Judge holds new hearing as he considers yanking control of homelessness spending from LA's elected leaders

A federal court hearing with potentially far-reaching ramifications kicked off Thursday as a judge weighs whether to seize control of L.A. city homelessness spending and hand it over to a court-appointed receiver.

Why it matters

Plaintiffs in the lawsuit are asking U.S. District Judge David O. Carter to find the city in breach of its obligations to create more shelter and to hand control of spending to a receiver. The city objects to the idea, writing in court filings that its due process rights are being violated because it has not been given enough time to respond.

Carter also has been pushing for a new audit into where taxpayer money went for homelessness programs, including Inside Safe, which L.A. Mayor Karen Bass and the city attorney pushed back on. Carter has said he would take “drastic” measures if city officials didn’t agree to the audit.

The backstory

A recent, independent court-ordered audit found major failures by the city in tracking more than $2 billion of homelessness spending. Much of those funds flowed through the Los Angeles Homeless Services Authority, otherwise known as LAHSA. Auditors found inconsistent data and a lack of oversight for service providers.

L.A. County has since planned to pull more than $300 million out of the agency and into a new county-controlled department. The L.A. City Council voted unanimously to explore a similar departure a week later.

Why now

Carter has continually criticized a lack of transparency and accountability at LAHSA, including for the recent point-in-time homeless count. The agency released incomplete data months earlier than expected, which Carter called “political gamesmanship” and expressed skepticism about the accuracy of the results.

He also ordered LAHSA to give an update during Thursday’s hearing on how much of the roughly $50 million in cash advances paid to service providers the agency has been able to recover.

Who’s who

In orders, the judge has repeatedly asked city, county and state officials — including Gov. Gavin Newsom, Bass and outgoing LAHSA CEO Va Lecia Adams Kellum — to attend Thursday’s hearing.

But Bass and L.A. City Council President Marqueece Harris Dawson will not be there, according to a filing the city submitted Tuesday. City officials were lambasted by Carter for failing to properly track billions of homelessness spending at the most recent hearing in March.

How to observe

The hearing starts at 9 a.m. Thursday in Courtroom 1 at the First Street Federal Courthouse in downtown L.A.

What’s next

This week, Carter set another hearing for May 27 to gather evidence about whether the city violated two major agreements in the lawsuit to create new shelter beds, known as the Roadmap agreement and the L.A. Alliance settlement.

The L.A. Alliance, a downtown business group, alleges that city officials falsely told the court they created nearly 2,300 new housing units when they “unequivocally did not.”