The Homeless Keep Growing on the Streets Because of Building Mismanagement

This motel in Venice was bought by the city for $10 million to be used for housing the homeless. There are no public records to find out how many people have actually been helped.

“Unlike private developers, the builders of these government-funded projects actually make more money the more they spend, because their ‘developer fees’ are calculated as a percentage of the cost of building the project.”          Westside Current

CTN reported in 2020 that the Venice Ramada was sold to L.A. City in December 2020 for transitional housing for the homeless.

L.A. City Council authorized funds to purchase the 33-room Ramada Inn for $10,200,207, which was then sold to PATH (People Assisting the Homeless) for one dollar.

“There was no outreach, and letters to notify us of the project. Many of us found out by word of mouth after a notice was taped to the [Ramada Inn] building,” a neighbor said during a public meeting.

More than 400 residents and businesses went to the Board of Public Works asking them to stop the project as it was presented. Coastal access and lodging for all income levels were concerns.

But the City wrote in its Coastal Development Permit that “There is low demand for low-cost lodging in Venice, such as this hotel, since most tourists who visit Venice prefer destination type and boutique brand hotels. For those visitors who do prefer low-budget coastal accommodations, there are options to stay at a bed and breakfast or at other low-budget visitor accommodations in the Coastal Zone communities adjacent to Venice for a comparable price.”

Former Councilman Mike Bonin was in favor or the project, saying it would be used to house those living under freeways. The appeal by Venice residents was denied.

The Ramada was opened to the homeless and 32 residents moved in, including a sexual predator. Two people died in the hotel, one was an overdose, the second a medical reaction.

Renovations of the rooms, including building outdoor patios, were set to start in the fall of 2022 and all residents, the formerly homeless, were given notice they had to move.

This is the fire started by the homeless on Venice under the 405 Freeway. Former Councilman Mike Bonin had said those living under freeways would be moved into hotels. They were not.

UPDATE: Today the Westside Current’s Angela McGregor reported (“Behind the Post: Unveiling LAHSA’s Empty Promises”) click here.

In my reporting on the still vacant rooms of the former Ramada Inn, on which the city has (thus far) expended over $14 million since 2020, and which have cumulatively housed fewer than forty people for less than 18 months, I was reminded of another memorable quip from the Reagan era.  At his first Inauguration, President Ronald Reagan famously stated that ‘In this present crisis, government is not the solution to our problem; government is the problem.’

The Ramada purchase took advantage of  State and Federal funding released during the pandemic. It was one of five properties totaling 290 units purchased for $64,836,000 with Project Homekey funds by the Housing Authority of the City of Los Angeles on the same day.  All of them were handed off to nonprofits fortunate enough to have lucrative ties to LAHSA.

And to date, despite multiple requests, the Current has not heard back from LAHSA to find out how much of the more than $2.3 million they okayed for PATH’s services at the Ramada was ultimately doled out during the 14 months it was open.

I reported in 2021, on the cost of two HHH-funded homeless housing projects in Venice Beach in an effort to understand why they cost so much more to build than other, similar, privately-built projects.

After considering all of the possible excuses HHH projects’ advocates have given in the past for their high cost — CEQA restrictions, the increased cost of construction, NIMBY lawsuits — the reason boiled down to something much simpler.

Unlike private developers, the builders of these government-funded projects actually make more money the more they spend, because their “developer fees” are calculated as a percentage of the cost of building the project. This is the opposite of private developers, who spend less to make more.

When I asked one private developer how they thought the situation would be best remedied, they told me “have private developers build these projects, then sell them to the city” — something which, by their calculations, would cost about half as much.  (Another developer took one look at the numbers on the two projects and told me they were “so padded, I have no comment”.)

California voters passed Measure ULA in November 2022, a transfer tax on properties over $5 million — erroneously called the “Mansion Tax,” although it also impacts multi-family buildings for every income level. The money generated by this property transfer tax would take money from private developers and funnel it to the same developers currently authorized to build HHH-funded projects averaging over $600K per unit. Sure enough, the effects of ULA’s passage have been disastrous, bringing in far less money than promised by slowing both luxury housing sales and much-needed multi-family development.

The latest effort to keep this endless fire hose of money aimed at the homeless problem is called the “Affordable Housing, Homelessness Solutions and Prevention Now” motion, and it would add a quarter cent to Los Angeles County’s sales tax.

Despite the fact that the measure is simply doubling an existing, quarter-cent sales tax earmarked for homeless services, it is described in the glowing PowerPoint presentation on its website as “a bold, new approach” because it uses “goals-based accountability.”

These goals will be determined by an Executive Committee within a year.  That committee will likely include one of the measure’s biggest supporters — County Supervisor Lindsey Horvath.  In March, Horvath derided criticism of LAHSA by saying that “LAHSA is not somebody else.  It is us:  the City and County of L.A.”  So much for accountability.

It’s also worth noting that sales taxes are regressive, meaning they place a heavier burden on citizens who spend a greater percentage of their money on items that are sales-taxed than wealthier citizens, who tend to put the bulk of their money into things like investments and real estate.  This measure, therefore, would literally take from the poor and give to those who purport to…help them?

Last month, an audit was released showing that not only does California have nothing to show for the $24 billion the state has spent on homelessness over the past five years, but we also don’t even have the data to know whether or not the programs the state has implemented meet anyone’s definition of “success.”  A similar audit is being conducted to determine the effectiveness of Mayor Karen Bass’ signature Inside Safe program.

With a budget crisis at hand, the Mayor has now scaled back on the amount earmarked for the homelessness crisis:  $950 million, just over $20,500 for each unhoused person in Los Angeles.

If the past is precedent, it will be the homeless agencies, rather than the actual homeless, who will benefit most from the city’s largesse.  And all of us will remain the victims.

(Editor’s note: The Westside Current and Circling the News share content.)

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One Response to The Homeless Keep Growing on the Streets Because of Building Mismanagement

  1. Lynn Miller says:

    Not sure who wrote the title “The Homeless Keep Growing on the Streets Because of Building Mismanagement,” but that would only be part of the reason the homeless are growing: let’s not forget the expiration of covid handouts and the incessant migrant stream.

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