Trump Administration Pauses Funding to LA Homeless Agency

The U.S. Department of Housing and Urban Development (HUD) suspended federal funding to the Los Angeles Homeless Services Authority (LAHSA) on Thursday following an investigation into fraud and widespread mismanagement. Secretary Scott Turner stated the move follows evidence of false statements, irresponsible actions, and a lack of safeguards against conflicts of interest.

The suspension cuts off millions of dollars to the Los Angeles region. According to Turner, the Los Angeles Continuum of Care, led by LAHSA, received nearly $1 billion in taxpayer funds over the last five years while the city remained the center of a “drug-fueled” homeless crisis.

Why did HUD suspend LAHSA funding?

HUD officials cited a “clear pattern of fraud” and a failure in financial management. Secretary Turner stated that taxpayers will no longer fund an organization that prioritizes “self-interests” over the people it serves, referring to what he called the “homeless-industrial complex.”

Specific failures cited by HUD include an August 2023 instance where LAHSA could not verify if funding paid for empty hotel rooms because it failed to record when people left transitional housing. Additionally, a November 2024 audit by L.A. City Controller Kenneth Mejia found LAHSA failed to spend approximately $513 million in budgeted homelessness funding for that year.

Did You Know? The Los Angeles Continuum of Care, managed by LAHSA, has been allocated nearly $1 billion in taxpayer dollars over the previous five years.

What are the allegations against LAHSA leadership?

HUD’s action referenced the resignation of former LAHSA CEO Va Lecia Adams Kellum. According to an investigation by LAist, Kellum signed a $2.1 million contract with a nonprofit organization that employed her husband.

The agency has also faced criticism for inadequate record-keeping, failing to monitor spending accurately, and issuing late payments to service providers. These issues coincided with the L.A. County Board of Supervisors moving $300 million and hundreds of staff members from LAHSA to the new Department of Homeless Services and Housing.

Expert Insight: Samantha Carter notes that this suspension creates a high-stakes conflict between federal demands for fiscal accountability and the immediate operational needs of the region’s housing system. The removal of funds may force a rapid transition to new oversight models, but it risks disrupting the actual delivery of services to vulnerable populations.

How has the city of Los Angeles responded?

LAHSA officials described the suspension as a “blatant attempt” to pull resources from a city they claim has been targeted repeatedly. In a statement, the agency argued it has already corrected or is correcting the issues raised and has implemented online public dashboards to increase transparency.

Mayor Karen Bass expressed “grave concerns” about LAHSA and stated she has zero tolerance for negligence. However, her office warned that threatening federal funds “does nothing to house people” and could jeopardize progress made in reducing homelessness over the last two years.

Contrasting Data on Homelessness Trends

While Secretary Turner claimed homelessness “skyrocketed,” other data suggests a decline. Gov. Gavin Newsom announced in June that California saw the largest reduction in unsheltered homelessness in the nation last year.

HUD Secretary Scott Turner's Aim to End Homelessness the Right Way | Full Interview

Regional Impact: Los Angeles saw a 10.3% drop in unsheltered homelessness, the largest regional drop in the U.S., according to HUD data.
County Data: LAHSA’s 2025 point-in-time count showed a 4% decrease in homeless people across the county and a 9.5% decline in unsheltered homelessness compared to the prior year.
City Data: Unsheltered homelessness in the city of L.A. dropped 7.9% in 2025 and 17.5% over the last two years.

What happens next for L.A. homeless services?

LAHSA is currently exploring all available options to ensure federal funds continue to support thousands of people already housed through its rehousing system. The agency stated that a fair review by HUD’s Inspector General would validate their current tracking systems.

Because the funding is suspended, thousands of formerly homeless individuals could potentially be put back on the street. City and county officials may be forced to accelerate their moves toward new transparency and accountability frameworks to regain federal trust.

Frequently Asked Questions

Why did HUD stop funding to LAHSA?
HUD suspended funding due to allegations of fraud, widespread mismanagement, false statements, and a lack of safeguards against conflicts of interest.

How much money was unspent according to the city audit?
A November 2024 audit by L.A. City Controller Kenneth Mejia found that LAHSA failed to spend approximately $513 million in budgeted homelessness funding for that year.

What progress has Los Angeles made in reducing homelessness?
According to HUD data, Los Angeles experienced a 10.3% drop in unsheltered homelessness, and LAHSA reported a 3.4% drop in homeless people within the city of Los Angeles in its 2025 point-in-time count.

Do you believe federal funding should be tied strictly to financial audits or to the total number of people housed?