Federally funded homelessness services are rife with fraud and failure
WASHINGTON, D.C. – This week the U.S. House Subcommittee on Delivering on Government Efficiency held a hearing titled “Fixing Fraud and Failure in Federally Funded Homelessness Services.”
During the hearing, members assessed how misguided homelessness prevention policies implemented by left-wing states and localities are wasting federal, state, and local taxpayer dollars, while enriching left-wing nonprofits. Members also highlighted the city of Los Angeles as an example where public spending is simply perpetuating the cycle of homelessness.
Key Takeaways:
American taxpayers are footing the bill for failing programs that continue the homelessness crisis.
Jonathan Choe, journalist and Senior Fellow at the Discovery Institute, testified that “Problem is, life is now imitating art, and the cycle continues, with more taxpayer dollars being wasted on questionable public health policies tied to housing first. Most of these buildings are considered low barrier. That means drug use is allowed behind closed doors, and staff look the other way. Then on top of that, you can pick up these so-called harm reduction kits at the front desk. Let me show you briefly what’s inside.
"Mr. (Rep. Tim) Burchett, you refer to the meth pipes that you can easily get, but this baggie given out at King County public health, just minutes from the Seattle space needle, is called a party pack. You can get a free meth pipe, you can get a tourniquet. You can get countless needles inside. You can get fentanyl test strips. You can get cookers. They’re giving away free drug supplies like candy in the name of harm reduction. And preventing disease with zero oversight and rarely any offers for addiction treatment. In reality, critics say that this is enabling instead of helping. And now people are dying at higher rates behind closed doors of fentanyl overdoses.”
Paul Webster, Senior Fellow at the Cicero Institute, testified that “From Mayor Bass’s office that greenlit $27 million in taxpayer grant funds to buy a property from a business, purchasing almost simultaneously for $11 million. It’s not just LAHSA’s own chief executive that signed $2.1 million in contracts with the nonprofit that employs her husband, after telling the public she was completely recused from such dealings. It’s the poorly crafted, expensive and unworkable system Congress created that was supposed to end homelessness in 2023. This is what happens when billions flow to a network of nonprofits over which no state or local government has authority that measures inputs, beds, salaries and services billed rather than on whether anyone left the street. It took [Department of Housing and Urban Development] roughly a decade to determine that Los Angeles was wasting its awards. Thousands of homeless people died in the meantime.”
Los Angeles is a case study of failed policy, fraud, and mismanagement that has been left unchecked for too long.
Mr. Webster also testified that: “Last year’s point in time count found nearly 70,000 homeless people in Los Angeles, 44,000 were unsheltered, 27,000 were chronically homeless, and six of them die on the street every day. No region in America has more unsheltered people, and no region receives more federal homeless assistance. Los Angeles has taken in $2 billion in federal funds in federal funds since 2005, including $220 million in 2024 in continuum of care awards. Its awards are up 213 percent.
"The city and county have budgeted another $4 billion of their own money since 2022. Here’s what that bought since 2009, the year the Hearth Act reformed federal homeless assistance programs, overall homelessness in Los Angeles doubled, unsheltered homelessness grew 130 percent, chronic homelessness rose 20 percent, and homelessness among people with serious mental illness rose 90 percent. There is more money than ever before, more capacity than ever before, and more and sicker people on the streets than ever before. That is the record.”
The Trump Administration has been working to reverse failed policies that perpetuate the cycle of homelessness.
Mr. Webster urged members of the Subcommittee to “Reform the continuum of care program in three ways first, stop funding and empowering entities that voters cannot reach route homeless assistance through states and their agencies, which answer to an electorate rather than through unaccountable regional nonprofits. Nonprofit consortiums have failed to solve homelessness for the last ten plus years, and, when challenged, demand more money to continue their ineffective research-based programs. Second, direct HUD to monitor and to act. Audit findings of mismanagement should not sit for a decade. Performance should be demanded annually because lives are on the line. Third, fix the definition federal law and regulation redefines a person as no longer homeless when their names appear on a subsidized lease, advocates claim they know how to end homelessness, but it is this definitional gimmick that is the basis for that claim.”
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