Secretary Scott Turner just shot a carcass. News reports on Thursday announced the U.S. Department of Housing and Urban Development (HUD) has informed the Los Angeles Homeless Services Authority (LAHSA) that it will no longer receive federal funding.
The news stories depict this as a harsh rebuke and a serious loss for the agency, and some say HUD has defunded the city’s homeless agency. Most of that framing misses what really happened, and LAHSA isn’t a city agency. The only strange thing here is that it took HUD so long to defund a failed organization.
There’s a term missing from news stories on the defunding, and it’s “joint powers agency.” LAHSA was created in 1993 as part of a lawsuit settlement, an independently managed authority that would be funded and overseen jointly by the City of Los Angeles and Los Angeles County.
It became more important in 2017 with the passage of Measure H, a countywide tax increase initiative that generated hundreds of millions of dollars a year for homeless services. Measure H was repealed and replaced in 2024 by Measure A, which turned that tax increase into a bigger tax increase. Money poured into the homeless-industrial complex, which grew to match its new revenue sources.
Flooded with new funds, LAHSA was supposed to solve the homelessness problem throughout a giant urban county. Maybe you can already spot the structural problem and the question of incentives: A big new agency with a massive income stream was supposed to end the cause of its existence.
Nine years after the first tax increase that was supposed to fund the solution to homelessness, the most recent count of the homeless in Los Angeles County puts their number somewhere around 72,000, through a confused process in which LAHSA initially guessed at a number in the high-60,000s.
Aggressively funded, LAHSA has leaked cash. As their “about LAHSA” page declares, the authority funds “more than 100 nonprofit partner agencies,” becoming a fountain of nongovernmental organization (NGO) money. Sample outcome from a Department of Justice press release: “Executive Director of South L.A.-Based Charity Arrested on Federal Complaint Alleging $23 Million Swindle of Homelessness Funds.” Those big tax increases to end homelessness ended up allegedly paying for “lavish spending in Las Vegas, private jet travel, and stays at luxury resorts across the United States – from Hawaii to Florida.”
The Federalist sent LAHSA a public records request in January that asks for the records of their decision to grant tens of millions of dollars in public funds to the person who ended up being indicted for allegedly stealing most of the money. LAHSA sends us a monthly update to tell us they still haven’t found those records. Imagine how hard they must be looking.
Leaking cash to apparent fraud and obviously not solving the problem they were funded to solve, LAHSA has become a political target, even among Democrats in Los Angeles. County Supervisor Lindsey Horvath, a noticeably dim bulb who mostly focuses on lame virtue signaling, led a successful effort to pull county homeless funding from LAHSA’s joint agency structure and move it to a new system under direct county control.
Losing county funding, LAHSA has announced major layoffs and a significant restructuring to narrow its focus. After defunding by the county, LAHSA is also watching and waiting as the Los Angeles City Council explores its options regarding the agency.
Much of this is old news. The California news website CalMatters reported more than a year ago on the implosion of LAHSA, writing that “the county is blowing up that joint agency.” This Los Angeles Times headline is also more than a year old: “Court-ordered audit finds major flaws in L.A.’s homeless services.”
So the actual event this week is that Donald Trump’s HUD leadership has withdrawn federal funding from an agency that was functionally near-dead at least a year ago, so obviously a failure that even the dumber elected officials in Los Angeles knew they needed to do something else. The question today is why it took federal officials so long to act.
The Federalist asked HUD for a full copy of its termination letter to LAHSA officials, and here it is below.
26.06.11_LAHSA Notice of Suspension_signed by The Federalist
