While homelessness kept climbing nationwide in 2025, California's unsheltered population moved in the opposite direction — and by the largest margin the state has seen in more than 15 years.

  • ~9% drop in unsheltered homelessness across California in 2025
  • 30 Continuums of Care reported the preliminary data to HUD
  • 16,000 homes created through the Homekey program across 250 projects
  • 172,000+ Californians reached by Homekey since 2019

A reversal after decades of growth

The preliminary point-in-time counts, calculated using the U.S. Department of Housing and Urban Development's standard methodology, show California's unsheltered homeless population fell by roughly 9% in regions that have reported 2025 figures so far, according to the Governor's office. State officials call it the largest year-over-year decrease in homelessness in more than a decade and a half.

That stands out because national homelessness has continued rising. California has spent six years building out a response most other states haven't matched: new shelter capacity, faster permanent housing placements, and a statewide push to connect people living in encampments with services instead of just clearing them.

"No one in this country should be without a place to call home. In California, we're proving there is a solution," Governor Gavin Newsom said in the announcement.

Where the housing actually came from

The centerpiece of the effort is Homekey, the first-in-the-nation program that converts hotels, motels and other buildings into housing. Since 2019 it has created nearly 16,000 homes across 250 projects and reached more than 172,000 Californians. Alongside it, the state has directed $2.25 billion through Homekey+ for people with mental health or substance use needs and veterans, and over $5 billion through Homeless Housing, Assistance and Prevention grants to local governments.

A separate $1 billion Encampment Resolution Fund has helped move roughly 23,000 people out of 120 encampment sites and into services. Since 2021, Caltrans has also cleared more than 19,000 encampments from state right-of-way, removing an estimated 354,000 cubic yards of debris in the process.

The mental health piece

Voters backed up the housing push in 2024 by approving Proposition 1, a $6.4 billion bond that is funding behavioral health treatment beds and supportive housing alongside the physical units. State officials project it will eventually create 6,800 residential treatment beds and nearly 26,700 outpatient treatment slots, aimed at closing a long-standing shortfall in behavioral health care that has kept people cycling between the streets, hospitals and jail.

Lawmakers also updated California's decades-old conservatorship laws and launched a new CARE Court system, giving judges a way to order up to two years of treatment for people with untreated severe mental illness or substance use disorders who are unable to care for themselves.

None of this means the crisis is solved — California still has one of the largest homeless populations in the country, and the preliminary numbers will be finalized over the coming months. But for the first time in a generation, the trend line in the state hit hardest by the housing crisis is pointed down.