According to a new report on the demise of the group, the failure of one of Skid Row’s largest homeless housing providers represents a terrible warning about the feasibility of supportive housing in Los Angeles.
Posted on Wednesday Redesign requires: Lessons to permanently support housing from the Skid Row Housing Trust buildingconcluded that low and inconsistent rent subsidies and other structural issues play a key role in the trust’s 2023 collapse in Los Angeles’ homeless housing system.
Claire Knowlton, a financial advisor for Los Angeles-based nonprofit, said other supportive housing providers remain at risk in the absence of significant changes, creating housing for thousands of the most vulnerable residents in the region and exposing taxpayers to further relief.
"It's a wake-up call," said Knowlton. "It's time to dig out and figure out the vision of the industry moving forward."
The country's leader once considered homeless housing Announced in early 2023 It no longer manages its 2,000 units in 29 properties, many of which were renovated, centuries-old single-resident hotels in and around Skid Row. After the decision Year of economic trouble With the building in disrepair and chaos, it is filled with squatters, crimes, non-functional elevators, blocked toilets and broken toilets.
Los Angeles City Leader Push the trust into takeover After 18 months, all characteristics are Transfer to new owners. This city Almost $40 million allocated To provide funds to the takeover person, although the new owner paid back some money when in control. The trust declared bankruptcy and dissolved in January.
Researchers can access the trust’s internal financial data and interviewed more than 30 people, including former trust managers and people who are well-knowledged about their business, to produce the report.
The report, funded by the Conrad N. Hilton Foundation, is not a clear understanding of the failure of the trust. Time report display Suspicious decision-making, financial mismanagement and unstable leadership marks the last few years of the organization. The report does not examine specific measures taken by trust executives. Joanne Cordero, the trust’s final CEO, took over its co-author in the late 2022 spiral.
The report determines that the source of the trust problem is that the tenant’s public rental subsidy does not provide enough income to manage the building, including the expenses required to assist with the handling of mental illness and drug addicts. The report found that all trust properties, including new buildings with studios and one-bedroom apartments, are operating an annual deficit — in one case nearly $1 million — once long-term maintenance costs are considered.
Not only is the rental subsidy not enough to cover the cost, but the funds are also coming from multiple plans that pay huge different rooms to the trust without any clear way to add rooms. Similar trust buildings receive subsidies at up to $600 per month.
The report says the calculation of these rates is "mysterious" and its variability is "irrefutable".
"The subsidy is not paid for," said Knowlton. "The increase is inconsistent. The types of subsidies are inconsistent, and there is no reason."
The report takes 2015 as a turning point in the trust attribute. That year, the area implemented a new coordinated entry system to place homeless residents in trust buildings and other support housing through a process designed to identify rooms for the most needed rooms.
The system has been widely criticized among homeless housing providers for taking too long to match potential residents with units and focusing too many mental illnesses, physical disabilities and addiction problems in buildings.
After implementation, vacancies in trust construction surged, which further reduced the organization's revenue. Security spending immediately jumped from $50,000 a year before 2016 to more than $500,000, and eventually soared to more than $1.4 million in 2022.
Notton said she could not determine that a coordinated entry system was the source of these problems because other factors played a role. The portfolio's job openings have been stable until the staffing and maintenance dilemma during the 2020 Covid-19 pandemic made them spin. She said that during the same period, a sharp deterioration in gliding rows could also explain greater security needs.
Still, Knowlton said local leaders should reassess the decision to have the most serious health problems in single-room hotels that share kitchen and bathroom facilities.
“I think single-room occupancy is not the right type of housing for people with high mental health needs or extreme medication use issues,” she said.
A similar conclusion was drawn during the takeover, urban housing officials Advocate for the removal of trust Sros And replace them with new efficiency and one-bedroom apartment buildings, but they abandoned the plan to be too risky, expensive and destructive.
Knowlton is pushing for funding to support housing system overhaul in the area, noting that the issues she identified are common.
Rent subsidies should be set to provide supportive housing costs, including social services, said Knowlton. However, doing so will require substantial and ongoing funding promotion at the federal level, which she believes is “extremely ambitious.” In the short term, she believes that government agencies should increase and standardize subsidies to reduce their variability.
“This will give us time and mats and we need to really set the long-term vision around these buildings as public assets (public assets as community assets) because that’s them,” she said.
The alternative could be worse, she said. Other supportive housing providers show signs of stress. Sro Housing Corp., a similar nonprofit landlord, operates 30 supporting housing buildings, has a big presence in Skid Row Its financial challenges have been documented for many years. In December, a building tenant So-called pest infestation, elevator rupture and sewage leak In litigation.
When the trust fails, New York City stepped in to save critical upper-story housing, but paid a huge price to taxpayers without addressing potential issues in supportive housing systems, Notlton said. Federal, state and local leaders should do their best to avoid similar situations again, she said.
Knowlton said the trust’s collapse was: “Canaries in the coal mine situation.”
Douglas Smith, a staff member of the era, contributed to the report.