Key LA city leaders call for shifting homelessness spending away from LAHSA

In what could be a major change in oversight of L.A. homelessness spending, the City Council’s homelessness committee is recommending the city start shifting some programs away from the L.A. Homeless Services Authority (LAHSA) over the course of the upcoming fiscal year. Which programs and who would oversee them remains to be seen.

The move comes a year after L.A. County decided to pull its funding from the joint city-county agency in response to multiple audits that found LAHSA failed to properly track and manage billions of homelessness dollars. Officials are also warning homelessness services may have to be cut due to ongoing, years’ long delays on LAHSA’s part in reimbursing service providers for their work. The committee’s chair, Councilmember Nithya Raman, describes LAHSA as “plagued with scandal” in her mayoral platform.

On Wednesday, the council’s Housing and Homelessness Committee voted to recommend multiple changes to city homelessness spending, including a recommendation by Raman to shift management of some city programs away from LAHSA during the next fiscal year that starts July 1.

Another recommendation advanced by the committee, which was proposed by Councilmember Tim McOsker, is to pursue negotiations to give the city “a clear majority” in the governance and decision-making control at LAHSA — including over federal funding meant for 84 other cities in L.A. County. Currently, LAHSA’s governing commission is split 50-50 between city and county appointees. Starting next year, the city will be by far the largest funder of LAHSA.

[Click here to read the recommendations a majority of the committee voted to make.]

The recommendations call for city officials to send the council a report by July 1 analyzing which city programs make sense to shift away from LAHSA and instead be managed by the county, the city or another entity. If approved by the council, $450,000 would be budgeted to hire consultants to advise the city about the funding shift, and city officials would be directed to update the council every 30 days about the transition.

The recommendations now go to the full City Council for a decision.

Mayor Karen Bass has expressed concern that moving too quickly to shift funds from LAHSA could harm services for unhoused people. That concern was echoed at Wednesday’s committee meeting by Gita O’Neill, who is serving as LAHSA CEO during a year-long leave from being an attorney at the city attorney’s office.

“ I would just ask this committee to take their time to look at the issues. Sometimes when things are rushed and hurried, unfortunately our unhoused folks fall through the cracks,” O’Neill said. “Seeing it go really quickly, sometimes things can get lost, sometimes contracts can get lost.”

Councilmember Heather Hutt, who is on the council’s homelessness committee, said Wednesday she does not support shifting spending yet to the county or in-house.

“It's too premature, too early and too rushed,” Hutt said. “Given the actions of the county and the federal government, we need to make sure our system is stabilized over the next two years before we think about what a longer transition looks like.”

She voted against Raman’s recommendations to start shifting funding over the next fiscal year, and voted for McOsker’s recommendations to try to beef up city control of LAHSA.

The full City Council is expected to decide on the recommendations at a future meeting. Regardless of what the city does, all of the county’s funding of services through LAHSA will be pulled as of July 1 and moved to full county control.