$3.3 Billion in Grants to Bolster California Behavioral Health Infrastructure
To help address a 7,000-plus behavioral health bed shortfall in California, Gov. Gavin Newsom has announced $3.3 billion in grant funding to create over 5,000 residential treatment beds and more than 21,800 outpatient treatment slots for behavioral healthcare services.
Administered by the California Department of Health Care Services (DHCS), the Proposition 1 Bond Behavioral Health Continuum Infrastructure Program (BHCIP)’s first round will expand access to care for Californians experiencing mental health conditions and substance use disorders, including those experiencing homelessness.
“Today marks a critical milestone in our commitment to transforming California’s behavioral health system,” said Kim Johnson, Secretary of the California Health & Human Services Agency, in a statement. “Through these awards, we are investing in bold, community-driven solutions that expand access to care, promote equity, and meet people where they are. These projects are a reflection of our values and vision for a healthier, more compassionate California.”
Additionally, the Department of Housing and Community Development (HCD) will oversee up to $2 billion in Proposition 1 funds to build permanent supportive housing for veterans and others who are homeless or at risk of homelessness and have mental health or substance use disorder challenges.
The San Diego-based Palomar Health Foundation has been awarded a conditional bond of nearly $50 million through BHCIP that will help fund the development of the Palomar Health Behavioral Health Institute. Slated to open in 2027, the 84,700-square-foot Institute will feature a 120-bed acute psychiatric hospital with hospital-based outpatient treatment and 38 dedicated slots for detoxification and withdrawal management. Once open, the outpatient program is projected to serve nearly 20,000 individuals annually, providing high-quality, life-changing care for the state of California.
“This is the largest grant ever received by Palomar Health — and the single largest Bond BHCIP Round 1 awarded in the entire San Diego region,” said Kristin Gaspar, president andCEO of the Palomar Health Foundation, in a statement. “It marks a transformational milestone for our community, one that will create lasting change for thousands of individuals and families. We are honored to play a leading role in advancing solutions that address our region’s most pressing behavioral health needs.”
The County of Ventura has been awarded $93.7 million to support the development of three major behavioral health projects that will expand access to care throughout the region: the Lewis Road Mental Health Rehabilitation Center (MHRC), the East County Crisis Stabilization Unit (CSU), and the East County Psychiatric Health Facility (PHF).
“This is a once-in-a-generation opportunity to build out critical high-level behavioral health infrastructure in Ventura County,” said Loretta Denering, DrP.H., M.S., Ventura County behavioral health director, in a statement. “These investments will help us deliver timely, effective care for those with the most serious behavioral health conditions – in our own community. We’ve been committed to bringing our residents back into our County and closer to home during their treatment.”
Sutter Health has been awarded $23 million to support two major mental health infrastructure projects: the expansion of Sutter Center for Psychiatry in Sacramento County and the construction of a new Emergency Psychiatric Assessment, Treatment, and Healing (EmPATH) unit at Sutter Coast Hospital in Del Norte County. These projects are part of a larger effort by Sutter to expand inpatient and outpatient mental health capacity, strengthen care coordination, and improve access for underserved communities. In addition to Bond BHCIP funding, Sutter is investing $27.6 million of its own capital to expand Partial Hospitalization Programs (PHP), Intensive Outpatient Programs (IOP), and other behavioral health services across Northern California.
Alameda Health System (AHS) has been awarded more than $77 million. It will use the funding to build a 10-bed inpatient medical detox and psychiatric care unit at San Leandro Hospital and two 20-bed units dedicated to geriatric psychiatric patients at St. Rose Hospital. These facilities are expected to open in two years.
“This is a transformative investment for Alameda Health System and the East Bay community. It strengthens our ability to care for those in the most vulnerable moments of their lives and ensures that people can get the mental and behavioral health care they need close to home. We are proud to be recognized as a critical component of California’s efforts to modernize and expand mental and behavioral health care. This funding will advance our mission of caring, healing, teaching, and serving all,” said Mark Fratzke, chief operating officer of AHS and board chair of St. Rose Hospital, in a statement.
