LA council delays plan to study pulling funds from troubled homelessness agency

L.A. city leaders have pushed back the timeline to start prepping a plan to strip hundreds of millions of tax dollars from the region’s troubled homeless services agency and move it under different control.

For years, some members of the City Council’s homelessness committee have urged their colleagues to consider an exit, after major data accuracy issues and official reviews and audits that found serious oversight failures.

About three months ago, a City Council committee recommended a July 1 deadline to get an analysis on how to move parts of the money away from the L.A. Homeless Services Authority, known as LAHSA.

That work has yet to begin, according to city records and officials. The City Council has not approved starting the analysis nor funding for consultants to prepare it.

The backstory

Back in April, the City Council’s homelessness committee recommended the full council hire a consultant to deliver an analysis by July 1 on which city programs make sense to start transitioning the city away from the embattled L.A. Homeless Services Authority. The idea was to explore moving homelessness spending oversight away from LAHSA to the county, the city or another entity.

The recommendation came about a year after the L.A. County Board of Supervisors decided to pull county funds from LAHSA in the wake of back-to-back scathing audits in 2024 and March 2025, finding LAHSA failed to properly oversee the dollars it was entrusted with. The board’s decision to move the funds to a new homeless services department took effect this month.

The city’s analysis is now expected to take much longer. The full City Council has not yet voted on whether to commission the analysis nor budgeted the expected $450,000 to hire a consultant for it.

And the recommended deadline for the analysis was pushed back nearly a year and a half to December 2027 by the most recent council committee to take up the item.

Timeline might change

A spokesperson for Katy Yaroslavsky, the councilmember who chairs the budget committee and suggested the later timeframe, said that deadline is likely to move up to a sooner date.

The idea was to update the deadline after “we had an idea of the process for hiring a consultant,” said the spokesperson, Leo Daube.

The timeline still needs to come to the full council for approval and is likely to be changed, he said.

Councilmember Nithya Raman, who chairs the homelessness committee and is running for mayor against Karen Bass, told LAist she will try to get the process fast-tracked.

“We will be working to push up the timeline,” Raman told LAist in a statement. “Preparing for the next step is urgent given the circumstances.”

Raman and other City Council members voted in May for a city budget that includes $358 million to LAHSA over the next 12 months, a 5% increase over the prior fiscal year’s $339 million. That budget, which 12 of the 15 councilmembers approved, doesn’t require an analysis of shifting dollars that Raman and her committee had recommended.

Raman defended her budget vote.

“As the city does not yet have an alternative system set up to directly manage its own contracts, we must continue to fund our current work,” Raman said in a written statement. “We have started the process to build that system through [a contract] and are continuing to build our capacity to manage in-house.”

The office of Council President Marqueece Harris-Dawson — which worked with Yaroslavsky on the revised recommendations that included the delayed timeline — did not respond to phone messages for comment.

LAHSA is governed by a 10-member commission that is appointed by city and county elected officials who can remove and replace commissioners. Half of the commissioners are appointed by Bass, and half are appointed by each of the five county supervisors. Bass has served on the commission since she appointed herself to it in fall 2023 and is the only elected official on the commission.

What the mayor says

As the council’s homelessness committee considered its recommendation this spring, Bass cautioned against shifting funds too quickly from LAHSA without a plan and capacity, issuing a statement in March warning that it would harm unhoused people.

“What we need is a serious, thoughtful transition plan — the last thing we need is a new department and more bureaucracy,” she said at the time.

The following month, she joined councilmembers Ysabel Jurado and Tim McOsker in a letter indicating support for moving away from LAHSA in the long term, while increasing city control of LAHSA in the short term.

“In the long term, the city must re-envision new systems to handle the responsibilities of homelessness services. We need to explore internalizing LAHSA’s functions,” the letter states. “Without taking steps to both clarify and assert the role of the city within what is left of LAHSA, we risk continuing to defer critical decisions and accountability.”

Her public tone further shifted last month, when her office reacted to the Trump Administration suspending all federal funding to LAHSA.

“Mayor Bass, too, has grave concerns about LAHSA and zero tolerance for mismanagement and negligence, which is why she previously directed the city to evaluate how to move away from the agency,” said the June 11 statement.

Kolby Lee, Bass’ communications director, confirmed Bass directed city departments to “develop options to transition away from LAHSA.”

Lee has not responded to a request from LAist asking when Bass gave that direction and whether the options have been presented to her.