Gov. Newsom fired back, insisting California is making progress on tackling the housing and homelessness crises in the state.
Trump administration leaders have doubled down on their criticism of California homelessness policies, as local leaders pushed back.
At a Tuesday press conference, Housing and Urban Development Secretary Scott Turner and Health and Human Services Secretary Robert F. Kennedy Jr. continued attacking the Biden-era "housing first" model. That model prioritizes providing housing quickly and without preconditions. But Turner and Kennedy said it isn't effective in reducing homelessness.
"I've seen the ineptness, the incompetence of government that has contributed to this problem," Kennedy said. "Half the homeless people in the country are in the state of California."
The conference comes a few days after Los Angeles reported that homelessness increased last year, despite added resources under Mayor Karen Bass. Bass, who is up for reelection, has made curtailing the city's homelessness problem a major campaign priority.
HUD's critique of the "housing first" policies championed under the Biden administration hasn't been limited to California policies. But the state has been a particular flash point, especially amid federal allegations of local fraud. Earlier this year, HUD froze funding to Los Angeles' largest homeless services nonprofit, arguing it was guilty of massive fraud.
"California is a key driver of our nation's homelessness crisis," Turner said. He called out the Los Angeles Homeless Services Authority, which received $1 billion in government funding over the past five years.
"They will not receive another cent of American taxpayer money until they can account for every single dollar," Turner said. "Year after year, hundreds of millions of taxpayer dollars were funded to LAHSA, with little accountability and zero results."
California leaders, including Gov. Gavin Newsom, argue they're making progress.
"California’s investments have created immediate, measurable results and the critical foundation necessary to finally solve California’s housing and homelessness crisis," Newsom said in a statement. His policies "have had a significant impact."
Democrats vs. Republicans on homelessness
The Golden State's homelessness issues are a focal point of a larger fight over how Democrats and Republicans want to address homelessness. HUD attempted to redirect $4 billion in funding for homeless services from "housing first" programs in favor of a system that ties funding to assistance programs, addiction treatment, and recovery.
Judges repeatedly halted that move after homeless services agencies, and 23 state attorneys general, launched multiple lawsuits against HUD.
"We can't continue funding programs without demanding evidence that they're helping people get off the street and rebuild their lives," Kennedy said.
Failing to require those things creates a "homeless industrial complex," Turner said. HUD says the nationwide 27% increase in homeless people since 2013, despite more funding directed at the problem, shows its failure.
"The Trump administration will not fund a homeless industrial complex any longer," Turner said in California. "At HUD, we're only interested in real results."
While L.A.'s homeless count increased in the latest measure, California overall saw a 6.8% reduction in unsheltered people, more than any other state. The state also saw its overall homeless population drop by 2.8%, a decline not seen since 2009. L.A. also later claimed a glitch exaggerated its numbers.
Skid Row in Los Angeles on July 22, 2026. The area spans approximately 50 blocks and has the highest density of unhoused people in the country. (Photo by Hans Gutknecht, Los Angeles Daily News/SCNG) Continuing battle
Newsom has pushed for more home construction to improve the state's affordability. And he's taken a harder line against cities that have blocked affordable housing development. The state also pioneered new housing ideas, from tiny homes to straw housing to get more people off the street.
After HUD cut LAHSA's funding, Bass said she'd already directed the city to move away from the troubled homeless services program. Reality TV personality Spencer Pratt, who is challenging Bass for the Mayor's office, has his own set of answers for the homelessness crisis.
Newsom was at his own event on Tuesday, announcing about $239 million for 20 affordable housing developments that promise 1,700 new units of housing.
“California is reversing decades of housing inaction by making historic investments to build more homes, faster," Newsom said in a statement. "Those efforts are delivering results: more housing moving forward, more affordable homes being built, and more Californians gaining access to the stability and shelter they deserve.”
In its annual budget, HUD sought a 13% budget reduction aimed at defunding some housing programs, claiming they were derailed by “woke” causes. That sparked concern from the National Association of Realtors® and others.
In the meantime, HUD unveiled its own tool kit for what it calls "treatment first." It prioritizes "accountability-driven engagement in evidence-based treatment." The program has a strong focus on evidence and outcomes, with self-sufficiency as the end goal.
“Treatment must come first. Recovery begins when we connect people with effective care, not leave them trapped in addiction and homelessness,” Kennedy said.