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iAUDIT! –
“Never try to teach a pig to sing opera.
It takes a tremendous amount of effort.
The results are always disappointing.
And it annoys the pig”.
--Attributed to Mark Twain
My father was a gifted mechanic. Growing up on a southern Missouri farm, he learned to fix everything from a tractor to a water pump. Recognizing his skills, the US Navy assigned him to a combat logistics unit in the Pacific during World War II, keeping a vast array of equipment repaired and running. After the war, he dabbled in the corporate world until he returned to his roots and opened a service station in the 1960’s. He was one of those people who could listen to an engine and correctly diagnose its problem without touching a tool. I remember when I was changing the oil on my (very used) 1968 El Camino. My dad came out to the garage just as I was finishing. When I started the engine, he cocked an ear toward the car, and asked, “Can you hear that”? At first, I heard nothing, until I put my ear right next to the engine and heard a faint clicking. He said, “Your distributer cap has a crack in it”. He was, of course, right. When I was in high school, I went to work in his station where he taught me to make only the repairs needed to fix the problem. He never charged for unnecessary work. Sometimes a simple repair got a car back on the road, and sometimes the engine needed replacement.
Using an automotive analogy, the engine that drives Los Angeles’ homelessness programs has broken down, but the mechanics can’t seem to find the right fix. We are asked to believe the City’s, County’s, and LAHSA’s anemic, disorganized, and siloed programs are effectively addressing a homelessness crisis that leaves as many as 139,000 people unhoused. Like an underpowered engine, we are told programs that house a few dozen or a few hundred people per year are working, and Inside Safe, which has housed only 697 people at a cost of more than $491,000 per person, is successful. Responding to the Supreme Court’s Grants Pass decision, Mayor Bass said, “The only way to address this crisis is to bring people indoors with housing and supportive services. In the City of Los Angeles, we will continue leading with this approach, which helped move thousands more Angelenos inside last year than the year before. We cannot go backwards – we must continue innovating and moving with intention and urgency until every person experiencing homelessness is able to access housing, services and support.” Yet the City’s own performance reports show no more than a few hundred people have been housed in the past year, and many more have been lost back into homelessness. Inside Safe lost 868 people to homelessness, almost 25 percent more than it housed. In LA, homeless housing is neither permanent nor supportive.
Exacerbating the lack of effective programs, we face a homelessness system plagued by inefficiency and outright corruption. The City Controller is investigating at least two local nonprofits. An employee of Urban Alchemy was caught on video using a pressure washer to force an unhoused person off the sidewalk, triggering the Controller to review UA’s millions in service contracts with the city. Last month, the Controller’s office announced it is investigating an unnamed provider for fraud, for giving people in the Inside Safe program instant Raman and other fast food instead of the required nutritional meals. Faced with an almost complete lack of meaningful data, federal Judge David Carter ordered a comprehensive performance audit of the city’s homelessness programs, expressing serious doubt that as much as $600 million has been spent effectively.
In view of widespread performance problems, local officials have tried one quick fix after another, while consistently failing to address the root cause. As my father might have said, you can’t fix a cracked head by refilling the gas tank. The latest quick fix fad seems to be elected officials appointing themselves to various boards in a superficial effort to bring “accountability” to homelessness programs. Mayor Bass now sits on LAHSA’s Board, as does Lyndsey Horvath, who acts as the Chair of both the Board of Supervisors and LAHSA. Rather than improving transparency or accountably, these interlocking relationships merely create a system of shared deniability. For example, the online news agency Calmatters.org has had to sue LAHSA to get death and crime records in shelters. On August 29, federal Judge David Carter had to issue an order to the County to provide performance data requested by independent auditors. This is hardly the kind of accountability and transparency promised.
In a previous column, I wrote about how institutional corruption has enveloped LA’s homelessness programs. The system is designed to funnel money to a small group of nonprofits and developers while doing almost nothing to reduce homelessness. For a moment, put yourself in the place of the more than 70 percent of the unhoused who are unsheltered. Here’s what you can expect from the $4 billion being expended each year by the City and County:
- At best, you stand a 50/50 chance of being approached with a housing offer, per a 2022 study by the RAND corporation.
- After being approached by numerous case workers from different providers, who may or may not have shared information about your needs, you might enter a shelter or transitional living facility.
- If you enter a shelter, it may not be much better than the streets. As I wrote a few weeks ago, shelters are chronically mismanaged and often unsafe for their inhabitants. A survey of Inside Safe participants revealed about 70 percent of residents have received no help finding permanent housing, and few receive medical or mental health assistance.
- If you are lucky enough to find permanent housing, it may not be permanent and will almost certainly not be supportive. According to the City Controller, 46 percent of the people housed by Inside Safe are in time-limited subsidized housing, which they may lose once the two-year rent subsidies expire. As poignantly described by Christopher LeGras, once you are “housed”, there is little chance you’ll receive the services you need to stay housed.
If a system this badly broken has been allowed to continue, there must be something or someone supporting it. There may be many reasons, from organizational inertia, to siloing, to simple incompetence. Consider for a moment who benefits financially from the status quo:
- In 2016, LAHSA’s budget was about $100 million and it had 100 employees. Now it has almost 900 employees and a budget of more than $800 million.
- In 2016, the City of Los Angeles’ homelessness budget was about $110 million. Its is now $1.3 billion.
- ProPublica.org’s nonprofit tracker has interesting data on some of LA’s largest nonprofit homelessness organizations and their CEO compensation. From the latest available data
- In 2019, St. Joseph Center had a budget of $39 million and its CEO’s compensation was $291,970. By 2022, its budget grew to $49 million, and its CEO made $386,330, a 32 percent increase in three years
- In 2019, Urban Alchemy was just getting started. Its budget was $32,700 and its CEO made nothing. By 2022, its revenue exploded to $70.26 million, and its CEO made $344,500. That’s about a 2,200 percent increase in revenue
- In 2019, PATH’s revenue was about $64.2 million and its CEO made $277,790. By 2022, its revenue grew to $159.5 million, and its CEO made $346,590, a 24.7 percent increase in three years.
- By way of comparison, the City of Fullerton’s population is about 143,000, quite close to the estimated 139,000 unhoused in LA County. The City Manager makes $257,150 in salary and benefits, far less than any of the nonprofit CEO’s, while managing a larger budget of $285 million. And the city manager is responsible for services ranging from police to libraires. The CEO’s of these nonprofits have only one task: reduce homelessness, something they seem incapable of achieving.
- LAHSA’s 2019 PIT count claimed there were 56,257 unhoused people in LA County. By 2023, the number had risen 34 percent to 75,518. Even as agency budgets increased and CEO compensation skyrocketed, homelessness continued to climb.
In light of the increase in homelessness, no reasonable person could say the growth in budgets and compensation were based on performance. Rather, it was a combination of a flood of new money and opportunism. I picked 2019 as the base year because it was the last full year before the COVID pandemic. In 2020 and 2021, the state and federal governments spent billions of dollars to rescue the economy with some funding going to to programs to prevent and ameliorate homelessness. (Project Roomkey is an example). Unfortunately, the money did not come with increased oversight. Many large nonprofits saw an opportunity to increase their budgets while doing little to improve their programs. Nonprofits aligned their messaging with vocal advocacy groups like Knock LA and Ground Game to form a powerful lobby that has the financial, political, and ideological muscle to control policy. Most elected officials hesitate to challenge the status quo and incur the wrath of an energized lobby backed by billions in funding.
It doesn’t help that the state and federal governments continue to require Housing First policies as a prerequisite for funding. It is a symbiotic relationship; with its emphasis on housing as a primary goal, Housing First fits the ideological philosophy of many advocate groups who view housing as a social justice issue. It also improves the bottom lines of many public and nonprofit organizations.
This leaves us with the question: Can current homelessness programs be reformed? My answer is you may as well try to teach a pig to sing opera. These programs cannot be reformed; inefficiency and ineffectiveness are endemic to their structure, and it is in many organizations’ best financial interests to maintain the status quo. The homelessness system must be restructured, with programs focused on goals backed by meaningful performance measures. First and foremost, it must be based on an honest assessment of who the homeless are and what they need. Several surveys based on personal interviews show a significant number of the unhoused have intractable substance abuse or mental illness problems that cannot be solved by housing alone. Housing First’s one-size-fits-all model cannot accommodate intensive support services, especially in Los Angeles’ environment of lax contract enforcement for service providers.
What LA needs is a flexible, goals-based system that meets each unhoused person where he or she is. Some people may need little more than temporary financial help until their employment situation stabilizes; they do not require the services of the expensive and time-consuming shelter-to-housing system currently in place. At the other end of the spectrum, some people will require a lifetime of structured institutional care, something the present system cannot accommodate, even with the new CARE Courts in operation. Whatever form a new system takes, it cannot pay organizations for their mere existence. Just because huge corporate nonprofits like PATH or St. Joseph Center fit the ideological worldview of some of our elected leaders, that doesn’t make them effective. Above all else, there must be a hard-nosed, well-articulated, and consistent focus on goals instead of rhetoric. Then we may finally see a real and sustainable reduction in homelessness.
(Tim Campbell is a resident of Westchester who spent a career in the public service and managed a municipal performance audit program. He focuses on outcomes instead of process.)
