LA County to strip hundreds of millions of taxpayer dollars from homelessness agency

L.A. County will stop sending hundreds of millions in taxpayer money each year to the troubled agency charged with serving the unhoused — a stinging admission by elected officials that the region's longstanding approach to homelessness has failed.

What the vote means

On a 4-0 vote Tuesday with one abstention, the Los Angeles County Board of Supervisors put in motion a plan to strip more than $300 million a year in taxpayer funding from the L.A. Homeless Services Authority — known as LAHSA — by the middle of next year. Instead, those funds will shift to the county’s direct oversight and control.

The funding shift was spearheaded by supervisors Lindsey Horvath and Kathryn Barger. Horvath said the move was needed to fix a broken system and to make it more transparent and accountable.

“To engender the public’s trust, we must take action for a more centralized, effective, data-driven strategy to reduce homelessness,” she said. “Investments must be connected to outcomes — outcomes that this board ultimately must be responsible for. We have studied the homeless service system to death.”

Horvath added: “I want to be clear that this is not more government, it is better government.”

Speaking before the vote, Supervisor Janice Hahn said no one really defended LAHSA “because I don’t think anybody wants to.”

Why it matters

The move follows a series of harsh audits and a judge’s rebuke of the job LAHSA officials have done in recent years at managing and tracking spending — including an inability to properly account for billions in taxpayer dollars. That’s on top of a public growing increasingly impatient with L.A. government leaders’ handling of the crisis.

What do Los Angeles officials say?

The supervisors moved forward with seizing control despite being urged not to by L.A. Mayor Karen Bass and several L.A. City Council members, who raised concerns that services could be disrupted and questioned if the new approach would be better.

“We are making forward movement. We must keep building on this and confronting our challenges, together,” Bass and Councilmember Nithya Raman wrote in a joint letter to supervisors they distributed to media a few hours before Tuesday’s vote. She also appeared in person at today's meeting to address the board.

While LAHSA’s mismanagement has been a major concern, experts and advocates for unhoused people have said the main driver of the homelessness crisis in L.A. is rising housing costs amid short supply of homes.

What happens to LAHSA?

Tuesday’s decision by county supervisors leaves LAHSA’s fate uncertain.

Its largest funder is the county, with taxpayer funds making up 40% of the agency’s projected funding this fiscal year and an even larger share — 70% — of LAHSA’s administration budget.

Hundreds of LAHSA employees will likely have to leave the agency due to the funding shift. The county plan calls for giving priority to LAHSA employees for jobs in a new county department tasked with overseeing spending meant to help unhoused people get permanently off the streets.

LAHSA’s next largest funder is the city of L.A. at 35% of all revenue. The city is now exploring whether to follow in the county’s footsteps by pulling city funding and moving it under direct city control.

If both the city and county pull funding, LAHSA would dramatically slim down to far less than half its current size, handling a small subset of its current work. The agency’s ongoing work would include managing federal homelessness funds for the region, handling the annual point-in-time homeless count and overseeing the main data tracking system for homeless services, known as HMIS.

What will this change accomplish?

County officials say they’d have much better accountability and oversight of homelessness spending than what LAHSA does, while critics say it’s unclear whether the county would do any better than LAHSA.

“Our Board is taking full responsibility for the tax dollars we collect and distribute, ensuring transparency, efficiency, and real results for those we serve,” Barger said in a statement. “The buck stops here.”

The new effort to fight homelessness will be inspired by the county’s Housing for Health program, which is widely lauded. An evaluation by the RAND Corporation found Housing for Health did a better job of coordinating and providing care and services to unhoused people than other programs.

The county's renewed effort to fight homelessness promises transparency, in part by providing “clear expectations in its contracts, a range of support to help partners succeed, and oversight throughout,” according to a document provided by Horvath’s office.

The goal is also detailed monitoring to make sure that services are being delivered, according to that document.

The vote was 4-0-1. Who abstained?

Supervisor Holly Mitchell abstained from the vote and was the only supervisor not to support the move.

“If we go fast without a clear baseline of performance metrics that would actually enable us to determine if the new county homeless department is more effective at ending county homelessness, how will we know that we've actually built something that's better than what we are walking away from?" Mitchell said.

She said her colleagues were moving too fast with the 15-month transition to county control of the funding, calling the timeline “incredibly rushed.”

Horvath pushed back.

“I reject that notion, when seven people a day die on our streets in Los Angeles County. Our need is urgent,” Horvath said, calling that county program the most successful in the region. “It is time to empower Housing for Health’s model."

Hahn also said the status quo is simply not working.

" It's been no secret that LAHSA has had its share of troubles, issues, contract delays, unaccounted funds, and the quality of services has become a repeated problem," she said.

What did LAHSA's leadership say in response?

LAHSA CEO Va Lecia Adams Kellum and other LAHSA executives pleaded with supervisors to not pull the plug, saying much progress has been made in the two years she’s been in charge. She pointed to LAHSA’s numbers from last year’s point in time count showing a drop in street homelessness in the city of L.A.

“To enhance transparency, I promised that we would improve our operations — and we have,” Adams Kellums told the supervisors during the public comment period. “We've implemented 20 new data dashboards that provide unprecedented insight into how our system functions.”

Raman, who chairs the council’s housing and homelessness committee, also addressed the board on LAHSA's behalf, insisting that data coming out of the agency was getting better.

“What I fear most is that we are moving money from one bureaucracy to another,” Raman added.

Barger, however, said the current situation is untenable — pointing to what a federal judge described last week as ongoing failures at LAHSA.

“It couldn’t get any worse,” Barger said.

LAist reporter Aaron Schrank contributed to this story.

Read more LAist coverage:

• 5 takeaways from LA’s troubling new homelessness spending audit
• Judge blasts LA homeless spending as a ‘train wreck’ and threatens to seize control
• LA County supervisors to vote on pulling over $300 million out of homeless services agency
• Citing incomplete data, LAHSA announces drop in homelessness as county considers taking control of funding