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Garcetti Wants $1 Billion In Homelessness Spending. A Federal Judge May Have Other Plans

Tarps cover homeless peoples' tents on Skid Row on a cloudy day in Los Angeles. In the foreground, a woman pushes a shopping cart full of her belongings.
A woman pushes her belongings past a row of tents on the streets of Los Angeles on February 1, 2021. U.S. District Judge David Carter likened the situation to "a significant natural disaster in Southern California with no end in sight."
(FREDERIC J. BROWN AFP via Getty Images
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On Tuesday, L.A. Mayor Eric Garcetti introduced an $11.2 billion spending plan for the next fiscal year, “more aggressive and progressive than any other I’ve proposed as mayor,” he claimed in a letter accompanying the document.

Shortly after its release, however, a federal judge’s order threatened to upend the most ambitious part of Garcetti’s proposal: close to $1 billion in funding to combat homelessness.

Despite the legal drama, Garcetti is projecting a drastically sunnier outlook compared to last year’s budget release, which he dubbed “a document of our pain.” In 2020, the COVID-19 pandemic ravaged tax revenues, and the city faced a revenue shortfall of hundreds of millions of dollars.

Throughout a tumultuous 12 months, L.A. furloughed personnel, scraped the bottom of the barrel of reserves and the rainy day fund, and — for the first time in its history — borrowed money just to cover daily expenses. The scrimping and saving meant cuts in almost every city department, and renegotiating labor contracts to delay planned raises for police, firefighters and civilian workers.

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Now, Garcetti and other local government leaders are breathing a sigh of relief due to the federal stimulus bill signed by President Biden last month. The City of L.A. is in line to receive $1.35 billion — allowing the Mayor to restore pandemic-era cuts to most city departments. He’s also set a goal of using $696 million to refill the depleted rainy day funds that city leaders were forced to almost completely drain during the height of the pandemic.

And Garcetti is eyeing ways to squeeze the most out of the rest of that funding, including:

  • Helping an estimated 100,000 families with emergency rental assistance
  • $25 million, primarily grants, for restaurants and small businesses hurt by the COVID-19 pandemic
  • Upping the city’s investment in the Gang Reduction and Youth Development program (GRYD), that contracts with community intervention workers to try to break cycles of violence in neighborhoods

The LAPD’s operating budget comes in at $1.76 billion for the upcoming fiscal year under the Mayor’s plan. City budget analysts argue that’s a 5% reduction year-over-year, compared to the 2020-21 adopted budget. But a lot has happened over the past twelve months: hundreds of thousands of people took to the streets to protest police killings of Blacks and Latinos. Under pressure to act, Garcetti and the city council cut $150 million from the police budget.

If you consider the post-George Floyd funding level as the baseline, the Mayor’s new budget plans a $41.9 million increase for LAPD in the fiscal year beginning July 1.

Garcetti is also taking his biggest swing yet at a problem that has plagued local and state leaders for years: he plans to boost spending on homelessness prevention and services — by a lot.

The Crisis On Our Streets

The proposed budget includes $791 million new FY 2021-22 spending drawn from the general fund, state money, the voter-approved bond measure HHH and the American Rescue Plan federal relief package. Add to that $164 million in federal and state funding rolled over from the current fiscal year, along with some unexpected savings from the cost of Project Homekey properties for a total of $955 million.

“We are showing that investment does work,” said Matt Szabo, Deputy Chief of Staff to Mayor Garcetti, in a media briefing. “This is an extraordinary crisis and it requires extraordinary investment.”

L.A. Mayor Eric Garcetti stands at a podium with the city's seal. He's speaking at the Griffith Observatory, and a view of Los Angeles stretches out behind him. Over his right shoulder, a sign language interpreter performs the speech for the hearing impaired.
L.A. Mayor Eric Garcetti delivers his 2021 State of the City speech at Griffith Observatory on April 19, 2021.
(Screengrab from the Mayor's Facebook page.)

The biggest line item in the homelessness budget is the construction or development of 5,600 Proposition HHH units, twice as many as the current year. Funded with bond money city voters approved in 2016, the cost-per-unit and timelines for HHH apartments have soared in recent years. Only 489 have been completed to date.

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More controversially, the Mayor’s proposal significantly expands the CARE+ cleaning programs, which some homeless advocates call “sweeps” and blame for disrupting the lives of tent dwellers, causing belongings to be lost and traumatizing homeless Angelenos. City staff reject the term “sweeps,” arguing the cleaning operations are vital for public health -- and the CARE+ teams bring services such as showers, housing resources, COVID-19 testing and vaccinations.

If approved by the City Council, Garcetti’s budget for the next fiscal year would add nine CARE+ teams for a total of 22 citywide.

“Adequate Housing” For Skid Row Residents

All of this was thrown into question Tuesday afternoon, however, when U.S. District Judge David O. Carter issued a preliminary injunction ordering Los Angeles city and county to offer “adequate housing” to all residents of Skid Row by Oct. 18. The order stipulates that offer must come sooner, within 90 days, for women and children.

The Judge is overseeing a lawsuit filed in March 2020 by downtown business owners who want the city and county of Los Angeles to do more to get homeless Angelenos off the street.

The firebrand judge is ordering an audit of all sources of homelessness funding in Los Angeles, as well as an investigation into developers who receive HHH money — and Carter wants to put a hold on Garcetti’s spending plan.

“Pursuant to the Mayor’s announcement of a ‘justice budget’... the Court ORDERS that $1 billion, as represented by Mayor Garcetti, will be placed in escrow forthwith, with funding streams accounted for and reported to the Court within 7 days,” Carter writes in the injunction.

“I would say stay out of our way... Roadblocks masquerading as progress are the last things we need."
— L.A. Mayor Eric Garcetti responding to Judge David Carter's April 20 order

It’s unclear what this legal development means for the future of Garcetti’s homelessness and housing agenda, but during a press briefing Tuesday afternoon, the mayor implored: “I would say stay out of our way.” He added the caveat that he hadn’t read Carter’s order yet. “Roadblocks masquerading as progress are the last things we need … I don’t want to wait one day extra.”

The plaintiff in the lawsuit, a group called the L.A. Alliance For Human Rights, has previously asked for $300 million in HHH dollars, meant to build permanent supportive housing, to be diverted to temporary shelters to more quickly get people off the street.

At a February hearing on Skid Row, Shayla Myers — an attorney with the Legal Aid Foundation of Los Angeles — blasted the idea, saying temporary shelters strand homeless people in limbo with no path to stable housing, "moving the structural and racial inequalities that have created our housing crisis into the shadows."

During his Tuesday briefing, Garcetti added that he doesn’t believe voter-approved HHH dollars can be diverted or blocked: “I’m happy to help inform, whether it’s ... Judge Carter or anybody else, what we can legally and not legally do.”