Meeting the Moment
An Action Plan to Advance Prop. HHH
Introduction
By overwhelmingly approving Prop. HHH in 2016, Los Angeles’ voters authorized City officials to issue up to $1.2 billion in general obligation bonds with the aim of reducing homelessness by building, buying, or remodeling supportive housing and other facilities, including interim housing. The measure provided for citizen oversight and a yearly financial audit by the City Controller.
L.A. Controller Ron Galperin first examined Prop. HHH in October 2019 and recommended reallocating funds to lower-cost projects and streamlined permitting. View the 2019 story map that summarizes last year's findings and recommendations.
Galperin presents this new story map and report on the current HHH strategy and recommends a short-term action plan to utilize the remaining bond funds and provide more immediate relief to people experiencing homelessness. Scroll below to view details about HHH.
Where We Stand
Despite hundreds of millions of public dollars spent yearly to alleviate homelessness in the City of Los Angeles, 45% more people are experiencing homelessness today than when Prop. HHH passed in 2016.
Homelessness Continues to Rise
This year's Greater Los Angeles Homeless Count recorded a 16% increase in homelessness in the City from 2019 to 2020. Of the more than 41,000 people experiencing homelessness in Los Angeles, almost 70% are unsheltered and struggling to survive in tents, encampments, vehicles and other locations.
This grim reality is further compounded by the fact that the annual homeless count was performed in January 2020 before the COVID-19 pandemic began, which has left hundreds of thousands of Angelenos unemployed or underemployed, and degraded health and safety conditions for those already living on the streets.
Racial Inequities Worsen the Crisis
Homelessness impacts every community in the City, but not every community is impacted in the same way. While local leaders strive to reduce and, ultimately, eliminate this vexing social issue, it is worth understanding that inequities in society inform who experiences homelessness. In Los Angeles, Black residents represent almost nine percent of the City's overall population but make up nearly 38 percent of the homeless population, a 16% increase over 2019. Native Americans are only 0.2% of the City's total population, but make up 1% of the homeless population.
The disproportionate impact on these communities is exacerbated by the toll of COVID-19 on communities of color. The pandemic has been especially deadly for Black and Latinx residents, many of whom work in jobs that cannot be performed remotely or have preexisting health conditions.
Income inequality, lost wages, housing insecurity, and disparate health outcomes mean increased risk of homelessness for many disadvantaged communities. These are the communities who stand to benefit most from the City's HHH program.
HHH Is Falling Short
However, there is not enough housing completed or being built to move the needle for disadvantaged communities and most others experiencing homelessness in the City. Nearly four years have passed since voters approved Prop. HHH and, despite the City’s efforts to lower costs and shorten timelines, the program's current trajectory is increasingly falling short of the unhoused population's needs.
- Only three projects have been completed with a total of 179 supportive units and 49 non-supportive units.
- 5,522 supportive units and 1,557 non-supportive units are in the development pipeline, but nearly 73% of these are in pre-development and have not yet started construction.
- Based on current projections – which may not fully reflect pandemic-related delays – only 19% of units in the development pipeline (or 1,363 units) will be completed before January 1, 2022.
Tens of Millions Remain Uncommitted
As of August 2020, the City has allocated approximately $1.17 billion in Prop. HHH funds to complete the projects in the pipeline – nearly the full amount approved by voters. Here's where the money is going:
- $993 million for supportive/affordable housing developed through the traditional Housing + Community Investment Department (HCIDLA) development pipeline.
- $120 million for supportive housing developed through the HHH Housing Challenge.
- $58 million for interim shelter and facilities projects.
$30 million in Prop. HHH funds have not yet been allocated by the City. Additional funds will be returned to the program if approved projects do not materialize.
Action Plan Needed
Even if all HHH projects meet their deadlines, tens of thousands of Angelenos will remain unsheltered on our streets and be at increased risk for serious illness and death. The Los Angeles County Department of Public Health reported that deaths among the unhoused population climbed nearly 100 percent over seven years, with 1,047 people dying on the streets in 2018 alone.
The number of deaths among people experiencing homelessness increased each year from 2013 to 2018. Data is not yet available for 2019.
The average age of death was 51 for individuals experiencing homelessness, compared to 73 for the general population, a difference of 22 years. The evidence is clear – homelessness leads to grave consequences. A greater focus is required to meet the demands of this moment.
Our review of Prop. HHH found that development costs for supportive housing were high and estimated project timelines were not aligned with the growing magnitude of the homeless crisis. Supportive housing projects will take between three to six years to complete. The COVID-19 pandemic has added uncertainty to an already lengthy process and will almost certainly result in additional delays.
Only 19% of remaining units in the HHH development pipeline will be completed before January 1, 2022.
Even before the pandemic, the City had granted extensions for 15 projects, ranging from just over a month to more than a year of additional time before each is ready for occupancy. Delays such as these will likely result in higher development costs, like loan interest, holding costs on land and construction costs. Since our last report, the estimated cost per unit of supportive housing projects increased by more than 10% for projects in pre-development.
Currently, nearly 33% of units in pre-development are estimated to exceed $600,000.
Proposition HHH funding typically makes up around 25% of each project’s total budget, while the remaining funding comes from a combination of private sources, along with the federal government, State of California and L.A. County.
Although the City does not bear the entire cost of these projects, high costs and delays are hampering the program's success. The City should seek to further minimize development costs and – to the greatest extent possible – avoid draining the overall pool of funds available for supportive and income-restricted housing projects.
Status of HHH Projects
Scroll through the maps below to view details about all 111 HHH projects that are under construction, in pre-development and ready for occupancy. Each pin represents a separate project and includes the developer's name, project costs, HHH contribution and more.
HHH Projects in Pre-Development
Most HHH projects are currently in the pre-development phase. Pre-development is a broad term that includes projects that have been approved and the developers are in the process of applying for funding, securing land use approvals, engaging the community and obtaining permits.
There are 78 projects in pre-development. When completed, they will provide 4,015 supportive housing units and 1,142 non-supportive units.
Per-unit costs in this category:
- Lowest: $324,771 per unit
- Highest: $746,797 per unit
- Average: $558,847 per unit
The estimated cost per unit increased by more than 10% over the last year for projects in pre-development.
Click the legend on the bottom left corner of the map to view the cost categories.
HHH Projects Under Construction
There are 30 projects under construction. When completed, they will provide 1,507 supportive housing units and 415 non-supportive units.
Per-unit costs in this category:
- Lowest: $309,901 per unit
- Highest: $739,377 per unit
- Average: $531,711 per unit
Cost breakdown for projects under construction:
- 13% land costs
- 32% soft costs (fees, consultants and financing)
- 55% construction costs
The overall share of units with development costs above $600,000 increased from 10.8% to more than 28% over the last year.
Click the legend on the bottom left corner of the map to view the cost categories.
HHH Projects Completed
Since we issued our last report, the first three HHH-funded projects were completed and are (or will soon be) providing homes and supportive services to a mix of formerly homeless individuals, seniors, families, youth and individuals with mental health conditions.
The projects provide a total of 179 supportive units and 49 non-supportive units. The average HHH subsidy was approximately $7 million.
Cost breakdown for completed projects:
- 12% land costs
- 31% soft costs (fees, consultants and financing costs)
- 58% construction costs
All HHH Projects
This map shows all 111 HHH-funded projects across the City of Los Angeles. Explore to find the nearest project to you.
Click the legend on the bottom left corner of the map to view the cost categories.
Recommendations
The City's most vulnerable residents are suffering on the streets as a global pandemic continues to ravage the region. They deserve a housing strategy that addresses this reality.
- Read Galperin's full 2020 Prop. HHH report
