San Francisco, CA — Today, Mayor London Breed and Supervisor Rafael Mandelman announced findings and recommendations from the Residential Care and Treatment Workgroup, first convened in May 2024 to address the shortage in long-term residential placements for individuals with complex behavioral health needs. The San Francisco Controller’s Office facilitated the Workgroup and published the final report about how the City should expand residential treatment and secure new funding resulting from the passage of State Proposition 1 (March 2024), which in part restructures how mental health funding is allocated in California.
“This is a pivotal moment for our City and we must take full advantage of every tool, and funding source available to us, in order to best support one of our most vulnerable communities,” said Mayor London Breed. “We know where our challenges exist and understand that while good progress has been made to expand our residential care and treatment programs with over 400 additional beds, there is still so much work ahead of us. San Francisco needs to be ready with sufficient treatment capacity for when individuals at the highest acuity levels are ready to re-enter the community.”
Tools include CARE Court and California’s Senate Bill 43, which expanded conservatorship criteria to help gravely disabled individuals with mental health and substance use disorders receive care. Despite recent treatment program expansions, the City experiences persistent challenges in placing clients with the most complex needs into appropriate treatment facilities. Among the Workgroup’s findings and recommendations, several key themes emerged.
MORE PLACEMENTS ARE NEEDED
Specifically, the Workgroup determined a need to add 75–135 beds in the coming two years among long-term locked care and residential care settings that support adults with complex mental health and/or substance use disorders. “Locked care” facilities are for individuals who are mandated for treatment by a criminal or civil court judge and typically have secured exits and monitored perimeters. These facilities take on some of the most behaviorally complex clients, including individuals who are incompetent to stand trial, under conservatorship, or registered sex offenders. “Residential care” involves less supervision and generally includes non-medical room and board with caretaking assistance for daily activities (feeding, dressing, etc.). The City must focus on reprogramming beds and reserving space specifically for the hardest to serve clients who may be denied placement in other settings — not just adding more beds.
LACK OF REIMBURSEMENT CREATES A BUDGET CHALLENGE FOR SAN FRANCSICO
Unlike skilled nursing facilities — where the cost of placements is often reimbursable through Medicaid or Medicare — San Francisco must cover the cost of expanding and operating the types of long-term placements needed through local funding sources and the General Fund. This is due to current State and federal funding limitations. Although the State, through Proposition 1, will offer limited, one-time capital funds for expanding certain types of facilities, the Workgroup acknowledged that the operational costs of added placements must be borne by county general funds or local sources. This creates a strong disincentive and budgeting challenge for San Francisco or any other county looking to expand its supply of these high-cost beds.
CALIFORNIA NEEDS TO SUPPORT COUNTIES IN IMPLEMENTING SOLUTIONS
It’s unlikely that collaboration among local jurisdictions (many of which face similar bed placement and capacity challenges) will succeed on a timeline and at a scale required to meet urgent behavioral health needs. To fulfill the full promise of Proposition 1, the State must take a proactive role in regional and statewide solutions and support cross-county financing and collaboration.
“If we are going to solve San Francisco’s behavioral health crisis, we must have appropriate placements for the most severely mentally ill among us. Mayor Breed and I convened the Residential Care and Treatment Workgroup earlier this year to meet that challenge,” said District 8 Supervisor Rafael Mandelman. “The recommendations from this Workgroup provide a path to expand local treatment capacity for our most behaviorally complex clients, and I am gratified that the Department of Public Health has already moved forward on their implementation. However, the magnitude of this crisis requires more than local action. We need stronger partnerships and increased investment from the state and federal governments to achieve meaningful and lasting progress.”
The Mayor’s Office and Supervisor Mandelman convened the Workgroup in partnership with the Department of Public Health (SFDPH) and the Department of Disability and Aging Services (DAS), and selected leading subject matter experts to participate — including local hospital executives, labor representatives, criminal justice representatives, and health officials. Each member has a key role in the system of care and brings deep expertise in client needs, gaps in care, and the ways clients interact with and flow through care systems.
“SFDPH is committed to expanding residential care and treatment capacity to better serve high-need clients," said Dr. Hillary Kunins, Director of Behavioral Health Services and Mental Health SF at SFDPH. "The Department has laid the groundwork and will continue to increase locked-subacute treatment and adult residential care facilities, including applying for state Proposition 1 funding this past December”
In December 2024, San Francisco applied for over $140 million in one-time capital funds for several new projects through the Proposition 1 Bond Behavioral Health Continuum Infrastructure Program (Bond BHCIP). If awarded, these grants would result in an increase of as many as 100 new long-term locked treatment beds added to the system of care. This is a key step to achieve San Francisco’s expansion goals and placing the City’s most complex clients into care.