San Francisco has finally stumbled upon a concept so revolutionary that Mayor Daniel Lurie says he’s prepared to spend the next three years redoing the city’s homelessness service contracts: If you spend $1 billion of taxpayer money, you should probably find out whether you’re getting what you paid for.
On Monday, Lurie announced that San Francisco will redo virtually all of its homelessness services and housing contracts in a sweeping process scheduled to run through May 2029.
The administration calls it “outcomes-based contracting.” The basic idea is that the city should stop judging programs primarily by how much activity they generate and start judging them by whether they actually produce results.
Not simply: How many people did you serve? But: Did their lives get better? Did they get housed? Did they stay housed? Did the program accomplish what the city paid it to accomplish?
One would hope that an included question would be: Did they stay alive?
It’s awfully late for San Francisco to be asking these questions. The problem was not that San Francisco lacked numbers. It had plenty of them. The problem was figuring out whether those numbers meant anything.
The 2025–26 civil grand jury identified the problem in June. Its examination of the Department of Homelessness and Supportive Housing (HSH) concluded that the department was “largely failing to track how its spending is addressing the crisis.”
That is a remarkable finding for an agency overseeing hundreds of millions of dollars in public spending.
The grand jury found that only 30 to 40 percent of participants in some city-funded homelessness programs ended the year in stable housing. Other measures showed declines in successful exits to permanent housing.
“This is not a picture of success,” the grand jury concluded.
That conclusion now hangs over Lurie’s announcement, especially given his rejection of their recommendations.
Apart from the sheer scale of the problem, a major obstacle will be dealing with those providers and their legislative allies — what many call “the nonprofit industrial complex” — who will see the changes as a political problem.
“We are not going to continue spending $1 billion of taxpayer money on a failing system,” the mayor said Monday. “We’re fixing the system so we can deliver the safe and clean streets every San Franciscan deserves.”
Fine. But that raises an unavoidable question: If the system was failing, why was the city still spending $1 billion on it? Lurie’s answer, at least going forward, is to change the rules.
Between now and May 2029, HSH will run a competitive process to re-award its full portfolio of homelessness services and housing contracts. The new agreements are supposed to include clearer definitions of success, more consistent performance measures and greater accountability for both the city and the nonprofits receiving public money.
The administration says it will redirect money when programs are not producing results.
That last part is the one to watch.
San Francisco has spent years building commissions, dashboards, performance reports, strategic plans, and oversight systems. It has collected data and commissioned studies. Yet the city still could not consistently demonstrate that its enormous investment was producing commensurate results.
The grand jury also found weaknesses in HSH’s monitoring of serious incidents at city-funded facilities. Information was collected, but it wasn’t necessarily analyzed to identify problems.
San Francisco had data. It just wasn’t necessarily using it.
That matters because a bureaucracy can become extraordinarily good at measuring itself without becoming good at accomplishing its mission. A nonprofit can meet with clients, make referrals, fill out reports, and meet contractual requirements without necessarily getting a homeless person off the street and keeping them housed.
That is the gap Lurie says he now intends to close.
“This is a reset of how San Francisco funds and delivers homelessness services,” said HSH Executive Director Mike Levine.
The scale of the reset is revealing. If the city needs to reconsider virtually every major homelessness contract, the problem cannot simply be a handful of underperforming nonprofits. It suggests something more fundamental: San Francisco’s contracting system has not been designed to distinguish successful programs from unsuccessful ones before millions of taxpayer dollars have already been spent.
The HomeRise controversy offered a preview.
Last month, HSH declined to renew four contracts with the major supportive-housing provider that would have been worth $39 million over three years after the Chronicle and U.C. Berkeley Investigative Reporting Program scrutinized the organization’s operations.
But by the time the city decides a provider requires intervention, the provider may already have been deeply embedded in the system for years and hold numerous other public contracts.
That is what happens when the city discovers problems after the money has been spent.
Lurie, of course, argues that his administration is already producing results. He has touted a 22 percent decline in unsheltered homelessness and described the current level as the lowest in 15 years. His administration has also pointed to increased shelter placements, new treatment beds and other components of its “Breaking the Cycle” initiative.
Those claims may be legitimate. But the mayor is now asking the homelessness system to meet a higher standard than rhetoric or activity. Apart from the sheer scale of the problem, a major obstacle will be dealing with those providers and their legislative allies — what many call “the nonprofit industrial complex” — who will see the changes as a political problem.
The real test will be whether the city follows through when the answers become inconvenient — when a politically connected nonprofit fails to meet its targets, when cutting a program means eliminating jobs, or when advocates argue that a program serves people whose outcomes are difficult to measure.
That is when San Francisco will find out whether this is truly a reset or merely another exercise in bureaucratic rebranding.
The mayor is right about one thing: The city cannot continue spending enormous sums on homelessness indefinitely without being able to clearly explain what that money is accomplishing. But he should resist congratulating himself for discovering the problem.
The question is why it took so long to decide that results matter — and whether, when the new numbers start coming in, anyone at City Hall will finally be willing to act on them.
