CAO: City homelessness budget tops $1 billion this year but faces a funding gap next year

The City Administrative Officer told the Housing and Homelessness Committee Jan. 29 that the city’s adopted budget and subsequent additions put Los Angeles’ homelessness spending at just over $1 billion for fiscal year 2024–25, while warning of a multi‑million‑dollar shortfall projected for 2025–26.

“Many of us have heard the $1,000,000,000 number that the city spends $1,000,000,000 on homelessness a year,” CAO staff member Matt Szabo said, and he later gave a consolidated figure: “The actual number for the 24,25 current fiscal year budget is just over a $1,040,000,000.” Szabo listed the main funding sources that feed the total: general fund dollars, state grants (including the HAP grant), county contributions related to the Roadmap agreement, HHH bond funds, and ULA dollars.

Szabo and CAO staff described three program buckets for those dollars: outreach, interim housing (shelter and motel-based programs), and permanent housing (including Prop HHH construction and time-limited rental subsidies). The CAO’s office provided a program-level inventory that includes 7,850 interim housing units (including motel rooms, bridge homes, tiny home villages and safe parking) and 2,574 time-limited subsidies.

The CAO also reviewed the Roadmap and Alliance legal arrangements. He said the Roadmap agreement required a multi-year county payment to support bed operations but noted the current year is the last year of that county Roadmap commitment: “This current fiscal year is the last year of that 5 year agreement.” On the Alliance settlement, he said the agreement “requires the city to establish 12,915 units of interim or permanent housing by June of 2027,” and the city had established 4,674 beds with another 4,000 in progress.

Looking ahead, Szabo said available interim-housing funding for the remainder of 24–25 totals about $234,600,000 against cost projections of about $244,000,000, a shortfall that is partially mitigated by anticipated reimbursements tied to Alliance‑eligible beds. For 2025–26 he projected a larger problem: higher nightly bed rates and the loss of roughly $60,000,000 in county Roadmap payments will widen the gap. If all current projects in progress come online, the CAO estimated a 25–26 interim housing obligation near $302,000,000 but said local solutions from Measure A were being projected at roughly $220,000,000 as a possible offset.

The CAO staff described office capacity: 17 dedicated staff members work on homelessness policy, contracting, outreach coordination and litigation reporting. Committee members raised whether other city departments’ homelessness-related costs — notably Fire and Police medical and response costs — are captured in the calculation; the CAO said some data are available but there is not a comprehensive cross-department accounting in the current presentation.

Committee members asked for follow-up. Chair Raman and others said the city must develop stronger performance oversight and shared data so the council can assess whether investments are yielding results (for example, whether shelter openings translate to rules for prioritizing residents in city-funded units). The CAO said the office will return with additional detail as requested and that coordination with LAHSA and county partners remains critical to managing the funding and meeting Alliance targets.