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Audit: Homeless Housing Paid For By Taxpayer-Backed Initiative Still Expensive, Slow To Build

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Homeless encampments in Koreatown, photographed on June 29, 2019 in Los Angeles, California. (James Bernal for KPCC) James Bernal
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An audit released today by L.A. City Controller Ron Galperin warns homeless housing supposed to be built with Proposition HHH funding is now even more expensive and more behind schedule than it was last year.

How slow? Only three buildings totaling 179 supportive housing units have opened. The controller warns that just 19% of the remaining units proposed will be ready for occupancy by the beginning of 2022.

How expensive? The median per-unit cost of HHH housing is now $531,000, up from $521,000 last year, according to the report. (The median home sale price in Los Angeles County, for context, is about $643,000)

Also concerning, the audit reports that about three-quarters of the HHH projects are still in ‘predevelopment’ four years after taxpayers passed the funding initiative. Auditors warn that the coronavirus-driven recession might just tank some of the projects outright.

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The controller advocates shifting course, and reprogramming some percentage of the $1.2 billion to be spent on more interim infrastructure, like temporary shelters and bridge housing.

The money supplied by Proposition HHH is intended to help boost the production of low-income housing in Los Angeles.The city promises bond money to low-income housing developers in written commitments. Developers then use those letters from Los Angeles to leverage other funding sources like grants and private investors.

But financing for Low Income Housing Tax Credit housing/apartments, which is technically what HHH is for, is notoriously complicated. It takes years for developers to arrange funding, typically from several different sources, for even just one building.

That reality has Galperin urging that some of the HHH money should be redirected. In his letter addressed to L.A. Mayor Eric Garcetti, City Attorney Mike Feuer and the L.A. City Council, Galperin wrote:

“City leaders should pivot to a viable plan that would spend available HHH dollars in these ways:

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  • Build more interim housing and facilities:​ Stopgap measures will not end homelessness but will get thousands of people off the streets more rapidly while supportive units are built, and help meet health, hygiene, sanitation and storage needs.
  • Prioritize adaptive reuse:​ The City should pursue alternative development strategies that could prove cheaper and faster to complete, including acquisition or adaptive reuse of existing buildings, like hotels/motels, and unused commercial and office space.

Read the full audit:

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