Los Angeles, CA – A recent City Hall report has exposed significant concerns over the city's spending on homelessness programs, revealing that taxpayers footed a bill of $417.8 million in the last fiscal year, with much of the funding directed toward temporary measures rather than permanent solutions. Delivered on Tuesday, the analysis from the City Administrative Officer – the chief financial watchdog for the mayor and City Council – highlights how only about 10% of the budget is allocated to efforts that successfully move individuals into permanent housing. As the city faces budget shortfalls forcing cuts of 10 to 15 percent in these programs, critics argue the system is sustaining homelessness rather than resolving it.
The report comes at a critical time for Los Angeles, where the homeless population has hovered around 75,000 for years despite increased funding. According to the document, the bulk of the $417.8 million went to initiatives like hygiene stations, mobile showers, and laundry services, totaling $3 million last year. Another $4.3 million supported Operation Healthy Streets in the Skid Row area, which focuses on cleaning sidewalks and providing medical services and hygiene products to those living on the streets.
Councilwoman Monica Rodriguez, who represents parts of the San Fernando Valley and has been a vocal critic of the city's approach, did not mince words in her assessment. “We’re hemorrhaging money on a homelessness system that was never designed to succeed — and no one is being held accountable for the failure,” Rodriguez said. She emphasized the need for oversight, adding, “If we really wanted to do something about this crisis, we would be advancing real oversight, demanding results, and shutting down programs that don’t work — not protecting a system that keeps spending more while delivering less.”
Supportive services, including street medicine and moving assistance, consumed more than $13.6 million, while nearly $19 million funded navigation systems to help people transition to permanent housing. Safe Parking programs, which allow individuals to live in their vehicles under city supervision, cost $3.56 million, even though the Los Angeles Homeless Services Authority has acknowledged they yield “low outcomes.” These programs, the report suggests, provide comfort and services but often fail to address root causes, leaving participants in limbo.
The city's interim housing network stands out as the largest expenditure, swallowing $319.3 million this year. Of that, nearly $250 million covered service costs, and another $61 million was spent on leasing beds and rooms. These temporary placements enable officials to report that people are being “served,” but many remain stuck without a path to permanent residences, according to the analysis.
“We know where a big pot of money is that isn’t being used wisely — and that’s Inside Safe,” Rodriguez said. “We know the redundancies. We know the malpractice that occurred under emergency contracting. And yet there’s been zero change.”
Inside Safe, Mayor Karen Bass's flagship initiative launched as a humane alternative to encampment clearances, has drawn particular scrutiny. Promoted as a way to move people indoors quickly, the program now costs taxpayers an average of $82,421 per motel room annually – or about $226 per night – when combining lease and service expenses, the City Administrative Officer reported. This figure is more than double the citywide average for other interim housing beds, which run about $31,500 per year, largely due to high motel lease rates that the county refuses to reimburse.
The report's release was prompted by looming budget constraints, with the city needing to identify cuts up to 15% from homelessness funding. Officials project a funding gap exceeding $181 million next year, potentially growing to nearly $247 million the following year, even after initial reductions. These shortfalls stem from declining tax revenues and rising costs, forcing Los Angeles to rethink its priorities amid a homelessness crisis that has persisted for decades.
Outside official channels, John Alle, a longtime homelessness advocate who has personally funded efforts to reunite families and relocate individuals, echoed the report's findings based on his on-the-ground experience. “Services are a band-aid,” Alle said. “The numbers never go down. There are no results — and no consequences for mismanagement, because the same people who run the system get to investigate themselves.”
Alle, who has invested his own money in direct interventions, contrasted his approach with the city's model. He pointed to a lack of transparency as a major barrier, stating, “We can’t even begin to calculate the total fraud until officials open their books. These are public funds, and they’re hiding from audits and accountability.” His comments underscore broader frustrations among watchdogs who argue that without independent audits, waste and inefficiency will continue unchecked.
The Los Angeles Homeless Services Authority, which oversees many of these programs, has defended aspects of the system in past statements, noting that emergency responses like Inside Safe have housed thousands temporarily during a surge in unsheltered individuals. However, the authority's own admission of “low outcomes” in programs like Safe Parking aligns with the report's critical tone, though officials have not yet responded directly to Tuesday's findings.
Historically, Los Angeles has ramped up spending on homelessness since the 2010s, with voter-approved measures like Measure H in 2017 adding a quarter-cent sales tax to generate billions for services. Yet, despite these infusions, the homeless count from the annual point-in-time survey has fluctuated without significant decline, fueling debates over effectiveness. The current report adds to a growing chorus calling for a shift toward housing-first models that prioritize permanent placements over interim supports.
Rodriguez and other council members have pushed for reforms, including competitive bidding for contracts and performance metrics tied to outcomes. “The analysis — produced by the City Administrative Officer, the mayor and City Council’s chief financial watchdog — was ordered as Los Angeles is now being forced to slash homelessness spending by 10 to 15 percent. Not by choice, but by necessity,” the report's context notes, highlighting the urgency.
As budget deliberations unfold, the implications extend beyond Los Angeles. Similar critiques have emerged in other major cities like San Francisco and New York, where high-cost homelessness programs face scrutiny amid fiscal pressures. In Los Angeles, the report could catalyze changes, but advocates warn that cuts without strategic reallocations might exacerbate street conditions in areas like Skid Row and the San Fernando Valley.
Looking ahead, city leaders face tough choices: trim ineffective programs or risk deeper deficits. The City Administrative Officer has recommended reviewing emergency contracts from the Inside Safe rollout, which bypassed standard procedures during the pandemic. Whether these recommendations lead to accountability remains to be seen, but the report has ignited renewed debate on how to turn taxpayer dollars into lasting solutions for one of America's most visible social crises.
For residents like those in Rodriguez's district, the stakes are personal. Encampments along freeways and under bridges persist, affecting quality of life and public safety. As Alle put it, the system's self-perpetuating nature demands external intervention: “The lack of transparency makes it impossible to calculate how much taxpayer money has been misused or wasted.” With funding gaps looming, Los Angeles stands at a crossroads in its long battle against homelessness.