by Randy Shaw on April 13, 2026 (BeyondChron.org)
Shifting Away from Permanent Supportive Housing
San Francisco will soon announce plans to “decommission” four city-funded permanent supportive housing sites. The city plans to reveal specifics by April 30 but it appears the Lurie Administration is more focused on scaling back permanent supportive housing than expanding it.
That’s a monumental shift in San Francisco’s homeless strategy.
Since the late 1980’s San Francisco has prioritized providing permanent housing for the unhoused. The Lurie Administration is quietly moving away from this, Its shift in city homeless strategy reflects both economic and ideological factors.
I’ve been involved in running housing programs for the unhoused since 1988. Here’s my thoughts on the city’s new direction.
What it Means to “Reduce” Homelessness
People are “homeless” who lack permanent homes. That’s why those staying in shelters or moving from sofa to sofa every few days or weeks are “homeless” despite having a temporary roof over their head. Transitional housing only reduces homelessness if residents have the opportunity to transition to a permanent home.
When widespread visible homelessness began in 1982, San Francisco’s Mayor Feinstein saw it as temporary. She refused to invest in permanent affordable housing for the unhoused. The city instead spent hundreds of millions of dollars for the unhoused to stay one to three nights in SRO hotels. The mayor’s hotline hotel program was a disaster.
Feinstein also invested heavily in shelters. As many of us argued to her until she left office in 1988, shelters that fail to lead to permanent exits from homelessness are not reducing the crisis.
Mayor Art Agnos understood that reducing homelessness required providing affordable homes. Agnos backed the closing of the hotline. He shifted to a permanent housing Modified Payment Program (MPP) strategy conceived by the Tenderloin Housing Clinic, which I head. The MPP got permanent housing for the over 1000 people who previously only got short-term hotel stays via the hotline.
Agnos soon confronted a problem every big city mayor has since felt: the lack of federal money for affordable housing. Reagan’s 1981 HUD budget cuts devastated affordable housing funding. HUD has never served anywhere near the percentage of eligible families it helped prior to 1981. Yet the public expects big-city mayors to solve homelessness without the federal funds necessary to do so.
Lurie’s Quiet Shift
Mayors Brown, Newsom, Lee and Breed all expanded permanent supportive housing (hereafter PSH) through master leasing to nonprofits. Newsom’s voter-backed Care Not Cash brought in millions of dollars for PSH. I laid out the success of this strategy last November. See “Permanent Supportive Housing is a Rousing Success.”
The Lurie Administration does not dispute this success. But it believes it is not economically sustainable.
That’s a tough conclusion to accept. But it’s understandable in the short-term. San Francisco’s PSH strategy provides lifetime rent subsidies to thousands of indigent residents. Since the Board of Supervisors lowered all PSH rents to 30% of a tenant’s income, San Francisco is effectively using general fund money to run a local Section 8 program for thousands.
Lurie took office after Mayor Breed made some ill-advised multi-million-dollar SRO purchases via the state’s Project Homekey. The city patted itself on the back for taking advantage of the state picking up 50% of the cost. But the city vastly overpaid for some of these projects. This includes a former youth hostel at 685 Ellis and the Granada and Gotham Hotels. These huge purchases tied up Prop C money that could have housed hundreds and potentially thousands more through master leasing.
These purchases, combined with the city’s budget deficit and Trump’s attempts to further slash HUD, sharply reduced Lurie’s short-term options. Yet Lurie has kept using 685 Ellis as a shelter despite it being purchased for the express purpose of PSH.
The most economically viable strategy for expanding PSH is step-up housing. Step-up housing moves longterm SRO residents into higher quality SRO’s with less support services, significantly saving costs.
But Prop C funds cannot be used for the formerly homeless (only the currently unhoused). This led the Breed Administration to stop acquiring step-up housing. To revive this effective strategy Mayor Lurie should consider legislation expanding Prop C’s reach.
Lurie Favors Treatment, Shelters Over Permanent Housing
Lurie ran for mayor vowing to add 1500 shelter beds. I’m glad he abandoned that plan, which would represent a massive misuse of funds. But the mayor sees investing in treatment and shelters as a higher priority than expanding permanent supportive housing.
Treatment is the name of the game in Daniel Lurie’s San Francisco. Everyone supports the city helping addicts recover.
But treatment unconnected to permanent housing does not reduce homelessness. That’s a point often missed. Graduates of the Salvation Army hotel programs that have gotten virtually all of the new SRO money under Lurie are not assured of a permanent place to live when their program ends.
Some graduates of recovery programs find jobs and get housing on their own. But I doubt most can afford market rate housing in expensive San Francisco.
This means taxpayers are investing in treatment for those unlikely to remain in the city. In contrast, the beneficiaries of permanent supportive housing remain San Francisco residents. And they are no longer homeless.
I’ve suggested to the city that they open a permanent-drug free hotel where residents would be limited to two-year stays as at the Salvation Army but would be guaranteed PSH in another building after graduation. This interim housing model would ensure that those receiving funding for treatment get to stay in San Francisco if they choose.
Shelters were designed as short-term, transitional facilities. They are supposed to lead people to permanent housing. If the city is no longer providing shelter residents with exits to housing, the millions spent on navigation centers and shelters is not reducing homelessness.
Is San Francisco Done Expanding PSH?
As one of the earliest advocates for master leasing permanent supportive housing, I never imagined the city would stop expanding it. It’s far and away San Francisco’s best strategy for housing the unhoused.
But what if San Francisco cannot afford further expansion? And what if the public has gotten tired of providing longterm rent subsidies to the unhoused without seeing a meaningful decline in the overall homeless numbers?
I don’t hear the public blaming Mayor Lurie for not housing more unhoused. As the vast majority of sidewalk drug-users now refuse shelters or housing, people don’t blame the mayor for failing to expand housing options.
So what is San Francisco’s homeless strategy in 2026?
To quietly reduce its longtime commitment to expanding PSH while shifting money to treatment. Permanent supportive drug free housing remains on hold until city finances improve.
The Lurie Administration will make it appear that San Francisco is as committed as ever to housing the unhoused—all while stopping PSH’s expansion. And reducing opportunities for the unhoused to become longterm residents of San Francisco.
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.
