The Trump administration suspended the Los Angeles Homeless Services Authority from receiving federal funds on Thursday, citing repeated mismanagement of funds and a lack of oversight of conflict of interest protections.
In a letter, Department of Housing and Urban Development Deputy Secretary Andrew Hughes told LAHSA that the agency has reason to believe the administration may have violated federal law and funding will be suspended pending an investigation by the HUD inspector general.
Depending on the outcome, funding may be reinstated or LAHSA may be permanently banned.
“HUD cannot ignore LAHSA's mismanagement of public funds,” Hughes said in his letter. “Diverting dollars from appropriate programs to LAHSA only makes the problem of homelessness worse.”
Federal funding made up 7% of LAHSA's annual budget this fiscal year, mostly paying for permanent housing subsidies through HUD's program known as Continuum of Care.
In a statement, LAHSA said HUD's action “could put thousands of formerly homeless people back on the street” and “has fixed or is in the process of fixing almost all of the issues raised” by the housing agency.
LAHSA said that if HUD's inspector general “actually does a proper review” of LAHSA's current and future processes, they will clearly see how our programs now allow us to clearly track the work and investments that have led LA to perform best nationally in reducing homelessness over the past two years.
LAHSA said while the investigation is ongoing, it is looking at “all available options” to keep federal dollars.
Los Angeles County Supervisor Kathryn Barger, the only Republican on the county's five-member board, called HUD's decision “deeply concerning” but also said it is “consistent with longstanding problems” identified at LAHSA. Last year, Barger and his colleagues voted to divest more than $300 million from LAHSA and create a new regional homeless organization.
“What's most important to me is protecting the homeless people who rely on these services and the organizations that work every day to help them,” Barger said in a statement. “They should not bear the consequences of the management's failure.”
Los Angeles City Council President Marqueece Harris-Dawson has promised local politicians and non-profit organizations that they will back down.
“Last year, Trump came after immigrants in our city, and now he's trying to go after our homeless neighbors,” he said in a statement. “Like last year, we will not back down. We will stand with Mayor Bass, the County Board of Supervisors, and housing providers to fight this attack.”
Elizabeth Mitchell, an attorney for the LA Alliance for Human Rights, a nonprofit group suing the city and county over their handling of the homeless crisis, agreed that HUD's decision put LAHSA and the homeless population in a “difficult position.”
“But we welcome the government's long-overdue recognition that the situation is unacceptable,” Mitchell said. “Real accountability (not the operative words associated with our local officials) is a necessary condition for helping people on the streets.”
The LA Alliance tried, but to no avail, to persuade the judge to introduce a housing program in the city, complaining that this was making it difficult for the city's most vulnerable people.
