Part 163: “You’re dead politically” – Homelessness Bureaucracy and Human Consequences in Los Angeles

Published April 1, 2025.

and

Apr 01, 2025

Judge David O. Carter walks with Special Master Michele C. Martinez and the late Skid Row activist Jeff Page “General Jeff” on February 4, 2021 in Downtown Los Angeles (Photo by Damian Dovarganes/Associated Press).

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By Zachary Ellison and Ruth Roofless, Independent Journalists

The stage was set on March 27; an epic showdown in federal court in Los Angeles had been brewing for more than a year over accountability on spending to address the crisis of the unhoused. The painful, even deadly issue that is homelessness in Los Angeles had once again come full circle, this time with an independent audit conducted by the firm Alvarez & Marsal under the auspices of Judge David O. Carter. The first headline out of the courthouse from LAist after the hearing was unsparing: “Judge blasts LA homeless spending as a ‘train wreck’ and threatens to seize control,” but whether that would happen was, in the end, still a wait-and-see type of question. The hearings, known after the case filing as the “LA Alliance Hearings,” have become almost their own melodrama even as suffering is visible on the streets of LA.

Mayor Karen Bass had attended, at times looking rattled by the cantankerous in the eyes of some critics, alongside Judge Carter, Chair of the Board of County Supervisors Kathryn Barger, Council President Marqueece Harris-Dawson, Councilmember Eunisses Herndandez, Controller Kenneth Mejia, and Wendy Greuel, Chairwoman of the Commission that oversees the Los Angeles Homelessness Services Authority and a former City Controller in her own right. According at least to the City Attorney’s office, the City Charter prohibits the Controller’s office from conducting audits of programs sponsored by elected officials. After going as far as ordering Mayor Bass to speak with Controller Mejia, she still wouldn’t grant permission for future auditing, including for her signature homelessness program, Inside Safe. “I fundamentally don't think it is right for one elected official to audit another,” Mayor Bass said with a certain resigned resolution.

The hearing had begun with Judge Carter citing a provision in the original agreement that founded LAHSA, stating that it couldn’t be sued by the City or the County before a recitation about how past audits had flagged problems that, depending on who you ask, either have or haven’t been addressed. Noting the alleged underservicing of the unhoused populations by service providers contracted through LAHSA, Carter stated, “I leave that to you to define fraud,” having noted press inquiries to such an effect. Only minutes before the 81-year-old judge had stated about the matter, “We'll never know.” Money continues to trickle back in from advances to providers from LAHSA under 2017’s Measure H, which was recently repealed and replaced by 2024’s Measure A, but at a reduced rate, which led Carter to exclaim, “They're waiting for us to either get senile or die or forget this.” LAHSA CEO Dr. Va Lecia Adams Kellum didn’t attend, instead sending a letter on March 24 stating improvements have occurred since July 2023.

In a seeming rebuttal the following day at the start of LAHSA’s commission meeting and in a letter to the judge, she was largely insistent that whatever faults the A&M audit led by Dianne Rafferty had found were already being addressed. LAHSA is promising further changes to its contracting systems and even a room reservation system in July 2025. At present, LAHSA seemingly has struggled, at least if the audit is to be believed, to provide a certain number of contractors. Both Mayor Bass and Chair Barger questioned the “methodology” that had been used, Barger with slightly less consternation. At one point in defense of her performance on the issue, Bass stated unequivocally, “I believe that we can stop people from dying on our streets.” With re-election approaching, Bass is increasingly on the defensive about her accomplishments.

For their part, the LA Alliance for Human Rights, represented by attorneys Elizabeth Mitchell and Matthew Umhofer, had, in seeking to hold the city and the county in breach of the settlement, all but run into a wall of judicial restraint. In a seemingly ill-considered move, they even floated the name of famed attorney Ken Feinberg, who administered the 9/11 Victims Compensation Fund, as a potential receiver. Judge Carter shut the idea down, stating, “And if that was ever to be considered, I need to be very certain what the attainable goals are and why the legislative and executive branches can't accomplish this. Still, this didn’t stop Umhofer from taking to LinkedIn following the hearing to gloat: “In court yesterday, we announced our plan to ask the Court to impose a receivership over city's [sic] broken homelessness-relief system.” He added, “LA deserves so much better.”

Contacted via email, Ken Feinberg hadn’t heard of the exchange in court, but he would “be pleased and honored to receive a telephone inquiry from either Ms. Mitchell or Mr. Umhofer.” Feinberg noted that in addition to administering the compensation fund for 9/11 victims, he’d served as a “Court-Appointed Special Master/Receiver in the homeless litigation many years ago involving the City of New York.” In Feinberg’s experience, even though he’d been successful in resolving the immediate dispute between parties, “the long term absence of needed housing stock prevented a global resolution.” Umhofer billed Feinberg as an “extraordinary human being,” but the case may be that the issues in LA just might be too complicated for even a highly regarded lawyer to resolve. It wasn’t clear if Feinberg would waive fees and take the role on a pro bono basis as Umhofer suggested in response to critique.

So even if Judge Carter isn’t jumping for joy to take over homelessness spending in Los Angeles, and even if just about everyone agrees what we’re doing now isn’t working, and even if some parties aren’t quite ready to simply accept the findings of an independent audit to such an effect, Carter didn’t rule it out fully. Whether the LA Alliance gets to its goal of holding the City and County in breach of the settlement, much less securing a receivership, what to do about the continuing outflow of funds to a system that seemingly can’t be audited? For their part, LAHSA maintains that they can track the money effectively. Carter wasn’t ready to flip the switch just yet, instead settling for threats and begging for a solution alternatively: “But I am your worst nightmare, like I told [Eric] Garcetti. And unfortunately, that's the position I'm going to take very aggressively. Okay? Please work this out for me.” Los Angeles can only hope they do.

Judge Carter also warned the politicians in the room that the cost of failure would become increasingly steep were he to have to take such actions, which would undoubtedly be met with resistance and even appeal to the Ninth Circuit. In the past, when Carter attempted to clear Skid Row with a court order, he was overruled. The writing clearly was on the wall though in immediate terms, even if there were no cameras in the courtroom to capture the moment:

You understand if I do that, you're dead politically. Did you get that? Do you hear me? You can pick up that in the LA Times or you can pick it up in The New York Times, then you pick that up in Paris before the Olympics, that's the last thing I want to do. But we're out of time now, we're out of patience and you've got to solve this.

The sad fact is that since the LA Alliance case was filed in 2020, the number of deaths daily among the unhoused has increased from three to seven. Meanwhile, as Carter noted in reference to the idea of the so-called “Homeless Industrial Complex” and the “Poverty Pimps” put forward by the late Skid Row activist General Jeff, it’s increasingly true. An analysis by Ruth Roofless using a sampling of wage costs from major LAHSA-contracted providers found that salaries consume 35-52% of their budgets as reported in their Form 900s. The money isn’t hitting the streets, but it’s often instead being siphoned off into salaries. The A&M audit perhaps missed an opportunity here.

In the LAHSA Commission meeting that followed on March 28, Mayor Bass expressed concern that a sudden recoupment of funds would destabilize service providers and that a renewed advancement under Measure A would only “set them up for failure,” citing her experience as a nonprofit leader. For her part, former Congresswoman and nonprofit leader of People Assisting The Homeless “PATH” and Special Services for Groups SSG/HOPICS Katie Hill seemed to be resigned to the idea that after “50 years,” there would always need to be extensive programs. In the end, Wendy Greuel led a sort of in-name-only resolution that continues to address the issues raised. LAHSA’s budget is increasingly troubled, with a projected deficit in excess of $130 million for next year, and that’s seemingly if the City and the County don’t pull out significant funding from the embattled organization. Things are so in flux that staff couldn’t even prepare balance sheets in advance of the meeting with commissioners on the potential collapse.

LAHSA is claiming in early results from this year’s point-in-time count to have again reduced unsheltered homelessness by 5-10%, a figure that drew skepticism from Judge Carter. This would only be the first time in consecutive years since the count began that there was a steady decrease. Carter has all but sworn off the agency, stating that its headquarters is “ostentatious” and arguing that he doesn’t “think it serves the public good with that kind of money expended,” noting that “when you come back and tell me you're short of money, trust me, we've got a real argument coming whether you have enough money or not.” There’s no debate that some executive leadership is needed and that there are going to be staffing costs, but when is too much money not going to services? It’s not even clear that LAHSA’s mapping of its point-in-time count integrates with its database of individuals known as the “homelessness information management system” (HMIS), which in turn functions with a “coordinated entry system” (CES).

The joint-powers authority established in 1993 was itself the product of a lawsuit, and contingently the general relief paid through the County Department of Social Services (DPSS) was in turn reduced in 1996 from $341 a month to $221 a month, a figure that has not changed and is lower than the 1982 GR amount. Whether Judge Carter would have the authority to reverse this provision remains murky. Those who argue against a funding freeze for what’s arguably a clearly troubled funding system state that it would hurt those receiving services and create panic, but clearly the safety net isn’t there. Recently, Los Angeles Times editorial writer Carla Hall wrote about the measly amount that doesn’t begin to approach the cost of living:

They are hamstrung by an economy in which housing is a commodity, an investment that skyrockets in value for no reason beyond that it is scarce and therefore increasingly valuable to its owner and decreasingly accessible to the vast number of Angelenos who can’t afford thousands of dollars a month in rent.

Poverty is real.

One recent study found that economic factors, even more than mental illness or drug abuse, are driving endemic homelessness. Los Angeles Times senior writer Doug Smith wrote:

Against a public perception that drug use is endemic to homeless camps, service providers and advocates see an exaggerated reaction to open drug use on the street that stigmatizes the majority of homeless people who do not use drugs.

Undoubtedly, demonizing the homeless population is as problematic as the issue itself and continues to drive violence toward the unhoused in addition to sweeps that are often quite destructive in their displacement. One person's nuisance is another's home. In the post-Grants Pass ruling environment since last summer, numerous jurisdictions have made encampments illegal. Hermosa Beach took such an action, joining other cities such as Long Beach, Indio, and Palm Springs in Southern California.

Hermosa Beach plans to collect fines of $100 for the first violation, $200 for the second, and $500 for the third, which would be more than twice the amount an individual would receive from general relief. The Times’ report noted an interview with Ann Olivia of the National Alliance to End Homelessness with NPR in which she claims, “No community in the country has enough resources to serve everybody who’s experiencing homelessness.”

Is that really true though, particularly in a place like Los Angeles where a great many are in fact quite wealthy? Noting repeated efforts to block housing projects on the West Side of Los Angeles, including by current Councilmember Traci Park, Judge Carter argued, “Maybe we ought to build something on the west side of LA for a change, wouldn't that be refreshing, send the Mayflower and dumping it on the 14th District…Ms. Hernandez's district, all the folks on the west side might like to contribute.” Carter’s daughter lost her home in the Pacific Palisades on the same day as the hearing on January 7, yet he refused to accept the fires as an excuse.

In claiming that the destruction alone of the Pacific Palisades created an exceptional emergency, the City of Los Angeles undoubtedly faced an enormous loss of wealth, and yet those affected were among the wealthiest. What Los Angeles might need so badly isn’t so much a “homelessness czar” or a receivership as it needs a fundraiser. The ability to leverage public funds with private funds, an ambitious part of the new agenda for the new Los Angeles County Affordable Housing Solutions Agency (LACAHSA), which will begin collections from the now permanent sales tax increase on April 1, at least on paper, represents a governance improvement. Matched by the Executive Committee for Regional Homelessness Alignment (ECHRA), the idea of intersectoral leadership is promising if, at least for now, mixed funding is elusive. Assuredly, Los Angeles has the capacity to find a solution, and moreover, as noted in last Thursday’s hearing, “nationally, there are some cities that are figuring it out.”

The reason cited for success by Judge Carter in those cities is because “they're looking at how you become homeless in the first place.” Los Angeles City Council President Marqueece Harris-Dawson, for his part, stated locally that there are “solutions in isolated areas that can be broadened.” Considering that this issue is the most important one perhaps facing the city, that more Councilmembers didn’t attend, and Supervisors for that part pose a simple challenge of getting everyone on the same agenda.

What is the model policy and program solution for those facing homelessness and those already on the streets?

The audit didn’t answer that question, but really it just might be the most important one to be answered. Harris-Dawson was there in sneakers and at some points appeared to be fatigued, rubbing his head in exhaustion. Both are former leaders of the nonprofit Community Coalition, and their ability to show not just minor incremental improvements but a substantial degree of effectiveness will frame their legacies.

Los Angeles can’t afford to keep getting this wrong. As the City and County circle LAHSA for defunding, the question remains of what’s going to be done differently, because a 5-10% annual reduction won’t get the LA Alliance off its back. As a representation of the business interests in LA, it’s been suggested that they’re an essential bully, what Carter more broadly called the lawyers a “buffer,” asking, “How do we break that impasse, or do we, or is this City doomed—I mean, doomed to another 20 or 30 years without accountability?” At the end of the hearing, County outside counsel Jennifer Mira Hashmall rebutted his intimation that the County’s prior audit had been held up until after the November 2024 election to not threaten passage of Measure A. Her lead-in might have just been priceless:

You know, I'm a lawyer, so I don't play politics; I deal with facts, I deal with evidence, I deal with the law.

Perhaps what’s most needed in homelessness policy in Los Angeles isn’t more lawyers or even auditors, but those who are willing to look for a more consistent framework for solutions to get people back on their feet.

The system that currently exists is largely self-reinforcing. It almost systematically has excluded the voices of those that it serves, and as an increasingly two-headed crisis of finances and real leadership converges, the problem isn’t going to get any less challenging. For her part, Special Master Michele C. Martinez was left all but pleading at the end of the hearing for an end to the recriminations being cast between the parties and instead for something very basic: greater connectivity between outreach workers and County services for health and mental health treatments.

Martinez, who will deliver her own report on the case, cited a recalcitrance on the part of the County to engage with providers on something so basic, stating about the logjam:

I respect that, but at what point in time is the City of Los Angeles or anyone else that is part of this homeless response system going to tell these outreach workers who are they supposed to call to get the appropriate care for the people that they're helping out on the ground.

LA has to do better. Today, on Tuesday, April 1, the Los Angeles County Board of Supervisors voted 4-0 to create a new homelessness response agency. The move would withdraw more than $300 million from LAHSA in favor of a new County, agency to provide homelessness services. The measure passed despite a last-minute appeal from LAHSA CEO Dr. Va Lecia Adams Kellum and skepticism from the public on if it would result in a meaningful difference. The news was first reported by LAist journalist Nick Gerda. It was a resounding expression of discontent and the biggest change to LA’s homelessness bureaucracy in several decades.

Link: Judge blasts LA homeless spending as a ‘train wreck’ and threatens to seize control

Link: Dkt. 878 Transcript of March 27, 2025 Hearing

Link: Dkt. 876 Order Re LAHSA Response and Documentation

Link: Matthew Umhofer LinkedIn Post RE: Receivership

Link: LA Alliance for Human Rights

Link: Homeless deaths in L.A. County are leveling off but still nearly seven per day

Link: L.A. homeless agency posted solid numbers last year. Now it’s under fire from all sides

Link: Confused About What The LA Homeless Services Authority (LAHSA) Does? We Have Answers.

Link: To understand homelessness, listen to homeless people. Here’s what I learned

Link: Large majority of homeless people in California are not illicit drug users, study finds

Link: Hermosa Beach bans camping in all public areas to address homelessness

Link: LA County to strip hundreds of millions of taxpayer dollars from troubled agency overseeing homelessness