In a significant move that could reshape how Los Angeles manages its homelessness crisis, a key city council committee has voted to advance a plan to strip the beleaguered Los Angeles Homeless Services Authority (LAHSA) of some of its powers. The council’s Housing and Homelessness Committee on Wednesday recommended the city begin shifting the management of some homelessness programs away from the joint city-county agency over the upcoming fiscal year.
The decision comes amid mounting criticism and a series of damning audits that found LAHSA had failed to properly track billions of dollars in funding. The agency, which coordinates services for tens of thousands of unhoused people across the region, has also been faulted for extensive delays in paying service providers, putting essential programs at risk of cuts. The situation has been described by committee chair Nithya Raman as being "plagued with scandal."
This move by the city committee follows a decision by the Los Angeles County Board of Supervisors last year to pull its own funding from the joint authority. As of July 1, all of the county’s funding for homeless services will be managed directly by county departments, leaving the City of Los Angeles as LAHSA’s largest remaining government partner.
A crisis of confidence
The recommendations put forth on Wednesday signal a profound loss of confidence in LAHSA, an independent body created in 1993 to oversee and coordinate housing and services for unhoused people throughout Los Angeles County. For years, it has operated as a central pillar of the region's response, managing federal, provincial, and local funding streams intended to combat the growing humanitarian crisis on the city's streets.
However, recent audits have raised serious questions about its financial oversight and operational effectiveness. These reports detailed the agency's inability to consistently manage its contracts and track whether its vast expenditures were leading to successful outcomes. Compounding these issues are what sources describe as "years' long delays" in reimbursing non-profit organizations for their work. These providers, which operate everything from street outreach teams to shelters, have warned that the payment backlog could force them to reduce services at a critical time.
The committee, led by Raman, is proposing that city officials report back by July 1 with an analysis of which city-funded programs could be managed by the county, other city departments, or another entity entirely. If the full council approves, the plan would allocate $450,000 to hire consultants to guide the complex transition, with officials required to provide an update on the progress every 30 days.
Two paths forward
While the committee agreed on the need for change, members advanced two distinct proposals for the full council's consideration. The first, from Councilmember Raman, is the formal recommendation to begin the process of shifting programs away from LAHSA over the next fiscal year.
A second recommendation, proposed by Councilmember Tim McOsker, seeks to reform the agency from within. It calls for negotiations to give the City of Los Angeles "a clear majority" in the governance and decision-making at LAHSA. Currently, the agency's governing commission is split evenly between city and county appointees. With the county withdrawing its funds, McOsker's proposal argues the city should have greater control over the body, including its management of federal funding that serves 84 other municipalities within Los Angeles County. The diverging proposals highlight a central debate among city leaders: whether LAHSA is a fundamentally broken organization that needs to be replaced, or a salvageable one that requires significant structural reform and stronger city oversight. The city now finds itself at a crossroads, forced to chart a new path after its long-time partner, the county, has already opted to exit the arrangement. This decision also comes as the city government grapples with its overall financial picture, with Los Angeles County recently previewing a new budget amid looming cuts to federal funding. Much like the LAHSA situation, Los Angeles school district reaches last-minute deal with support staff, averting strike.
Concerns over rushed transition
The push for a swift overhaul has been met with caution from some city leaders and LAHSA officials, who warn that a hasty transition could inadvertently harm the very people it is meant to help. Mayor Karen Bass has previously expressed concern that moving too quickly could disrupt vital services for unhoused residents.
Gita O’Neill, who is serving as LAHSA's interim CEO while on leave from the city attorney’s office, echoed those sentiments at Wednesday's meeting. She urged the committee to proceed carefully to prevent any gaps in service delivery.
I would just ask this committee to take their time to look at the issues. Sometimes when things are rushed and hurried, unfortunately our unhoused folks fall through the cracks. Seeing it go really quickly, sometimes things can get lost, sometimes contracts can get lost.
Councilmember Heather Hutt, who also sits on the committee, said she believes any talk of shifting funds is "too premature, too early and too rushed." Hutt voted against Raman’s recommendation to begin moving programs away from LAHSA, but supported McOsker’s proposal to increase the city’s control over the agency. "Given the actions of the county and the federal government, we need to make sure our system is stabilized over the next two years before we think about what a longer transition looks like," she said at the meeting.
The differing views set the stage for a major policy debate when the recommendations reach the full Los Angeles City Council. The final decision will determine the future of an agency that has been central to the region's homelessness strategy for three decades, and will have far-reaching implications for providers and the more than 75,000 people estimated to be experiencing homelessness in the county. Regardless of the city's choice, the ground is already shifting, with the county set to fully manage its own homeless services beginning on July 1.
