More than 250 tax-funded LA apartments sit empty under key Mayor Bass homelessness strategy

L.A. taxpayers have been paying for more than 250 empty apartments as part of an initiative Mayor Karen Bass introduced years ago to make housing readily available to unhoused people, according to official data reviewed by LAist. That’s just over a third of the units in the strategy, known as master leasing, the data show.

The vacancies have been tying up tax dollars that could house hundreds of people in other approaches, according to official financial data.

Under master leasing, a local agency uses tax dollars to rent entire apartment buildings, then subleases individual units to unhoused people whose rent is paid with tax-funded subsidies and grants. But local policies have restricted who can move in, leaving units vacant despite taxpayers continuing to pay for them.

Some level of vacancies are expected in long-term housing programs for unhoused people, due in part to repairs and an often-lengthy paperwork process to move in. But at one-third of units, the vacancy rate for L.A.’s master leasing program is far higher than in other programs. It’s nearly four times as high as the 9% vacancy rate for San Francisco’s long-term housing for unhoused people.

“It is unfortunate that LAHSA couldn't get this to work,” Bass spokesperson Ilanna Morales said in a statement. She added that it’s “now critical” that an upcoming transition to the county of services at the sites “is focused on preventing people from returning to the street.”

Bass appoints half of LAHSA’s governing commission, which she has served on since appointing herself to it in October 2023. She is the only elected official on the commission.

In a statement, L.A. County Supervisor Lindsey Horvath called the situation a “moral failure.”

“Apartments sitting empty and taxpayer dollars wasted while nearly 70,000 people live without safe shelter is financially reckless and a moral failure,” said Horvath, who led the charge a year ago to have the county pull its funds from LAHSA over accountability concerns. “This is exactly why Los Angeles County is leaving LAHSA. Angelenos are begging for accountability, transparency, and financial oversight, and the County is delivering that.”

LAist’s review of official records and questions to officials found:

• For over a year, the L.A. Homeless Services Authority (LAHSA) has been master leasing 14 buildings with a total of 758 housing units, according to a presentation prepared by LAHSA management. 
• Nearly a third of those units — 226 altogether — did not have anyone living in them as of April, according to the presentation. Taxpayers pay for all units regardless of how many are vacant.
• Vacancies increased by mid-May to 259 units — just over a third of the total — according to figures from the agency.

LAHSA officials said the high vacancy rate is due to local policies restricting master leased apartments to people who have taxpayer-funded subsidies, which have been cut back by the state. A new person only goes in if they have a taxpayer-funded housing subsidy and choose to move there, they said, and one of the most successful subsidy programs was paused a year ago due to the state cuts.

“Master-leased units will only see new occupants if the new [subsidy] holders wish to move into a master-leased unit,” said a statement provided by Ahmad Chapman, a spokesperson for LAHSA Interim CEO Gita O’Neill’s administration.

LAHSA pays an average of about $3,400 monthly for each master leased, single-person apartment — about half of which is for rent — according to figures in the presentation. At that rate, the vacant units would be costing taxpayers about $880,000 a month in homelessness funds, or $10.6 million a year.

Each of the 14 master leases is for five-year terms, with very limited options for LAHSA to terminate early. All but one of the properties is in the city of L.A., mostly in south L.A. and near downtown.

In the meantime, an agency report shows officials are using taxpayer funds to pay for vacant units — funds that could otherwise be housing hundreds of people. LAHSA has to pay for the leases, security and other costs regardless of how many units are occupied.

At the county’s direction, LAHSA now plans to issue termination notices for seven of the master leases, according to a LAHSA statement. “The notices will be issued prior to June 30 and take effect at various times throughout the upcoming fiscal year, depending on the specific agreement,” the statement added.

The five-year lease deals give LAHSA only narrow options to cancel early:

• They can cancel at the three-year mark
• If LAHSA’s funding is terminated, the agency has five days to notify the building owner that it’s ending the lease at a date at least six months out. In that case, LAHSA pays an early termination penalty equivalent to three months of rent
• If the building owner is in breach of the lease, such as failing to fix hazardous conditions after being given an opportunity to fix them.

Master leasing background

When she took office more than three years ago — after winning an election driven by voters wanting homelessness addressed — Bass announced master leasing as a key focus of her promise to quickly make housing available for unhoused people.

“The only way to make this work is to have housing solutions lined up and ready to go,” Bass said when announcing the master leasing strategy in late 2022. “They must be immediately available."

Auditors recently found that LAHSA had committed itself to more than $70 million in total payments over the coming years on “non-cancelable” leases. Master leases have been "primarily" responsible for the increase in LAHSA’s lease liabilities, auditors wrote.

Justin Szlasa, a LAHSA commissioner appointed by county Supervisor Kathryn Barger, raised questions about the master lease strategy last summer, a few months into his time on the commission.

“I was concerned because there was not a lot of transparency around the economics,” Szlasa told LAist in an interview. “My concern was that we’re getting ourselves into long term liabilities without funding sources to be able to cover that."

Szlasa said his questions started after he visited a master leasing site and heard that residents with disabilities had to be carried up and down stairs because the elevators were broken in the relatively new building. He said it wasn’t clear who had responsibility for fixing problems.

“I have questions about, what are we getting for that [spending], and how much is it costing us, and do we have the funds to operate them?” Szlasa said.

“When I hear that we are 30% vacant,” he added, “it is very troubling.”

Officials at the county’s new homelessness department have been working to take over responsibility of services at master leased sites from LAHSA, as the county prepares to take over county homelessness spending from LAHSA starting July 1. The leases themselves will continue to be held by LAHSA, with the new department overseeing services for people housed there, according to the county.

“If any lease is changed or terminated, the County will provide support to all tenants so they can remain in their units where possible or transition to other housing options if needed,” said a statement from the county Department of Homeless Services and Housing, which is led by Sarah Mahin.

Councilmember Nithya Raman, who chairs the L.A. City Council’s homelessness committee and made the runoff against Bass for this year’s mayoral election, has been in a key financial oversight position over city homelessness spending for years.

In a statement, she said master leasing is a “compelling option,” but that the problems LAist flagged about its management “are serious.”

“Vacant units representing underutilized public dollars, long-term lease obligations entered into despite declining revenues — these are not acceptable outcomes,” Raman said.

Raman said she’s been working to strengthen city oversight of homelessness dollars through a new city Bureau of Homelessness Oversight. More than a year after the City Council created and funded the bureau, three of its 10 positions have been filled, according to a city spokesperson. The city has a notoriously long hiring process.

The new bureau’s staff are focusing on ensuring that contracts for the upcoming fiscal year are in place, as well as processing invoices for this fiscal year, said Sharon Sandow, a spokesperson for the L.A. Housing Department, which oversees the bureau. The staff also are responding to matters that come up at the City Council’s housing and homelessness committee, Sandow said.

LAHSA transparency issues

The information about the master leasing vacancies was in presentation slides originally attached to the public meeting agenda for the April 17 meeting of LAHSA’s finance committee.

The presentation was canceled and its contents deleted from the public agenda after LAist asked LAHSA’s management about the program. They later confirmed the information was accurate.

The April 2026 presentation would have been the first time LAHSA staff would have notified the commission of the many vacant units in master leasing, according to LAHSA.

LAHSA’s city- and taxpayer-funded contracts, including the master leases, are not posted online or included in the online searchable database of city contracts. That’s because it’s officially a separate agency from the city, even though it's partly funded by the city and has taken direction from the mayor’s office on who to issue contracts to.

Szlasa, the LAHSA commissioner, said there should be transparent tracking of what’s been happening with the money and what taxpayers are getting for it.

“I think we need to have a full, detailed financial accounting and performance accounting, that’s laid clear to the commission, on our master lease program. And frankly that’s what I called for [for] several months,” Szlasa said. “It still hasn’t been provided."

What’s next?

Starting July 1, day-to-day operations at all master-leased properties will transition to the county’s new Department of Homeless Services & Housing (HSH).

The department “has been coordinating closely” to “ensure this transition is as smooth as possible,” said a statement from the department.

As for the seven properties where the leases are being canceled, the residents' leases “will automatically shift to being directly with the property owner” and resident will be able to stay in their units.

“In some cases, HSH is seeking alternate arrangements with owners to allow for more of an onsite presence from providers and other support for residents,” the statement said. “The buildings will continue to receive supportive services from HSH-funded providers as well as their rental subsidies, which come from a variety of sources.”