Waste, Fraud, & Mismanagement

Los Angeles Spends $600,000 Per Unit on Homeless Housing

Aerial View of Residential Rooftops Los Angeles

Funds from a voter-approved $1.2 billion bond to address homelessness in Los Angeles are not stretching as far as expected, as the average cost of housing projects in construction was $600,000 per unit in 2021 – and 14 percent of units in construction cost more than $700,000 per unit – Los Angeles City Controller Ron Galperin reported February 23.

“If nothing changes, … costs could soon reach $900,000 or $1 million per unit,” Galperin predicted. The per-unit cost was $530,000 in 2020.

One project in pre-development is estimated to cost $837,000 per unit, nearly $100,000 per unit more than the most expensive project in 2020.

The bond, Measure HHH, was approved in November 2016. The measure authorized the city to issue up to $1.2 billion in general obligation bonds to acquire or build up to 10,000 units of supportive/affordable housing and facilities such as interim shelters, restrooms, showers, storage, and service centers.

“Since HHH passed more than five years ago, homelessness has jumped by at least 45 percent in Los Angeles and thousands of people have died on the streets, including an average of five per day in the pandemic’s early months,” the city controller’s report stated.

“Although Los Angeles has made some progress with Proposition HHH, it hasn’t been enough,” Galperin said. “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.”

The projects are taking three to six years to complete. At the current pace, 54 percent of the projected units will not open for another two to four years. The bond is expected to fund 8,091 housing units across 125 projects. As of this week, 1,142 units (14 percent) are ready for occupancy, 4,347 units (54 percent) are in construction, and 2,602 units (32 percent) are in pre-development.