Los Angeles spending as much as $837,000 apiece for some housing units for homeless people

The homelessness epidemic reached new heights in Los Angeles during the COVID-19 pandemic. But according to Los Angeles Controller Ron Galperin, the city's plan to address the growing problem is too costly and too slow.

In fact, some housing units being constructed for homeless individuals are costing the city as much as $837,000 apiece, Galperin said in a new audit this week.

What are the details?

Los Angeles voters approved Proposition HHH in 2016, authorizing the city to issue up to $1.2 billion in general obligation bonds to address the growing homelessness problem in Los Angeles by partially subsidizing up to 10,000 supportive housing units.

But more than five years after Proposition HHH was approved, only 1,142 units have been completed, which Galperin described as "wholly inadequate in the context of the ongoing homelessness emergency." According to his report, Los Angeles has more than 41,000 homeless people, and the figure could be even higher since the COVID-19 pandemic has prevented the city from generating an accurate count of the homeless population.

The average construction price of the housing units, Galperin explained, rose to $596,846 last year. Meanwhile, he said that 14% of units in construction exceeded $700,000 per unit, while one project currently in pre-development will cost nearly $837,000 per unit. The increase of construction costs was partly attributed to the pandemic, which caused the price of labor construction materials to skyrocket.

At the end of 2021, Galperin said that more than 8,000 HHH-supported units were in some stage of development. His report indicated that only 14% of units were completed and ready for occupancy, while 54% were in construction and 32% were in pre-development.

"Although Los Angeles has made some progress with Proposition HHH, it hasn’t been enough," Galperin said in a statement. “The costs are too high and the pace is too slow to address the tragedy on our streets. My recommendations to improve HHH will make a difference now and should guide future homeless housing programs. If the City doesn’t learn from its mistakes, it risks repeating them. Angelenos, sheltered and unsheltered, cannot afford that to happen.”

What was the reaction?

Los Angeles Mayor Eric Garcetti responded to the audit by disputing it.

"Let's be clear: Prop. HHH is producing more units than promised, at a lower cost than expected. There are already 1,200 units online providing critical housing and services," Garcetti tweeted.

However, John Maceri — chief executive at People Concern, one of LA's biggest nonprofits fighting the homelessness crisis — agreed with the audit's findings.

"Housing has not kept pace with the urgency of the unsheltered homelessness crisis," Maceri told the Associated Press.