LA’s regional homelessness agency to reassign or lay off staff amid budget woes

Amid a 5% loss in overall funding this budget year, the top homeless services agency for the Los Angeles area announced Friday it would reassign or lay off employees within the next few months.

In a statement to LAist, the Los Angeles Homeless Services Authority said it would need to cut some of its outreach staff positions because of funding cuts from the city of L.A. for the 2025-26 fiscal year.

But the agency, known as LAHSA, also said it is hoping to avoid those layoffs by moving some employees into similar vacant positions funded by other sources.

“This is an incredibly difficult situation, and the well-being of our staff is our top priority,” said LAHSA’s acting CEO Rachel Johnson. “We are committed to exploring every possible option to retain our valued team members.”

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The agency is jointly governed by the city of L.A. and L.A. County, and it administers homeless services for the region’s estimated 72,000 unhoused residents. A plan to pull county funding from LAHSA won’t affect the agency until next year.

LAHSA reported in May that it employed 734 people and had 125 vacancies in full-time budgeted positions.

Last month, the agency approved an overall budget of about $836 million for the fiscal year that started July 1. That’s compared to about $875 million in the previous fiscal year.

LAHSA is funded through a mix of county, city, state, federal and private dollars. But nearly all of those funding sources took a dip in the current budget year, according to the agency.

The funding challenges this year reflect the broader fiscal climate, LAHSA said, with the city, county and state all facing budget shortfalls.

Layoffs or no?

It’s unclear how many LAHSA employees will eventually be laid off as a result of LAHSA’s budget challenges. The agency says it will have to make the staffing changes by Oct. 15. If outreach employees aren’t reassigned by then, layoffs will begin.

But LAHSA has put out mixed messages about its plans.

On Thursday, Johnson sent an email to LAHSA employees and others that warned layoffs were imminent.

“After an exhaustive review of our options, LAHSA leadership has determined that we will not be able to retain all current staff,” Johnson wrote in a email obtained by LAist. “As a result, LAHSA will move forward with at least one round, but possibly more, of staff reductions in the near future.”

One day later, the agency appeared to soften the message in a statement to LAist.

“As LAHSA continues its financial review, it may identify the need for further position reductions,” Friday’s LAHSA statement said. “However, LAHSA is hopeful that layoffs will be avoided by placing impacted staff into alternative roles.”

Budget problems

City funding for LAHSA is down from $306.5 million last year to $290 million this year, as the city of Los Angeles stares down a $1 billion budget deficit.

State funding for LAHSA also declined from $145.4 million last fiscal year to $88.5 million this year, with expiring or reduced grants. Meanwhile, federal LAHSA funding dropped from $72.6 million to $69 million.

In April, L.A. County leaders voted to strip about $350 million in funding from LAHSA and eventually administer those funds itself, through a new county homelessness department.

But those funds don’t shift until next July. That’s not the cause of LAHSA’s current budget problems, the agency said.

“The funding challenges for the current fiscal year are primarily a result of the broader fiscal climate, and most would have likely occurred regardless of the County’s motion,” a LAHSA spokesperson told LAist.

County funding for LAHSA appears to have increased this budget year — from $348 million to $379 million.

County transition

The plan to transition staff and funding from LAHSA to the county’s Department of Homeless Services and Housing in July 2026 is still taking shape. LAHSA is determining what these changes will mean for its staffing levels, the agency said.

County leaders said they were motivated to pull LAHSA’s funding after an audit and a federal court-ordered report found LAHSA had failed to properly track its vendors and hold them accountable for spending.

L.A. County recently began collecting a new stream of homelessness revenue known as Measure A. The sales tax, approved by voters last year, is expected to generate $1 billion a year for homelessness and affordable housing. The Measure A campaign, led by homeless service providers and nonprofits, promised voters more accountability and transparency.

The biggest part of LAHSA’s budget (84%) is passed along to the nonprofits it contracts with to provide shelter and or other services. The agency’s service-provider budget is $698 million this budget year, down from $716.8 million the previous year.

LAHSA’s budget for programs it provides directly to unhoused Angelenos, including housing and outreach, dropped by 25% this fiscal year — from $115.3 million to $86.4 million. Meanwhile, the agency’s administrative budget this year is $44.4 million, up slightly from last budget year.