SAN FRANCISCO — San Francisco is preparing to change a deceptively simple part of its homelessness system: what the city asks contractors to accomplish before it decides they are doing a good job.
Mayor Daniel Lurie announced an overhaul Monday that would move the Department of Homelessness and Supportive Housing, known as HSH, toward competitively re-awarding its contracts and putting more weight on defined outcomes. The change matters because the underlying portfolio is enormous. The city’s 2025–26 Civil Grand Jury says HSH administers and spends nearly $500 million annually in nonprofit contracts for outreach, prevention, placement, shelters and housing.
The phrase “outcomes-based contracting” can sound like procurement jargon. The practical question is easier to understand: if a provider receives millions of dollars to run a shelter, keep formerly homeless residents housed or prevent families from losing their homes, what result should San Francisco expect to see — and what happens when the result repeatedly does not appear?
What is San Francisco changing?
The Mayor’s Office says the city will move through a competitive re-award process rather than simply treating the existing provider network as permanent. The administration also wants performance and outcomes written more clearly into the agreements.
That does not mean every provider is suddenly paid only when a person exits homelessness. City contracts still have to cover staff, buildings, security, case management, meals and other operating costs. It does mean the next generation of contracts can make the intended result harder to miss.
Lurie’s announcement starts the design process; it does not settle the metrics. HSH has said providers, community members and people with lived experience will be part of deciding how different programs should be judged.
How much does San Francisco spend on homelessness contracts?
The best current citywide benchmark is “nearly $500 million annually.” That figure comes from the Civil Grand Jury’s June 2026 release, which describes HSH’s nonprofit contracting for outreach, prevention, placement, shelters and housing.
It is important not to confuse that contracting figure with every dollar San Francisco spends on homelessness. Other departments and funding streams can also touch behavioral health, street response, affordable housing, policing, sanitation and emergency care. The new contracting initiative is focused on HSH’s provider relationships.
What could count as a successful outcome?
There is no single number that works for every homelessness program.
A shelter could be measured partly by how many guests leave for stable housing rather than returning to the street. A permanent supportive-housing provider could be evaluated on housing retention, safety and whether residents remain connected to services. Prevention programs can be judged by whether people who received assistance avoided entering homelessness at all.
Treatment-oriented programs create another set of questions. A person with severe psychiatric or substance-use needs may require much more intensive work before a housing outcome is realistic. A contract that rewards only the easiest placements can create the wrong incentive: providers may look better by serving people with fewer barriers.
That is why “pay for results” is not the same thing as choosing one simple target. The harder work is defining a group of measures that reflects the people a program actually serves.
Why does the Civil Grand Jury matter here?
The accountability argument predates this week’s announcement.
The 2026 Civil Grand Jury report, At Scale, At Risk: Upgrading Data and Oversight to Improve Homelessness Services, called for stronger use of safety and operational data in the city’s homelessness system. Its recommendations include standardized safety metrics and incident thresholds in nonprofit contracts, more data-driven monitoring and a stronger oversight role for the Homelessness Oversight Commission.
The Board of Supervisors’ formal response is still pending committee action. Departmental responses were received in August.
An earlier 2023 Civil Grand Jury report made a related point from the performance side: collecting information is not enough if the public scorecard does not make clear whether different programs are improving outcomes.
Can a provider actually lose a city contract?
Yes. San Francisco has already shown that nonrenewal is a real consequence, although the recent HomeRise episode happened under the existing system rather than the new Lurie framework.
In July, HSH said it would not renew four expiring supportive-service contracts with HomeRise. The city had been considering three-year extensions that would have brought the combined value of those agreements to about $39 million, according to contemporaneous Chronicle reporting. The contracts covered services for more than 400 residents.
The department temporarily extended the agreements through the end of the year to allow services to transition. HomeRise continues to have other city relationships, so the decision was not a wholesale termination of the nonprofit.
The episode is useful because it makes the stakes concrete. Performance language matters much more when sustained failure can ultimately affect who receives the next multimillion-dollar award.
Has San Francisco already tried performance-linked contracting?
There is at least one recent model. The Chronicle reported that the city’s RESET sobering center contract ties some funding to performance, making it an early example of the approach the administration now wants to expand.
One pilot does not answer how to write hundreds of different shelter, housing and service agreements. It does give HSH something more concrete to examine than a theoretical procurement model.
Will residents be able to see whether providers are meeting the targets?
This may be the most important unresolved question.
An outcomes-based contract can contain dozens of performance measures and still produce very little public accountability if the results remain buried in internal monitoring files. For residents and taxpayers, a useful system should make four things reasonably easy to determine: what the contractor was supposed to accomplish, how the result was measured, how the provider performed, and what the city did when performance fell short.
Public reporting also needs enough context to prevent misleading comparisons. A provider serving medically fragile adults should not automatically look “worse” than a program working with a population facing fewer barriers simply because one headline metric differs.
That balance — transparency without rewarding cherry-picking — will be one of the harder design problems HSH faces.
What should San Franciscans watch next?
The announcement itself is not the finish line. The revealing documents will be the solicitations, proposed contracts and scorecards that follow.
Watch for the exact outcome definitions, the frequency of reporting, whether safety measures are included, whether targets differ by population, and whether missed targets trigger corrective plans, reduced renewals or competitive replacement.
There is also a useful comparison already on the site. SF News Today’s review of the Bayshore Navigation Center and Five Keys contract looked at the gap between paying for an operation and being able to see what performance taxpayers are getting from it.
Lurie has now set a broader promise: San Francisco’s homelessness contracts should tell the city what success looks like before the bill comes due. The real test will be whether the public can tell, a year or two from now, which providers actually delivered it.