A fix for L.A.'s homeless crisis isn't cheap. Will voters go for $1.2 billion in borrowing?

For years, many Los Angeles residents have watched with alarm as homeless encampments spread across the city, from the sidewalks of skid row to alleys in South Los Angeles, behind shopping centers in the Valley and even  on the bluffs above the Pacific Ocean.

Next month, voters will have to decide whether these concerns are strong enough to approve a new tax to fight homelessness.

The ballot measure culminated more than a year of discussion and debate at City Hall and beyond  aimed at getting past the rhetoric and putting significant money behind solutions to the homeless crisis.

It marks a major concession from city leaders that they cannot deal with the problem with existing city resources and need property owners to help foot the bill to move people out of homelessness.

Proposition HHH on the November ballot asks voters to authorize $1.2 billion in borrowing over 10 years to jump-start the construction of 10,000 apartment units with on-site social and clinical services for thousands of chronically homeless people.

Dozens of homeless services agencies, for-profit and nonprofit developers, city and county officials, labor unions, clerics and business leaders are backing the measure as the prime feature of plans to end the homelessness crisis.

Buoyed by several polls this year showing that homelessness has moved to the top of residents’ concerns, the “Yes on HHH End Homelessness in L.A.” committee plans a million-dollar campaign to secure the two-thirds majority needed for passage. The campaign is co-chaired by United Way of Greater Los Angeles and the Los Angeles Area Chamber of Commerce.

Opponents, who call the proposal “a giveaway to the politically connected developers,” have appeared at political forums but have not formed a campaign committee or raised funds. 

Advocates for the homeless and providers of homeless housing see Proposition HHH as the means to finally do right by thousands of people who live on the streets because of mental illness, disability or addiction, and at the same time to remove the blight of homeless camps.

“Prop. HHH is the most significant effort ever undertaken to end chronic homelessness in Los Angeles,” campaign literature states. “It builds the safe housing with on-site supportive services — like mental health and substance abuse counseling — that we need to break the cycle of homelessness and poverty in our city.”

That enthusiasm reflects more than a decade of frustration over unfulfilled plans to build thousands of supportive housing units. A mounting body of research has shown that such housing reduces the drain on public services by getting people permanently off the streets.

But Proposition HHH is no quick or easy fix.

The bond funds may be spent only on housing construction, not on homeless services, and targets only the most challenged of the city’s estimated 28,000 homeless people. Because permanent supportive projects usually take three or more years to build, the earliest that the new housing would become available in significant numbers is likely to be 2020. 

Calling homelessness “the greatest moral crisis that we face,” Mayor Eric Garcetti said the bond is a critical piece of the city’s homelessness plan, and “makes up for the cuts the federal government and state have made in affordable housing.”

The construction funds will free other dollars for services, he said.

To address other segments of the homeless population, the city has budgeted about $18 million this year for short-term housing for about 2,500 people, and hopes to create about 500 housing units for veterans in refurbished hotels by the end of 2017. Those funds would not come from the bond.

Rather than a solution in itself, HHH is seen as a key element in a long-range countywide housing program outlined in January by the Los Angeles Homeless Services Authority — one also involving aggressive new spending by the county.

For short-term solutions, the city is pursuing a number of programs that essentially support street dwellers in place — building lockers for their possessions, contracting for mobile showers and toilets and providing designated parking spaces for people living in vehicles.

The county housing plan, projected to cost $1.4 billion, is designed to dovetail with the city’s. Along with health and social services, it includes growing expenditures each year for “rapid re-housing” to put those who are homeless immediately into housing.

Those measures would be partly funded by existing county revenues, but the Board of Supervisors is expected to seek a quarter-cent sales tax increase on the March 2017 ballot to complete the funding.

Phil Ansell, head of Los Angeles County’s homelessness initiative, said the county is also requesting commitments from local housing authorities of about 1,000 federal housing vouchers each year for the chronically homeless. 

Combined, these efforts should begin to reduce street camps during 2017, Ansell said.

For its part, Proposition HHH has one main aim: to dramatically increase the rate at which about two dozen mostly nonprofit developers are able to build subsidized housing for people whose history of homelessness and other impairments precludes their living independently. The city is negotiating an agreement under which Los Angeles County would fund the services.

The housing includes space for on-site case managers and clinical services. Because of the added square footage as well as regulations associated with public financing, such housing generally takes longer to build, and costs more, than market-rate construction.

The homeless authority’s analysis concluded that L.A. County needs 25,000 units of permanent supportive housing, about 9,000 of which already exist.

Proposition HHH is designed to complete the city’s portion of the remaining gap, estimated at nearly 10,000.

Developers currently build about 300 units of supportive housing a year. The city hopes to triple that rate by contributing about $150,000 per unit — about a third of the cost — to supplement other local, state and federal grants, and federal tax credits purchased by investors.

Up to 20% of HHH funds could be spent on conventional affordable housing, without services. The measure also allows spending to build or buy shelters, but does not specify a limit. That would be among the questions to be considered by a citizen advisory committee to be appointed by Garcetti and the City Council. 

In addition to priming the financing pump, Los Angeles officials are working on procedural changes to remove obstacles that can hold up projects for years. These include streamlining the planning and approval process, increasing the number of units that can be built without City Council review and providing excess city properties for development.

Proposition HHH opponents, representing anti-tax and neighborhood groups, assail the measure for creating a long-term obligation with little immediate impact on the presence of homeless people on the streets.

Bonds from the measure would add an average $9.64 for every $100,000 of a property’s assessed valuation annually for 29 years, the City Administrative Office estimated.

“Proposition HHH will not provide funds for operating homeless shelters, mental health or substance abuse treatment, or extra policing to protect residents from the ill effects of homeless encampments,” opponents argue in a ballot statement.

Jack Humphreville, budget analyst for the Greater Wilshire Neighborhood Council, contends the city should budget funds from existing revenues rather than seek a new tax.

“All the guys downtown are saying this is a priority; they get out the violins, and yet they’re not making a priority in the budget,” Humphreville said.

The homelessness plan proposed by Los Angeles City Administrative Officer Miguel Santana originally included leased housing for about 5,000 chronically homeless people at a cost of $800 million over 10 years.

The City Council effectively abandoned that idea when it voted to raise money through a bond, which limits its use to capital projects.

Ultimately, proponents of Proposition HHH acknowledge, permanently ending homelessness will depend on two factors that are largely beyond city or county control: the economy and the housing supply.

A new recession could negate all the projections, said Santana. And even in an improving economy, the shortage of affordable housing in Los Angeles means there will always be homeless people. 

Based on the annual survey of homeless people, the homeless authority estimates that about 156,000 people are homeless at some point every year.

In a tight rental market, three months is the average time required to relocate the newly homeless, meaning, the agency concluded, that nearly 14,000 people will always be homeless.

“Heavy investment in additional affordable and homeless housing development is needed in order for even this less than perfect equilibrium to be achieved,” the agency concluded.

doug.smith@latimes.com

Twitter: @LATDoug

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