LA County supervisors vote to create new homelessness department, pull funding from LAHSA

The Los Angeles County Board of Supervisors voted Tuesday to create a new county department for regional homeless services, stripping hundreds of millions in funding from a joint city-county agency that's faced audits criticizing its handling of taxpayers' money.

It came the same day a new half-cent sales tax across the county went into effect, raising the sales tax from 9.5% to 9.75%, to generate an expected $1 billion annually for efforts tackling the homelessness crisis across the city and county of LA. The Measure A funding makes up just some of the government money being pulled from the embattled Los Angeles Homeless Services Authority (LAHSA) — which is expected to have all of its funding taken and transferred over to a new county department by July 1, 2026.

That's part of the plan approved by the Board of Supervisors with a 4-0 vote Tuesday, one which drew criticism from several LA City Council members at Tuesday's meeting over concerns regarding how current services would be affected. Some councilmembers questioned the idea of taking millions in taxpayer-approved funding from an agency which the money had been intended for. 

Supervisor Janice Hahn said the new county agency, which is expected to be in place by Jan. 1 of next year, would be responsible for managing $1 billion and staffing more than 1,000 employees. 

In November, county supervisors first proposed the idea of creating a new county homelessness department that would streamline services after a scathing audit by the LA County Auditor-Controller. The audit found tens of millions in taxpayers' money could not be accounted for, citing concerns with record-keeping for tracking the cash and other financial management issues.

"I think it's time to make a change," Hahn said at Tuesday's meeting, saying the passage of Measure A and other tax proposals intended to fund the fight against homelessness shows LA voters are "willing to continue to tax themselves" to resolve the crisis.

While saying it's clear voters "want a system that works" — one with more accountability and transparency than what she and other supervisors say LAHSA currently provides — Hahn also said she does "have issues" with creating another department expected to be one of the county's largest. 

Before the county supervisors unanimously approved the new department's creation, several city council members spoke before the board to urge them to vote against it, some saying the decision was being made too rashly while others said the city was being unfairly left out of the decision to effectively defund LAHSA.

"I believe strongly (Measure A) voters may not have supported it if they knew these dollars would be moved into the county without input and partnership from the city," Councilmember Nithya Raman, who serves as chair of the Housing and Homelessness Committee, said at the meeting. 

"What I fear most is that we're moving the money from one bureaucracy to another, one that the city of LA has much less visible to, potentially jeopardizing all of the shared progress that we've made," Raman said.

More than 75,000 people across Los Angeles County are struggling with homelessness, according to the latest count, an effort led each year by LAHSA. The annual county has been described as a "snapshot" of the crisis since it provides a single count from one point in time. 

Last summer, LAHSA reported reported a decline in the number of people experiencing homelessness in both the city and county of LA for the first time six years. Countywide, that decrease was just 0.27%, but LAHSA officials said progress was most notable in the larger declines seen in the number of people living outdoors on city streets.

Across the county, between 2023 and 2024, there was a 5.1% decline in the number of people living outside and a 12.7% increase in the number of people struggling with homelessness but living indoors in places like motels. For the city of LA, there was a 10.4% decrease in the number of people outside and unsheltered and a 17.7% increase in the number of people living indoors.

Dr. Va Lecia Adams Kellum, CEO of LAHSA, released a statement Wednesday responding to the Board of Supervisors vote, remarking on those changes and other signifiers of what she refers to as "unprecedented progress" made by the agency.

"Over the last two years, with unprecedented alignment and collaboration, we've made unprecedented progress in reducing unsheltered homelessness in two consecutive years and creating a more efficient rehousing system," Kellum said in the statement. 

"LAHSA will work to ensure a smooth transition, allowing our clients to continue on their path to permanent housing as seamlessly as possible," Kellum said. "We urge the County to hire as many of LAHSA's dedicated staff as possible while remaining committed to pursuing the coordination and alignment that have led to two consecutive years of decreases in unsheltered homelessness."

In recent years, LAHSA has struggled to fight off allegations of financial mismanagement, from the audit by the Auditor-Controller last year revealing tens of millions couldn't be accounted for to a more recent audit commissioned by a federal judge. 

That later audit found that tracking $2.5 billion spent last year on homelessness by city and county program was just about impossible, with many problems identified at LAHSA. Judge David O. Carter said he did not trust local leaders as an institution. 

The LA Alliance for Human Rights has pressed for a series of audits in recent years, targeting agencies and efforts beyond LAHSA. 

"It's heartbreaking," Elizabeth Mitchell, an attorney for LA Alliance for Human Rights, said last month of the city and county's overall handling of the crisis and allegations of financial mismanagement. 

She spoke following the audit commissioned by Judge Carter, which raised concerns that led to further criticism from supervisors including Lindsey Horvath, who proposed creating the new department.

 "It's atrocious," Mitchell said. "It's immoral. It's unjustified. But, what it is not, is surprising."

At the time, Mayor Karen Bass said the audit identified a "broken system" which she said she has been "fighting" since entering office. While saying changes are necessary, Bass referred back to the recent decline in people struggling with homelessness while living outside.

On Monday, she and Councilmember Raman had penned a letter to the Board of Supervisors urging them not to create a new department, claiming it would not fix current issues at hand, but instead, could actually exacerbate LA's problem with homelessness.

"Dismantling LAHSA will deprive the City of Los Angeles of essential resources, including recent voter-approved Measure A funding, and would severely stunt the City's ability to oversee existing programs that provide holistic solutions to individuals with complex needs," the letter reads. "Real people rely on these resources every day and this move puts that life-saving care in jeopardy."

"This action would create a monumental disruption in the progress we are making and runs the serious risk of worsening our homelessness crisis, not ending it," the letter continues.