The Trump administration has suspended the Los Angeles Homeless Services Authority (LAHSA) from receiving federal funds, citing chronic financial mismanagement and weak conflict-of-interest safeguards. The suspension, announced Thursday, comes amid a sweeping investigation by the U.S.
Department of Housing and Urban Development's (HUD) inspector general. Federal dollars account for about 7% of LAHSA's annual budget, primarily used for permanent housing subsidies through HUD's Continuum of Care program.
The agency warns that thousands of formerly homeless residents could be pushed back onto the streets if funding is not restored. In a letter, Deputy HUD Secretary Andrew Hughes stated, "HUD cannot ignore LAHSA’s wanton mismanagement of public funds.
Diverting dollars from worthy programs to LAHSA merely makes the homeless crisis worse." LAHSA responded by saying the action "could put thousands of formerly homeless people back on the street" and that it has "corrected or is in the process of correcting nearly all of the issues raised." The agency is exploring all available options to keep federal dollars flowing. Local officials have vowed to fight the suspension.
Los Angeles County Supervisor Kathryn Barger, the sole Republican on the board, called the decision "deeply concerning" but acknowledged it is "consistent with longstanding issues" at LAHSA. Last year, Barger voted to pull over $300 million from LAHSA to form a new county homelessness agency.
Los Angeles City Council President Marqueece Harris-Dawson promised a strong pushback, stating, "Last year, Trump came after immigrants in our city, and now he is trying to come after our unhoused neighbors. Like last year, we won’t back down." Elizabeth Mitchell, an attorney with the LA Alliance for Human Rights, which has sued the city and county over homelessness, welcomed the federal recognition that "the status quo is unacceptable." The LA Alliance previously tried to put the city's homelessness system into receivership.
The suspension could have severe consequences for the region's homeless population, which has seen a reduction in recent years. LAHSA noted that Los Angeles has outperformed the nation in reducing homelessness over the last two years.
The investigation will determine whether funding is restored or LAHSA is permanently barred from receiving federal money.