SF cuts millions in funding to troubled housing nonprofit after Chronicle investigation

San Francisco's homelessness department is cutting millions of dollars in funding to HomeRise, one of the city's biggest providers of housing for the formerly homeless, following an investigation by the Chronicle and UC Berkeley's Investigative Reporting Program into the nonprofit. 

The Department of Homelessness and Supportive Housing announced this week that it will not renew four expiring contracts with HomeRise that fund services intended to keep its residents housed. The department had planned to extend the four contracts by three years, bringing their total value to $39 million.  

HomeRise is a mainstay of San Francisco's supportive housing system and its most heavily funded response to chronic homelessness for the past two decades, serving more than 1,500 residents across 17 buildings. The idea is to help people rebuild their lives after time on the streets. But reporting by the Chronicle and IRP has exposed deadly neglect in its buildings, as well as drastic understaffing and alleged sexual abuse of residents that HomeRise staff largely ignored.

The department's decision to slash funding to HomeRise is one of the most severe actions it can take against a provider. Last year, the city did not renew four agreements with the embattled homelessness services nonprofit Providence Foundation. Before that, the last comparable action by the department came in 2023, when city officials cut ties with United Council of Human Services, whose CEO was later charged with nine felonies related to her management of the organization. 

"We want to make very clear to HomeRise as well as other providers that this level of failure is not acceptable," department spokesperson Emily Cohen told the Chronicle, adding that the department had "lost a lot of trust" in the nonprofit. "Public dollars cannot be used to support projects not achieving their outcomes."

The move away from HomeRise represents a critical challenge for the department and Mayor Daniel Lurie, who now must seek new providers to serve more than 400 of the city's most vulnerable residents. However, the contract nonrenewals will not end the city's relationship with HomeRise. Existing agreements commit the homelessness department to provide the nonprofit with tens of millions of dollars over the next several years.  

Mike Levine, the newly appointed head of the city's homelessness department, said in a statement that the department will continue to "closely monitor" HomeRise's four other contracts for supportive services, worth a collective $22.6 million, and "take additional action as necessary" to protect residents and taxpayer dollars. Those agreements begin expiring next summer.

HomeRise representatives did not immediately return a request for comment. 

The decision follows a turbulent stretch in which city officials struggled to keep up with the volume of concerns at HomeRise, which has long had trouble staffing many of its buildings with qualified caseworkers. Reports show buildings are plagued with habitability issues, including unchecked tenant violence, vermin infestations, broken elevators and a lack of heating and hot water.

Together with a scathing 2024 city audit that exposed alleged financial mismanagement, these issues have kept the organization on the city's strictest level of monitoring for most of the past two and a half years. 

Despite the city's increased scrutiny, HomeRise has continued to fail its residents, sometimes with fatal results. The Chronicle reported in March that Eric McCain, a resident of the Jazzie Collins Apartments, was found decomposing in his room last November after building staff neglected routine wellness checks on his unit, then falsified records to conceal the lapses.

The city attorney's office told the Chronicle in March it had opened an investigation into the nonprofit. Less than two months later, chief executive Janéa Jackson announced her resignation, leaving HomeRise under interim leadership as its board searches for a permanent replacement.

In June, the Chronicle reported that HomeRise had failed for years to act on allegations of sexual misconduct against a former case manager at the same building, while ignoring complaints from residents and staff members. That same week, the San Francisco Civil Grand Jury cited the newspaper's reporting on McCain's death as evidence that the homeless department has struggled to ensure taxpayer dollars are effectively addressing the homelessness crisis. 

While HomeRise is still slated to receive millions of dollars from the city annually, the impact of such large cuts from the organization's budget is likely to be far-reaching. HomeRise's interim chief executive, Tim Daniels, broke the news to staff on Monday in an email obtained by the Chronicle.

"I am writing to share difficult news, and I want you to hear it from me directly," the email reads. "We anticipate this may lead to layoffs in the organization."

Years of research has shown that permanent supportive housing - which offers people a home without pre-conditions like stopping drug use - ranks among the most successful interventions for keeping formerly homeless people off the streets. But key to these programs are fully staffed and effective supportive services. 

In recent years, a growing faction of politicians and city residents have raised concerns about the city's permanent supportive housing model, which largely relies on a network of contracted nonprofits to deliver services and operate apartment buildings.

Since he took office last year, Lurie, with the blessing of the Board of Supervisors, has redirected tens of millions of dollars in public funds for permanent supportive housing into shorter-term shelters. The Board of Supervisors recently approved legislation that will require new city-funded housing complexes to impose drug-free policies, allowing them to evict residents solely for using drugs - a policy at odds with current practices at most city-funded sites. 

To ensure that residents remain housed at the defunded HomeRise buildings during the coming transition, the homelessness department will temporarily extend the four contracts to the end of the year while it looks for a replacement provider.

The change will affect four of HomeRise's 17 supportive housing properties, including dozens of additional units scattered around San Francisco. Together, those units house roughly a third of the nonprofit's approximately 1,500 residents, many of them older adults and families. 

The city's decision to terminate supportive services does not impact HomeRise's ownership of its buildings, nor the funding it gets to maintain the sites. The Mayor's Office of Housing and Community Development oversees those contracts, which are collectively worth tens of millions of dollars. 

HomeRise already contracts with the Felton Institute, a nonprofit specializing in behavioral health and social services, at some of its buildings, giving the city a potential replacement option at the other sites. However, the nonprofit has previously clashed with other outside service providers. 

In 2024, UCSF Citywide Case Management withdrew from operating supportive services at two HomeRise buildings that serve some of the organization's highest-need tenants: Rene Cazenave Apartments and Drs. Julian & Raye Richardson Apartments.

Minutes from a December 2023 HomeRise board meeting described the relationship between the two organizations as "not on good footing" and noted that city officials had shared UCSF's concerns. The Felton Institute took over the contracts in 2024. 

Chronicle staff writer Michael Barba and Daniel Hennessy of the Investigative Reporting Program at UC Berkeley Journalism contributed to this report. 

This article was reported with the support of the Fund for Investigative Journalism and in partnership with the Investigative Reporting Program at UC Berkeley Journalism.

Subscribe

Read this story on sfchronicle.com