Nearly half of LA's record homelessness budget went unspent, city controller finds

LOS ANGELES — Nearly half of Los Angeles Mayor Karen Bass' record $1.3-billion homelessness budget for fiscal 2023-24 went unspent, an analysis by the city controller found.

Controller Kenneth Mejia found that only $599 million had actually been spent. An additional $195 million was encumbered, leaving at least $513 million unspent.

Mejia blamed "a sluggish, inefficient approach" for the underspending, listing lack of staff and resources, programs spread over multiple city departments and council offices, obsolete technology and absence of real-time data as contributing factors.

According to Mejia, the city spent or encumbered only about 30% of its $262 million in grants from the state Homeless Housing, Assistance and Prevention Program and 58% of its $267-million budget for Bass' Inside Safe encampment reduction program.

The encumbered amount will probably, but not necessarily, be spent eventually.

The city also spent or encumbered less than half of the $150 million it received from Measure ULA, the so-called "mansion tax" on real estate sales of $5.15 million or more, and also failed to spend $30 million from other federal, state and local grants and $16 million for substance use disorder treatment beds.

The City Administrative Office questioned some of Mejia's findings. It said $100 million of the "unspent" Homeless Housing, Assistance and Prevention funds included multiyear grants not intended to be spent in one budget year.

The analysis of the unspent Inside Safe funds did not account for more than $42 million used to expedite purchase of the Mayfair Hotel to get people off the street and later reimbursed to Inside Safe.

A spokesman for Bass issued a statement defending her record on spending.

"While the Controller is saying there's too much money being spent one day, and not enough being spent the next, Mayor Bass has been executing a prudent and comprehensive strategy that brought down homelessness overall for the first time in years and reduced street homelessness by 10%," Deputy Mayor of Communications Zach Seidl said.

"Even before taking office, she warned that the city's antiquated systems would get in the way, but while others ponder reports about the decades-long problems, she has been leading the charge to fix the issues head on."

Mejia acknowledged that overall homelessness declined by 2% in 2024 but said the city had lost an opportunity to do more.

"Imagine how much bigger the drop would have been had the city utilized the full potential of its homelessness budget," he said.

The report indicates the city moderately overspent on several categories, including a family source center expansion, short-term housing assistance and a fast response vehicle.