The Brief

Facing a nearly $1 billion deficit, the city of Los Angeles is set to finance much less affordable housing over the next year under a proposed budget released this week by Mayor Karen Bass.

The budget calls for a nearly 80% drop in city financing of new affordable housing units, declining from 770 homes in the current fiscal year to 160 homes in the next fiscal year.

Speaking with reporters Tuesday at a San Fernando Valley car dealership, Bass said economic conditions are increasingly unfavorable to housing development.

“The housing market, period, has been in decline because of interest rates and the general economy,” Bass said. “We have to look for how we cut back everywhere. Obviously, we want to see housing produced citywide, considering the shortage.”

Why such a steep drop? 

The downward projections come at a time when Angelenos continue to struggle with the city’s entrenched housing crisis. Most L.A. residents are renters, and most renters are paying more than 30% of their income on housing costs, a level the federal government deems unaffordable.

Clara Karger, a spokesperson for the mayor’s office, said the decline in the city’s affordable housing financing is the result of the sunsetting of Proposition HHH, passed by voters in 2016. That $1.2 billion bond measure has subsidized the creation of thousands of new permanent supportive housing units.

Measure ULA, the so-called “mansion tax” approved by voters in 2022, created a new source of affordable housing revenue. However, it has not increased the number of low-rent apartments in the city’s pipeline yet, officials said, because the measure continues to face litigation.

For now, they said, the city is taking a wait-and-see approach before committing money from Measure ULA to new affordable housing projects.

Karger said the mayor’s office is working “in coordination with City Council to responsibly allocate the funding for affordable housing.”

L.A. Mayor Karen Bass discusses her budget proposal at a car dealership in the San Fernando Valley.

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David Wagner/LAist

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Are there other ways for L.A. to get more affordable housing?

Financing from the city is not the only way affordable housing gets built in L.A. However, projects funded by sources outside the city budget are also facing economic challenges.

Continued high interest rates make it difficult for project financing to pencil out. Housing policy experts say the Trump administration’s emphasis on tariffs and deportations will likely make California’s high cost of housing construction even more expensive. And most of the city’s residential land remains off-limits to new apartments because of single-family zoning, which was left untouched in the city’s latest housing plan update.

Executive Directive 1, signed by Bass during her first week in office to accelerate the approval of 100% affordable housing projects, initially generated a surge of applications from developers eager to capitalize on a smoother path to breaking ground.

Many of those proposals were entirely financed by private capital, with no taxpayer subsidies. But the city went to court to try to kill these projects in single-family neighborhoods, and interest in the program cooled after Bass issued further restrictions on where such projects could be built.

L.A. gets some of its affordable housing from new market-rate apartment buildings. Developers are required by state law to set aside a small percentage of units for low-income renters in exchange for greater density. But a recent study from researchers with RAND and UCLA found that Measure ULA has caused a broad decline in these projects.

The researchers said the 40% decline in new housing permits in L.A. since 2022 has been steeper than in other neighboring cities. They concluded that L.A. would likely have more affordable housing if the “mansion tax” — which applies to sales of properties above $5 million — did not apply to recently constructed apartment buildings.

Other housing changes in the mayor’s budget

Bass’ budget proposal also calls for the elimination of the seven-member Affordable Housing Commission and the merging of its responsibilities into the Rent Adjustment Commission, which oversees the city’s rent control program.

Karger, the mayor’s spokesperson, said the proposal emerged from discussions with the city’s Housing Department.

“This consolidation of two advisory bodies promotes efficiency and reduces the Housing Department's administrative burden,” Karger said.

While the city’s Housing Department is projected to receive a net increase of 74 positions under the mayor’s budget, the Planning Department is slated to lose 114 existing staffers in layoffs. The Planning Department’s budget is set to be reduced from $72 million to $56 million.

A pessimistic outlook for housing growth

The city is contending with aggressive housing goals under state law, including a requirement to plan for about 185,000 new homes by 2029 that are affordable to low-income residents. Currently, the city is falling far short of that goal.

Thousands of Angelenos were displaced by January’s wildfires, and many are now looking for new housing. But the mayor’s budget is not counting on much growth in home sales or construction within the city.

More home-buying and building could help boost city revenues because of higher property tax and documentary transfer tax collection. But with home prices out of reach for the vast majority of Angelenos and interest rates remaining high, city officials are pessimistic about the likelihood of any boom in the housing market.

The budget’s revenue outlook says continued inflation and elevated interest rates will likely end up “hampering any rebound in the real estate market and housing production.”

The Los Angeles County Board of Supervisors voted unanimously Tuesday to approve an $843 million homelessness spending plan that includes nearly $200 million in reductions to programs and services in the next budget year.

Among those programs is Pathway Home, which helps move people from encampments into temporary housing. The county reduced funding for that program by $92 million, which will shrink it from 20 project sites to seven, officials said.

Supervisors also approved $105 million in reductions to other programs, including large cuts to street outreach teams, homelessness prevention programs and other supportive services.

County officials said they had to reduce spending in order to cover the rising costs of operating shelter beds and the loss of tens of millions in temporary state and federal funding, including some COVID-19 relief dollars.

“With federal neglect and state cuts, we have to do more with less,” Supervisor Lindsey Horvath told LAist. “And we will.”

The county’s new Department of Homeless Services and Housing has been warning about the looming shortfall since July. County officials solicited input on how to fill an initial $303 million gap.

Since then, the department adjusted the county’s homelessness spending plan, after finding some one-time state grants and cost-saving measures.

The budget year starts July 1.

Some funding restored

Last month, local homeless service providers urged county officials to restore all of the more than $200 million in proposed reductions to programs and services. Some supervisors raised concerns about specific cuts.

Since then, new revenue projections show the county stands to bring in $21 million more through Measure A than originally anticipated.

Measure A is a sales tax ordinance, approved by L.A. County voters in 2024, that funds homeless services and affordable housing initiatives. It is expected to generate about $1 billion annually, but exact revenues fluctuate with consumer spending.

The county’s slightly rosier revenue projections allowed the homeless department to roll back a fraction of the proposed reductions.

“It’s not a windfall and it doesn’t solve every challenge, but it does give us the ability to restore important programs that were on the chopping block,” Supervisor Janice Hahn said.

The board voted to use much of that $21 million to restore funding for two dozen full-time outreach workers and about 100 shelter beds that were previously on the chopping block.

The plan approved Tuesday also calls for $5 million in Measure A revenue to partially restore funding for interim housing in Long Beach, Pasadena and Glendale. It restored more than $1 million to operate family solution centers — hubs to connect unhoused families with services — and about $500,000 for a program that helps military veterans access government benefits.

Supervisor Holly Mitchell said she wishes Pathway Home funding could be maintained. She said it’s been crucial for helping people living in RV encampments in her district, which spans from Koreatown to much of the South Bay.

"These restorations don't expand encampment resolution operations,” Mitchell said Tuesday. “The services with the greatest impact in the Second District remain reduced, and the current plan does not replace what was cut."

County homelessness officials told supervisors the 100 shelter beds they saved will be prioritized for people living in encampments and will help make up for cuts to Pathway Home.

"The reduction to Pathway Home is not a reduced commitment to encampment resolution,” L.A. County Department of Homeless Services and Housing director Sarah Mahin said Tuesday. “It’s a recognition that it was built on one-time funding and we need to expand strategies to include more cost-effective resolution solutions."

New oversight push

The supervisors also voted 5-0 Tuesday to approve a new motion focused on accountability in homeless service contracting. The motion by Horvath and Kathryn Barger directs the homelessness department to work with the county auditor-controller to create strict oversight procedures for contracts, including random site visits, performance monitoring and provisions for termination.

They said the goal is to prevent the mismanagement that has plagued the Los Angeles Homeless Services Authority, and the fraud that has resulted in recent arrests. Last month, federal authorities arrested Alex Soofer, director of a nonprofit called Abundant Blessings, on suspicion of embezzling tens of millions in dollars meant to serve unhoused Angelenos. Soofer pleaded not guilty to the charges this week.

"Public dollars intended to address homelessness have gone unaccounted for under LAHSA," Horvath said. “That is unacceptable and it ends now with the county.”

Last year, the board voted to divert more than $300 million in county homelessness dollars away from LAHSA and administer the funds itself with a new homelessness department.

“As the department launches, every contract, every dollar, and every outcome must withstand scrutiny,” Horvath told LAist in a statement. “We don’t have resources to waste or time to lose in addressing the homelessness crisis.”

Barger described instances of fraud within the homeless services sector as “moral failures” that cannot be tolerated.

“They represent theft from the most vulnerable people in our community,” she said.

She also argued that ethical service providers “should not have their reputations destroyed by the criminal actions of a few bad actors.”

Barger told fellow supervisors at Tuesday’s meeting it’s their responsibility to monitor how county homelessness dollars are being spent — and to defund programs that aren’t generating results.

“Setting the budget is the easy part,” Barger said. “We have to see results. And if we don’t, we have to have a debate at this board: is that the best use of these resources?”

The department must report back to the board in 60 days with their full plan for monitoring contractors and preventing fraud and misuse of public funds.

Auditor-Controller Oscar Valdez told supervisors his office would submit a plan to county homelessness officials Tuesday.

A crew of four moon-bound astronauts will remain on the ground for at least a month after NASA delayed the launch of the Artemis II mission. During critical pre-launch testing Monday, mission managers uncovered a number of issues that prevented the completion of the test.

NASA is now planning a March launch date for the four astronauts — three from the U.S. and one from Canada — on a ten-day mission to circle the moon and return to Earth, traveling farther than any humans have ventured into deep space.

Issues leading to that delay began about an hour into Monday's test, known as the wet dress rehearsal. As the team began fueling the rocket at the Kennedy Space Center in Florida, sensors picked up a hydrogen leak. Super-chilled hydrogen is used as the fuel for the massive Space Launch System (SLS) rocket.

Hydrogen is an efficient propellant for rockets — but its molecules are so tiny and light they can escape even the tightest of seals. Launch director Charlie Blackwell-Thompson said they had troubleshooted the initial leak, but when they began to pressurize the tank, another leak surfaced.

"And so as we began that pressurization, we did see that the leak within the cavity came up pretty quick," said Blackwell-Thompson.

(L/R) NASA Associate Administrator Amit Kshatriya, NASA Associate Administrator Lori Glaze, launch director Charlie Blackwell-Thompson, and manager of NASA's Space Launch System Program, John Honeycutt, hold a news conference on the Artemis II mission at Kennedy Space Center in Cape Canaveral, Fla., on Tuesday.

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Miguel J. Rodriguez Carrillo

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AFP via Getty Images

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Hydrogen leaks plagued testing of NASA's Artemis I mission in 2022. Blackwell-Thompson said lessons learned from that uncrewed flight were utilized for Artemis II, but there's more investigation is needed.

The wet dress rehearsal uncovered other issues — including a problem with the Orion capsule, which will carry the crew to the moon. While no one was on board Monday, teams practiced preparing the spacecraft for its passengers. A valve that pressurizes the vehicle required additional attention and took more time to close the hatch than anticipated.

Teams also uncovered issues with cameras due to cold weather and audio dropouts across communication channels. "As always, safety remains our top priority, for our astronauts, our workforce, our systems and the public," said NASA administrator Jared Isaacman in a post on X, and that NASA will only launch when the agency is ready.

Work now begins to fix the issues. NASA will require another wet dress rehearsal before giving the "GO" to put astronauts on board. "All in all, a very successful day for us on many fronts," said Blackwell-Thompson. "Then, on many others, we got some work we've got to go do."

The earliest launch window for another attempt is March 6. NASA has additional launch opportunities on March 7, 8, 9 and 11.

The crew of NASA astronauts Reid Wiseman, Victor Glover, Christina Koch, and Canadian Space Agency astronaut Jeremy Hansen were released from quarantine and will remain in Houston, Texas. They'll re-enter quarantine about 14 days ahead of the next launch attempt and make the trip to the Kennedy Space Center six days before liftoff.

Artemis II is testing key systems of the Orion spacecraft, like its maneuverability and life support systems, ahead of the planned Artemis III mission that will take humans to the lunar surface. The Artemis II will mark the first time humans have returned to the moon since the final Apollo lunar mission in 1972.
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A trial got underway Tuesday in a case alleging that Huntington Beach illegally dilutes the power of Latino voters with its at-large election system.

Cities across Orange County and elsewhere in California have faced similar challenges over the past decade. Most have settled out of court by adopting by-district elections, where voters only vote on a city council representative from their area, rather than requiring candidates to run citywide. A notable exception is Santa Monica — the city has been fighting a challenge to its at-large election system in court for nearly 10 years.

Now, Huntington Beach is following suit.

The case was brought by the nonprofit group Southwest Voter Registration Education Project and Victor Valladares, a Huntington Beach resident and Democratic Party activist. It’s being heard by Orange County Superior Court Judge Craig L. Griffin.

The argument against at-large city elections

The plaintiffs allege Latino voters can’t elect a candidate of their choice under the current system, in violation of the California Voting Rights Act. This alleged dilution of Latino voting power, they say, leads to poor representation and negative consequences for the city’s majority-Latino Oak View neighborhood.

“Their needs get ignored,” Kevin Shenkman, the plaintiffs’ lawyer, said during his opening statement Tuesday. “It is a natural result of the at-large election system.”

Latinos make up about 20% of the population in Huntington Beach. Under a draft map of electoral districts drawn up by demographer David Ely, a witness for the plaintiffs, the district that includes the Oak View neighborhood would be 40% Latino. Plaintiffs argued this would give residents more power to elect a city councilmember who represents their interests.

The city’s defense of at-large elections

In their opening argument, lawyers representing Huntington Beach argued that Latinos in Huntington Beach are spread across the city and politically diverse.

The city’s lawyers also argued that recent elections of Latino city council members, including MMA star Tito Ortiz in 2020 and Gracey Van Der Mark in 2022, prove the city’s current at-large election system doesn’t impede Latino residents’ ability to participate in the local political process.

“The system works, it’s not broken, and the evidence will show that at trial,” said Anthony Taylor, one of the attorneys representing Huntington Beach.

The trial is expected to last into next week.

Go deeper

• Why were AI-equipped police cameras installed in this majority Latino Huntington Beach neighborhood?
• Huntington Beach's controversial voter ID law is illegal
• Voting by district gives Latino candidates a boost in Orange County
• District elections mean big governing changes for many California cities