The Department of Housing and Urban Development (HUD) has suspended federal funding to the Los Angeles Homeless Services Authority (LAHSA) due to allegations of widespread mismanagement and fraud. This decision was made while HUD's inspector general investigates potential wrongdoing by the agency and its leadership. The funding freeze was communicated in a letter to LAHSA Board Chair Wendy Greuel and CEO Gita O’Neill, as reported by Fox News.
Since 2021, LAHSA has received nearly $1 billion in federal funding, alongside support from local and state governments. HUD stated that the suspension is necessary to address the agency's severe failures, which have led Los Angeles County to withdraw its funding and the City of Los Angeles to consider similar actions.
The scrutiny follows the resignation of former LAHSA chief executive Va Lecia Adams Kellum, who resigned after directing $2.1 million in federal funds to a nonprofit that employed her husband. HUD emphasized the need for accountability in managing public funds, stating that continuing to fund an organization under investigation would not help reduce homelessness.
Federal officials have framed the funding halt as part of a broader initiative to enhance oversight of homelessness spending. HUD Secretary Scott Turner highlighted the lack of accountability in past funding decisions, noting that homelessness has increased despite significant taxpayer investment. Currently, over 72,000 individuals are experiencing homelessness in Los Angeles County, although local officials have reported a decline in homelessness for the second consecutive year in 2025.
HUD's actions coincide with Los Angeles city and county leaders distancing themselves from LAHSA, with the Los Angeles County Board of Supervisors withdrawing from the agency earlier this year due to transparency issues in its accounting. LAHSA and HUD did not respond to requests for comments.