HUD Suspends $200 Million in Funding to LA Homeless Agency

The U.S. Department of Housing and Urban Development (HUD) suspended nearly $200 million in federal funding to the Los Angeles Homeless Services Authority (LAHSA) on June 11, 2026. HUD Secretary Scott Turner cited a clear pattern of fraud, including failures to verify 2,300 housing sites, inaccurate tracking of motel housing exits, and the maintenance of 250 vacant apartments using tax dollars.

A HUD Office of Inspector General investigation highlighted severe conflicts of interest, specifically a $2.1 million contract signed by former CEO Va Lecia Adams Kellum with a nonprofit employing her husband. Additionally, audits revealed LAHSA underspent its budget by $108 million in the fiscal year ending June 2025. These actions align with a White House Task Force to Eliminate Fraud led by Vice President JD Vance and a broader administration shift toward temporary shelters and sobriety-based programs over permanent housing.

Local response has been divided. Los Angeles County already withdrew more than $300 million in annual funding to establish its own Department of Homeless Services and Housing. While Mayor Karen Bass acknowledged the agency's mismanagement, she criticized the federal funding cutoff as a move that could force thousands back onto the streets and lead to loss of life. LAHSA officials defended the agency, claiming it has corrected most issues and characterizing the suspension as a political stunt targeting Los Angeles. The agency has 30 days to request a hearing to prevent the suspension from becoming final.