Newsom withdraws $10M tiny homes grant for San Diego

Gov. Gavin Newsom is expanding on his tough-on-locals housing tactic by clawing back money California sent San Diego to build tiny homes, saying the county hadn't acted quickly enough on a project meant to get people off the street.

Newsom’s office notified San Diego County on Monday in a letter seen by POLITICO that the state was reclaiming a $10 million grant to build 150 tiny units after county officials, facing local resistance, backed away from an initial building site and failed to choose a new one. Much of the money will now go to San Jose instead.

"San Diego County could not move with the urgency the housing and homelessness crisis demands," Newsom spokesperson Izzy Gardon said in a statement. "The Governor is committed to accountability, and we will not allow local bureaucratic delays and opposition to impede the state’s unprecedented efforts to get people off the streets and into housing.”

In rerouting the funds, Newsom is once again wielding the state’s financial clout to influence local governments and make a statement about combating homelessness. The governor repeatedly accused cities and counties of obstructing or slow-walking new homes as California grapples with a two-sided crisis of pervasive homelessness and unaffordable housing, with the number of people living on the street steadily climbing on Newsom’s watch despite billions of dollars in state spending.

As he seeks to make a dent in the state’s housing crisis, Newsom has sued intransigent cities and used state money to try and force more local movement. He briefly froze hundreds of millions of dollars in homelessness aid, launched a sweeping review of San Francisco’s permitting process, and earlier this year announced a homelessness funding accountability plan .

But Newsom has also faced criticism for how his administration has doled out billions of dollars in aid even as the numbers of unhoused Californians continued to rise. A scathing audit earlier this year found the state was doing a poor job of tracking money and outcomes, and a tiny home program he unveiled with great fanfare last year has made halting progress .