The Trump administration is threatening to cut off federal funding to Los Angeles' primary homelessness agency, citing extensive waste, mismanagement, and corruption. Housing and Urban Development Secretary Scott Turner stated that the "days of funding corrupt failure are over" and the administration will no longer fund what he called a "homeless industrial complex."
During a press conference Tuesday at the Los Angeles Dream Center, Turner and Health and Human Services Secretary Robert F. Kennedy Jr. detailed concerns about the Los Angeles Homeless Services Authority (LAHSA). LAHSA, which manages an annual budget of approximately $845 million, has received nearly $1 billion in federal homelessness funding over the past five years, more than any other U.S. jurisdiction. Despite this investment, homelessness in Los Angeles has surged, doubling over the past decade while federal funding nearly tripled.
Officials pointed to several instances of alleged failures, including LAHSA's inability to verify the existence of 2,300 housing units it was responsible for. A 2023 finding also revealed the agency failed to properly track motel housing expenditures, making it impossible to determine how much was spent on empty rooms. Further concerns were raised regarding federal conflict-of-interest findings involving LAHSA’s former CEO and over $2 million allocated to her husband's employer. Turner also highlighted a federal fraud case involving Abundant Blessings, a LAHSA contractor, whose executive director was charged in an alleged $23 million fraud scheme.
In addition, Turner criticized People Assisting the Homeless (PATH), a nonprofit that received $2.5 million in federal funding for a project to convert a former Ramada Inn into homeless housing. As of this week, Turner noted, the Ramada Inn remains unoccupied.
"The numbers don’t add up," Turner said. "The very organization tasked with ending homelessness and equipped with billions of dollars shamelessly wasted them on corruption and mismanagement."
As an alternative, administration officials promoted faith-based organizations like the Los Angeles Dream Center, which houses approximately 600 individuals participating in addiction recovery and other programs at an estimated cost of $7,500 per person annually. Kennedy contrasted this with an estimated annual cost of $185,000 per person for the county to move a homeless individual off the street and into housing. Turner indicated a desire to reintegrate faith-based organizations into the federal homelessness system, directing funds toward providers that offer comprehensive care including housing, addiction treatment, and mental health services. "It’s not just housing. It’s not Housing First," Turner stated. "It’s the continuation of caring for men, women, children and families."
Turner issued a stark warning to LAHSA: "They will not receive another cent of American taxpayer money until they can account for every single dollar." This statement follows HUD's suspension of LAHSA from federal grant activity in June due to allegations from an inspector general investigation, including false statements, inadequate financial controls, and conflicts of interest.
The effort to withhold federal funding has already led to a legal challenge. LAHSA has requested a block on the suspension from U.S. District Judge David O. Carter, who is expected to rule on the case in the coming days, as Los Angeles nears its next round of Continuum of Care funding. Regardless of the court's decision, the administration's stance remains firm: to shift federal dollars away from what it views as a failed system and toward organizations that demonstrate tangible results in helping individuals achieve self-sufficiency. "We’re interested, only interested, in real results," Turner said, "and that’s actually helping our fellow Americans get off the streets, out of addiction and on a path to self-sufficiency."