You may think that California’s wild week of corruption and incompetence is pretty bad, but there is one silver lining: The state may not have fallen victim to an affordable housing Ponzi scheme after all!

For some background, California provides state funding for affordable housing projects designated for homeless people. Shangri-La Industries is one such company that took advantage of these funds, with seven properties filling that requirement. Earlier this year, though, Attorney General Rob Bonta sued the company, alleging that it took out loans on six of the seven properties and breached contractual obligations. Now, all seven are at risk of being foreclosed, and California wants its more than $100 million in funds back.

California likened this to a Ponzi scheme, leading to the embarrassing possibility that California doled out over $100 million to a Ponzi scheme because the state has allowed homelessness to spiral out of control. Shangri-La Industries, on the other hand, is now filing a lawsuit against its former CFO, alleging that he embezzled millions of dollars from the company that was for those housing projects to instead spend on cars, jewelry, private jets, and a mansion, leading to the company’s current predicament.

The good news is that losing $100 million in taxpayer dollars may not have been California’s fault. The bad news is that it is still definitely partially California’s fault.

California has roughly 28% of the country’s homeless population despite having just 12% of the country’s total population, with that share of homeless people rising drastically over the last few years. State policies do not incentivize homeless people to move into shelters and instead enable them to continue their homeless lifestyle, resulting in large encampments that pose health and safety risks to residents. The state then funnels billions of dollars into homeless programs despite the problem continuing to become worse.

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For perspective, another large, populous state, Texas, spent $19.7 million on its main programs for homelessness in 2022, while California lost out on $100 million for just seven housing projects from one company that are now facing foreclosure.

California’s bloated homeless response is inefficient and prone to scenarios just like this, and it is all in response to a homelessness crisis that the state has enabled to become worse. So, on the bright side, California might not have fallen for a Ponzi scheme, but it still made this entire ordeal possible through its incompetent handling of the homelessness crisis.