California continues to lead the nation in homelessness, with US data showing the state has the highest rate of unhoused people living outside in a worsening humanitarian crisis.

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The Department of Housing and Urban Development (Hud) released its Annual Homeless Assessment Report (Ahar) on Friday, providing a “point in time” snapshot from January 2023. On a single day, 653,104 people experiencing homelessness were counted across the US, the highest number since the count began in 2007. The estimates are considered to be undercounts.

California, the most populous state with the highest overall number of unhoused people, helped drive the surge. Experts and advocates say the lack of available affordable housing is the primary cause of homelessness in the state, exacerbated by the expiration of pandemic programs that had expanded shelter and protected tenants from eviction. Here are some key report takeaways.

California counted 181,399 people experiencing homelessness in January. Of those, 123,423 people (68%) were “unsheltered”, meaning living outside in tents, cars or other makeshift shelters, as opposed to indoor shelters or temporary setups. At 68%, the state has a greater share of its homeless population living outdoors than any other state and accounts for 49% of all people living on the streets in the US.

In most states, a majority of the homeless population is indoors. New York, for example, has one of the largest overall homeless populations, but only 4.9% were on the streets.

The five major US metro areas with the highest rates of unsheltered people were all in California: the San Jose region (75% of its homeless population was living on the streets), Los Angeles (73%), the Oakland region (73%), Long Beach (72%) and Sacramento (72%). And the two suburban regions with the nation’s highest unsheltered rates were El Dorado county in northern California (89%) and Imperial county (88%) along the Mexico border.

California leads in youth homelessness

The Golden State also reported the largest number of unaccompanied youth – 10,173 people under age 25. Of those, nearly 7,000 youth were found on the streets, making up roughly half of all US youth living outside. The three US cities with the greatest youth crises were San Jose (where 86% of unaccompanied youth were on the streets), San Francisco (81%), and Oakland (77%). In two suburban California areas, nearly all unaccompanied youth were on the streets and not in shelters – 99% in the Santa Cruz region and 96% in Marin county.

“The barriers to access for young people are particularly severe,” said Sathya Baskaran, a housing advocate who has worked with unhoused queer and trans youth in San Francisco. “Every young person I talk to, it feels like a surprise when something actually works out or somebody actually treats you well.” Youth programs are underfunded and teenagers struggle to access the range of services they need to stay off the streets, he said.

San Francisco recorded 1,113 unaccompanied youth in 2023, most of them living outside. But the city’s temporary shelter programs for children and young adults currently have capacity for only 287 youths, although the city also has 826 units for longer-term housing for young adults.

Chronic homelessness and severe racial disparities persist

The longer people are unhoused, the harder it becomes to access stable housing, and the data shows California has one of the highest rates of long-term unhoused people on the streets. A total of 53,169 people were living outside and classified as “chronically” unhoused, which Hud defines as an individual with a disability who has experienced homelessness for more than a year, or who has had four or more homelessness episodes in the past three years that add up to 12 months.

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Black residents also continue to be disproportionately impacted, making up 6.5% of California, but 29% of the total unhoused population in the count.

Unaffordable housing is driving the crisis

Meghan Henry, project director for Ahar, said California’s housing crisis continued to drive homelessness: “The three main [factors] that create this issue are unaffordable housing, stagnated incomes and systemic racism.” She pointed to a recent Hud report finding that across the country, 8.53m renters were on the brink of homelessness – households with incomes at or below 50% of the area median income, who receive no government housing assistance and who pay more than half their income on rent or live in severely inadequate conditions.

“The same time homelessness is getting to the highest it’s ever been, the number of people vulnerable to that experience is the highest it’s ever been,” she said. The report noted that in California, unsheltered homelessness increased in some communities after the phaseout of Project Roomkey, a pandemic program that provided temporary motel rooms. Henry also noted that California’s housing market impacts employees of agencies that support the unhoused population, creating a shortage of case managers that can delay people’s housing placements.

In San Diego, which has ramped up a police crackdown on encampments, the housing crisis is worsening, noted Bob McElroy, CEO of Alpha Project, a provider with roughly 600 beds. A new report found that for every 10 San Diegans who found housing in the last year, 16 people newly entered homelessness, an increase from the 10-to-13 ratio the previous year. “The political machine says we need to move people into housing, but there isn’t any,” he said, noting that there are hundreds on his waiting lists, “and many more who have just given up”.

The Los Angeles controller’s office also recently reported that despite a count of more than 46,000 unhoused people in the city, there are only 16,100 interim housing beds.

“People are being shoved out of their homes by market pressures, and then we have a government that is ill-equipped to deal with the crisis,” said Sergio Perez, chief of accountability and oversight for the controller. “It’s a very dire situation, because even if you’re on the street and go through the tremendous effort of finding a service provider to help you navigate what is available on the government side, the help just isn’t there and there are long, long waiting lists.”

There has been some progress over the last year

The report showed a roughly 6% increase in California’s total unhoused population from the prior year, which some advocates noted was not the steepest increase across the country and was lower than the 12% increase nationwide. Henry said there has also been increased coordination across California, which has improved processes to get people indoors.

Los Angeles mayor Karen Bass recently reported that more than 21,000 unhoused people have moved indoors over the last year. The Los Angeles Times, however, reported that only 13% of participants in her signature “inside safe” program have moved into permanent housing.

Governor Gavin Newsom recently announced that his Homekey program, launched at the start of the pandemic, has approved more than 14,000 units for unhoused people, although his recent funding efforts have focused on encampment removal.

Rachel Hayes, 56, was unhoused for a decade in San Diego until she finally got placed in supportive housing this year through a program that she had been pursuing for years. Many of her friends are still in tents on the street waiting, she said. “I got lucky,” said Hayes. “These shelter beds never become empty, because there is nowhere to put them in housing. You have to build the housing. It’s not a homeless crisis, it’s a housing crisis.”