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Homelessness: Sometimes You Don’t Get What You Pay For

When I worked full-time, my office was at the city’s public works corporation yard; as the name implies, it was a large facility that fulfilled myriad functions, including a 16-bay full service auto shop where skilled mechanics serviced everything from utility carts to fire engines.  The yard housed a sophisticated computerized water supply control system delivering 63 million gallons of drinking water to residents every day. Huge trucks and specialized vehicles supported crews performing duties that ranged from mowing park lawns to laying asphalt. Employees reported their time and costs into an automated management system that could tell us in near real time how much it costs to maintain everything from a park to the city jail. Far from a parking lot for city vehicles, the yard was a busy, complex operation staffed by experienced and productive employees.

By the late 1990’s the department had outgrown its facilities, some of which dated to the 1940’s. The city bid a contract for a firm to design and build a modern new facility that could handle the city’s current and future needs.  When it came time to award the bid, we recommend a firm specializing in designing and building corporate and service yards. Its bid was $50,000 more than the second-place bidder, a local firm with no design experience in municipal service facilities.  Against the staff’s recommendation, our City Council awarded the contract to the local firm, preferring to keep its investment local. Six months later, the firm moved to an adjacent city.  Worse, the design was so poorly executed, the project had to be stopped mid-construction and a new firm was brought in to properly complete the new yard. The project ended up costing nearly double its original budget because our Council wanted to save $50,000—a tiny fraction of the entire cost.  It was a hard lesson in getting—or not getting--what you pay for.

When it comes to homelessness programs, learning you don’t always get what you pay for seems to be a lesson the City and County have yet to absorb. Local government will spend about $4 billion on homelessness program in fiscal year 2023-24.  That number doesn’t include related costs like fire suppression, police calls to homeless encampments, and repairs to damaged infrastructure. Nor does it include private sector costs like extra security in stores or lost revenue when customers won’t navigate tent cities in front of businesses.  There are also the non-monetary costs of community divisiveness caused by debates about where shelters belong and the proposal for massive citywide densification.  And there is the human toll of at least six deaths per night among the homeless.

Like my city’s mistake granting its yard construction contract, there is precious little to show for the huge monetary and emotional investment in homelessness programs. Just a few examples:

  • Six hundred thousand dollars per unit (and often more) for building spartan housing units that are little more than revolving doors for the homeless.

  • Millions paid to nonprofits of questionable ability for field services, with little or no accountability for their performance.

  • Eighty-three million dollars to purchase the Mayfair Hotel, plus another $11.5 million for repairs the owners pocketed—with City approval—without making repairs, leaving taxpayers on the hook for an additional $11.5 million.

According to Mayor Bass’ office, these huge expenditures have housed more than 21,000 people in the past year, or almost half of the 46,000 homeless in the City of Los Angeles. Of course, the evidence we see with our own eyes tells us homelessness hasn’t decreased by anywhere near that, if it all. One of the reasons is that there is a constant flow of people falling into homelessness even as many lift themselves out of their  situations, (one-third self-resolve with no interventions).  The other and more pernicious reason is that the numbers quoted by public leaders are fictitious. The L.A. Times has already reported the 21,000 “sheltered” includes more than 7,000 people who left their housing units for a number of reasons, from reuniting with family to simply walking away. The City Controller’s recent report on LAHSA’s shelter utilization system concluded the agency has no idea how many people occupy shelters on any given night. The same people move in and out of shelters and housing, inflating the number of people “housed” while achieving no real progress.

As an example of how poorly the system serves the unhoused, LAist recently published an exposé on HOPICS, a non-profit that contracts with LAHSA to provide subsidized housing for formerly homeless people. In turn, HOPICS contracts with a variety of other organizations to find apartments for clients and arrange payment, using $140 million in local, state, and federal money.  The problem is HOPICS managed the process so badly, hundreds of its clients have been evicted for nonpayment.  As the money changed hands from the revenue sources to LAHSA to HOPICS to its subcontractors, miscommunication and inefficiency delayed payments, triggering evections in many HOPICS-sponsored buildings.

As usual, there are plenty of excuses but no real change.  LAHSA and HOPICS blame a shortage of qualified case workers to handle the number of applicants and tenants. Apparently, nobody thought to use any of the $140 million to hire sufficient staff to support its workload.  Like so many other agencies, no planning or long-term strategy went into its efforts—it was and is all about the funding.

HOPICS’ failure goes to the core of the entire premise of Housing First; that stable housing forms the foundation for all other services and is the key to reintegrating into society.  Turning people out of their apartments is not only wasteful and inefficient, it is a major psychological blow to HOPICS’ clients, traumatically destabilizing their lives just as they were gaining a sense of place.

HOPICS’ inability to meet its obligations is a symptom of a much larger problem throughout the entire homelessness services system; that taxpayers, public agencies, and the homeless themselves are not receiving the services $4 billion should provide. Indeed,  they are not even receiving basic services.  As described in a recent LAist article, small nonprofits and community groups are providing the unhoused with food, supplies, and services $4 billion worth of expenditures should be supplying.  As the article states, “The philosophy behind mutual aid is the idea of community supporting community, but there’s a big question: Why is this work of providing lifesaving services often left to volunteers?”  Despite all the self-congratulatory statements from the Mayor and others about impressive housing numbers, thousands of people are stranded on the streets with no outreach.  Even Bass admitted. "If I have learned anything this year, it’s how the ability to provide services of every type is woefully inadequate," she said. "People need water, they need the ability to have basic hygiene, they need food. They need all of that." In some ways, her statement is a frank admission the current system doesn’t work.  But inevitably she doubles down on her support of failed service models and the agencies that mismanage them. There seems to be a universal recognition that needed services are woefully inadequate, but nobody seems able or willing to ask why.

There is an even larger issue behind the need for nonprofits to provide services government agencies should be delivering: The desperate needs of people left on the street wouldn’t exist if these agencies had been doing their jobs all along, and providing people with the shelter, services, and housing they need.  Outreach teams should be accountable for actual  outreach and getting more people into shelter.  Service providers should provide the support services so many people need to stay housed.  The City and County should be exploring every possible avenue to provide clean, decent, safe shelter, instead of depending on wildly expensive construction projects. The entire system should be imbued with an obsession on performance, communication, and accountability, where underperforming program are either modified or abandoned. Innovation should be encouraged instead of stifled by smothering bureaucracy. The politics of showmanship, with smarmy photos of leaders “locking arms” should be replaced with a hard-nosed unmerciful demand for real outcomes.

Indeed, one would be hard pressed to find a single homeless program with a track record of success.  Many shelters are so poorly run, their clients prefer life on the street and surrounding communities regard them as little better than Dickensian bedlams.  Providers of support services are so loosely monitored they provide few, if any, services to clients.  Construction projects are plagued by delays and massive cost overruns.  Camp clearances are mired in months of ineffective “outreach” as workers try, often in vain, to convince individual campers to move into shelters or interim housing. The statistics on the number of people sheltered, served, and housed are so unreliable, they are useless as performance measures. And all the while, our leaders try to convince us things are working, and a little more time and a few more tens of millions of dollars will achieve the progress we’ve been told is just around the corner.

At the nucleus of this massive structural failure is the concept of Housing First.  The idea that housing is a goal unto itself, rather than a component of a comprehensive program of recovery and reintegration is a deadly fallacy.  The millions of dollars spent repairing housing units are tangible evidence that housing alone, in the absence of services, is financially and performatively a failure.  Because advocates have been so successful demonizing shelters, aided by the abject failure of the corporate nonprofits managing them, the focus on construction has grown to obsessive levels.  The system of interlocking leadership between providers and the agencies that are supposed to monitor them guarantees the continuing failure of these programs with few if any consequences.

In any world other than the warped one of homelessness in Los Angeles, the stunning breadth and depth of these failures would never be tolerated.  All of these programs and all of this money have only one goal: getting people off the street into the housing they need in a way that ensures they stay housed.  When you cut through the fog of rhetoric, slick presentations, press opportunities and cherry-picked success stories, all of these programs have been sordid failures. Our leaders’ inability or unwillingness to admit that failure and demand we, the taxpayers get what we pay for, is the greatest tragedy of all.

(Tim Campbell is a resident of Westchester who spent a career in the public service and managed a municipal performance audit program.  He focuses on outcomes instead of process.)


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