Inefficiencies Blamed for Underspending Despite Record Allocation in FY2024
The City of Los Angeles hasn’t spent over half of its record $1.3 billion homelessness budget for Fiscal Year 2024, according to findings announced by City Controller Kenneth Mejia. Of the total budget, $599 million was spent, and $195 million was encumbered, leaving at least $513 million unspent.
“Homelessness is still at a historic high,” Mejia said. “The City had a record high homelessness budget at its fingertips but failed to spend over half a billion dollars of it. The number of people experiencing homelessness dropped only 2% from the previous year. Imagine how much bigger the drop could have been if the City fully utilized its budget.”
Mejia’s office is the first in the City’s history to track homelessness spending formally. The Controller’s team implemented accounting codes to match budgets with actual expenditures and verified the data with city departments.
Mejia attributed the underspending to inefficiencies, including a lack of staff, siloed efforts, outdated processes, and obsolete technology. Specific unspent or unencumbered funds included:
- $185 million from state grants for homeless housing programs
- $112 million for the Inside Safe program
- $80 million from Measure ULA for affordable housing, rent assistance, and tenant protections
- $30 million from other state, federal, and local grants
- $16 million for opioid and substance use treatment beds
Despite the underspending, several allocations were utilized or committed, including:
- $262 million from Proposition HHH for permanent supportive housing
- $126 million for Inside Safe
- $70 million from Measure ULA
- $50 million for Homeless Housing, Assistance, and Prevention Programs
- $28 million from community block grants
- $22 million from other state/federal and local grants
The homelessness budget for Fiscal Year 2025 has decreased by 25% to $961 million, a reduction of $317 million compared to the previous year. The drop is largely due to reduced funding for programs like Proposition HHH, Inside Safe, and community block development grants.
Unspent general funds typically revert to the Reserve Fund unless reappropriated, while unspent special funds roll over into subsequent years. Mejia urged the city to fully utilize its resources to make a greater impact on the homelessness crisis.
