Los Angeles’ approach to homelessness spending is facing renewed scrutiny as newly reviewed data reveals the scale and cost of taxpayer-funded housing projects across the city and county.
Since 2020, approximately $2.6 billion in public funds has been allocated to acquire and convert hotels, motels, and other properties into housing for the homeless. The funding is split between $1.3 billion from California’s Homekey initiative and another $1.3 billion from local city and county sources used for renovations and construction.
Records tied to 83 properties show that per-unit costs in several cases approach or exceed $1 million. In West Hollywood, the Holloway Motel—located near high-end private venues—was converted at a cost of roughly $22 million for 20 units, or about $1.05 million per unit.
In San Fernando, a 27-unit development reached approximately $1.5 million per unit. Other projects, including conversions in Venice Beach and East Hollywood, range from roughly $450,000 to over $800,000 per unit, depending on scope and delays.
Many of the units include features typically associated with market-rate housing, such as private balconies, in-unit laundry, gated parking, and modern interior finishes. City officials have stated that some of the higher costs are tied to requirements for accessibility upgrades and code compliance.
Criticism has emerged from multiple directions. Developer Rick Caruso described the spending levels as unsustainable and questioned the effectiveness of the current model, arguing that high per-unit costs are not producing scalable results. He pointed to nonprofit housing providers with higher placement success rates as examples of alternative approaches.
City officials and state leadership have defended the broader strategy. Governor Gavin Newsom’s office cited a reported decline in unsheltered homelessness, while Los Angeles Mayor Karen Bass pointed to reductions in street homelessness and an increase in approved housing units. Both have emphasized ongoing efforts to accelerate housing delivery and reduce administrative delays.
However, project timelines remain a concern. A number of Homekey-funded sites are still under construction or not yet occupied, including several high-cost developments. This has raised additional questions about efficiency and the lag between funding allocation and actual housing availability.
Calls for oversight are growing. Local officials have requested further review of spending levels and project outcomes, particularly as Los Angeles continues to manage budget pressures alongside a persistent homelessness crisis.
