Apr 25, 2025
While homelessness in Los Angeles County declined 5% last year, it remains a huge problem affecting roughly 73,500 people.
The good news: Billions of dollars have been allocated to address the issue. The bad news: A large chunk of that money can't be accounted for.
Advertisement
Now, Bill Essayli — President Donald Trump's newly appointed U.S. attorney for L.A. — has announced plans to investigate possible fraud and corruption.
"Taxpayers deserve answers for where and how their hard-earned money has been spent. If state and local officials cannot provide proper oversight and accountability, we will do it for them," Essayli said in a recent statement.
Where has the money gone?
Ciaran McEvoy, spokesperson for the U.S. attorney's office, told CBS News that according to one audit, about $2 billion is unaccounted for.
When asked whether there's actual evidence of fraud or corruption with regard to the homelessness funds, McEvoy responded, "All we can say is we're going to go where the evidence takes us."
Recent audits specifically pointed to reckless spending and a lack of transparency at the LA Homeless Services Authority, or LAHSA, which provides shelter for homeless residents.
In early April, the Los Angeles County Board of Supervisors voted to pull roughly $300 million in funding from LAHSA and transfer that money to the county's newly created homeless services department. That vote came on the day the countywide sales tax increased by a quarter-cent to provide additional funding for homelessness programs.
Los Angeles council member Monica Rodriguez supports an investigation into the potential misuse of homelessness funds. "I think there have been some very clear failures," she said.
As of now, the newly formed Homelessness Fraud and Corruption Task Force will not be targeting one agency specifically. But as the investigation takes shape, that could change.
Advertisement
LA County needs all the funding it can get to address the crisis. The problem is particularly noticeable in downtown LA, where hundreds of people live in makeshift shelters in the Skid Row neighborhood. Homeless encampments are also increasingly showing up in suburban areas under freeway overpasses.
Must Read
- You can now build wealth like a landlord for as little as $100 — and no, you don't have to chase down rent or take 3 A.M tenant calls
- Goldman Sachs used to hoard prime real estate deals for the ultrarich. Two ex-analysts just opened the door for $250
- Robert Kiyosaki begs investors not to miss this ‘explosion’ — says this 1 asset will surge 400% in a year
Join 250,000+ readers and get Moneywise’s best stories and exclusive interviews first — clear insights curated and delivered weekly. Subscribe now.
What the crackdown means for LA
Cracking down on homelessness is a significant priority across California. The state accounts for nearly a quarter of the homeless population in the United States.
Earlier this year, Gov. Gavin Newsom announced plans to distribute $920 million in funding to address the state's crisis. But he also called upon local governments to take action individually, and he threatened to pull funds earmarked for homelessness initiatives if cities didn’t start stepping up their game.
“We want to see results. We have to address unsheltered homelessness, encampments and tents,” Newsom said. As of 2024, more than 187,000 people in the state were homeless.
Los Angeles Mayor Karen Bass introduced a program called Inside Safe in late 2022, which provides motel rooms for homeless residents who leave encampments. However, the program is costly, and its future is unclear. Homeless individuals who are housed in motels live in limbo until permanent housing becomes available to them.
County officials will be tasked with developing more effective solutions, but the concern is that agencies may be stonewalled in light of the crackdown.
Advertisement
The United Way of Greater Los Angeles recommends expanding housing subsidy programs and vouchers and providing more financial support to homeless people who are transitioning into housing. The group also feels that job training programs and child care initiatives are crucial to preventing homelessness by making it easier for county residents to earn a living.
To be clear, much work has already been done to address LA County's homelessness crisis. The Homeless Initiative of LA County says that since June of 2017, more than 125,000 homeless people have been placed in permanent housing, while almost 43,000 people were prevented from becoming homeless.
Because more work needs to be done, there’s no room for error — or fraud. Still, reactions to Essayli's task force have been mixed.
Mayor Bass recently told reporters she does not want Essayli's investigation to diminish the city's efforts to combat homelessness.
"I'm not opposed to the task force, but I don't want it to be a fishing expedition," Bass said. "I don't want it to be a distraction that takes us away from what our primary mission is."
On the other hand, Los Angeles County Supervisor Kathryn Barger expressed support for the task force's creation, saying it was "long overdue."
"I believe this task force will add a much-needed layer of oversight that will help restore public trust and ensure resources actually reach those in need," Barger said in a statement.
You May Also Like
- Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake — here’s what it is and the simple steps to fix it ASAP
- Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how
- Millionaires under 43 are reshaping investing — just 25% of their portfolios are in stocks. Here’s where their money is going
- Robert Kiyosaki issues grim warning for baby boomers. Many could be ‘wiped out’ and homeless ‘all over’ the country. How to protect yourself now
Maurie Backman has been writing professionally for well over a decade. Since becoming a full-time writer, she's produced thousands of articles on topics ranging from Social Security to investing to real estate.
