More than $950 Million Budgeted for LA’s Homeless

April 21, 2021 Updated: April 21, 2021

Los Angeles Mayor Eric Garcetti wants to spend up to $23,000 per homeless person over the next year.

That’s the analysis of Garcetti’s state of the city speech April 19 and his 500-plus page budget proposal, covering the July 1, 2021 to June 30, 2022 fiscal year.

In his speech, Garcetti said, “we will dedicate nearly $1 billion toward ending homelessness… starting July 1, that number will be north of $950 million.”

There were 41,290 homeless people in Los Angeles during the last census of the population, taken in January 2020.

If $950 million is divided by 41,290, it means the mayor wants to spend $23,008 per homeless person during the upcoming budget year.

There was no census of the homeless population released in 2021, because the pandemic was so severe in Los Angeles during the past year that it was deemed unsafe for the census-takers to do their work.

If the homeless population grew at the same 16 percent rate in 2020-2021, as it did in 2019-2020, there would be 47,900 homeless people now living in Los Angeles. If that figure is correct, Garcetti’s proposal equates to $19,832 being spent for housing and other services per Los Angeles homeless person during the next year.

Rental Assistance

This $950 million proposed spending on homeless persons seems to be in addition to the $235 million the mayor is proposing for the city’s emergency rental assistance program to “help pay the rent of nearly 100,000 households” that otherwise would not be able to make their rent payments.

The average household size in California is 2.94 people, according to Statistica.com. The $235 million proposed to be spent for rent payments will help about 294,000 people stay in their current homes.

That works out to about $800 per person over the next year to help keep 294,000 people in their homes, if the statistics in the mayor’s speech are accurate.

Even though $800 per person for an entire year seems like a very low cost to keep so many people housed, the mayor’s other statistics, which if true and which will be verified during the next few days, point to some very strong successes:

  • 8,000 people received shelters and hotels through Project Roomkey
  • 1,200 additional vouchers were used to help people find homes
  • The city purchased 20 buildings in three months

Of course, some of the ideas and statistics in the budget proposal and speech are difficult to verify. For example, during his April 19 speech, the mayor claimed “Proposition HHH got a second wind and beat the hype.”

In fact, Proposition HHH refers to a $1.2 billion bond measure passed by Los Angeles voters in 2016. As of September 2020, when Los Angeles City Controller Ron Galperin issued his annual progress report regarding how the HHH bond monies were being spent, only some 228 housing units had actually been built almost four years after the bond measure had been passed.

Garcetti during his speech also said that projects being funded with HHH proceeds are “now set to come in at an average of $15,000 per unit cheaper for one thousand units more than originally promised—two years ahead of schedule.”

Of course, it is possible that something radical occurred in the past seven months to make that true, or that both reports are true, but the tone is really different from what the city controller reported back in September.

More time will allow more analysis to review these claims, along with the claim that the proposed spending package is “creating more than a million new jobs in our city” of more than 4 million people and presumably about 2.56 million people in the entire labor market. Nationwide, less than 64 percent of the population is in the civilian labor market. People not in the job market are under 16, retired, full-time students or spending time at home raising their children.

As the mayor noted, a city budget is not only “a financial document but also a roadmap” prioritizing where money gets spent and where money does not get spent, both of which reflect the city’s priorities, including “justice and equity.”

There is much to be lauded in the mayor’s ambitious budget proposal.

Time will tell whether all of his goals come to fruition.

Tim Shaler is a professional investor and economist based in Southern California. He is a regular columnist for The Epoch Times, where he exclusively provides some of his original economic analysis.

Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.