The New Gatekeepers

San Francisco has co-opted the language of justice to run a homelessness machine built on control, not outcomes.

TL;DR

The left coined “non-profit industrial complex” to warn of the co-optation of its causes. Ironically, San Francisco has since built the fullest working example of it, where ideological purity substitutes for outcomes and dependency substitutes for delivery. The result is a coalition that claims to speak for the poor, while its own constituents, given an actual vote, keep voting it out.

For the better part of a decade, San Francisco has conducted one of the most expensive experiments in the history of American municipal government: spending its way out of a humanitarian crisis while declining to measure whether the spending works.

The city’s annual homelessness budget swelled from $284 million in fiscal 2018-19 to $676 million in fiscal 2022-23, even as unsheltered homelessness rose 22 percent between 2017 and 2022. By 2026 the figure had crested three-quarters of a billion dollars a year, and a civil grand jury found that only 30 to 40 percent of the people who enter city-funded homelessness programs end the year in stable housing. Roughly a quarter of all accidental overdose deaths in the city now occur inside the “permanent supportive housing” the city pays nonprofits to operate. “This is not a picture of success,” the jurors wrote—an understatement, to say the least.

That failure isn’t an accident, nor is it a shortfall of compassion or cash. This is the predictable output of a political machine that has learned to convert the vocabulary of justice into a technology of control, one that policies who counts as a “real” progressive, sustains a network of nonprofits dependent on city contracts (who in turn supply the machine’s political muscle), and protects incumbents by keeping the people it claims to serve dependent.

The Old Logic in New Language

The sharpest description of this dynamic didn’t come from the right. In 2004 the radical feminist collective INCITE! Women of Color Against Violence convened a conference, and later published an anthology, “The Revolution Will Not Be Funded,” to describe what its contributors termed the “non-profit industrial complex”: a web of connecting government, foundations, and service organizations that, in their telling, manages and defuses political movements as much as it serves the people it’s funded to help. One of the anthology’s central essays, by the scholar Dylan Rodriguez, describes a system of “state and owning-class proctorship and surveillance” over the very movements it claims to support, reaching openly for the vocabulary of colonization to describe it.

The irony is that a critique written by and for the left describes, with some precision, the system San Francisco has since built. The historian Thomas Leonard has documented how the original Progressive Era reformers hijacked the language of “justice” to exercise social control over populations they found unfit to govern themselves . A century earlier, the ward boss George Washington Plunkitt of Tammany Hall had at least the candor to name his method “honest graft”: “I seen my opportunities and I took ‘em.” The sociologist Robert Michels, observing the socialist parties of his own era, distilled the pattern: every organization, however revolutionary its charter, comes in time to be governed by a class whose first commitment is its own perpetuation.

What has changed in San Francisco is mostly the vocabulary. Damon K. Jones calls today’s version “the new paternalism,” a mode of governing “that speaks the language of compassion while quietly reinforcing hierarchy,“ framing communities "primarily through vulnerability while reserving authority, expertise, and institutional control for elite leadership.” Its tell, Jones writes, is that “success is measured by spending and moral positioning rather than measurable upward mobility.” And the demography of the arrangement is not incidental. The machine’s managerial layer, its supervisors, strategists, and nonprofit executives, is drawn disproportionately from the city’s white, affluent, and credentialed classes, while the communities invoked in its every funding resolution are Black, brown, and Asian. The invocation and the governance run in opposite directions: the poor communities of color supply the moral justification, the professional class supplies the management, and when those same communities are finally handed a ballot, in the recalls, in the Sunset, in the Bayview and Visitacion Valley, they vote against their appointed protectors by the widest margins in the city. A movement cannot claim to be the voice of people who, given the chance, keep voting to silence it.

Strip away the terminology and the structure is one every colonial administrator and machine boss would recognize on sight: a managerial class that governs a dependent population in the name of protecting it, quietly extracts the resources appropriated for that population along the way, and treats any challenge to its authority as a moral betrayal.

The Nonprofit Dependency Complex

San Francisco routed roughly $1.5 billion last year to community-based nonprofits for health, behavioral health, homelessness, and allied services with remarkably little scrutiny. A 2026 civil grand jury reported that the city spends about $500 million annually on homelessness contracts alone, yet the Homelessness Oversight Commission that voters created in 2022 expressly to audit that spending has never once audited the department or its contractors. Worse, the grand jury found that by 2025 department leadership had ceased even presenting most contract renewals and extensions to the commission for review.

When the Controller’s office did look closely, it flagged 61 of 199 nonprofits, nearly one in three, as failing to meet basic fiscal standards. The 2024 homelessness audit found the department had failed to spend $73 million of $180 million budgeted for 130 housing contracts in a single fiscal year, while hundreds of supportive-housing units sat empty during a declared housing emergency.

The individual cases are worse than the averages. HomeRise, among the city’s largest supportive-housing operators with more than $200 million in city grants and loans, improperly transferred $2 million out of a restricted account and borrowed another $2.5 million from a property’s operating account to cover corporate payroll, per a Controller’s audit. A Bayview homelessness nonprofit, the United Council of Human Services, was barred from nearly $10 million in city contracts and referred to the FBI after auditors concluded it had improperly collected rent and allowed access to housing to be sold illegally. One public-safety nonprofit dismissed its director after discovering nearly $80,000 in grant money spent on a Lake Tahoe retreat, luxury gift boxes, and limousine service.

The gravest case reached into City Hall itself. In 2026, Sheryl Davis the former executive director of the city’s Human Rights Commission, was charged with seventeen felony counts, among them conflict of interest, misappropriation of public funds, and perjury, for what prosecutors called a “pervasive pattern of self-dealing.” She stands accused of steering more than $4.5 million in funds appropriated for the city’s Black community to a nonprofit she had led and remained financially entangled with, including money that investigators say paid her son’s UCLA tuition and first-class airfare.

A nonprofit whose budget depends on the officials who sign the checks does not audit the machine. It rallies for it.

Purity Tests as Gatekeeping

The “Machine’s” most durable architect is Aaron Peskin, who served nearly seventeen years on the Board of Supervisors and three separate terms as its president. In March 2024, the board he led overrode a mayoral veto, the first override in years, to enact Peskin’s own legislation restricting the height and scale of housing across historic blocks in and around his district. State Senator Scott Wiener publicly called the measure anti-housing; a fellow supervisor warned it would invite more neighborhoods to claim historic exemptions and imperil the city’s housing targets. Peskin called it “responsible planning.”

Housing is where the test is most visible and most costly. Former District 5 Supervisor Dean Preston styled himself a housing champion, yet widely cited analysis found he’d opposed projects that would have produced more than 28,000 homes, including roughly 8,500 designated affordable.

The board has engaged in a similar form of performative politics. In October 2021, supervisors voted 8 to 3 to block a 495-unit apartment building, 24 percent affordable, on a Nordstrom valet parking lot beside a BART station, overturning their own Planning Commission and ordering an environmental study that could consume years. Weeks earlier the same board had rejected 316 smaller homes in the Tenderloin.

Whatever one thinks of the underlying goals, it’s hard to see how deferred or blocked housing helps the renters and workers these policies are ostensibly meant to protect.

The economists Edward Glaeser and Andrei Shleifer gave this dynamic a name and a formal model two decades ago: the Curley effect, after Boston’s James Michael Curley, in which a politician deliberately shapes, and where necessary impoverishes, his own electorate to secure his hold on it. Scarcity, in such a system, is not a malfunction. A population that remains poor, dependent, and anxious is a population that keeps voting for the people who promise to protect it, which is precisely why the machine has so little incentive to solve the problems. The Curley effect is not a conspiracy theory. It is an equilibrium.

When San Franciscans have gotten a clean up-or-down choice, they’ve rejected the machine’s flagship figures, particularly in the working-class neighborhoods that bear the most crime and disorder.

Consider Chesa Boudin, elected district attorney in 2019 on the progressive-prosecutor platform. In 2021 his office secured three drug-dealing convictions for the entire year, not one of them for dealing fentanyl, while nearly five hundred San Franciscans died of overdose; his predecessor had obtained more than ninety such convictions in 2018 alone. His prosecutors acknowledged weighing dealers’ immigration status in charging decisions. One repeat offender, Troy McAlister, was freed under a plea arrangement after the office adopted a policy against pursuing three-strikes cases. He was arrested repeatedly thereafter without new charges, and on New Year’s Eve 2020 ran a red light in a stolen car and killed Hanako Abe, 27, and Elizabeth Platt, 60. In June 2022 the voters recalled him, 55 to 45.

Dean Preston lost his seat in 2024 to Bilal Mahmood, prevailing on first-choice votes but collapsing once the ranked-choice consolidation ran its course. Peskin ran for mayor the same year and finished third, well behind Daniel Lurie.

A movement that genuinely served the poor would be rewarded by the poor. Instead the machine retains its organized coalition while its own constituents vote it down, which is what the iron law looks like when the members finally notice the oligarchy.

The people who pay are the ones with the least to spare. A quarter of the city’s fatal overdoses now occur inside the supportive housing built to keep the vulnerable alive. The share of people exiting city homelessness programs into stable housing fell 14.3 percent in a single year. Every affordable unit blocked on that SoMa parking lot, every year of manufactured delay on the Market and Van Ness parcels, is a family that did not get a home. Two women crossing a street on New Year’s Eve did not get to go home at all. And the machine’s answer to each failure is invariant: more money for the same organizations, and a loyalty examination for anyone impertinent enough to ask why the results never improve.

It is not that compassion is wrong. It is that a machine has captured the vocabulary of compassion and refitted it as an instrument of incumbency, and that the bill is presented, invariably and by design, to the very people the machine claims to champion. Competence is not a betrayal of progressive values. Delivering housing, safety, and functioning public services to poor and working people is the value. Everything else is branding.

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