CAO's office reallocates unused HAP funds to meet interim housing rate increases

In a critical discussion during the Los Angeles City Council meeting on June 3, 2025, officials addressed the financial implications of increasing funding for interim housing services, raising concerns about the sustainability of future housing projects. The conversation centered on the use of Housing Assistance Program (HAP) dollars, with city leaders emphasizing the need to balance immediate service costs against the long-term goal of establishing new beds for the homeless.

City Administrative Officer Ed Gibson clarified that while some interim housing funds are already general-funded, the majority of the resources needed to cover the increased service rates would come from unused HAP dollars. However, this approach raises alarms about the potential depletion of funds necessary for future housing projects. "Once you go to general fund, you can never go back to HAP," Gibson warned, highlighting the precarious nature of funding allocations.

Council members expressed concern that the increased financial commitment to service delivery could hinder the city’s ability to create new housing beds, which are desperately needed to meet the demands of the community. The discussion revealed that most HAP dollars are currently allocated to services, leaving little room for capital projects. As the city prepares for a decrease in HAP funding for the upcoming fiscal year, the urgency for additional financial resources becomes even more pronounced.

The council's deliberations underscored a critical crossroads for Los Angeles: balancing immediate service needs with the long-term vision of expanding housing solutions. As officials navigate these financial challenges, the future of the city’s homeless support initiatives hangs in the balance, with the potential for significant impacts on the community's most vulnerable populations.