US Housing Department Suspends Funding for Los Angeles Homeless Agency

The Los Angeles agency tasked with reducing homelessness will lose its federal funding due to concerns over potential fraud as the city’s homeless count has risen despite funding increases, according to U.S. Department of Housing and Urban Development (HUD) Secretary Scott Turner.

Turner announced the suspension on June 11 following an investigation into the Los Angeles Homeless Services Authority (LAHSA).

“HUD will fund results, not corrupt failure or the homeless industrial complex,” said Turner.

“Year after year, hundreds of millions of taxpayer dollars were funneled to LAHSA with little accountability. Meanwhile, homelessness skyrocketed. Taxpayers will no longer bankroll an organization that puts its own self-interests ahead of the Americans it was created to serve.”

The Los Angeles Continuum of Care, which is under LAHSA, has received almost $1 billion in taxpayer money since 2021.

According to HUD, despite receiving more federal money to stave off homelessness than any other jurisdiction in the nation, the city continues to be the “epicenter of the nation’s drug-fueled homelessness crisis.”

The HUD Office of Inspector General investigation uncovered evidence of irresponsible actions and failures, including a lack of financial management and safeguards against conflicts of interest.

According to HUD, the California-based agency engaged in “repeated false statements,” and currently poses a threat to HUD’s mission and the appropriate use of taxpayer money.

“For years, American taxpayers have been sending billions of dollars to Los Angeles to house the homeless and other vulnerable Americans. The result? Fraud and corruption. That ends today,” said Scott Brady, White House Task Force executive director. 

LAHSA told The Epoch Times that the suspension of funding “could put thousands of formerly homeless people back on the street.”

The authority called HUD’s move a “blatant attempt to pull yet more resources from Los Angeles,” saying that it has either corrected or is in the process of correcting nearly all of the issues raised by HUD in the past.

In the course of the investigation, HUD auditors found the agency couldn’t determine if federal funds had been used to pay for vacant motel rooms because it failed to track when residents left transitional housing.

Another review found that the authority could not provide documentation to verify nearly 2,300 housing sites, which were supposed to be under its responsibility.

Investigators also found that the authority lacked a formal written conflict-of-interest policy until September of last year, despite their certification that they complied with federal requirements.

In addition, the authority’s former chief executive officer resigned after the authority directed that over $2 million in federal funds go to her husband’s employer.

The authority said in its statement to The Epoch Times that local oversight has “already resulted in strong repairs and reforms to [the Los Angeles Homeless Services Authority]’s internal controls, which are accountable and viewable to the public.”

The authority said that its “immediate priority is to explore all available options to ensure that federal funds continue to support the thousands of people who have been housed.”

The Los Angeles County Board of Supervisors made the decision to shift its $350 million in annual taxpayer funds away from LAHSA in April 2025 and create a county department focused on homelessness.

The city of Los Angeles took steps toward a similar action last spring, limiting LAHSA’s role.

“These measures aim to provide the City with greater clarity and control over homelessness service delivery, ensuring that any transition away from LAHSA maintains service effectiveness and continues to support the City’s most vulnerable residents,” the office of Councilman Curren D. Price Jr. said in a statement at the time.

The Trump administration called the city’s homelessness a crisis. According to HUD, since 2013, funding for the city’s homeless operations has increased by 178 percent. Homelessness has increased in Los Angeles by 100 percent during the same period, and free housing for the homeless has increased by 212 percent.

“Since 2021, LAHSA received $1 billion while homelessness skyrocketed and fraud ran rampant,” Turner said in a June 11 post to X. “Our message to the homelessness industrial complex: If you are doing something fraudulent, you are on notice.”