L.A. City and County Are Being Sued over Homeless Funds Misuse: LA. Alliance Says Still Pursuing Case

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L.A. Alliance wants better accounting of the funds that are supposed to provide housing.

The L.A. Alliance for Human Rights, et. al. v City of L.A. case made big news when the 9th Circuit Court ruled on the case at the end of September.

Many news outlets printed that Judge David Carter had overstepped his bounds. The LA Times printed “The 9th Circuit Court of Appeals on Thursday struck down a sweeping order by U.S. District Judge David O. Carter to house L.A.’s skid row . . .”

The ABA Journal reported that “9th Circuit Tosses Judge’s Order Requiring L.A. to House Homeless People in Skid Row” and the Daily News wrote, “Appeals Court Overturns Judge Carter’s Order to House LA’s Skid Row Homeless.”

The headlines made it sound like the fight was over. It is not.

Circling the News spoke to Elizabeth Mitchell, the attorney with the law firm of Spertuss, Landes & Umhofer, who represents the L.A. Alliance for Human Rights, who explained “The court issued a narrow ruling based on procedural steps.”

An LA Alliance press release clarified “The court did NOT dismiss our case but rather ordered it returned to Judge Carter for further action. . . .the L.A Alliance will file an amended complaint shortly which will cure the procedural concerns raised by the 9th Circuit. . . The LA Alliance will be back in Judge Carter’s courtroom very soon and will hold the City and County accountable for its constitution-sized ineptitude.”

The case addresses why there is not more housing for the homeless, especially since residents passed Proposition HHH (a $1.2 billion bond in 2016) and Measure H (L.A. County .25 sales tax in March 2017). Money approved by voters was specifically to be used to address the needs of homeless.

In the 110-page injunction examined by the 9th Circuit, Carter points out that City has not moved forward with housing for the homeless and “nearly half of newly constructed units in Los Angeles between 2012 to 2019 were in lower-income communities.

“Yet 90 percent of the new construction during that period is unaffordable to working-class tenants in Los Angeles. By concentrating new housing initiatives in lower-income communities, older buildings are razed and replaced by higher cost units, further decreasing the availability of affordable living for tenants in those communities and driving gentrification.”

In 2017 Mayor Eric Garcetti praised residents for passing Measure HHH and Measure H, which generate about $355 million a year for mental health, substance abuse and employment services.

Westchester Park parents have complained the park is not safe for children. It has been taken over by the homeless.

But, where has the money gone?

According to the complaint filed by the Alliance in March 2020, “Proposition HHH, a $1.2 billion City project, is now expected to net only 5,873 supportive units and 1,767 affordable units, at a staggering cost of $531,000 to $700,000 per bed.

“Likewise Measure H—a county-wide tax increase that was originally estimated to net $355 million in homeless-relief funding available per year—is spread so thin that it has failed to make any significant dent in the crisis.”

The injunction points at least 1,383 homeless died in L.A. County between 2017 and 2020. In January 2021, 165 homeless died.

“Each day, while the City and County of Los Angeles stand by, allowing bureaucracy to upstage the needs of their constituents, five more people experiencing homelessness die in Los Angeles County,” the injunction states.

“Recent investigations into City-funded housing projects for the homeless demonstrate that a lack of government oversight has allowed the proliferation of corruption.

“In at least two separate instances with two different developers, reports indicate that developers of taxpayer-funded affordable housing projects have purchased properties before turning around and reselling those properties to themselves at higher prices in order to artificially inflate their project budgets and, in turn, the amount of public money that they receive.”

“In the case of a partly renovated motel in L.A.’s Westlake neighborhood, developers were able to increase the project’s budget by $8 million through this process of reselling. According to reporting by KCRW, ‘most of the more than $30 million pumped into the renovation of this rundown motel has gone to its former owners, who, right before the sale, were sued by public interest attorneys for illegally evicting tenants.’ In another case near Koreatown, a similar reselling process was used by a different developer to artificially inflate the budget by $6 million.”

“Where has this money gone?” a National Public Radio station announcer, Anna Scott, asked, and noted that more than 28 percent of Prop. HHH units exceed $600,000.

Ron Miller, the Executive Secretary of the Los Angeles/Orange Counties Building and Construction Trades Councils, in a letter to L.A. City Attorney Mike Feuer asked why abuses under HHH had not been stopped.

“There has been virtually no general call to action to publicly disclose and discuss the amount of money that is being made by developers or needed background investigation on entities applying for HHH funding. Even beyond the damage it’s done to the homeless community and those facing housing insecurity, these issues are also hurting the construction community.”

L.A. City Controller Ron Galperin in a March 2021, Daily News story said, “What’s the problem with HHH? The projects are too expensive and too slow to make a meaningful difference for people living on our streets. As of this month, 489 bond-funded units are ready for occupancy and most others won’t be finished until 2023, 2024 or later.”

The injunction also listed the public safety crisis to not only the homeless, but also residents, because of increased fires, drug and alcohol overdoses, lack of mental health support, diseases related to living on the streets, unsanitary conditions and the lack of ADA accessibility.

Initially, the District Court issued a sweeping preliminary injunction against the County and City of Los Angeles and ordered, among other relief: the escrow of $1 billion to address the homelessness crisis, offers of shelter or housing to all unhoused individuals in Skid Row within 180 days.

The Order would have required numerous independent audits, investigations, and reports related to the County and City’s funds, properties, and contractual relationships with developers; the cessation of land and property transfers County- and City-wide; offers of shelter to all unhoused individuals on Skid Row within 180 days; the creation of a “plan that ensures the uplifting and enhancement of Skid Row without involuntarily displacing current residents;” and the escrow of $1 billion to address homelessness.

It makes sense that the City and County would appeal this injunction, because they would be audited as far as homeless funds: and there might be investigations into resources that local and county officials may have been squandered.

The L.A. Alliance has said they would fix the procedural issues that caused the 9th Circuit to initially overturn the United States District Court ruling by Judge Carter (Case No. LA CV 20-02291-DOC-(KESx).

It appears this fight for transparency of taxpayer money and its purpose of helping the homeless is far from over.

A homeless man was transported to the hospital in serious condition.

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3 Responses to L.A. City and County Are Being Sued over Homeless Funds Misuse: LA. Alliance Says Still Pursuing Case

  1. Joan Hill says:

    Outraged, but to whom do I direct my concerns and demand transparency of funds? Garcetti, City council members or where? This is total fraud of taxpayer taxes and a humanitarian crisis. Please advise where to direct inquiries.

  2. Sue says:

    Joan,

    Many of the City officials are complicit. City Controller Ron Galperin noted that the money was being wasted–but there just doesn’t seem to be any accountability, which is why the L.A. Alliance finally took the legal route.

    Sue

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