HSH presents adopted FY25-26 budget and HAP-6 priorities; city reallocates $34.7M to shelter and interim housing

The San Francisco Department of Homelessness and Supportive Housing presented the department's adopted two-year budget and described state Homelessness Assistance Program (HAP) Round 6 priorities during the commission meeting on Aug. 6.

Lisa Agustin, HSH finance director, presented the final adopted budget figures: $785,600,000 for fiscal year 2025'26 and $705,200,000 for fiscal year 2026'27. Agustin said the year-over-year decreases (7% in 25'26 and 10% in 26'27) reflect the end of one-time investments made in the prior fiscal year, including one-time Prop C allocations and round-specific HAP investments. Agustin said some program funds were transferred out of HSH to other city offices to better align administration with program delivery; the adopted budget also reflects salary and benefits adjustments and a shift of certain grant expenses to professional services per city attorney contracting guidance.

The adopted budget adds funding for an interim housing expansion tied to the mayor's Breaking the Cycle initiative. Agustin said approximately $64.7 million in one-time funds were identified for interim housing efforts, of which $53.6 million was added to support new interim housing beds for adults (including 120 restore beds) and $10 million-plus in one-time items to support hotel vouchers for households fleeing violence and other targeted interim supports. The adopted budget also included $9.9 million to maintain 130 hotel vouchers for families, $1.3 million for HSH staffing to implement the expansion, and $25.4 million over two years for the vehicle-intervention (large-vehicle) strategy covering outreach, vehicle buyback and rapid rehousing subsidies.

The adopted budget contains one-time Prop C investments: $30 million in the first year for TAY and family housing supports, including 130 new rapid rehousing slots for families, 30 new shallow-subsidy slots, and 100 new TAY rapid rehousing slots; and $6.7 million for prevention programming for families and transitional-age youth. Agustin also described small capital investments (for example, roof and elevator work at known properties) and the department's vacancy and position changes (a net reduction of 20 vacant positions, 11 positions moved to the Department of Public Health, and several new positions approved to support the expansion).

To fund the adopted investments the Board of Supervisors approved trailing legislation affecting the city's OCO fund. Agustin said the approved action reallocated $34.7 million in unencumbered OCO funds and unappropriated earned interest, suspended a 12% cap on short-term rental subsidies through FY27'28, and authorized the city to spend up to $19 million of future OCO revenue through FY25'27 on eligible homelessness programs rather than allocating strict percentages under the tax code.

Separately, HSH staff summarized the HAP Round 6 program and the department's draft priorities for a state HAP application. Emily Cohen said the state has appropriated $1 billion for HAP Round 6; HSH noted that prior rounds totaled roughly $227 million allocated to San Francisco over five rounds. HSH said Round 6 requires that at least 50% of awards be spent on housing solutions and at least 10% be spent on services for transitional-age youth, and that local applications demonstrate sustainability plans for any interim housing proposed. HSH said its HAP-6 action plan will align with Home by the Bay and the mayor's Breaking the Cycle initiative and will prioritize prevention, interim housing that can be sustained during the grant term, added permanent housing units, and scaling shallow subsidies and rapid rehousing.