The Problems and Progress of Prop. HHH
Reviewing L.A.'s Performance Over the First Five Years
Introduction
More than five years have passed since Angelenos overwhelmingly approved Proposition HHH. The ballot measure authorized the City to issue $1.2 billion in general obligation bonds to develop or acquire thousands of units of what is commonly known as “supportive” housing, along with additional affordable housing, interim housing, restrooms, showers, health clinics and storage facilities. The measure provided for citizen oversight and a yearly financial audit by the City Controller.
Controller Galperin presents this story map alongside his most recent report, which reflects on the progress made since the passage of Prop. HHH and identifies the lessons learned to inform future homeless housing programs.
Problems Overshadow Progress
Despite steep increases in public spending year over year to address homelessness in Los Angeles, more people are unhoused today than when Prop. HHH passed in 2016. The soaring cost of living and lack of affordable housing have been further compounded by the COVID-19 pandemic, leaving tens of thousands of people unhoused or at-risk throughout the region.
This problem is not unique to L.A. — on any given night, more than half a million people experience homelessness throughout the United States. It is, however, particularly acute in Los Angeles and California as a whole. According to The 2020 Annual Homeless Assessment Report (AHAR) to Congress produced by HUD, more than half of all unsheltered people in the country reside in California, and Los Angeles was ranked as the metro area with the second largest homeless population. The only metro area with a higher number of people experiencing homelessness, New York, is dramatically outpacing L.A. when it comes to providing shelter and services.
Thousands Remain Unsheltered
In 2020, the annual Greater Los Angeles Homeless Count estimated that more than 41,000 people were unhoused in the City of L.A. alone. That count, which was conducted before the COVID-19 pandemic, does not account for the economic devastation wrought by the pandemic.
While updated estimates from this year's count will not be available until later in 2022, there is no doubt that tens of thousands of Angelenos still remain unsheltered.
Increase in Mortality Rates
Despite increased funding and services, the regional response has not kept pace with the dire need to address this public health crisis. Preliminary data from the L.A. County Medical Examiner-Coroner found that as many as four people experiencing homelessness died each day in 2020.
While more recent estimates are still pending, a report from UCLA researchers found that nearly 1,500 people died on the City’s streets during the pandemic between March 2020 and July of 2021. The report, which examined data from the L.A. County coroner’s records, concluded the most common cause of death was accidental overdose.
HHH Project Timelines Don't Meet the Scale of the Crisis
While more HHH projects have been completed since Controller Galperin's 2020 report, the cost of each unit continues to rise and the pace of construction remains inexcusably slow.
Overall, there are 8,091 total housing units — 6,578 supportive — spread across 125 HHH projects in various stages of development:
- Only 14% of projects have been completed, a total of 1,142 units.
- While 54% of projects are currently in construction, nearly a third are still in pre-development.
- Projects in the primary HHH pipeline are taking between three to six years to complete, with most set to open between 2023 and 2026.
Development Costs on the Rise
The Controller's previous reviews of Prop. HHH highlighted several key factors which have contributed to soaring project costs, such as the overall high cost of construction in Los Angeles, prevailing wage requirements, funding complexity, regulatory issues and land use challenges.
Over the past year, HHH per-unit costs in the primary pipeline have continued to climb to staggering heights:
- The average per-unit cost for units under construction increased from $531,000 in 2020 to $596,846 in 2021.
- 14% of the units currently under construction exceed $700,000.
- At least one project in pre-development is estimated to cost nearly $837,000 per unit.
Status of HHH Projects
Scroll through the maps below to view details about all 125 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, current status and more.
HHH Projects in Pre-Development
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.
Currently, 27 projects (26%) are in pre-development. When completed, they will provide 1,880 housing units.
Per-unit costs in this category:
- Lowest: $372,000 per unit
- Average: $580,000 per unit
- Highest: $830,000 per unit
Click a point on the map to view more information about each project.
HHH Projects Under Construction
There are 65 projects under construction. When completed, they will provide 4,205 housing units.
Per-unit costs in this category:
- Lowest: $309,000 per unit
- Average: $596,000 per unit
- Highest: $765,000 per unit
Average cost breakdown for projects under construction:
- $2.6 million land costs
- $11.4 million soft costs (fees, consultants, and financing)
- $25 million construction costs
14% of units currently in construction exceed $700,000 per unit in development costs.
Click a point on the map to view more information about each project.
HHH Projects Completed
Despite passing more than five years ago, only 18 HHH-funded projects have been completed and are ready for occupancy.
The projects provide a total of 1,142 units—831 of which are supportive. The average HHH subsidy was approximately $134,000 per unit.
Average cost breakdown for completed projects:
- $2.45 million land costs
- $10.5 million soft costs (fees, consultants, and financing costs)
- $20 million construction costs
Click a point on the map to view more information about each project.
HHH Housing Challenge
In response to concerns about project costs and timelines, the City set aside $120 million in Proposition HHH funds and initiated the HHH Housing Challenge in January 2019.
The primary goal was to identify innovative construction and financing models to produce nearly 1,000 new supportive housing units within two years after receiving funding approval.
While some HHH Housing Challenge projects have been cancelled, there are 3 projects currently in construction and another 12 projects in the pre-development phase.
Click a point on the map to view more information about each project.
All Projects
This map shows all 125 HHH-funded projects across the City of Los Angeles. Explore to find the nearest project to you.
Click a point on the map to view more information about each project.
Recommendations
The City has started implementing two of four major changes recommended in the Controller's previous reports, but more urgency is needed now and in the future. Scroll below to see the status of our office's recommendations for improving the implementation of HHH.
In progress
Speed up the City review processes for HHH-funded projects. L.A. has made some progress on this, primarily by collaborating with developers and City departments to streamline processes and troubleshoot issues on a project-by-project basis.
In progress
Acquire and convert existing buildings for housing. Controller Galperin recommended that the City focus on acquiring and converting existing properties without tenants to counter rising construction costs and land use issues. LAHD is now exploring using $80 million from HHH to acquire 868 existing units as part of Project Homekey.
Not Implemented
Build interim housing and facilities using HHH funds. While HHH’s primary goal was to develop supportive housing, interim housing, restrooms, showers and storage can also be built. The City has allocated just $58 million in HHH funds for interim housing and facilities — a mere five percent of the $1.1 billion awarded.
Not Implemented
Reevaluate expensive or stalled projects before finalizing HHH loans. The City should evaluate its ability to reallocate HHH funding commitments for costly projects. Twenty-seven projects in the primary pipeline do not have loans in place. In response, City officials have voiced worries about damaging relationships with developers and cited potential legal concerns.
