Will city of LA exit troubled homeless agency? Here’s where things stand

This week, Los Angeles' embattled homelessness agency made a major shift when it decided to no longer conduct the region's annual homeless count and give up management of over $200 million in annual federal funds aimed at addressing homelessness starting next month.

The day after the shift, federal prosecutors announced new fraud and bribery charges over homelessness funds that flowed through the agency. They allege a nonprofit founder siphoned $1 million in taxpayer funds into a high-end nightclub and a nearly $50,000 trip to Tahiti, among other claims. The founder's attorney has not responded to requests for comment.

It’s the latest fallout around the L.A. Homeless Services Authority, known as LAHSA, which for years has seen outside audits and reviews find that it’s failed to adequately oversee taxpayer spending.

In response to one of those audits, L.A. County decided a year and a half ago to pull its roughly $300 million per year from LAHSA — moving it into a newly created county homelessness department.

Until this year, LAHSA was funded by three main sources: the county, the city and the federal government.

With LAHSA’s decision this week to bow out of federal funding, the city of L.A. is now left as its last remaining major funder.

The L.A City Council has debated withdrawing funds for years, but is still in the process of hiring a consultant to come up with a plan.

L.A. Mayor Karen Bass and her mayoral challenger, Councilmember Nithya Raman, both say they want the city to pull its funds and manage them directly. In recent weeks on the campaign trail, Raman has promised an exit within her first year as mayor if elected, while Bass this week said it would take “a couple of years.”

L.A. Mayor Karen Bass speaks at a press conference before LAHSA's annual homeless count on Tuesday, Feb. 18, 2025, in Los Angeles.

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Carlin Stiehl

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LAist

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In June and July, Bass’ office said she took steps toward exiting LAHSA, saying she directed city housing staff to come up with a plan for the city to leave the agency. Those staff told LAist they’re not aware of any such directive, and Bass’ office has not responded to follow-up questions.

No decisions yet from city

Three years ago, as the L.A. City Council’s homelessness committee was expressing frustration at years of inaccurate and incomplete performance data from LAHSA, a council member said the council had failed to examine alternatives that could take over management of the funding from the agency.

“ We have to have something in place. And I think what we failed as council is to start talking [through] the questions about what that would mean,” Councilmember John Lee said at the time.

“ We need to make sure that we take a look at those options. Otherwise, every year, we're going to be coming here … having the same exact conversations.”

The next year, county auditors found that LAHSA had failed to properly track and oversee the money it managed.

The City Council then voted in March 2025 to study letting the city contract directly with homeless service providers, bypassing LAHSA.

It was about a year before council members discussed next steps at a meeting.

This April, the council's Housing and Homelessness Committee — chaired at the time by Raman — recommended shifting city-funded programs away from LAHSA over the course of the current fiscal year. They recommended a July 1 deadline for a plan to be provided. That date came and went without the full council directing that a plan be created.

City Councilmember Nithya Raman speaks ahead of the annual homeless count on Jan. 20, 2026.

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Jordan Rynning

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LAist

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The full council approved money for a consultant on Aug. 4, when it voted to allocate $450,000 to "rapidly hire" outside experts to study a transition plan.

That consultant hasn’t been hired yet. A competitive bidding process is underway, according to City Administrative Officer Matt Szabo.

"We are required to solicit bids for that work and are currently in the procurement process," Szablo said via email.

Mounting federal and legal pressure

The city's deliberations are unfolding against escalating scrutiny of LAHSA itself.

In June, the Trump administration suspended the agency from federal homelessness dollars, citing what it called a pattern of fraud, failure and flagrant mismanagement. Administration officials at the U.S. Department of Housing and Urban Development, or HUD, pointed in part to the case of Abundant Blessings, a nonprofit whose director, Alex Soofer, was criminally charged in January with siphoning at least $10 million in homelessness funds that flowed through LAHSA.

An LAist investigation found LAHSA had approved at least $3.5 million in contracts to Soofer's nonprofit even after its own compliance team flagged the group as high-risk for failing to do its job. Soofer recently agreed to plead guilty to diverting $2 million and previously repaid LAHSA $1.25 million.

LAHSA sued to block the federal suspension of homelessness dollars, arguing HUD's evidence was thin and its process abrupt. In an August ruling, U.S. District Judge David Carter paused the suspension pending further hearings, writing that LAHSA "may be dysfunctional" but that federal officials had "abruptly" pulled funding from providers serving thousands of people.

This week, LAHSA gave up trying to continue its federal responsibilities, just before prosecutors announced the new charges against LAHSA vendors.

LAist reporter Aaron Schrank contributed reporting to this story.