We know the city of Los Angeles had over $500 million for solve the homeless crisis, and did not spend it. Now, we find they wasted over $200 million on sheltered beds they paid for, but did not use. Please go anywhere in L.A. and you see homeless encampments. Oh, why made off with the $200 million?
“The Westside Current’s investigation builds on these findings, uncovering that over 1,200 city-owned permanent housing units remain vacant, further underscoring systemic failures in managing housing resources. The investigation focused on properties acquired through Project Homekey, a state-funded initiative to convert hotels and motels into permanent supportive housing. Of the 2,157 rooms purchased by Los Angeles County, over 71% remain unoccupied years after acquisition. Notable examples include the 57-room former Motel 6 in Harbor City ($7.9 million), the 107-room Extended Stay in Carson ($41.8 million), and the 109-room Grand Park Inn in Baldwin Park ($42.8 million).”
Maybe Elon Musk would be willing to solve the mismanagement, corruption and incompetence of L.A. in dealing with the homeless crisis.
Audit Reveals $218 Million Wasted on Unused Shelter Beds Amid LA Homeless Crisis
Jamie Paige, Westside Current, 12/11/24 https://www.westsidecurrent.com/news/audit-reveals-218-million-wasted-on-unused-shelter-beds-amid-la-homeless-crisis/article_d6a35d04-b7d0-11ef-b682-b33c6368ffe5.html
LOS ANGELES – A new audit by City Controller Kenneth Mejia has revealed startling inefficiencies in Los Angeles’ homelessness programs, with one in five city-funded shelter beds going unused between 2019 and 2023. The audit estimates that this underutilization cost taxpayers a staggering $218 million, raising serious questions about resource allocation and management.
The report found that while the city’s investment in interim housing programs has grown significantly, the impact remains limited. Of the individuals who entered city-funded shelters during the audit period, only 20% transitioned to permanent housing, while more than half returned to homelessness or faced uncertain outcomes. The audit also highlighted that LAHSA consistently fell short of its 95% occupancy target, with citywide rates averaging between 64% and 78%.
Controller Mejia emphasized the broader implications of the findings. “Every empty bed represents a lost opportunity to help someone off the streets and into safety,” Mejia said. “The city’s inability to fully utilize these resources is not just a waste of money—it’s a failure to address the urgent needs of our most vulnerable residents.”
The agency noted the audit period covered a time of rapid expansion for the city’s interim bed portfolio, largely driven by the coronavirus pandemic, as well as a settlement with the LA Alliance for Human Rights that committed up to $1.24 billion in additional funding to provide beds for people with mental health and substance use disorders. Despite this influx of resources, the audit found interim housing occupancy rates remained significantly below the target level, further compounding inefficiencies.
Findings also highlighted severe data quality issues, which the agency has since begun addressing. LAHSA recently unveiled new dashboards and monitoring systems to better track occupied, available, and offline beds, as well as programmatic performance and financial metrics, which can be viewed on its website.
Among other issues, the audit criticized a lack of formal policies guiding reservations of shelter beds. The City Council and Mayor Bass’ office frequently requested the use of beds based on geographic zones, often linked to encampment cleanups or anti-camping enforcement operations, which contributed to delays in placing unhoused individuals.
The audit also found that time-limited subsidies yielded the best outcomes for homeless individuals securing permanent housing, with a success rate of 39%. By contrast, people in permanent supportive housing had a success rate of just 13% in achieving stable living situations.
LAHSA representatives reported that early changes under CEO Va Lecia Adams Kellum’s leadership led to a record 18% increase in permanent housing placements in 2023, with nearly 28,000 individuals housed. In the past 18 months, the agency has implemented reforms to expedite contracts, revise bidding processes, hire a new chief financial officer, and restructure its staff to improve communication and streamline workflows.
“LAHSA is deeply committed to continuous improvement and collaboration with all our stakeholders to continue making significant changes,” Kellum said in a statement. “We must be vigilant in optimizing the interim housing system to maximize its effectiveness for people experiencing homelessness in Los Angeles, who are counting on us to do better for them.”
“The city’s failure to move swiftly on utilizing these properties is unacceptable,” Mejia said. “Millions of dollars are being wasted while people are left without shelter.”
The Westside Current’s investigation builds on these findings, uncovering that over 1,200 city-owned permanent housing units remain vacant, further underscoring systemic failures in managing housing resources. The investigation focused on properties acquired through Project Homekey, a state-funded initiative to convert hotels and motels into permanent supportive housing. Of the 2,157 rooms purchased by Los Angeles County, over 71% remain unoccupied years after acquisition. Notable examples include the 57-room former Motel 6 in Harbor City ($7.9 million), the 107-room Extended Stay in Carson ($41.8 million), and the 109-room Grand Park Inn in Baldwin Park ($42.8 million).
Mayor Karen Bass defended her administration’s actions, citing progress made since she took office. “These issues raised in the audit are serious, which is why my team took urgent action to address them,” Bass said. “Since I took office, permanent housing move-ins have doubled, and thousands more have entered interim housing compared to the year before. But we know there is much more work to do.”
The audit also highlighted the city’s lack of formal referral and placement policies, which contributes to beds and units sitting empty. Without clear guidelines, service providers often struggle to efficiently match individuals with available housing options. Geographic restrictions, such as requiring placements within designated City Council districts, further complicate the process and leave beds unfilled. For example, elected officials can reserve shelter spaces for specific purposes, such as encampment cleanups, which can delay or block the immediate placement of those in urgent need.
Financial barriers, such as credit requirements and insufficient funding for housing subsidies, create additional obstacles. Bureaucratic red tape—including delays in approving subsidies and processing applications—further prolongs the wait for permanent housing, pushing individuals back into homelessness.
The costs associated with these resources are staggering. Tiny Home Villages cost an average of $130,000 per unit to construct, while Bridge Home shelters, using portable and prefabricated structures, cost between $4 million and $8 million per site. Project Homekey properties often require tens of millions of dollars for acquisition, with additional costs for renovations to meet permanent housing standards. Non-congregate shelters, such as hotels and motels, cost approximately $57,000 per bed annually to operate, while congregate shelters cost around $29,000 per bed annually. Despite these investments, occupancy rates for interim housing facilities consistently fell below LAHSA’s target of 95%, averaging between 64% and 78%.
At several Project Homekey sites, renovations have stalled entirely. For instance, the former Best Inn on West Adams Boulevard remains gutted, with no visible progress toward occupancy. These delays leave tens of millions of dollars tied up in unused facilities while unhoused individuals remain on the streets.
Recommendations from the audit and the Westside Current investigation include:
- Establishing formal referral and placement policies to ensure maximum use of shelter and permanent housing beds.
- Strengthening oversight and accountability for service providers to improve occupancy and housing placement rates.
- Expanding the number of Housing Navigators to connect more individuals to permanent housing solutions.
- Implementing performance-based compensation for service providers tied to occupancy and placement metrics.
“The failure to effectively use taxpayer dollars to address homelessness is not just a financial issue; it’s a moral one,” Mejia said. “We have the resources, but they are not being used effectively. That needs to change immediately.”
