Trump Administration Battles Homeless Agency Over Nearly $250 Million in Federal Funding
The Trump administration and Los Angeles’ largest homelessness agency are locked in a high-stakes court battle over hundreds of millions of dollars in federal funding, with the dispute putting renewed attention on allegations of financial mismanagement inside the agency responsible for coordinating the region’s homelessness response.
The U.S. Department of Housing and Urban Development moved to freeze funding to the Los Angeles Homeless Services Authority, commonly known as LAHSA, earlier this summer.
HUD has accused the agency of mismanagement, fraud and abuse while arguing that federal taxpayers should no longer bankroll homelessness programs that fail to produce results. HUD Secretary Scott Turner reiterated that position during a visit to Los Angeles this week, declaring that “the days of funding corrupt failure are over.”
The financial stakes are enormous. Nearly $250 million in federal funding is caught up in the dispute, while HUD says LAHSA has received more than $1 billion in taxpayer money since 2013. The Trump administration argues that continued federal support cannot be justified without stronger safeguards ensuring that taxpayer dollars are properly managed.
The controversy was documented in a new video report from Frontlines TPUSA, which spoke with people familiar with Los Angeles’ homelessness system and examined the allegations facing LAHSA. One formerly homeless man identified only as “Mike” told Frontlines that he sought assistance while living on Skid Row but received little meaningful help finding housing.
According to Mike, one worker eventually told him, “I don’t know how to help you. You just need a job.” Asked what assistance he received with housing, Mike responded, “Nothing.”
The Frontlines report also detailed accusations surrounding LAHSA’s handling of taxpayer money, including questions over spending, oversight and potential conflicts of interest. Those concerns have become central to the Trump administration’s effort to force changes in the way federal homelessness dollars are distributed in Los Angeles.
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One controversy involved former LAHSA CEO Va Lecia Adams Kellum, who approved more than $2 million in federal funding connected to an organization that employed her husband. The episode added to broader concerns about financial controls and conflicts of interest inside an agency entrusted with enormous amounts of taxpayer money.
Hal Bastian, a downtown Los Angeles stakeholder interviewed by Frontlines, argued that the system lacks accountability at the top.
“If you or I didn’t have a metric of an improvement, we’d get fired,” Bastian said. “There it’s just rewarded.”
He argued that the bureaucracy funnels money toward programs that have failed to solve the underlying crisis.
The Trump administration is now using LAHSA as a prime example of what officials describe as a failed approach to homelessness. During their Los Angeles visit Tuesday, Turner and Health and Human Services Secretary Robert F. Kennedy Jr. blasted what they called the “Homeless Industrial Complex,” arguing that federal dollars should instead prioritize treatment, recovery and self-sufficiency. HUD says its homelessness funding to Los Angeles nearly tripled over the last decade while homelessness doubled.
LAHSA, however, has fought the administration’s funding action in court, warning that withholding federal dollars could disrupt housing and services and ultimately make the region’s homelessness crisis worse.
That argument sets up the central question in the escalating battle: whether cutting money to an agency accused of mismanagement will force greater accountability or instead hurt the homeless residents the programs are intended to serve.
Los Angeles remains one of the most visible examples of America’s homelessness crisis, with tens of thousands of people experiencing homelessness across the county despite years of massive public spending.
For the Trump administration, that record demonstrates why the existing system needs a dramatic overhaul. For LAHSA and its defenders, losing hundreds of millions of dollars could make an already severe problem even harder to contain.
Now the fight has moved to the courtroom, where the fate of nearly $250 million could determine not only LAHSA’s immediate future but also how aggressively the Trump administration can reshape federal homelessness policy in Los Angeles.