Feds suspend funding to Los Angeles homelessness agency

By Madeline Shannon
The Center Square

A federal agency suspended taxpayer funding to the Los Angeles Homeless Services Authority on Thursday, effective immediately.

A letter was sent to the city of Los Angeles on Thursday by Andrew D. Hughes, deputy secretary of the U.S. Department of Housing and Urban Development. Hughes accused the city of abusing hundreds of millions of taxpayer dollars on programs that failed to substantially reduce homelessness. The letter also alleged that the city’s main agency to help the homeless, the Los Angeles Homeless Services Authority, lacked basic safeguards and requirements to ensure money was spent responsibly.

“HUD has evidence that LAHSA’s repeated false statements and its irresponsible actions and failures, including its lack of financial management, internal controls, and safeguards against conflicts of interest pose a threat to HUD, the public and those living on the streets of Los Angeles,” Hughes wrote. His letter was addressed to LAHSA CEO Gita O’Neill.

Hughes told O’Neill that the Los Angeles Homeless Services Authority receives more federal taxpayer dollars from his department to aid the homeless than any other city agency in the country – more than $220 million in 2024 and $944 million total since 2021. The letter also details how the agency’s former CEO resigned after it was found she committed $2 million of the agency’s money to her husband’s employer. That CEO was Va Lecia Adams Kellum, who Hughes noted also committed federal funds to her former employer.

Both those incidents were just two in a string of examples that established a pattern of misuse of taxpayer funds, Hughes said in his letter.

“HUD cannot ignore LAHSA’s wanton mismanagement of public funds,” Hughes wrote. “HUD’s mission is to reduce the plague of homelessness in America. Turning over billions of dollars from American taxpayers to an organization under investigation and suspected gross misuse of federal funding and ‘obvious fraud’ does nothing to reduce homelessness.”

“Indeed, diverting dollars from worthy programs to LAHSA merely makes the homeless crisis worse,” Hughes added.

The Center Square previously reported that the Los Angeles Homeless Services Authority was jointly funded by both the city of Los Angeles and Los Angeles County. In April 2025, the county suspended funding to the authority to fund its own homeless services agency after the authority failed two audits.

That followed a federal court finding in March 2025 that the Los Angeles Homeless Services Authority could not account for $2.3 billion, The Center Square reported.

Hughes and other officials from the U.S. Department of Housing and Urban Development on Thursday afternoon did not return The Center Square’s calls and emails to The Center Square requesting an interview. However, in a press release sent on Thursday afternoon, the department said that homelessness has skyrocketed in Los Angeles on the Los Angeles Homeless Services Authority’s watch.

“Under President Trump’s leadership, HUD will fund results, not corrupt failure or the homeless industrial complex,” said Secretary Scott Turner in a press release from the U.S. Department of Housing and Urban Development. “Year after year, hundreds of millions of taxpayer dollars were funneled to LAHSA with little accountability. Meanwhile, homelessness skyrocketed. Taxpayers will no longer bankroll an organization that puts its own self-interests ahead of the Americans it was created to serve.”

City officials, including Los Angeles Mayor Karen Bass, did not respond to The Center Square’s requests for an interview on Thursday.

However, Bass’s office said in a press release sent on Thursday afternoon that she was also concerned about misuse of taxpayer funds by the Los Angeles Homeless Services Authority.

“Mayor Bass, too, has grave concerns about LAHSA and zero tolerance for mismanagement and negligence, which is why she previously directed the City to evaluate how to move away from the agency,” that statement read. “Threatening federal funds does nothing to house people and jeopardizes the progress Mayor Bass has led to reduce homelessness for two years in a row, after it only went up in Los Angeles for years. We urge HUD to work with the City of Los Angeles to provide the necessary funding to reduce homelessness.”

Officials from the Los Angeles Homeless Services Authority did not respond to The Center Square on Thursday.

Susan Shelley, vice president of communications for the Los Angeles-based Howard Jarvis Taxpayers Association, who has been critical of homelessness funding in Los Angeles, also did not respond to The Center Square.