Los Angeles is spending hundreds of millions of taxpayer dollars on homelessness programs that critics say make street living more comfortable rather than solving the underlying crisis.
A bombshell report from the City Administrative Officer revealed that of the $418 million spent in 2025, only about 10% went toward getting people permanently off the streets.
The report, delivered Tuesday by the mayor and City Council’s chief financial watchdog, comes as Los Angeles faces mandatory cuts of 10-15% to homelessness spending due to budget constraints.
“We’re hemorrhaging money on a homelessness system that was never designed to succeed — and no one is being held accountable for the failure,” said councilwoman Monica Rodriguez, who represents parts of the San Fernando Valley and has been one of City Hall’s most vocal critics of homelessness spending.
The analysis shows that millions were allocated to services that maintain rather than resolve homelessness. This includes $3 million for hygiene stations and mobile showers, $4.3 million for sidewalk cleanups in Skid Row, and $13.6 million for street medicine and moving assistance.
The most expensive program is the city’s interim housing network, which consumed $319.3 million in 2025. Nearly $250 million of that went to service costs, while $61 million was spent on leasing beds and rooms. Critics argue these placements allow officials to claim people are being “served” even when they remain in temporary housing with no path to permanence.
Inside Safe, the mayor’s flagship homelessness initiative, has become particularly costly. According to the report, a single Inside Safe motel room costs taxpayers an average of $82,421 per year — approximately $226 per night — more than double the cost of other interim housing options citywide.
The city isn’t alone in facing budget challenges related to homelessness. Los Angeles County recently approved nearly $200 million in cuts to homeless services to address a $270 million budget shortfall. The reductions will affect outreach programs, rental assistance, and encampment cleanups.
“This will result in more people experiencing homelessness for longer periods of time and greater visibility in our communities,” Shawn Morrissey, vice president of advocacy with Union Station Homeless Services, told county supervisors.
These local funding challenges come as California’s state homelessness investments have declined from a peak of $6.8 billion in 2022-23 to $1.5 billion in 2025-26, according to the California Budget & Policy Center. The governor’s proposed 2026-27 budget includes only $500 million for the Homeless Housing, Assistance and Prevention Grant Program (HHAP), a 50% cut from prior funding levels.
Despite these funding challenges, there have been some positive results. Early homelessness point-in-time count data showed a 9% reduction in unsheltered homelessness in 2025, and youth homelessness has dropped 24% since 2019. Over 90,000 Californians have been moved into permanent housing since 2023.
However, critics like John Alle, a longtime homelessness watchdog, remain skeptical of the city’s approach.
“Services are a band-aid,” Alle said. “The numbers never go down. There are no results — and no consequences for mismanagement, because the same people who run the system get to investigate themselves.”
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