GOV. GAVIN NEWSOM HAS VETOED a bill that would have allowed local governments to use state funding for substance-free housing.

Assemblymember Matt Haney, D-San Francisco, wrote Assembly Bill 255 as a way to work around the limitations in “housing first,” a state policy that requires permanent housing to be offered to unhoused people without conditions such as employment or sobriety. 

“It’s disappointing that the governor vetoed AB 255,” Haney said in a statement. “This bill was about giving people in recovery a real choice to have safe, sober housing when they need it.”

Funding provided through “housing first” policies cannot be applied to residences that require complete abstinence from drugs or alcohol, a restriction that Haney says can negatively impact the recovery of unhoused people seeking to remain completely abstinent from drugs or alcohol. 

“Californians who are working hard to stay sober are often forced into housing where drug use is allowed, and that puts their recovery and their lives at risk,” he said. 

The policies surrounding “housing first” are focused on minimizing barriers to accessing housing, following the idea that implementing requirements like sobriety only limits who can and cannot receive housing.

In a letter written to the state Assembly on Wednesday, Newsom said that setting up a different category in “housing first” would both cost more money to oversee and cause more complications.

“Current law already permits local jurisdictions to receive funding for recovery housing without creating a duplicative and costly new statutory category,” he wrote.

“Establishing a separate certification and oversight process wrongly suggests incompatibility with Housing First, while imposing fees that would not cover implementation costs … For these reasons, I cannot sign this bill,” Newsom wrote.

AB 255 would have allowed up to 25% of state homelessness funding to go toward supporting substance-free housing. But for housing programs to receive that funding, they would have to go through a certification process and be routinely monitored to make sure they are in compliance with enforcing total abstinence. 

Abstinence-based programs would also be required to ensure that residents who relapse or want to transition to housing with a harm-reduction model secure a permanent housing placement before leaving the program.

California State Assemblymember Matt Haney speaks on the steps of San Francisco City Hall alongside Mayor Daniel Lurie about a new bill to support drug-free recovery housing on Monday, May 5, 2025. (California State Assembly via Bay City News)

But Haney argued that the additional costs of allowing state homelessness funding to go toward substance-free housing outweigh the potential consequences. 

“The cost of the status quo is far greater than the cost of state investment in drug-free recovery housing: more lives lost to fentanyl, more people revolving through emergency rooms and jails, and more families torn apart,” he said. 

City leaders warn progress at risk

San Francisco Mayor Daniel Lurie, a supporter of AB 255, said that Newsom’s veto is a step in the wrong direction as the city needs state aid to help fully address its addiction and homelessness crises

“We still have a long way to go and need support from the state to continue moving forward,” Lurie said in a statement. “We are starting to see progress, but the Governor’s veto of this bill threatens to stop that progress in its tracks.”

In his letter, Newsom said he hopes that Haney and the bill’s co-authors rewrite the bill to minimize costs.

“I encourage the author and stakeholders to continue working with my administration to strengthen these options in ways that complement, rather than complicate, the state’s approach,” Newsom said. “Any broader programmatic changes, if warranted, should be considered holistically through the annual budget process.”

Alise Maripuu is an intern at BCN with a focus on covering the Peninsula. Originally from San Carlos, Alise discovered her passion for journalism after studying abroad in Thailand during her senior year attending UC Santa Cruz. Her experience in Thailand taught her the consequences for democracy when living in a society with strict laws against free speech. After graduating with a bachelor’s degree in history, Alise took courses in journalism at Skyline Community College to learn how to write for news. As the Chief Copy Editor on Skyline’s student-run newspaper for the 2023-24 school year, Alise gained editing and managing experience leading a team of reporters. She covered hyperlocal stories affecting her campus such as the rise in food and housing insecurity. Alise wants to focus on data journalism.