LA Spends Up To $837K Per Unit To House Just 5,600 Of Over 40,000 Homeless

Authored by Mike Shedlock via MishTalk.com,

In 2016, the city of Los Angeles had 28,464 Homeless. It passed HHH authorizing $1.2 billion to tackle the problem. Let’s check in on the progress…

Los Angeles Passed Proposition HHH in 2016. Cost per unit from LA City Audit.

Inquiring minds are investigating Los Angeles City Controller’s Audit Report on the Progress of Proposition HHH a 2016 measure that authorized spending $1.2 billion to tackle homelessness in LA.

Key Points

• California had 28,464 Homeless in 2016.

• LA then passed proposition HHH, authorizing $1.2 billion to address the problem.

• In early 2020, pre-Covid, the city had 41,250 homeless. There are no current homeless stats and due to Covid are undoubtedly much higher.

• The city is building units to address the problem. 1,200 units have been completed. 

• 4,400 units are in construction. 

LA Homelessness

Homelessness chart from LA City audit pre-Covid, annotations by Mish. 

Proposition HHH Cost Per Unit

• Average completed cost is $520,879 per unit

• Average cost of units underway is $596,486 per unit 

• Approximately 14% of units in construction exceed $700,000 per unit.

• One project is currently estimated to cost $837,000 per unit.

• It took 3.4 years for the 1,200 completed units.

• The estimated timeline is another 4.3 years for the additional 4,400 units.

My guess is there are now 60,000 LA homeless (possibly a lowball number due to Covid). At the current average of $600,000 per unit (and rising), LA will need to spend another $36,000,000,000. 

The controller says “Projects exceeding $600,000 per unit are no longer outliers.“

Interim Housing

What about interim housing? 

Good question. Although six years have come and gone since HHH passed, the city is just now addressing delays.

Ron Galperin says “The City should use remaining HHH funds—or any HHH funds that become available—to prioritize the development of facilities such as interim housing, clinics, storage, and showers to help better manage the immediate needs of Angelenos experiencing homelessness.”

How Timely!

Q: How much money is left anyway?

A: Less than 5%, according to the audit, and that is a 2018 figure after the city suspended building HHH facilities and still struggles to complete them.

Current vs Ongoing Costs

• Housing the current estimated homeless would cost another $36 billion taxpayer dollars at the current rate. Unfortunately, that’s not the end of it. 

• What about food, electricity, mental health treatments, and other services? 

• What about building maintenance? 

• What about building security at union wages? 

Of the $1.2 billion authorized, we have the same questions, just on a smaller scale. 

In another 4.3 years, LA will have a total of 5,600 units built for $1.2 billion while needing perhaps 60,000 units. Then what?

When Does it Stop?

The report says “Even after housing being built through Proposition HHH is completed, it is likely that tens of thousands of people will remain unsheltered.”

Duh? Ya think?

I assure you that whatever the the number of homeless is, be it 45,000 or 75,500 there is an endless demand for free services. 

If the city were to give away 100,000 free units at a cost of $600,000 to $800,000 each, there would be 200,000 willing takers if not 2 million takers.

What’s to stop San Diego or Austin, Texas from offering $200 and free bus transportation to LA for willing participants?

Perhaps Austin should consider that right now.  The obvious snag is unlimited demand for a mere 5,600 “free” units. 

Some will manage to get to LA from nearby areas even without the free transportation. 

Progress? What Progress?

There will never be progress in combatting homelessness by building $600,000 units to shelter the homeless.

Inflationary Madness

Paying $600,000 per unit to shelter homeless is inflationary madness. 

So is the entirety of Build Back Better: Free college, student debt cancellation, more union jobs, free child care, combined with an attack on energy to allegedly save the world, while now promoting free gas money for dependents who don’t even drive. 

On the table if Build Back Better happened to pass was a guaranteed “living wage” proposal. 

One courageous Democrat, Senator Joe Manchin of West Virginia saved the US from massive perpetual inflation of “free” stuff. 

Meanwhile, Biden Doing Everything Possible to Drive Up the Price of Oil, Some of It’s Illegal. 

Stop!

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