Who in their right mind would continue to spend $1 billion annually for a failing product? Two Los Angeles city councilmembers—Joe Buscaino and Paul Koretz—asked that question recently while introducing a motion for the city to withdraw from the Los Angeles Homelessness Services Authority. The city pays LAHSA nearly $300 million a year to administer homelessness services on its behalf, yet the agency is unwilling to provide taxpayers or city departments basic information about its activities, such as a line-item scope of services or verifiable data on program outcomes. The agency receives nearly $1 billion in annual funding from federal, state, county, and city sources.

LAHSA’s core function is to provide street-level outreach to the homeless population in the Greater L.A. area, ensuring that they receive resources, shelter, and eventually permanent supportive housing with comprehensive services. Yet even with its vast budget, the agency is falling short. According to a 2019 audit from city controller Ron Galperin, LAHSA has failed to meet five outreach targets and in some cases has reported a mere 4 percent success rate, reaching only dozens of people in need, as measured against the tens of thousands of homeless living in encampments scattered across city and county streets, freeway underpasses, parks, and community spaces.

LAHSA’s failures are not the result of understaffing or underfunding in light of the surge of the homeless population in recent years. According to its own annual count, from 2015 to 2020 the number of homeless in Los Angeles grew steadily from 41,174 to 63,706, an increase of 55 percent. Yet during that five-year period, the agency’s annual payroll rose even faster, from $7.2 million in 2015 to $36.8 million in 2020—a 411 percent increase. That this massive increase hasn’t raised more red flags about financial mismanagement is testament to the power of the “homeless-industrial complex” in L.A.

Recently, L.A. County supervisor Kathryn Barger nominated Reverend Andy Bales, president and chief executive of the Union Rescue Mission (URM) on Skid Row, as a commissioner to LAHSA. Many saw the appointment as an attempt to shake up homelessness policy, which still aligns with the federally mandated housing-first approach that identifies the primary problem as housing, rather than mental health or drug addiction. Bales has openly criticized this policy, particularly because it fails to mandate or provide services to meet abstinence and sobriety requirements. A significant percentage of those who receive housing services end up back on the streets.

Over the holidays, I joined Reverend Bales and volunteered at URM, located in downtown Los Angeles. Skid Row, as the neighborhood is known, has the highest concentration of people experiencing homelessness in the U.S.—an estimated 5,000– 8,000 people live on the streets in an area of almost three square miles, filled with drugs, drinking, human trafficking, violence, rape, murder, hourly overdoses, and despair. Upon my arrival at 5 a.m. on Thanksgiving morning, many were already openly using and buying drugs from street-gang dealers.

Founded in 1891 to dispense food and clothing from gospel wagons, URM is a privately funded provider of homeless services that today occupies a five-story building in the heart of Skid Row. It practices a faith-based recovery model, offering immediate food and shelter, health care, and life-skills training for up to 1,000 daily clients. URM requires abstinence, order, and sobriety. These requirements make it ineligible for federal money, but it receives $18 million per year in private donations.

An eternal optimist and man of faith, Bales lost his lower right leg to flesh-eating infections he acquired while caring for the homeless on the streets of Skid Row. He thus personifies sacrificial self-giving, but his philosophy comes with rules and an expectation of lawful behavior from those he helps. Meals are scheduled by groups, based on level of need, gender, and family status. URM requires sobriety; it doesn’t even serve coffee at breakfast, as caffeine could have a negative effect on some of its residents.

It’s unclear how much power Bales will have as a commissioner when it comes to revising the agency’s failed housing-first policy. The LAHSA Commission, which has authority to make financial, planning, and program policies, has ten members—five appointed by county supervisors, the other five by the mayor and city council. Several commissioners differ with Bales on strategy, though none have spoken out against him.

Brian Ulf, president and chairman of the board of SHARE! Collaborative Housing—a public-private partnership providing homeless services—believes that Bales will say things publicly that no other service provider or LASHA commissioner would. He describes Bales as “a true spiritual warrior on the streets of L.A., devoid of ego, who acts in a spiritual and humanitarian capacity.”

Barger’s appointment of Bales may be a sign that she recognizes the system is broken and in need of an outsider’s perspective. Many believe that Bales will represent the interests of homeless individuals, rather than those of the homeless-services system. However things play out, it will be people like Reverend Andy Bales and privately funded, faith-based organizations such as URM that will lead L.A. out of this humanitarian crisis, not the government.

Photo by APU GOMES/AFP via Getty Images


City Journal is a publication of the Manhattan Institute for Policy Research (MI), a leading free-market think tank. Are you interested in supporting the magazine? As a 501(c)(3) nonprofit, donations in support of MI and City Journal are fully tax-deductible as provided by law (EIN #13-2912529).

Further Reading

Up Next