Embattled homeless services agency faces greater control from city of Los Angeles

For more than a decade, Los Angeles County’s response to the exploding humanitarian crisis on its streets has been guided by a 33-year-old joint powers authority that collects millions from the county, city and federal and state governments and uses the funds to administer homeless programs such as shelters, permanent housing and outreach.

But after years of criticism that the Los Angeles Homeless Services Authority lacks proper oversight over its programs, the county last year voted to remove the vast majority of its funds from the authority and transition programs into an internal department.

That move, effective July 1, leaves the city as LAHSA’s primary funder and poses a significant question: Will the city stay with the embattled agency or will it, as the county did, jump ship?

No decision has been made. But some ideas are taking shape that thread a middle ground — neither ditching the agency nor seizing full command of it, but gradually taking more control over the millions it spends to get people off the streets.

Mayor Karen Bass, who came out against the county’s decision last year, has touted a recent drop in unsheltered homelessness in her reelection bid and has warned the city risks reversing that progress if it withdraws too quickly from LAHSA.

At the same time, she said change is needed.

In a letter this month to the City Council, Bass and Councilmembers Tim McOsker and Ysabel Jurado laid out a series of proposed changes.

They included renegotiating a joint powers agreement with the county to give the city a majority on the LAHSA oversight board and directing city departments to work with LAHSA to “streamline and standarize” the agency’s contracting process, payment systems, data collection and performance tracking.

The city would then look to take over those administrative duties from LAHSA where “feasible,” to ensure “continuity of services while increasing city control and efficiency.”

On April 15, the city’s influential Housing and Homelessness Committee approved the Bass-supported proposals.

“As we navigate the transition away from LAHSA in a responsible way, we are making sure that people are not turned back out onto the street, and are increasing oversight and accountability over LAHSA in the interim,” Bass spokesperson Ilanna Morales said in an email.

The Housing and Homelessness Committee also passed a series of LAHSA reform measures from Councilmember Nithya Raman, who chairs the committee and is challenging Bass for mayor.

Among the approved Raman proposals was one to “transition the administration of appropriate City-funded programs away from LAHSA” over the coming fiscal year.

“Los Angeles cannot afford another decade of the same broken pathways,” Raman said. “We have an opportunity to build something that actually functions — and I think we owe it to everyone who has been waiting for this system to work with accountability to take this opportunity seriously.”

McOsker, in an interview, said he didn’t see much difference between the proposal by Bass and him to integrate some LAHSA administrative functions into the city and Raman’s ideas to shift some programs away from LAHSA.

Both those ideas will require further study to become finalized, and any differences could be worked out later.

McOsker and Raman voted to approve all the proposals, as did Jurado. Raman called the entire package “a managed transition that preserves what works, fixes what hasn’t, and finally gives the City the direct oversight needed to ensure that public dollars produce real outcomes.”

The measures now head to the city’s Budget and Finance Committee, before going to the full City Council.

If they ultimately pass the council and are signed by Bass, some actions such as directing city departments to negotiate for more city control over the LAHSA Commission would start within 30 days.

McOsker said it’s important to move quickly, because by July 1 the city will be the primary funder of LAHSA but seats on the LAHSA Commission will still be split 50-50 between the city and county.

Other actions would take longer.

Raman’s proposal to move some programs away from LAHSA in the fiscal year starting July 1 calls for a report on whether it is “more strategic and cost effective” to have the city take over programs LAHSA runs or whether it makes more sense to contract with the county or another entity.

Even if the city removed all programs it funds from LAHSA, the agency would still be set to receive large amounts of federal dollars to fund permanent housing subsidies, as well as data systems that allow providers to coordinate care across different types of homeless programs.

The agency also continues to face questions over its management and last week announced the layoff of more than 250 employees.

On Friday, the LAHSA Commission approved a required federal audit of its 2025 fiscal year finances, nearly one month past the deadline. The audit also found LAHSA had a “significant deficiency in internal control over financial reporting.”