The Trump administration suspended federal funding to the Los Angeles Homeless Services Authority (LAHSA) in June 2026 pending a federal fraud investigation [1, 2]. HUD alleges that LAHSA violated conflict-of-interest rules, misused government funds by paying for empty hotel rooms, and failed to provide documentation verifying housing sites [1, 2]. The agency has received nearly $1 billion in federal funding since 2021, which makes up about 8% of its total budget [1, 2].
HUD’s letter to LAHSA cited “severe and pervasive” failures that led Los Angeles County to withdraw $300 million in funding earlier this year and prompted the city to consider doing the same [2]. A federal judge found LAHSA committed "obvious fraud" by requesting funding for an 88-bed shelter operating at roughly half capacity [2]. About 70% of LAHSA contracts involve nearly 2,300 housing sites that the agency has been unable to verify [2].
The fallout follows the resignation in 2025 of former LAHSA executive Va Lecia Adams Kellum, who directed $2.1 million in federal funds to her husband’s nonprofit [2]. HUD Secretary Scott Turner criticized LAHSA, saying, "HUD will fund results, not corrupt failure or the homeless industrial complex. Taxpayers will no longer bankroll an organization that puts its own self-interests ahead of the Americans it was created to serve" [1].
LA County Supervisor Lindsey Horvath said she has called for accountability at LAHSA and urged cooperation between the federal government and county to address the problems [1]. LAHSA has stated local oversight has led to repairs and reforms to tackle the issues raised [1].
Los Angeles recorded an estimated 72,308 homeless people in 2025, down slightly from 75,518 in 2023 [1]. In February 2026, LA County redirected $300 million from LAHSA to create its own homeless services department [1].
The agency now awaits further federal review as the City of Los Angeles considers whether to pull its funding from LAHSA as well [2].
