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#  Empty Apartments, Full Paychecks: HUD Exposes LAHSA's $10 Million Homeless Housing Scandal

June 18 2026

Written by Mihran Kalaydjian.

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THE BOTTOM LINE - While Thousands Sleep on Los Angeles Streets, Taxpayers Are Paying for Hundreds of Vacant Apartments

Los Angeles taxpayers have spent years being told that homelessness is the city's greatest humanitarian crisis. They have been asked to support new taxes, larger budgets, and an ever-growing network of agencies tasked with addressing the problem.

What they were not told is that hundreds of taxpayer-funded apartments would sit empty while thousands of homeless individuals continue sleeping on sidewalks, in parks, under freeway overpasses, and in vehicles throughout the city.

**Now the federal government has stepped in.** The U.S. Department of Housing and Urban Development recently froze funding for the Los Angeles Homeless Services Authority (LAHSA) pending an investigation into alleged financial mismanagement. The action represents far more than an embarrassing headline. It is a warning sign that confidence in Los Angeles' homelessness bureaucracy is rapidly eroding.

At the center of the controversy is the city's master leasing program, one of the signature housing initiatives championed by Mayor Karen Bass. The concept was simple: public agencies lease apartment buildings, reserve units for homeless residents, and use government subsidies to cover the rent.

**But the results tell a different story.** According to recent reports, 259 of 758 units in the program sat vacant in May. More than one-third of the apartments taxpayers are paying for had no tenants. The vacancy rate of approximately 34 percent is higher than many struggling commercial real estate properties.

Yet taxpayers continue paying the bill.

LAHSA reportedly spends an average of roughly $3,400 per month per apartment regardless of whether anyone occupies the unit. Those vacant apartments are costing taxpayers approximately $880,000 every month, or more than $10.6 million annually.

**Think about that**.

Los Angeles continues to struggle with one of the largest homeless populations in America. Encampments remain visible across the city. Residents are repeatedly told that housing shortages require more spending and additional resources. Yet hundreds of apartments specifically designated for homeless residents remain empty.

This is not a shortage of funding.

This is a failure of management.

Los Angeles taxpayers have already spent billions of dollars addressing homelessness over the past decade. Yet residents continue to see the same encampments, the same tents, and the same public frustration. At some point, the conversation must shift from how much money is being spent to whether that money is producing measurable results.

LAHSA officials have blamed subsidy restrictions, funding reductions, and bureaucratic hurdles for the vacancies. Those explanations may account for some delays. They do not explain why taxpayers should continue financing empty apartments month after month. Nor do they explain why contracts were signed without ensuring the ability to keep units occupied.

**The concerns extend well beyond vacancy rates.**

Recent audits reportedly found that LAHSA has committed itself to more than $70 million in future lease obligations, much of it tied to long-term agreements that are difficult to cancel. That means taxpayers may remain financially responsible long after the current controversy fades from public attention.

HUD's response reflects the seriousness of the situation. When federal officials publicly state they cannot ignore what they describe as the "wanton management of public funds," every elected official in Los Angeles should take notice.

The timing is particularly significant. Beginning July 1, Los Angeles County will assume greater responsibility for homelessness spending and oversight. County leaders have already directed the termination of several master leases, signaling growing concern about the current approach.

The deeper issue is not simply vacant apartments.

**It is public trust.**
For years, voters have been told that more funding would lead to better outcomes. Yet billions have been spent, homelessness remains widespread, and federal investigators are now examining how public funds were managed.

Taxpayers deserve answers.

Homeless residents deserve better.

And the public deserves accountability from the officials and agencies entrusted with addressing one of Los Angeles' most urgent challenges.

HUD's funding freeze is not the scandal.

**It is the consequence.**

The real scandal is that after years of promises, billions of dollars, and endless declarations of urgency, Los Angeles has somehow created a system where thousands of people remain homeless, hundreds of apartments sit vacant, and taxpayers are paying for both at the same time.

That is not a housing strategy.

That is government failure.

*(Mihran Kalaydjian is a seasoned public affairs and government relations professional with more than twenty years of experience in legislative affairs, public policy, community relations, and strategic communications. A respected civic leader and education advocate, he has spearheaded numerous academic and community initiatives, shaping dialogue and driving reform in local and regional political forums. His career reflects a steadfast commitment to transparency, accountability, and public service across Los Angeles and beyond.*)

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