The decision made by the federal government to terminate the funding of LAHSA goes beyond being another political statement and is actually the logical conclusion of a failed system since its inception. Being a witness of how homelessness programs within the public sector have been managed, the situation is long overdue, not to mention the learning lessons that can be extracted.
The Secretary of Housing and Urban Development, Scott Turner, announced the suspension of the operations of LAHSA, which serves as the coordination body of the efforts made to deal with homelessness in Los Angeles. This announcement was followed after HUD initiated a formal investigation through the office of Inspector General.
The Numbers Don’t Lie — They Indict
What the numbers show when you dig beneath the surface is that the Los Angeles Continuum of Care, run by LAHSA, has received nearly $1 billion from taxpayer dollars over the past five years, which is the largest amount of federal money allocated to addressing homelessness anywhere in the United States. Yet despite all that investment, Los Angeles is still the hotspot for the homeless crisis in America. This disparity isn’t due to lack of funding. It is purely a governance issue.
And the magnitude of the dysfunction is alarming. According to a November 2024 audit carried out by the LA City Controller Kenneth Mejia, LAHSA did not allocate almost $513 million budgeted to it in the same fiscal year for tackling homelessness. Half a billion dollars unspent, while homeless individuals sleep on the streets!
A Pattern of Fraud, Not a One-Off Mistake
The accusations made against LAHSA by HUD do not consist of some bureaucratic minutiae. On the contrary, the problems identified point to a systemic and systematic breakdown of organizational control and accountability. Thus, in August 2023, LAHSA was unable to prove whether any funds were spent on maintaining empty hotel rooms since the agency lacked information on whether people vacated transitional motel housing. This is not just a lapse in paperwork but also a violation of internal controls that requires immediate response measures.
Another example of LAHSA’s ineffectiveness is associated with the inability of the agency to produce verification documents on nearly 2,300 housing sites under its management during a 2025 audit. This is a classic case of inadequate accountability, which is unacceptable for any organization working with public money.
Finally, an interesting situation related to organizational leadership deserves mentioning in this context. Indeed, the former LAHSA CEO, Va Lecia Adams Kellum, resigned from the position after the discovery of a $2.1 million contract signed between her husband’s organization and LAHSA.
The Institutional Verdict Was Already In
However, by the time of the federal action, the writing had been on the wall for months. LAHSA had failed to the point where Los Angeles County itself was prepared to stop providing financial support, transferring millions of dollars worth of funding into a newly-formed county department. Indeed, the decision to suspend funding is essentially the final institutional judgment against an organization that has lost credibility at all governmental levels above it.
The LA City Council has started considering the option of bypassing LAHSA entirely in favor of direct contracts with service providers – a necessary move that perhaps ought to have been undertaken some years ago.
The reality is that there are very real human concerns involved. Representatives of LAHSA expressed their concern that suspension would lead to many formerly housed people returning to homelessness. Such an outcome should not be dismissed out of hand. However, the solution is not in the continued funding of an organization incapable of managing funds properly.
The lesson here is that money alone, without adequate metrics for accountability, independent audit and effective enforcement mechanisms, cannot and does not constitute compassion, but merely negligent expenditure. There is not a funding problem in Los Angeles.
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