this company should never have been trusted with public funds.’
The Department of Homelessness and Supportive Housing and Mayor’s Office on Housing and Community Development asked for the audit in 2022 after discovering issues with HomeRise’s books.
They hired Sjoberg Evashenk Consulting to probe its finances.
Auditors found ‘unallowable, imprudent, or questionable spending’ by HomeRise that broke rules about using city dollars for fundraising, paying staff bonuses, and providing lunches and gifts to staff.
At the start of last year, the nonprofit had 118 active credit cards in use, many with limits exceeding $10,000 that were easily abused, auditors said in their report, which was released earlier this month.
They also found that HomeRise gave out ‘signing bonuses’ to staff who had been at the nonprofit for years.
One staffer got an $87,000 or 74 percent pay bump in the span of just nine months, they found.
Mayor London Breed says the city’s homelessness system needs more ‘transparency and oversight’
Other controversial costs included $12,500 for a social event.
The big payouts came even as the nonprofit lost millions of dollars because its mismanaged buildings were sitting empty.
In July 2023, two of its buildings in the gritty Tenderloin district were about one third empty.
Vacancies not only lost the company revenue but also ‘represent missed opportunities to provide unhoused people with permanent, supportive housing,’ auditors said.
Auditors said the charity was badly run and suffered from an ‘alarming rate of turnover.’
But rather than cut off city funding to HomeRise, city agencies were instead urged to strengthen oversight of their contracts with the nonprofit.
‘The City has a vested interest in HomeRise remaining a viable housing operator for its existing tenants and a developer of low-income housing in the future,’ auditors said.
San Jose’s Democratic Mayor Matt Mahan struggled to convince residents of his plan for a secure homeless camp in their neighborhood
Janéa Jackson, who took over as HomeRise CEO in the middle of 2023, has said she’s addressing the nonprofit’s financial problems.
HomeRise has overhauled its budgeting process, and slashed the number of credit card users to 30, among other steps.
The HomeRise scandal comes as California battles a crisis of homelessness and vagrancy.
Homelessness jumped 6 percent to more than 180,000 people in California last year, federal data show.
Since 2013, the numbers have exploded by 53 percent.
Nearly 28 percent of the nation’s entire unhoused population are in the Golden State.
Earlier this month in San Jose, angry residents shouted down Mayor Matt Mahan when a town hall meeting turned nasty.
The Democrat and former tech entrepreneur wanted to build a semi-permanent homeless camp near their multi-million dollar homes.
Also this month, auditors panned California’s bungled attempts at addressing the problem
The state spent $24 billion tackling homelessness over five years but didn’t track if the money was helping its growing number of unhoused people, their damning report said.
San Jose properties close to the planned homeless camp frequently change hands for upward of $3 million
It slammed the state’s homelessness tsars for spending billions across 30 programs from 2018-2023, but gathering no data on why the cash wasn’t tackling the crisis.
It confirmed what’s clear to many residents — that tent encampments and troublesome vagrancy across major cities is bad and getting worse.
More than two thirds of US adults say homelessness is out of control and that officials need to move those sleeping rough into tented encampments outside towns and cities, a recent DailyMail.com/TIPP Poll shows.
Our survey revealed that 67 percent of Americans are fed up with the country’s fast-rising number of homeless people and want mayors to take drastic steps to tackle the scourge.
More than 650,000 people were recorded as homeless by the federal government in its annual snapshot for 2023, which was released in January — a 12 percent surge on the previous year.
Officials in Portland, Los Angeles, Las Vegas and other cities have in recent months responded to public ire over homelessness by dismantling makeshift shelters and moving people on.
More than two thirds of Americans say homelessness, which surged by 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 on homelessness released by his campaign, Trump said that ‘hardworking, law-abiding citizens’ were being sidelines and made to ‘suffer for the whims of a deeply unwell few.’
He vowed to ‘ban urban camping’ and create ‘tent cities’ on ‘inexpensive land’ for homeless people that will be staffed with doctors and social workers to help people address systemic problems.
Still, homeless people and their advocates say sweeps and relocation policies are cruel and a waste of taxpayer money. The answer, they say, is more affordable housing, not crackdowns.
Our survey of 1,401 adults, however, found that a tough policy resonated with swathes of voters across the US — with more than two thirds saying they favored resettlement camps.
Democrat-leaning respondents were keener on resettling the unhoused. Fully 74 percent of them wanted the homeless moved on, compared to 64 percent of Republicans and 62 percent of independents.
