LA sat on nearly half a billion dollars in homelessness funds last year

This story first appeared on The LA Local.

More than half the money set aside by the city of Los Angeles for programs and services for unhoused people was not spent last fiscal year, according to an analysis by the city controller.

Los Angeles allocates more than $1 billion to agencies and initiatives responsible for helping the city’s unhoused population, which, at about 72,000 people, is among the largest in the nation.

In fiscal year 2025, the city left $473 million unspent.

These funds are intended to go to a variety of programs like emergency assistance for people facing eviction, substance abuse treatment and housing assistance, including shelter that can accommodate pets.

The controller provided several recommendations on how the city can better account for its homelessness budget, including spending housing grants in the same year they are reported, better communicating timelines to the public for when affordable housing will be available, and to analyze the budgets monthly to identify issues faster.

Most of the unspent money comes from special funds that roll over into the next year. But the discrepancy between budgeting in one year and spending another muddies the public’s ability to track how money is being spent on one of the city’s most pressing problems.

“The large homelessness budget leads the public to believe that the city is spending much more on homelessness than it actually is, increasing the public’s expectations and causing frustration when results inevitably do not align with the budget,” Controller Kenneth Mejia said in a prepared statement.

The city’s unhoused population has decreased slightly over the last two years even as it has increased about 18% nationally over that same time period. L.A. Mayor Karen Bass has taken credit for recent drops in the city, one of the primary issues she’s focused on during her tenure.

Bass released a statement supporting the controller’s recommendations on how to better account for the funds.

“We are committed to transparency so Angelenos will have a clear picture and understanding of how much is being spent in one year and what funding is supporting programs over multiple years,” Bass said. “It’s important that we strategically spend funding over multiple years to ensure we can sustain progress despite state and federal changes.”

A spokesperson for her office told The LA Local that Bass has been committed to identifying ways the city can better address homelessness and supported the controller’s recommendations. But stopped short of providing concrete steps for what will be done next.

“She’s been cutting red tape in City Hall from day one and will back any serious proposal to ensure every dollar the City spends is clear, accountable, and effective,” the mayor’s press office wrote by email.

The L.A. controller’s analysis, released Monday, found that the largest share of unspent money came from a state housing grant. More than $223 million in Homeless Housing, Assistance and Prevention (HHAP) grants, which are issued by the California’s Department of Housing & Community Development, have yet to be used. 

A spokesperson for the state’s housing department told The LA Local that the HHAP grants are provided in multiyear rounds providing two-year windows for when they need to be used. That flexibility is part of what accounts for the delayed spending.

The second-largest amount was a little more than $99 million of unspent funds from Measure ULA, the city’s so-called “mansion tax” on property sales above $5 million. Those funds can also be retained and spent at a later date.

2025 was the second year in a row that the controller found a pattern of underspending homelessness funds. About $513 million went unspent in 2024, of the approximately $1.3 billion in funds set aside. This spending is particularly difficult to track because it comes from an array of sources and is distributed across a variety of agencies.

Mejia explained to The LA Local that tracking this spending was one of his priorities when he took office. His team created accounting codes, which hadn’t been done before, to better account for the money in various departments over several budget cycles.

“Once we started tracking homelessness spending, we were able to find out that the city wasn’t actually spending anything close to what it was budgeting for homelessness – for two years in a row,” Mejia said.

Councilmember Nithya Raman, who represents District 4 and is running for mayor, said the budget included money set aside for a homelessness oversight bureau she helped create, but has not yet been staffed.

“Nearly a year later, not one staff member has been hired,” Raman said in statement attached to Mejia’s report. “Unless we are able to move with greater urgency to provide accountability to the public, Angelenos will lose faith that the city is spending these desperately needed dollars well.”