Amid ‘crisis’ at homelessness agency, LA city leaders to discuss pulling funding

L.A. city leaders will discuss on Wednesday whether to pull hundreds of millions of dollars out of the regional homelessness agency and assign different oversight.

L.A. County supervisors voted to withdraw funding for the L.A. Homeless Services Authority last April, citing ongoing problems with the agency's oversight of homelessness funds.

Now 10 months later, City Council members are planning to talk about whether to pull the city’s funds from LAHSA — which amount to just under $300 million this fiscal year.

It’s one of the most consequential decisions on homelessness city officials have faced in years. In deciding the future of LAHSA, the City Council will be deciding who will be entrusted with taxpayer funds meant to address the nation’s largest unsheltered homeless population.

What the council will discuss

On Wednesday, the council’s Housing and Homelessness Committee is scheduled to discuss a range of options that include:

• not changing anything major
• keeping the city money at LAHSA, but beefing up city oversight
• shifting the funding from LAHSA to direct city control
• shifting the city’s funding from LAHSA to the county homelessness department to administer it

The committee also is scheduled to discuss whether to pursue shifting the city’s federal homelessness funding from LAHSA to more direct city control.

The options were first laid out in a staff report to delivered last April, two years after it was requested by Councilmember Monica Rodriguez.

At a City Council meeting in January, Rodriguez criticized housing and homelessness committee chair Nithya Raman for not scheduling a committee discussion on the options.

“It's been sitting [for] 280 days, a report in your committee that you won't hear,” Rodriguez said at the January meeting. “So let's stop playing this false notion of the arsonists showing up as the firefighters.”

Asked for a response Monday, Raman’s spokesperson Stella Stahl told LAist the item is on Wednesday's agenda.

In a statement, Raman said she expects to hold two meetings to discuss all the city’s options before the council makes a decision.

Raman and Mayor Karen Bass urged the county not to pull funding from LAHSA last spring, saying the agency was making progress on homelessness.

The supervisors went ahead last April with their decision to withdraw the more than $300 million in annual county funding from the agency.

The vast majority of county funds will be shifted from LAHSA starting July 1.

Raman recently announced she’s running in the June primary against Bass, whom she previously endorsed for re-election.

LAHSA is in ‘crisis,’ its CEO says

LAHSA was created by the city and county in 1993 to oversee homeless services. It’s governed by a CEO who reports to a commission of 10 members. Half of the members are appointed by the L.A. mayor, and the other half by each of the five county supervisors. Bass also serves on the commission, having appointed herself in fall 2023.

While it’s long faced criticism, it’s been under particularly close scrutiny for more than a year.

An audit and court-ordered review found it failed to properly track its spending and whether services were being provided.

LAHSA also has been facing criticism more recently for months-long delays in paying tens of millions of dollars to reimburse service providers — a problem officials vowed to fix nearly two years ago. Several providers recently told LAist they've had had to dip into reserves or take on debt.

While addressing the commission that oversees the organization on Friday, CEO O’Neill said LAHSA was “in crisis. And I say this not as a criticism to any of our really hardworking staff. They've built what they were asked to build.”

LAHSA’s staff report to “essentially 21 elected bosses, all of whom have different, sometimes conflicting agendas,” O’Neill said. “This creates a structure that is unstable.”

“LAHSA has been structured for decades as the entity that takes the blame,” she added. “Political incentive…has been to point at LAHSA rather than to address structural issues.”

“Morale is very low,” O’Neill said of LAHSA staff.