Source: LA Times —
Nearly $150 million worth of federal grants to the three main housing agencies working to reduce homelessness in Greater Los Angeles went unspent between 2015 and 2020, as the number of unhoused people soared.
Instead of being used to address L.A.’s acute homelessness crisis, the money was returned to the U.S. Department of Housing and Urban Development, according to data provided to The Times by the Los Angeles Homeless Services Authority. More than 85% of the returned funds were earmarked for sorely needed permanent supportive housing.
LAHSA returned more than $29 million to HUD during the six-year period; the Housing Authority of the City of Los Angeles returned more than $82 million; and the Los Angeles County Development Authority returned nearly $38 million.
Asked why so much federal money went unspent, LAHSA spokesman Ahmad Chapman said in an email that, while the data are “imperfect,” his agency operates “in a climate where the rental market is so hard to access, it makes it very challenging to use all these resources.”
But the amount given back to HUD by the three agencies over the six years is more than the total amount of grants the federal housing agency awarded them in 2020, $133.1 million.
“Given the need in L.A., we want every single dollar utilized,” said Molly Rysman, LAHSA’s chief programs officer.
That’s not a realistic short-term goal given HUD’s “rigid” and “complex” funding system, which can make it difficult to spend funds quickly or reallocate money that can’t be used for its initial purpose, Rysman said. Instead, some of those federal dollars go unspent.
“We’ve said this to HUD over and over again,” she said. “We need a lot more flexibility.”
In emailed statements, the county and city housing authorities blamed their underspending on a range of issues. The county housing authority cited insufficient workable housing units and client referrals, poor credit and rental histories among the homeless population, and program attrition.
The city housing authority pointed to landlords’ unwillingness to rent to homeless people, the city’s tight rental market, and high unit turnover rates. It also blamed shortfalls by “program partners” in key areas including referrals, housing search assistance and case management.
A HUD spokesperson said in a statement that “[t]here are many reasons that HUD may recapture” funds. “In some cases, new projects take time to start up, and are not fully operational in time to expend their initial grants. Recipients may also have challenges finding housing units.”
The amount of money L.A. County’s continuum of care program returns to HUD annually has fallen from $30.2 million for grants that expired in 2019 to $21.1 million for grants that expired in 2021, according to a July LAHSA memo. The program is led by LAHSA and coordinates housing funds for homeless people.
The memo described the recent decrease in unused HUD money as a “positive trend resulting from the sustained partnership and collaborative efforts aimed at improving the use of” the funds.
But affordable-housing developers decry the return of any funds, blaming red tape and government inefficiency for their underuse. Many say they could immediately use some of that money to house Angelenos in desperate need of assistance.
Deborah La Franchi is founder and chief executive of SDS Capital Group, which finances permanent supportive housing projects across Greater L.A. She said she was dismayed to learn that millions of federal dollars for permanent supportive housing are being returned each year by LAHSA and the city and county housing authorities.
“When Angelenos see funding reverting back to Washington, D.C., for homelessness when we have a homelessness crisis in our backyard, it creates a lack of confidence that the right solutions are in place,” she said.
