L.A. leaders promised to spend $138 million on homelessness this year. Then reality hit

Confronted with surging homelessness, Los Angeles Mayor Eric Garcetti and several City Council members gathered at City Hall’s steps in September 2015 to declare that the situation had turned into a crisis.

They pledged to spend $100 million to aid those living in encampments and shelters, despite uncertainty over where the funds would come from.

Homeless advocates praised the announcement, which drew national headlines and put pressure on political leaders to find the money.

Months later, Garcetti went even further, unveiling a budget for 2016-17 that promised an unprecedented $138 million for homelessness.

As the fiscal year enters its final month, the city has spent about half that figure — roughly $65 million — on services and programs for homeless people, including housing, shelter beds and outreach workers.

The rest of the budgeted amount, Garcetti and aides say, comes from city property that has been set aside for sale or development of homeless and low-income housing. But none of the land has been sold, nor have any final development agreements been reached to build housing.

The 2016-17 spending plan marked the beginning of an aggressive new approach by city leaders to tackle homelessness — one that will see more money directed toward the problem in coming years, thanks to a voter-approved bond measure.

But the rollout was bumpy: Community opposition thwarted some planned homeless programs, while Garcetti’s plan to raise millions from a development tax was never approved.

These setbacks reflect the political and bureaucratic challenges inherent in tackling entrenched homelessness, which has worsened over the last year. L.A.’s homeless population grew 20% this year, to more than 34,000, according to survey results released Wednesday.

The mayor expressed frustration this week at how long it is taking for budgeted funds to make a dent in the problem.

“Am I happy about the pace?” Garcetti said at a news conference outlining the new homelessness numbers. “How can we look outside and anybody be happy with the pace?”

The mayor’s office said in a statement that more than 9,000 people were housed last year. As for the $138-million budget, mayoral spokesman Alex Comisar said the “city has already spent or implemented a majority of those funds, and we are putting the rest into action as quickly as possible.”

A significant portion of Garcetti’s budget for homelessness involves real estate. The budget anticipated the sale or development of eight city-owned parcels, which had an appraised value of $47 million. The mayor included that amount in the $138 million because homeless and low-income people will live in the units.

Garcetti on Wednesday defended that budgeting maneuver and said new appraisals showed the land was worth even more than previously estimated. City budget officials say just five of the parcels — those deemed most likely to be developed — are now valued at $72 million.

The city has exclusive negotiating agreements with developers on four sites and is seeking proposals on the fifth.

The mayor is taking the same approach in next year’s budget for homelessness, including 17 city properties valued at $46 million that will be reviewed for development.

Mark Ryavec, president of the Venice Stakeholders Assn., criticized Garcetti for including unsold, undeveloped land in his spending plans, calling it “smoke and mirrors.”

Ryavec called for more immediate relief for his community, where encampments line the beaches and residents see homeless people sleeping in their driveways.

One major revenue source in Garcetti’s budget never panned out. The mayor counted on $20 million from a so-called linkage fee — a popular financing tool that cities such as San Diego and San Francisco have used to develop affordable housing.

Laura Guglielmo, executive officer at the city’s Housing and Community Investment Department, estimates that $20 million, combined with existing funds, could have helped finance 160 to 200 units of new, affordable housing.

“It would have been super helpful,” Guglielmo said. “The bigger pot of money, the more housing we can develop.”

While Garcetti’s appointees on the Planning Commission approved the fee proposal in February, the City Council has yet to take it up.

Some council members are concerned the fee will drive up housing costs, said Councilman Marqueece Harris-Dawson, who chairs the Homeless and Poverty Committee.

In another setback to the plans laid out in the budget a year ago, community opposition derailed new storage facilities for homeless people. San Pedro residents fought a facility proposed near an elementary school, while another planned for Venice also faced resistance. Plans to provide mobile showers have been delayed as well.

Though those proposals represented a relatively small expenditure — about $2 million — the facilities would have given Los Angeles police more license to break up sprawling encampments, according to a February report on the city’s homelessness strategy.

Those shantytowns have incensed city residents from Wilmington to Tujunga, fueling much of the support for Proposition HHH, the $1.2-billion bond measure that voters approved in November.

City Councilman Mike Bonin supports the storage center program and is leading efforts to place one in his Venice district. He also supports the city’s push for more housing.

“I’ve had plenty of outreach in my district,” Bonin said. “There are only so many times you can give somebody a McDonalds gift card. Where can we give folks a place to put their head down that night?”

Of the $65 million that has been spent, the largest share — more than $50 million — went to the Los Angeles Homeless Services Authority.

But that windfall had a delaying effect of its own: The agency had to spend months gearing up its operations as it expanded its reach, slowing the distribution of rent vouchers and other more immediate homelessness relief.

City Councilman Jose Huizar said he had issues with the budget approved a year ago, saying in a recent interview that it was “premature” to count on the $20 million from the stalled linkage fee. He also questioned whether a subsidy of city land can be counted as a budget expenditure.

But in the end he voted to approve the plan because it pushed the issue of homelessness — a flashpoint in his district, which includes skid row — to the forefront.

“I wasn’t wholly satisfied that it was new money, but I loved the fact that they made a commitment,” Huizar said. “I was elated that the political leadership had done more.”

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Twitter: @geholland

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