Lack of urgency, coordination has sidelined Los Angeles’ HHH program

Editor’s note: This story was reported by the Beacon Project, a student journalism initiative supported by the University of Southern California Annenberg School for Communication and Journalism. It is independent of the university’s administration.

Duane Foster cared for his grandmother with Alzheimer’s for 15 years. When she passed away, he was forced to find a new home. Foster thought he would be able to support himself by being a caregiver for someone else in need.

Instead, he found himself living on the streets of Los Angeles, homeless.

For five years, Foster jumped from shelter to shelter, spending 90 days in whatever bed the city had to offer him, before returning to the streets for another 90 days, an experience that left him feeling empty.

“When it starts getting dark, everyone’s got a place to go but you,” he said. “That’s when it kicks you in your gut.”

One day, Foster was sitting at a bus stop when he was approached by members of Los Angeles Oasis, a nonprofit organization that offers educational programs for those over 50. Through the group, he was connected with a counselor at the Southern California Health and Rehabilitation Program, a mental health and rehabilitation services nonprofit.

In April 2020, SCHARP helped Foster move into 88th and Vermont, a permanent supportive housing project partially funded by Los Angeles’ Proposition HHH, which voters passed four years ago to help combat the homelessness crisis.

“Once you get a roof over your head, it feels a lot better,” Foster said. “Then you can look towards the future and other things you want to do.”

Foster, now 59, wants to get into real estate, or write a book, or even both, he said.

Finding housing was a dream come true for Foster. However, for many experiencing homelessness in Los Angeles, Foster’s reality is something they can only imagine as they fall asleep on street corners and in their cars.

In November 2016, voters approved Proposition HHH, authorizing $1.2 billion in bonds to help pay for the construction of 10,000 housing units for the homeless. More than three-fourths of voters supported the proposition, overwhelmingly endorsing the city’s plan to provide loans to developers working on the construction of more permanent supportive housing.

There were more than 28,000 homeless people in Los Angeles that year, with more than 21,000 classified as unsheltered. The need for more housing was evident to anyone who traveled around the city, and Proposition HHH was heralded as an essential first step towards alleviating homelessness.

Permanent supportive housing combines affordable rent with access to job training, mental health services and drug treatment, giving formerly homeless individuals a better chance at staying housed.

Now, four years later, seven permanent supportive housing projects under HHH are ready for occupancy, totaling 361 units. In the same time span, the total number of people experiencing homelessness in the city has increased by 13,000.

Despite the obvious need for more housing, developers and officials told Annenberg Media the city has demonstrated a lack of urgency when it comes to implementing HHH, leading to construction timelines being wildly off schedule and costs increasing for almost every project.

The COVID-19 pandemic has slowed work on projects, but not significantly, according to city officials. Homelessness was an issue in the city long before the pandemic gripped the world, and HHH was already experiencing prolonged delays and rising costs before March 2020.

Sierra Atilano, chief real estate officer at Skid Row Housing Trust, knows these delays well. Her organization has five projects in the HHH pipeline. Two of the projects have been ready to start construction since August 2019, she said, but they are on hold while she waits for city approval.

“There’s a lot of developers out there with money and projects that are not being pushed forward,” Atilano said.

Atilano understands the importance of developing permanent supportive housing. Despite the high costs, often upwards of $500,000 per unit, and extended timelines compared to market-rate housing, Atilano is committed to the mission of helping those most in need. Without that commitment, she said, developers would have little incentive to navigate the convoluted city bureaucracy involved in this type of construction.

Developing housing for the homeless in Los Angeles is complicated. Permanent supportive housing often requires double the number of funding sources and twice the amount of time compared to market-rate housing.

Developers are well aware of these difficulties, but many have complained about a lack of responsiveness from the city. In a 2018 survey of 34 HHH developers and stakeholders conducted by the Mayor’s Office and the Los Angeles Housing and Community Investment Department, respondents expressed their frustrations with burdensome bidding requirements and nightmarish permitting procedures. Taken all together, these complaints suggest an overly complicated yet understaffed bureaucracy, leaving the promise of HHH unfulfilled.

“The overwhelming majority of Angelenos had the greatest intentions to help prevent the situation from worsening,” City Controller Ron Galperin wrote in an email to Annenberg Media. “But in its implementation, the program has not delivered on what was promised.”

Frustrations with Prop HHH

Los Angeles has the highest number of unsheltered homeless people of any major metropolitan area in the United States. More than two-thirds of the city’s homeless population are unsheltered, meaning they live outdoors in cars, tents or less, according to the 2020 Greater Los Angeles Homeless Count. By comparison, just over four percent of the homeless population in New York is unsheltered, according to NYC’s 2019 point-in-time count.

With more than 28,000 unsheltered homeless individuals, Los Angeles is desperately in need of more housing units, and HHH was intended to help fill that gap. However, in a 2019 audit of the program, Galperin said HHH is “not keeping pace with the growing demand for supportive housing and shelter.”

Since HHH’s approval in November 2016, seven projects are now ready for occupancy. In the same time span, there has been an increase of more than 7,000 unsheltered homeless individuals, the primary targets for this type of housing.

Most of the projects approved for HHH funding have experienced delays in construction start and finish dates, as well as increased costs, according to a review conducted by Annenberg Media of all available quarterly reports. For example, two projects known simply as Building 205 and Building 208 were scheduled to start construction in May 2018. They didn’t break ground until August 2020.

For projects approved through FY 2019-2020, the construction start dates are being pushed back on average almost a year, which is also pushing the expected completion dates back by an average of more than seven months.

After the first permanent supportive housing project funded by HHH opened in January 2020, Mayor Eric Garcetti proclaimed, “This year, we will see an opening of one of these about every three weeks,” according to the Los Angeles Times. That should have amounted to 18 projects, but only six other HHH projects finished construction in 2020.

The mayor’s office did not respond to multiple requests for an interview.

HHH aims to have permanent supportive housing projects completed within three to six years of approval, said Edwin Gipson, director of finance and development at the city’s housing department. Every current HHH project has a timeline that fits within that frame, but some in the community are discouraged that projects are experiencing such significant delays.

According to a 2020 audit of the program by City Controller Ron Galperin, if all projects currently in construction meet their deadlines, only about one-fifth of the total units in development will be completed by Jan. 1, 2022.

“The frustration that the community has is legitimate,” said Miguel Santana, the former city administrative officer who went on to lead the HHH citizens committee. “It’s disappointing that it’s taken as long as it has, yet the number of people experiencing homelessness continues to rise.”

Santana left the citizens committee in August 2019. The city was “maintaining the status quo,” he said, despite the growing need for adequate and effective solutions for homelessness.

Those still working with the city have more optimistic — although at times careful — assessments of HHH’s progress.

Gipson said the original construction start and end dates listed on quarterly reports were best-case scenarios.

“The estimates that went in were based on everybody doing everything as expected when looking a year and a half out,” he said. “On a lot of occasions, people are like, ‘Hey, they’re late,’ but they’re just not on the schedule they hoped for.”

When projects are approved through HHH, they receive a two-year conditional funding commitment from the city. During that time, developers are expected to figure out the rest of their finances. Other agencies often only take applications once or twice a year, Gipson said, meaning it can take many months before a project receives the full funding it needs to break ground.

Kerry Morrison, a member of the citizens committee, said the frustration people are feeling with the rollout comes from a misunderstanding of how affordable housing works in Los Angeles. Expecting units to be operational in a short time span is “magical thinking,” she said.

“[Prop HHH] was a project intended to build 10,000 units over 10 years, but somehow the narrative was hijacked to suggest that magically within three years or so the bulk of these units would be ready to roll out,” she said. “That’s just not feasible in the LA construction market.”

“A professional nightmare”

In 2018, the city conducted a survey of 34 organizations involved in affordable or market-rate housing development, and the responses — often frank and frustrated — highlight the difficulties of developing affordable housing under HHH.

One developer who opted not to proceed with a full application wrote, “Decided that the requirements were too burdensome and that we would have to add too many costs not associated with truly helping the homeless, that bidding on this project negated our desire to help the homeless and honor taxpayers’ money.”

“The permitting process is a professional nightmare,” wrote another developer. “The timeline to achieve a building permit is expensive both in time and costs.”

Gipson, the director of finance at the housing department, acknowledged the process for HHH developers is “long, tiresome and unbelievably complicated.”

For some projects, costs have increased significantly since the process began. A development known as SP7 Apartments Recap, which was approved more than three years ago, has seen a $15 million increase in costs, according to quarterly reports.

In his 2019 audit, Galperin said his office has found a 5 percent increase in the average per-unit cost. In his 2020 report, costs for projects in pre-development, projects which have yet to start construction, had increased an additional 10 percent.

Robert Sausedo is the chief executive of Community Build, a non-profit community development corporation. He described the program as “building the plane as we fly it.” He said one of the biggest lessons being learned is how much the overall housing market in Los Angeles, including the demand for materials and labor, affects the per-unit cost for HHH projects.

“It is absolutely ridiculous that it costs between $500,000 and $700,000 per unit,” he said, adding that those costs would make it impossible for the city to build its way out of the homelessness crisis.

Morrison, who has served on the citizens committee from the start, said the media has done a disservice to the public by making it seem like the city is paying for these rising costs. HHH funding is actually capped, according to Galperin, amounting to an average of $150,000 per unit. Morrison said she believes this a reasonable use of money.

The city might not be paying directly for these rising construction costs, but taxpayers are paying interest on the bonds. In his October 2019 audit, Galperin said Los Angeles taxpayers had incurred at least $5.2 million in excess interest payments through June of that year because the city had sold so many bonds before the money could be used to build housing.

Increases in construction costs lead to extended timelines, which in turn lead to more costs. It’s a cycle that has stymied progress so far, and some say there’s more the city could be doing to help move construction along.

Lack of urgency

Unlike other forms of housing, permanent supportive housing provides more than just a roof over someone’s head. Being placed in these units gives people formerly experiencing homelessness access to mental health resources, job training and one-on-one support, among other services.

“People who are homeless or who have a mental illness or whatever situation they may be in, they don’t need someone who just wants to help them get to one place,” said Monique Jordan, who has lived in a permanent supportive housing unit at Young Burlington for almost 10 years. “They need someone to be there continuously.”

Jordan was homeless for three years after her mother kicked her out of the house due to her sexuality. She recalled how important permanent supportive housing has been to her, not only because of the housing, but also the services offered with it.

The staff at Young Burlington helped her connect with her first job at Wingstop, where she worked for five years and became a store manager. When she decided to move on from that, the program helped her connect with a culinary school so she could learn how to be a chef. This culminated in her starting a catering business, Mo Flava, which Jordan still runs.

Jordan didn’t stop there, though. Seeing how much permanent supportive housing has helped her, she wanted to give back. She took a peer specialist class and was hired by Housing Works to be an enrichment services coordinator at 88th and Vermont.

“I want to be involved with giving back and helping someone else that was homeless like me, bringing them into a new life, having someone they could be able to talk to, someone to hold their hand,” Jordan said.

Because of how supportive and necessary these units are, it has been frustrating for some working with the city to see how slowly the program has progressed thus far.

When asked what frustrated him most about the rollout of HHH, Santana said it was “the limited sense of urgency” that was felt across city departments, which often did not coordinate with one other.

Homelessness is clearly a crisis, he said. “It’s a matter of life and death. The need for urgency to bring focus and attention to moving things forward and the willingness to break practices for a shared outcome wasn’t always the case.”

In the 2018 survey of developers, one question asked if the city had a sense of urgency in making supportive housing projects a reality. More than half of those who answered the question said the city was not being responsive.

Atilano, the chief real estate officer at Skid Row Housing Trust, said the lack of responsiveness stems from miscommunication between departments within the city.

“I think the lack of urgency isn’t necessarily because they don’t have the want or desire for the projects to move forward,” she said. “There are competing interests.”

In the 2018 survey, many developers complained the city did not have enough staff to manage the permitting process. City Controller Galperin agreed with that assessment.

“When the program was implemented, there weren’t enough staff dedicated to support the work that needed to be done to move each project through the various phases of development,” he wrote in an email to Annenberg Media.

According to multiple sources, the Los Angeles Department of Water and Power appeared to be one of the most significant hurdles a developer faced during pre-development and construction of HHH projects.

Atilano said two of her projects, Six Four Nine Lofts and Flour 401, both located minutes apart on 7th Street in downtown Los Angeles, were delayed three and two months respectively due to the department.

She said the department sometimes took weeks to finish tasks that should have been completed in days. When there was an issue with Six Four Nine Lofts’ street address, she said LADWP took four weeks to process the correction. For Flour 401, LADWP required a redesign of a transformer. The department ultimately sent her the wrong equipment, resulting in a two-week delay, she said.

“Mistakes happen, and this is understandable,” she said in an email to Annenberg Media. But the continual “delays and lack of urgency cause days to turn to weeks, to months.”

She said LADWP skipped meetings set up by the mayor’s office to help accelerate two of her projects. “It’s not fitting for an organization like LADWP, but that is the behavior that we see over and over again.”

In a written statement provided to Annenberg Media, the department wrote, “LADWP is fully committed to supportive and affordable housing. LADWP has streamlined processes and implemented controls and coordination measures to keep projects on track.”

Atilano said the mayor’s office, on the other hand, was helpful. That efficiency actually became a source of frustration for her. “They’re capable of doing it in a couple of days, which is even more frustrating to know that you sat in line for eight weeks.”

Atilano said she was optimistic about HHH at the start of the program but was surprised by all the “disarray” between various departments. She said she is so fed up with how the city has overseen the development of HHH projects that she plans to take her business elsewhere.

“And I’m saying this from Skid Row Housing Trust,” she said. “I mean, our name is L.A. based.”

In June 2019, when there were still no permanent supportive housing projects funded through HHH completed, the city hired Jed Butler as a “Proposition HHH Concierge.” Butler’s role was to streamline development and improve interdepartmental communication, according to a memo reviewed by Annenberg Media.

Butler also said “both the Power and Water sides of LADWP appear to be the largest bottlenecks” when it comes to coordinating between departments, according to the memo. Butler left his role in November, two months before the first housing project was completed in January 2020. He declined multiple requests for an interview with Annenberg Media.

Sausedo said the proposition was a great first step in fighting homelessness and did not agree there had been a lack of urgency.

“There’s a bit of unfairness because people say, ‘Well, we don’t see the results,’” he said. With a program as big as HHH, “you won’t see results for at least five years.”

Sausedo did acknowledge delays, however, not only for the HHH program but for all housing in Los Angeles. He, too, said the biggest hurdle was usually LADWP.

He feels as if the delays were not intentional, though, but rather the result of a lack of institutional knowledge to help move projects along.

Morrison completely disagreed with the idea the city had exhibited a lack of urgency. After HHH passed, the citizens oversight committee was seated within three months, she said, and members were “immediately” presented with policies to review.

“From a person who shows up at these meetings every month, I sense that there is a sense of urgency,” Morrison said.

Gary Painter, director of the USC Sol Price Center for Social Innovation and the Homelessness Policy Research Institute, believes HHH has been relatively successful so far.

“Considering the hope and scale for what is trying to be accomplished, and knowing how hard it has been to build any sort of affordable housing, let alone housing for the homeless, I think it’s actually been pretty effective,” he said.

Projects being constructed and operational in two to three years are on the low end of the timeline to develop permanent supportive housing, according to Painter.

However, for many experiencing homelessness, this simply is not fast enough.

Biby Chavez was living in her car for two years in Orange County before she got connected with permanent supportive housing. She sought out a more permanent situation after being abused by a man, she said, leading her to a shelter in Fullerton.

Chavez began seeing a psychologist and was prescribed medication for her mental health, eventually winding up in a treatment center. She moved to Los Angeles and into 88th and Vermont in March 2020.

“A lot of things changed,” she said. She finally feels like a person again, she said.

While Chavez has managed to find her way off of the streets and into the safety of permanent housing, her story is all too rare for the more than 28,000 other unsheltered people experiencing homelessness in Los Angeles.

What to make of HHH

Was HHH poised to disappoint from the beginning? Even when the 10,000 units are constructed and operational, what kind of dent will it actually make in the homelessness crisis?

These are the big questions on the minds of many people involved in the process.

“I think HHH was trying to put one of those one small circle bandaids on an open gushing wound,” said developer Atliano, “and while it helps for that little tiny corner of the wound, it doesn’t really do anything for the overall problem.”

Santana, the former head of the citizens oversight committee, said Prop HHH was designed to make changes that were not possible without first reshaping the systems in place.

“There was an unprecedented investment that was made to this issue,” he said, “but the systems that were in place prior to that investment didn’t change.”

During his time on the citizens oversight committee, Santana experienced resistance within the city, he said, with departments more invested in maintaining the status quo than finding innovative ways to combat the homelessness issue.

Resistance to change was just one structural issue hampering HHH’s success.

Multiple sources described to Annenberg Media how difficult it was to construct affordable — let alone permanent supportive — housing in Los Angeles.

Nearly a third of the HHH projects awaiting construction would cost more than $600,000 per unit, according to Galperin’s latest report. For a point of comparison, the median price of a single-family home in Los Angeles County is $650,000.

“It makes affordable housing almost an oxymoron in terms of the cost of development,” Painter said.

Los Angeles’ construction boom also complicates matters, said Gipson, the director of finance at the housing department. Market-rate housing is less complicated and more profitable for contractors, he said, leaving slim pickings for affordable housing developers.

With homelessness increasing at a steady rate, perhaps the biggest impediment to HHH’s success was its failure to address the root causes of the issue.

“If there was more attention paid to the front end of housing, on just making sure there was enough affordable housing in general, you wouldn’t see the numbers climb as they did this year,” Atilano said.

For Atilano, some of those root causes are higher-paying jobs leaving the city and incomes not rising at the same rates as rent. She described HHH as reactive, meeting the needs of the homeless after they have fallen into the situation, rather than proactive, keeping people from becoming homeless in the first place. It should be the other way around, she said.

In the end, Prop HHH may be considered a disappointment because it sought to work within a system that was already failing to adequately fight the homelessness problem, rather than reforming that system and taking a new approach.

To paraphrase Morrison, who still serves on the citizens oversight committee: We should not expect more from HHH than what it was designed to do.

“Prop HHH was never intended to solve our homelessness problem,” she said.

Mathematically, this assessment is true. If all HHH units were completed this very day, only a little more than one-third of the currently unsheltered homeless people in Los Angeles would be housed. By the time all the permanent supportive housing projects are actually completed, it is likely the increase in unsheltered homeless people will surpass the total of all those units. In other words, the program will be negated and the city will be in the same situation it faced before the proposition.

In the words of Atilano, “Throwing money at the problem without solving some of the root causes was just like putting a drop in the bucket.”

Correction issued Feb. 19, 2021 at 2:52 p.m.: A previous version of this story stated Community Build was the developer of the 88th and Vermont structure. The owner and developer is actually WORKS (Women Organizing Resources Knowledge and Services). Annenberg Media apologizes for this error.