Ending LA’s homeless industrial complex

The Trump administration is turning off the money tap to end federal financing of the Los Angeles homeless industrial complex. This is an important first step toward reclaiming America’s streets and its tax dollars.

On June 11, the Department of Housing and Urban Development announced that it was suspending federal funding for the LA Homeless Services Authority.

The authority has received nearly $1 billion from the federal government since 2021. But HUD now accuses the agency of repeated false statements, weak financial controls, conflicts of interest, and a “severe and pervasive” failure to safeguard taxpayer dollars.

In its suspension notice, HUD cites a finding by a federal judge that LAHSA continued to seek funding for an 88-bed shelter despite knowing the facility was operating at roughly half capacity.

HUD sent the notice in its role in the newly created Task Force to Eliminate Fraud, overseen by Vice President JD Vance. The task force has vowed that “fraud and corruption ends today.” In Los Angeles, it appears to have found a worthy target.

In June 2025, Judge David O. Carter called for greater oversight of Los Angeles’s homelessness bureaucracy. “When the system fails, people die,” Carter wrote. His ruling came in a lawsuit from the LA Alliance for Human Rights, a group of downtown business and property owners who warned that “for decades the homeless crisis in Los Angeles has been shaped by indifference, avoidance, and bureaucratic inertia.”

It warned that the suffering “had become a defining feature of the city’s daily life,” with nearly seven unhoused people dying every day in Los Angeles County. LAHSA, which has existed since 1993, seems incapable of, or uninterested in, solving the problem it was created to address. That is often the way; the creation of an authority to fix a problem creates a at the same time a vested interested to ensure that the problem continues. A year after Carter’s warning, the verdict is in. The system is not merely failing. Its incentives seem less designed to end homelessness than to sustain the bureaucracy around it.

HUD also cited the April 2025 resignation of LAHSA CEO Va Lecia Adams Kellum after it was revealed that the agency paid $2.1 million in federal funds to a nonprofit organization that employed her husband. Kellum made more than $430,000 a year while homelessness grew under her watch.

That same week, the Los Angeles County Board of Supervisors voted to end its association with LAHSA, a relationship dating back to the agency’s founding and involving hundreds of millions of dollars a year.

Now it is the federal government’s turn.

The Task Force to Eliminate Fraud has already uncovered a staggering amount of waste, including $6.3 billion in suspected fraudulent government contracts.

EDITORIAL: CALIFORNIA ELECTIONS HAVE NO INTEGRITY

For decades, Washington has judged homelessness programs by inputs rather than outcomes: dollars spent, grants awarded, beds promised, and contracts signed. That model rewards bureaucracy, not recovery. The result is a vast network of publicly funded organizations that can keep failing and collecting your money.

A paradigm shift is needed. Success should require that fewer people live on the streets. Success is not simply the spending of more federal dollars on failing bureaucracies. That will require new incentives, real oversight, and long-overdue accountability.