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HUD Report Finds Misuse of Funding by L.A. Housing Authority

The U.S. Housing and Urban Development (HUD) Office of Inspector General (OIG) has released a report that found that the Los Angeles Homeless Services Authority (LAHSA) failed to utilize millions in federal homeless assistance funds that later expired, and continues to struggle with issues related to homeless provider capacity and oversight.

According to HUD’s findings, LAHSA did not satisfactorily enforce HUD’s quality housing standards, as 50 of the 68 housing units examined by HUD failed to meet minimum quality housing standards.

“The Authority did not properly use its program funds and program tenants lived in units that were not decent, safe, and sanitary,” said the report. “Based on our statistical sample, we estimate that over the next year, HUD will pay more tat $11.5 million in housing assistance payments on units with material housing quality standards violations if inspection procedures do not improve.”

LAHSA was founded in 1939 to manage and develop affordable housing in the Los Angeles area. Since 1938, LAHSA has administered federally funded public housing, rental assistance, and services for residents of the area living in public and assisted housing.

“When over 66,000 people are experiencing homelessness in Los Angeles County, it is wholly unacceptable for a single dollar of federal homeless relief to go unspent,” said Congresswoman Maxine Waters of California, Chair of the House Committee on Financial Services. “While for years I have been critical of LAHSA’s ability to manage the homelessness crisis in Los Angeles, I am deeply disappointed that the HUD Office of Inspector General found that the agency failed to spend $3.5 million in federal funds that later expired.”

After examination, HUD concluded in its report that LAHSA should:

  • Implement adequate procedures and controls to ensure that units meet HUD’s housing quality standards to prevent $11.5 million in program funds from being spent on units that are in non-compliance.
  • Verify and certify that the owners take appropriate corrective actions for all applicable housing quality violations.

“In light of these findings, I will continue to work to hold LAHSA accountable to our community to ensure we have a homeless system that actually meets the needs of our neighbors who have been forced to live in shelters, on streets, and in cars or tents,” said Rep. Waters.

About Author: Eric C. Peck

Eric C. Peck has 20-plus years’ experience covering the mortgage industry, he most recently served as Editor-in-Chief for The Mortgage Press and National Mortgage Professional Magazine. Peck graduated from the New York Institute of Technology where he received his B.A. in Communication Arts/Media. After graduating, he began his professional career with Videography Magazine before landing in the mortgage space. Peck has edited three published books and has served as Copy Editor for Entrepreneur.com.

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