The Brief

Years behind schedule on promises to house veterans experiencing homelessness, the opening of two newly restored apartment buildings this spring on the West L.A. Veterans Affairs campus was greeted with excitement by high-ranking leaders at the local, state, and federal level.

The May 2 opening was heralded as a major milestone toward promises to create 1,200 units at the campus for unhoused veterans.

In speeches covered widely in the press, high-level officials like VA Secretary Dennis McDonough and L.A. Mayor Karen Bass spoke of an urgent need to house people who struggle with physical and emotional wounds from fighting for their nation.

All 120 units were “move-in ready," VA officials said at the time.

But more than two months later, most of the housing is still unoccupied, LAist has learned.

As of late last week, only about one-third of the units had been moved into, leaving the other two-thirds vacant. That’s according to the latest available figures from the VA, which officials provided in response to our questions.

Dozens of vacancies

VA officials said in an email that they’ve identified veterans for approval for all 120 units, but only 42 people had moved in — leaving 78 units vacant.

“It’s definitely frustrating that those units have not been filled yet,” said Rob Reynolds, a formerly unhoused veteran who for years has advocated for veteran housing at the campus.

“[Unhoused veterans] watched the opening ceremony two months ago [with officials] congratulating themselves, and then here we are today, and the majority of them aren't even in there yet.”

In a statement for this article, Bass said she’s working to clear through red tape so people can get housed more quickly.

“There are barriers preventing some individuals from getting into housing that we are working to address,” the mayor said.

“But I believe, and I'm sure many do, that the time for bureaucracy and regulations is not in the middle of [a homelessness] emergency.”

The mayor, who has taken on homelessness as her top issue, oversees city agencies that have devoted dozens of housing vouchers to the new VA apartments.

Why are most of the apartments still empty?

When LAist asked in recent days, agencies involved in overseeing the apartments and approving veterans for the housing gave several reasons, some of which contradicted each other.

• Still waiting for disability inspection: For 19 of the apartments, the VA said people can’t move in yet because a city contractor hasn’t yet done a final inspection to make sure disability requirements are met. But city officials told LAist that’s not a barrier to moving people in. According to the city’s housing department, apartments have been approved for move-in since early April under a temporary certificate. After LAist’s questions this week, the city’s housing director said she contacted the building’s developer to assure them “that they have been free to lease up the [disability] units.”
• Waiting for veterans’ applications to be approved: The main reason VA officials gave for the vacant apartments was that veterans are still waiting for their applications to be approved. But the city and county say they’ve approved 111 people to move into the 120 units, as of Monday. That’s a lot more people than the 42 who have moved in.
• Key city approval didn’t come until a month after the opening event: Work to move people into one of the buildings couldn’t start until after June 5, because the city didn’t approve it for housing payments until then, said Aaron Criswell, chief housing development officer for the nonprofit group Step Up. The group was hired by the VA to help veterans navigate the process of getting apartments in the building, and to serve veterans once they’re living there. “Yes, ‘move-in ready,’ big picture,” Criswell said of the messaging around the May 2 opening. “But then you get down into the weeds and the details, and that’s where the devil is, right?”
• Waiting for veterans’ paperwork: It’s been difficult for social workers to find some veterans and get the information they need, Criswell said. “That’s just par for the course” with this type of housing, he said. “It takes a lot of work to get somebody housed.” Veterans shared different experiences with LAist. Unhoused Army veteran Josh Pettit said he’s provided all of the information that’s been asked of him as soon as it was requested. Pettit said he’s had to fill out the same paperwork, with dozens of pages, three different times in recent months and is still waiting to get into a new unit.

As part of efforts to contact Step Up this week, LAist called the organization’s veteran services department during business hours. No one picked up, and a recording said there was no functioning voicemail.

Filling out the same paperwork multiple times

Small changes officials made to the forms have made the paperwork more challenging, said Reynolds, the veterans advocate.

“It was very frustrating for a lot of these guys,” he said. “We literally were just copying information from one piece of paper to another piece of paper because a form number had changed.”

Pettit, who has three Purple Hearts from his infantry service in the army during the Iraq War, said he’s frustrated from months of trying to get placed in a new unit.

“I filled [the housing paperwork] out. Months go by. I have to fill it out again. Then months go by and I filled it out for a third time last week on Friday,” Pettit told LAist this week.

“It's dozens and dozens of papers that I have to go through again,” he said.

Federal rules require that income documents for this housing be current within the last 60 days, so if there are delays for other reasons, people have to fill out their income paperwork again, according to the city Housing Authority and Criswell.

Pettit used to live on the sidewalk outside the VA campus, in an encampment called Veterans Row that was later cleared by L.A. County Sheriff’s deputies. He now lives in a small shed-like shelter on campus with a bed and mattress, known as a tiny home.

Pettit said he was finally told that he should be able to sign a lease for one of the new apartments in about two weeks.

Campus was given to government for veteran housing

The massive 400-acre West L.A. VA campus was gifted to the federal government in the 1800s specifically to house former soldiers. At its peak, about 5,000 veterans lived on the campus during the Korean War.

But Congress later dismantled the VA’s soldiers home system, shifting the agency’s focus to healthcare and cemeteries.

VA officials in West LA eventually leased out much of the campus for non-veteran uses, including a laundry facility for Marriott hotels, athletic facilities for the private Brentwood School, a private parking lot, and a UCLA baseball stadium.

But with the West LA land specifically designated for veteran housing, and rising homelessness among veterans, the ACLU sued in 2011, saying the leases for non-veteran uses were illegal. A federal judge agreed, and the VA eventually settled the case, promising to build 1,200 units of housing on the campus.

But the promise wasn’t enforceable by the courts. And progress was slow, with the VA’s inspector general finding in 2021 that the agency was years behind schedule.

A new lawsuit — filed last year — seeks to get the VA to move faster at honoring its housing promises.

The 120 new units are fully refurbished, according to the VA, and include amenities such as outdoor community areas, indoor community spaces, central laundry facilities, onsite management offices, a leasing office, and case worker offices.

The inside of a bedroom at new housing for unhoused veterans at the West Los Angeles Veterans Affairs campus. About 80 of these apartments were still sitting empty in early July.

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Nick Gerda

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LAist

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Who’s actually in charge?

VA officials didn’t have an immediate answer about whether any one person is in charge of coordinating between the various agencies that have roles around the new housing.

Those agencies include the VA, at least two city housing agencies, a county department, the federal housing administration and the nonprofit Step Up.

City officials noted the VA housing situation can get perplexing with so many government offices responsible for different parts of it.

“There has been some confusion lately surrounding these buildings due to the different entities and agencies involved,” wrote Courtney Gladney, a spokesperson for the city’s Housing Authority.

Pettit said someone needs to be responsible for getting the agencies together to assess the problems that led to the empty apartments and figure out solutions.

“Who makes the decision?,” Pettit said. “It's crazy. There has to be somebody that makes the decision that we can talk to. Somewhere down the line this system is broken, and it needs to be fixed.”

This story was originally published by CalMatters. Sign up for their newsletters.

In 2019, first-year Gov. Gavin Newsom inherited a state flush with cash. With a $21.4 billion budget surplus to play with, an ambitious Newsom invested billions in affordable housing, child care and healthcare expansion while paying down the state’s debt and shoring up reserves.

The next governor won’t be that lucky.

When Newsom unveils his last spending plan as governor Friday, he will do so with the specter of a projected $18 billion deficit — the result of the state’s fast-growing spending, federal funding losses and heightened economic uncertainties under President Donald Trump’s administration.

The deficit could balloon to $35 billion annually in the next few years if state leaders don’t pursue long-term solutions, namely making sustainable revenue increases or cutting spending, according to the Legislative Analyst’s Office, the nonpartisan fiscal adviser to lawmakers.

But neither will be appealing options to Newsom and legislative leaders this year.

They have repeatedly resisted increasing taxes on average Californians and high-income earners alike — a politically dicey pitch to make in a state with high tax rates and increasing revenue. Spending cuts are equally painful to swallow, especially for Democrats running for re-election in November who have fought to expand services, such as Medi-Cal, that may now be rolled back.

For Newsom, a lame-duck governor with presidential aspirations, there is even less incentive to address the state’s long-term budget health through major policy changes, political strategists say.

“It’s not an uncommon occurrence in California for a departing governor to leave a note on the new governor’s desk that they’ve got a budget deficit,” said longtime Democratic consultant Garry South.

But how Newsom tackles the structural deficit will almost certainly have implications for his expected presidential bid. State Republicans, such as Assemblymember David Tangipa of Fresno, are already blaming the budget problem on Newsom’s mismanagement. “A Newsom presidency would be a fiscal and governance disaster of historic proportions,” Tangipa wrote in a December op-ed.

It’s the fourth consecutive year in Newsom’s tenure that the state is projecting a deficit even as revenue grows. In the past, state Democratic leaders resorted to temporary fixes such as internal borrowing, deferring payments, one-time cuts and drawing from California’s rainy day fund to avoid cutting into the social safety net.

But that cushion is deflating: The state’s reserve stands at $14 billion, half its peak balance, after two years of withdrawals. State leaders have borrowed more than $20 billion from other state funds, debts that will come due in later years. Continuing to rely on those options would leave the state “undeniably less prepared” for an economic downturn, the LAO warned.

“Eventually you are going to run out of Band-aids,” said Steve Maviglio, a Democratic strategist who worked for then-Gov. Gray Davis during a massive budget deficit. Newsom "has used every trick in the book, and after a certain point, there’s nothing left.”

More healthcare cuts to come?

Newsom has not indicated whether he’ll consider cuts to Medi-Cal, the state’s primary health insurance program for low-income residents. But as the state’s most expensive program, it is an attractive target. More than half of the $200 billion program’s funding comes from the federal government.

Last year, as Newsom and legislators scrambled to close a $12 billion budget gap, they froze new Medi-Cal enrollment for undocumented immigrants, charged immigrant enrollees a $30 monthly premium and delayed cutting certain benefits. The cost of Medi-Cal has been rising faster than expected, forcing the state Legislature to allocate $6.2 billion midyear to prevent a shortfall.

The decision was contentious, with some healthcare advocates and Democratic lawmakers slamming their leaders for creating a “two-tiered healthcare system” that deemed immigrants less worthy of quality coverage.

“That was an incredibly disappointing backslide,” said Amanda McAllister-Wallner, executive director of Health Access California, which advocates for universal healthcare.

This year, Trump’s budget reduced the federal government’s share of funding to Medi-Cal, requiring the state to pay more to provide the same benefits. California is projected to spend at least $1.3 billion more to implement that change, a figure that could reach $5 billion by fiscal year 2029-30, the LAO estimated.

The Martin Luther King Community Hospital in Los Angeles.

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Pablo Unzueta

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CalMatters

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Assemblymember Mia Bonta, an Oakland Democrat who chairs the Assembly Health Committee, said solving the state’s budget crunch shouldn’t come at the expense of health care.

“California needs its state and federal leaders to look for more innovative solutions to fill the gaps, make healthcare affordable, and keep our families healthy,” she said in a statement that did not offer specific alternatives.

Any cuts to Medi-Cal could bring political consequences for Democrats who often pride themselves on expanding social services. Rolling back Medi-Cal could hurt Newsom’s legacy, too, since it was under him that the state began offering Medi-Cal to immigrants.

“Democrats are the party of expanding healthcare,” Maviglio said. “To slash it goes against everything they stand for.”

McAllister-Wallner acknowledged she isn’t optimistic about the budget outlook. But she said she hopes the state finds new revenue through taxing corporations instead of making cuts to vulnerable populations.

If “we are addressing this through cuts only, and cuts to the most vulnerable, that’s … not the leadership that we are looking for,” she said.

State leaders could also walk back some of last year’s funding commitments in other areas. While state lawmakers negotiated $500 million for homelessness to counties and delayed it until next year, it is not guaranteed. Newsom, who has blamed the state’s homelessness problem on local governments, could withhold the money.

Newsom also promised last year he’d reach a deal with Bay Area transit advocates over state funding. But last month, in light of the budget shortfall, Newsom urged advocates to dip into previously allocated dollars to save the regional transit network, instead of a $750 million loan the advocates had requested.

Taxing the rich a nonstarter for Newsom

It’ll be hard to muster the political will in Sacramento to raise taxes.

Former Assembly Speaker Anthony Rendon, a Los Angeles Democrat running for state superintendent of public instruction, said he’s long supported higher taxes on industries that have “skated away from taxation for a long time.”

But even the most progressive Democrats in California have had little appetite to raise taxes, he said, because many represent affluent areas such as Silicon Valley where their wealthy donors live.

Even when the state faced a projected $56 billion deficit over two years in 2023, Rendon said Democrats were “shrugging” at the problem and pointing to the state’s reserves as a solution, which he said reflected a culture of reliance on the rainy day fund.

This year, Newsom has already spoken out against a proposed labor-backed wealth tax ballot measure, consistent with his past opposition to similar proposals.

The ballot measure, titled “The 2026 Billionaire Tax Act” and filed with the state attorney general’s office in October, seeks to tack a one-time 5% tax on those with a net worth of at least $1 billion and use the money to fund the state’s healthcare and education programs. The effort is led by the SEIU-UHW, a powerful labor union representing healthcare workers, and St. John’s Community Health, one of the largest nonprofit healthcare providers in Los Angeles County.

State. Sen. Roger Niello, a Roseville Republican and vice chair of the Senate Budget Committee, applauded Newsom’s opposition to the proposed tax increase.

“To have a situation where we have developed an increasing deficit in the face of an economy that is not in recession, and revenues are increasing, it would seem to be silly to solve that by further increasing revenue,” he said.

While taxing the rich is a popular Democratic talking point, backing a proposal like that could mean alienating the wealthy donors Newsom will likely rely on for his presidential run.

There would also be no political gain for Newsom in his last year to stabilize the state’s progressive tax structure, which heavily relies on high-income earners, despite him promising to do so when he took office.

“He’s going to make more enemies doing it than he would not doing it,” Maviglio said.

This article was originally published on CalMatters and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.