Los Angeles City Comptroller’s Report Shows Average Cost of Supportive Housing Nearly $600,000


City comptroller’s report details rising costs of supportive housing

By Dolores Quintana

In a report titled The Problems and Progress of Prop. HHH, City Comptroller Ron Galperin detailed the rising costs the City of Los Angeles faces to build permanent supportive housing to address the problem of homeless people on city streets.

The HHH proposal was passed by California voters in 2016 as a $1.2 billion bond measure that promised to fund 10,000 housing units for homeless people. The targets set by the bond measure were slightly unrealistic as they assumed that housing costs would not rise sharply. Of course, no one could have predicted the financial effects of a global pandemic entering its third year.

Galperin’s office released a previous report in 2019 that estimated the average cost of building a Prop housing unit. HHH at $507,000 per unit. Costs only increased over the next two years, with unit cost averaging $530,000 in 2020 and reaching nearly $600,000 per unit in 2021.

“While Los Angeles has made some progress with the HHH proposal, it hasn’t been enough. The costs are too high and the pace is too slow to deal with the tragedy on our streets. If the City doesn’t learn of her mistakes, she risks repeating them. Angelenos, protected and unprotected, cannot afford for this to happen,” Galperin said in a statement.

The city has 65 supportive housing projects that are under construction with funding from Prop. HHH for a total of 4,300 units. Galperin estimates indicate that the average cost per unit is currently $596,000, with some projects at a low of $309,000 per unit, but with some as high as $765,000 per unit. Of this total of 4,300 units under construction, the Comptroller estimates that more than 14% of the 4,300 total projects cost more than $700,000 each.

There are 27 other Prop projects. HHH being designed which would create an additional 1,880 housing units. Among these projects in the planning stage, the average cost is $580,000 per unit, with the low end being $372,000 per unit and the high end reaching $837,000 per unit.

Prop program. HHH is on track to provide just over 8,000 new housing units, of which only 7,000 would be supportive housing with a total of 125 projects.

It is Galperin’s recommendation that the City should adopt additional measures to facilitate the approval process and consider using Prop funds. HHH to buy buildings that already exist to convert them into permanent supportive housing, much like the Project Homekey program or build transitional housing instead. Galperin reiterated his recommendation that the City should think twice about projects that stall or cost too much. City officials did not respond positively to Galperin when he first made the recommendation.

It is possible that officials may be able to misappropriate the Prop fund. HHH some messed up plans, but that doesn’t solve the overall LA construction price problem.

It’s not just supportive housing that’s expensive, all types of construction are impacted by rising prices in the Los Angeles area, including infrastructure projects and market rate construction.

For example, Metro Los Angeles has a proposal on the table to split the Metro Gold Line or Eastline L extension into smaller stages due to rising prices making the line more expensive than the money that was allocated for the to construct.

In fact, a report on construction costs in Los Angeles from the UC Riverside School of Business shows that the average unit cost in Los Angeles for new housing is nearly $580,000 for any type of construction project, little anyone builds it. This speaks to the larger real estate market problem in the Los Angeles area which in turn has exacerbated and continues to exacerbate the problem of homelessness.


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