Late use of housing funds faulted

In a region with the largest homeless population in the nation, the city of Los Angeles is not promptly using more than a quarter of the federal money intended to house ailing homeless people, according to a city report.

By contrast, San Francisco leaves just 12% unused and Berkeley uses all of it, according to officials in those cities.

“That makes no sense,” said Los Angeles City Councilman Greig Smith. “Here is a city where everyone is complaining we have 48,000 homeless people, and we’ve got beds going unused.”

At a downtown community center Friday night, a homeless man in a wheelchair said he needed shelter and could put any unused money to good use.

“It’s sad,” said Oliver Svenson, 54, who says he has memory and mental problems and has been homeless for three years. “I should like to have a place to stay.”

Earlier this year, federal officials did not allocate $12.5 million in new funding the city was expecting, saying the city’s Housing Authority and the nonprofit agencies it works with have not shown they are properly spending money.

Housing Authority officials, city leaders and nonprofits are pointing fingers at one another and the federal government, even as they scramble to fix the problem. Many of them said Los Angeles was being penalized unfairly for practices the federal government once allowed.

City officials say that because of a new interpretation of federal rules, the city and its contractors are not allowed to use the federal dollars to leverage additional funds for new housing. That essentially means Los Angeles is penalized for its ambitious plans to build better housing rather than place homeless people in older buildings, as other cities do, officials said. Because construction takes time, the money is not being spent within the required 12 months.

Many nonprofits, which contract with the Housing Authority to build the homes and run the programs, also have complaints about the federal regulations. But some also blame inefficiency at the city Housing Authority itself, which they say makes it hard for them to move homeless people into empty units quickly.

Housing Authority officials, meanwhile, say the nonprofits need to build and lease their units faster.

All concerned say they are rushing to fix problems so they can be funded again next year.

The federal money is part of a program called Shelter-Plus-Care. It provides money for housing and services such as counseling for homeless people suffering from mental illness, HIV/AIDS, or chronic problems with alcohol and drugs. The program typically provides long-term apartments, not short-term beds in homeless shelters.

In Los Angeles, the federal money, about $25 million, is administered by the city’s Housing Authority and then granted to nonprofits, which operate apartment buildings and single-room-occupancy hotels.

In February, HUD surprised the city and the nonprofits by announcing that Los Angeles would not get $12.5 million in new funding it was expecting.

Some nonprofit agencies had been so sure of getting some of that money that they had already allocated it and said its loss could throw years-long building projects into question.

On Friday, the City Council passed an emergency motion to cobble together other funds so building projects could continue.

Councilwoman Jan Perry said Los Angeles officials need to lobby the federal government to change its policy so that the city has more than a year to use its money.

But Rudolf Montiel, the head of the city’s Housing Authority, said that until federal policy is changed, the city and its nonprofits must abide by the rules.

His office also released statistics showing that some nonprofits are not filling all their existing apartments.

McCoy Plaza, run by the Watts Labor Community Action Committee, for example, is authorized to receive payment for 32 units. But it was using only four of them as of April 10. Money for the rest will be returned to Washington rather than spent on homeless people here, officials said.

In another case, the Parker Hotel Apartments in the Mid-City area, operated by the nonprofit developer A Community of Friends, is funded for 28 units, but was using only 21, according to the city. Many other housing developments operated by the group were full or nearly so.

Officials at the nonprofits offered a variety of explanations.

“The process is not conducive to getting people off the street,” said Community of Friends Executive Director Dora Gallo.

Before people can move in, city and nonprofit officials must complete a complicated certification process that includes verifying a homeless person’s identity and that they are homeless and disabled. The apartment units also must be inspected by the city. All this requires getting ill homeless people, not the most reliable population, to provide documents and show up for appointments.

Still, Orlando Ward, director of public affairs for the Midnight Mission, said nonprofits need to do a better job of letting homeless people know apartments are available.

“The outreach function is not working,” he said. “People are walking around with this eligibility yet still living on the street.”

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jessica.garrison@latimes.com