by Randy Shaw on March 17, 2025 (BeyondChron.org)
SF bought this tourist hotel next to Little Saigon–and made it a shelter.
The Unhoused Have Changed—City Policies Haven’t
San Francisco’s homeless strategy has gone off track. I say this as someone who since the 1980’s has created and implemented some of the city’s most successful homeless programs. The Tenderloin Housing Clinic, which I head, runs the city’s largest permanent supportive housing program for unhoused single adults.
Here’s what I know from personal experience.
When in 1989 the city finally replaced the Feinstein hotline hotel program with our Modified Payment Program, roughly 1000 formerly unhoused residents quickly seized the opportunity for permanent housing. We had few vacancies in our over thirty hotels.
In those days the vast majority of unhoused preferred to pay rent rather than stay in a shelter. They chose housing even though rent took up 60-80% of their welfare check (rents in permanent supportive housing are now limited to 30% of income).
Mayor Art Agnos’ Housing First strategy enabled thousands to obtain a home. Mayor Willie Brown built on this with the hotel master leasing program. Mayor Gavin Newsom’s Care Not Cash then injected over $20 million annually into permanent supportive housing.
But San Francisco’s unhoused population has changed. The vast majority no longer accept available housing. More pursue drugs over jobs.
City homeless policy has encouraged this shift. San Francisco prioritizes the needs of drug tourists over the quality of life of the formerly unhoused. HSH encourages sidewalk drug sales in the Tenderloin and other areas where the formerly homeless primarily live.
The fiction that most sidewalk drug users want shelter or housing blocks real solutions. San Francisco is wasting millions of dollars on “outreach” to a population that is not interested in paying rent.
Many of those on sidewalks come to San Francisco because the city offers them rent-free tourist hotels with private baths and two meals a day. No other city gives drug tourists better options than rent-paying tenants.
Mayor Lurie constantly talks about closing the city’s open air drug markets. But he won’t succeed without changing the policies that keep the flow of unhoused drug addicts coming to San Francisco.
SF’s Street Population Rejects Housing
Most of those pitching tents in alleys and using drugs on sidewalks are not interested in paying rent for housing in San Francisco. Consider:
Only 14 occupants of the 116 at the Cova Hotel (one of four tourist hotels the city converted to shelters) chose to move to housing. 70 went to another shelter despite already getting free rent, a private bath and two meals a day for as long as 2-3 years!
The average stay at the Monarch Hotel is from 182-266 days. That’s six to nine months! The current HSH leadership has converted shelter into free longterm housing at the taxpayer’s expense. Our cash-strapped city pays an average $225 per client per night for private hotel rooms occupied by many of those using drugs on Tenderloin and Lower Polk sidewalks.
Shelters do not “get people off the streets.” People don’t wake up in a shelter and spend the day inside. They hang out on nearby sidewalks with friends. The area around Tenderloin’s Little Saigon proved that where shelters open, drug use on sidewalks follows (that would change if shelters with private rooms were drug-free).
HSH knew from the few occupants of the COVID-driven SIP hotels who chose to move to housing in 2022 that most staying in converted tourist hotels do not want to pay rent. Yet City Hall ignored this message. Instead, HSH embarked on a “non-congregant shelter” plan to continue the misguided and destructive use of tourist hotels as shelters.
San Francisco has since spent over $51 million on these luxury shelters! And HSH is now pushing to spent $14 million more next year despite the budget crisis.
Forget what you hear about data and accountability—those terms don’t apply to HSH’s failed strategy of converting tourist hotels to shelters.
What did the $51 million accomplish? It got some drug tourists and others off the streets at night. But consider the cost: HSH’s converted tourist hotels created a massive sidewalk drug market that wrecked Little Saigon and killed retail on lower Polk and the Tenderloin’s Geary Street corridor.
Further, HSH’s conversion of two hotels to shelters at Ellis and Larkin caused hundreds of thousands if not million of dollars in losses for nearby tourist hotels. Hotel guests posted terrible but true online comments about the neighborhood.
The city regularly has between 65-95 vacant permanent supportive housing units in move-in condition. If demand for housing were what city policy thinks it is, we would have virtually no vacancies and a long waiting list.
Why did San Francisco stop expanding the large congregant shelters primarily used by the city since 1982? They are far and away more economical. They also ban drugs, which does not occur in converted tourist hotels. I’ve heard that HSH thinks people on sidewalks don’t want congregant shelters. So we’re going to spend more taxpayer dollars to meet their needs at the expense of residents and small businesses impacted by these refuseniks?
Stopping drug tourism requires ending the policies that encourage it.
Ignoring the Drug Crisis
San Francisco’s unhoused population is more impacted by drugs than ever before. A recent report found that 35% of the city’s shelter clients reported having an addiction. This compares to 13% in other California cities studied.
35% only includes those reporting their addition. Anecdotal evidence from people working in permanent supportive housing and in street outreach has the percentage of unhoused addicts over 70%.
Why does San Francisco have far more homeless addicts than other cities? Because our homeless policy encourages drug tourists.
The city offers no non-congregant drug-free shelters. It offers no permanent drug-free housing. And we wonder why we have so many unhoused addicts?
San Francisco should mandate that the next five non-congregant shelters and permanent supportive housing sites all be drug-free. This will attract unhoused people eager to turn around their lives. The people San Francisco wants to help. Supervisor Matt Dorsey tried to pass a version of this last year; it should be brought back.
What if San Francisco prioritized drug-free private room shelters and housing? Wouldn’t that help closing sidewalk drug markets and discourage drug tourism? And help bring back small businesses and tourist hotel business throughout the city?
A new drug-free homeless strategy would boost San Francisco’s image across the world. With Trump already targeting federal funding to combat homelessness, San Francisco should turn to a more strategic homeless policy that is also more cost-effective.
Randy Shaw
Randy Shaw is the Editor of Beyond Chron and the Director of San Francisco’s Tenderloin Housing Clinic, which publishes Beyond Chron. Shaw’s new book is the revised and updated, The Tenderloin: Sex, Crime and Resistance in the Heart of San Francisco. His prior books include Generation Priced Out: Who Gets to Live in the New Urban America. The Activist’s Handbook: Winning Social Change in the 21st Century, and Beyond the Fields: Cesar Chavez, the UFW and the Struggle for Justice in the 21st Century.
