Santa Cruz County Rushes to Fill Daytime Homeless Service Gap Amid Nonprofit Crises and Funding Loss

Growing Concerns Over Daytime Services for Homeless Population in Santa Cruz County

Santa Cruz County is facing a growing challenge as key daytime services for people experiencing homelessness are being curtailed or discontinued. This has sparked discussions among local policymakers and community leaders about how to mitigate the impact of these changes.

The Mental Health Client Action Network (MHCAN), a peer-run organization that provides essential services such as showers, laundry machines, water access, and device charging stations, closed abruptly in late August due to financial and administrative struggles. According to county Behavioral Health Director Marni Sandoval, the entire board of MHCAN resigned by November, making it even more difficult to reopen its doors.

In addition to MHCAN, another major service provider, Housing Matters, has announced that it will stop offering drop-in day services at its Coral Street campus starting March 31, 2026, as it transitions to a new location in the Harvest West neighborhood. These services have been critical for the homeless population, with Housing Matters providing mailroom services to 1,669 people and bathroom access to 2,060 people annually, along with showers for 335 people per month.

Supervisor Justin Cummings, representing the 3rd District, expressed concern over the loss of these services, stating, “We went from having multiple day services programs to almost having zero.” While the county does not have the authority to dictate how Housing Matters operates, Cummings and county staff have been working to find solutions.

Exploring Creative Solutions

Efforts to support MHCAN have included discussions about fiscal sponsorship from other nonprofits, financial solutions to address debt, and new operational approaches to ensure sustainability. The organization is under contract with the county for up to $477,939, plus an additional $100,000 commitment from the city of Santa Cruz.

County Housing for Health Director Robert Ratner emphasized the importance of integrating daytime services into the broader safety net to qualify for state and federal funding. He also highlighted the need to connect individuals with long-term stable housing.

To address the gap in mail services, the Employment and Benefits Services Division is planning to offer these services to public program beneficiaries such as CalWorks, CalFresh, Medi-Cal, and general assistance recipients in Santa Cruz and Watsonville.

Community Response and Future Plans

At a recent meeting, members of the public urged the board to engage with faith-based organizations to fill the gaps in services. Supervisor Kim De Serpa asked about the county’s plans to collaborate with local faith groups, and Ratner confirmed that it is a priority, with plans to highlight these opportunities during affordable housing month events in May 2026.

Tyler Starkman, former executive director of MHCAN, blamed the board for the organization's struggles. No previous board members spoke publicly at the meeting.

The county has also adjusted its contracts with Housing Matters, including terminating its homeless mail services contract and capping compensation at $75,000. Additionally, the North County emergency shelter services contract was reduced by $45,000, and references to “day services” programming were removed.

Federal Policy Changes Impact Local Efforts

Changes in federal housing policy have further complicated efforts to secure long-term housing for vulnerable populations. The U.S. Department of Housing and Urban Development recently withdrew a notice of funding opportunity for its Continuum of Care Program, which had previously awarded Santa Cruz a $1.2 million rental assistance grant. This grant, which supported 48 local residents with disabilities who have a history of homelessness, will expire on February 28, 2026, and is not expected to be renewed.

Additionally, the Trump administration and Republican leaders in Congress plan to sunset the Emergency Housing Voucher program, which has provided long-term housing stability to over 250 households in the county.

Looking Ahead

The board has directed its staff to participate in local planning workgroups to address the gap in day services. Recommendations from these collaborations, along with updates on stabilizing MHCAN, are expected by March 24, 2026.

Cummings emphasized the importance of MHCAN, noting that the organization owns its building and provides essential services like showers, a commercial kitchen, mail, laundry, and food. More importantly, he said, it offers a sense of community.