California CARE Court Secures $291 Million to Expand Mental Health Services and Housing

California is doubling down on its first-in-the-nation CARE Court system with $291 million in new funding and a public accountability framework that rewards high-performing counties while placing lagging regions into an intensive support program. Governor Gavin Newsom announced the measures March 2 in Hayward, one day after the state confirmed its first drop in unsheltered homelessness in more than fifteen years.

The Community Assistance, Recovery, and Empowerment Act—known as the CARE Act—launched in eight pilot counties in 2023 and expanded statewide by December 2024. Since then, California courts have received more than 3,800 petitions requesting court-supervised treatment plans for individuals with untreated schizophrenia and other psychotic disorders, many of whom also struggle with substance use. An additional 4,000 people were connected to services through "CARE diversions," cases resolved without formal court involvement.

Now the state is publishing county-level performance data and directing resources to close the gap between leaders and stragglers.

Ten Counties Earn 'CARE Champion' Status

Newsom recognized ten counties as "CARE Champions" based on per-capita petition rates in 2025, the first full calendar year of statewide implementation. The designation goes to Humboldt, Tuolumne, Marin, Napa, Merced, Sutter, Alameda, Santa Barbara, San Mateo, and Imperial counties.

Alameda County, where the Governor delivered his announcement, stood out for its proactive adoption. Judge Sandra Bean oversees the county's CARE Court docket and recently described the transformation of one participant who gained stable housing and Social Security income through the program's wraparound services.

"The one turnaround point for her was getting housing," Judge Bean said. "Just having someone really advocate for her that she perceived as being part of the court system really, really changed this person's life."

The county partners with Bay Area Community Services (BACS), which operates the Regis Village Campus in Hayward. The site provides permanent supportive housing, transitional beds, and on-site behavioral health services. With state infrastructure funding from Proposition 1 and the Behavioral Health Infrastructure Program, BACS is expanding to add medical respite, substance use detox, a sobering center, and dedicated CARE Act offices.

Ten Underperforming Counties Enter 'CARE ICU'

On the other end of the spectrum, the state identified ten counties with the lowest petition rates and placed them into the CARE Improvement and Coordination Unit, nicknamed "CARE ICU." The list includes California's most populous county—Los Angeles—alongside Orange, San Bernardino, Riverside, Kern, Fresno, Monterey, Yolo, Santa Clara, and San Francisco.

"Care and accountability go hand in hand," Newsom said. "Local leaders have a moral and legal obligation to deliver this transformational tool for those who need it most. We will not accept failure and excuses when lives are on the line."

The ICU designation comes with technical assistance, training, and oversight from the state's California Health and Human Services Agency. Performance data is now published on accountability.ca.gov, a public dashboard tracking county-level progress on housing, homelessness, and behavioral health.

California Health and Human Services Secretary Kim Johnson framed the accountability measures as essential to the program's mission. "The CARE Act reflects California's belief that compassion and accountability must go hand in hand," she said. "It offers people living with severe mental illness a real path to treatment and stability, while making clear that every county has a responsibility to deliver."

$291 Million Split Between Housing and Prevention

The new funding breaks into two streams. Homekey+ awards total $131.8 million for eight affordable housing projects creating 443 units with on-site behavioral health support. The developments will serve people experiencing homelessness who also have mental health or substance use disorders, as well as veterans. Projects are located in Stockton, Santa Fe Springs, and the counties of Contra Costa, Los Angeles, Tehama, and Yuba.

Homekey+ is part of Proposition 1, the $6.4 billion behavioral health bond approved by voters in 2024. When fully deployed, Prop 1 funding is expected to create 6,800 residential treatment beds and 26,700 outpatient treatment slots statewide—a direct response to California's long-standing shortage of behavioral health capacity.

The second funding component awards $159 million through Homeless Housing Assistance and Prevention (HHAP) Round 6 to twenty regions. HHAP supports regional collaboration on housing stability, interim shelter, and local interventions tailored to each community's needs. Earlier this year, the state awarded $419 million to the Los Angeles, San Diego, and San Francisco regions; total HHAP Round 6 funding now stands at $578.9 million, with $181 million more expected in the coming weeks.

HHAP Round 6 includes stricter accountability measures than previous rounds. Grantees must maintain compliant housing elements under state law, and the state can withhold funding from local governments that fail to show progress. A seventh round totaling $500 million is planned for fiscal year 2026-27, contingent on even tighter performance requirements and evidence that communities are making meaningful housing policy changes.

Structural Gaps in California's Behavioral Health System

The CARE Act addresses a crisis decades in the making. State psychiatric hospitals were shuttered beginning in the 1960s without adequate community alternatives, leaving individuals with severe mental illness cycling through homelessness, emergency rooms, and jails. Today, Californians with untreated psychosis are ten times more likely to experience homelessness and sixteen times more likely to be incarcerated than the general population.

The CARE Court process begins with a petition filed by the individual, a family member, first responder, or mental health professional. Eligible participants—those with schizophrenia or related psychotic disorders—receive a court-supervised treatment plan lasting up to two years. The civil court judge coordinates a team of providers, housing support, and social services to ensure participants stay engaged with care.

The structure is voluntary in nature, though the court can compel participation if a person is found eligible and unwilling to engage. Unlike criminal proceedings, CARE Court carries no punitive consequences; the goal is recovery, not punishment.

Addiction Treatment Embedded in Behavioral Health Expansion

While CARE Court focuses on severe mental illness, the broader infrastructure investments explicitly include substance use disorder treatment capacity. Proposition 1 bond funding is building residential detox units, medication-assisted treatment programs, and dual-diagnosis facilities that serve people with co-occurring mental health and addiction challenges.

The BACS campus in Alameda is a working model. It houses substance use residential treatment and detox alongside mental health services, reflecting the integrated approach California is scaling statewide. Many CARE Court participants arrive with both psychiatric illness and active substance use; the system is designed to address both simultaneously rather than forcing individuals to navigate separate, siloed programs.

HHAP funding also flows to substance use services. Grantees can use dollars for housing navigation, interim shelter, and connections to outpatient addiction treatment—critical supports that reduce barriers to long-term recovery.

First Drop in Unsheltered Homelessness Since 2007

The accountability announcement comes one month after California reported a 9 percent decline in unsheltered homelessness, the first statewide drop since 2007. The decrease followed Newsom's 2024 executive order directing state agencies and local governments to clear encampments while connecting residents to shelter and services.

The Governor created a Statewide Action on Encampments (SAFE) Task Force in 2025 to accelerate encampment resolution in California's ten largest cities. Since launch, the task force has worked with San Francisco, Los Angeles, Long Beach, Sacramento, and Fresno to dismantle encampments and offer housing and treatment. Caltrans, the state transportation agency, has removed more than 19,000 encampments from state right-of-way since 2021, collecting 354,000 cubic yards of debris in the process.

The CARE Act fits into this larger homelessness strategy by addressing the subset of individuals whose psychiatric illness prevents them from engaging with traditional outreach. For people cycling between street homelessness and psychiatric crisis, the court-supervised model offers sustained engagement that episodic emergency interventions cannot match.

What Happens Next

California's accountability dashboard will update quarterly with county-level CARE petition data, diversions, and participant outcomes. The ten CARE ICU counties have until mid-2026 to demonstrate improvement or risk additional state intervention.

Homekey+ and HHAP projects funded in this round are expected to break ground by late 2026, with housing units coming online through 2027 and 2028. Proposition 1 treatment bed construction is on a similar timeline, with phased openings beginning this year and continuing through 2029.

The state has not announced financial penalties for underperforming counties, but the public dashboard creates reputational pressure and a framework for future enforcement. Counties that fail to spend HHAP funding on housing solutions or adopt policies that increase housing supply could see future grant dollars withheld.

For now, California is betting that transparency, technical support, and targeted funding can close the implementation gap—and that the ten counties in intensive support will follow the path blazed by the ten champions.