Local News

Controller critical of how city spends homeless funds

LOS ANGELES — City Controller Ron Galperin is calling on the City Council to speed up the process of building permanent supportive housing for the homeless and to find ways of decreasing costs, noting that some units being planned cost more than an L.A. condominium.

Galperin released a report titled “The High Cost of Homeless Housing,” examining the city’s spending of $1.2 billion funded through voter-approved Proposition HHH to build 10,000 housing units for the homeless, concluding that construction costs are too high and the project timelines are too long.

“Tens of thousands of people are sleeping on our streets, in our parks and on our sidewalks each night,” Galperin said. “Providing housing and shelter is a proven way to solve homelessness, but three years after voters approved a $1.2 billion bond for that very purpose, not even a fraction of the housing required exists. A course correction is needed so that the city can maximize HHH dollars and create more units quickly and cost-effectively.”

The city controller’s report stated that as the city’s homelessness has increased to more than 36,000 people, just 5,873 supportive-housing units and 1,767 low-income units have been approved three years after the voters approved the funding.

The units are slated to be constructed at a median cost of $531,000 per unit, the report stated, noting that the cost of building some units “approaches — and in many cases, exceeds — the median sale price of a condominium in the city of Los Angeles and a single-family home in Los Angeles County.”

The report states that nine projects are under construction but no HHH-funded units are open.

According to the report, an “unusually high” 35% to 40% of costs come from development fees, consultants, financing and other “soft-costs,” compared to the 11% for the cost of acquiring the land.

“Expenses will continue to rise as projects are taking anywhere from three to six years to complete, despite the city’s urgent need to house Angelenos experiencing homelessness,” Galperin said. “While city policymakers recently set aside one-10th of the bond proceeds for more innovative projects in an attempt to cut costs and shorten timelines, the city should revisit other HHH projects to see if they can be done cheaper and faster as well.”

City Councilmen Mitch O’Farrell and Gilbert Cedillo, the respective chairs of the Homeless and Poverty Committee, and the Housing Committee, could not be immediately reached for comment.

Galperin said the city should focus on new ways to save time and money on the projects, including reducing costs on projects that have been approved or conditionally approved, and direct more resources toward temporary shelters, hygiene centers and other service facilities to address people’s needs.

“Three years after voters approved a $1.2 billion bond for that very purpose, not even a fraction of the housing required exists.”

— City Controller Ron Galperin

From City News Service