Los Angeles City Controller Ron Galperin released a February 23 report “HHH Homeless Housing Tops $830K Per Unit, Urges City to Learn from Mistakes.”
If the City has trouble learning from its mistakes, voters can’t be far behind.
A proposed November 2022 ballot measure “United to House L.A.” would put a new “documentary transfer tax” on property sales of $5 million or more. Any property between $5 and $10 million would be taxed four percent of the sale price.
Properties selling for more than $5 million would be taxed 5.5 percent. The stated purpose of the tax is to address homelessness. Some of the money would go toward the construction of 26,000 units of housing over 10 years. The rest of the money would go toward homelessness prevention, such as rent relief, income assistance for disabled tenants and free legal services for tenants facing eviction.
There is no money in the bill slated to build mental facilities or house the mentally ill. According to a L.A. Times report “67 percent of the country’s homeless reported or were observed suffering from mental illness or substance abuse.”
Many residents voted to pass HHH in 2016, which was promoted as a way of ending homelessness by building supportive housing. Since HHH passed, homelessness has jumped by at least 45 percent in Los Angeles and an average of five people per day are dying on the streets.
According to Galperin’s report “only 30 adults have been housed through the program that cost taxpayers $13 million.”
The report notes that in five years of the 8,091 units proposed, only 1,142 units are ready for occupancy, another 4,347 are in construction and 2,602 are in the pre-development phase.
In 2020, the cost of a unit was $530,00, in 2021, it had risen to $600,000 and now one project in pre-development is expected to cost $837,000 per unit.
“If nothing changes, Galperin believes costs could soon reach $900,000 or $1 million per unit,” the report said.
What steps did the City Controller recommend?
1.Use HHH funds to prioritize the development of facilities such as interim housing, clinics, storage, and showers to help better manage the immediate needs of the homeless. More than 95% of funds allocated through Proposition HHH have been set aside for supportive/affordable housing rather than interim housing.
- Reallocate funding commitments from expensive or stalled projects in the pre-development phase before finalizing HHH loans. According to the report, the City does not want to do that because it feels like it might compromise business relationships with supportive housing developers. (visit: lacontroller.org/problems-and-progress-of-prop-hhh).
Another person unclear on the actual statistics is Los Angeles Mayor Eric Garcetti, who tweeted “Let’s be clear: Prop. HHH is producing more units than promised, at a lower cost than expected. There are already 1,200 units online providing critical housing and services. And HHH will deliver over 10,300 units of supportive and affordable housing by 2026,” the mayor said.
“HHH has increased our production of supportive housing by almost 600%, from 300 to 2,000 per year. I thank all of our partners for continuing to support our vision of housing all Angelenos in need.”