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Mon, May

California's Homelessness Programs: Trickle-Down Failure Echoes Reagan-Era Economics

IMPORTANT READS

iAUDIT! - In my last column, I wrote about the City’s homelessness program performance website and some of the information it contains. This column continues that storyline and shows how failure has trickled down from the State to counties, cities, local agencies, and nonprofit organizations. 

Anyone old enough to have followed the news in the 1980’s should remember supply-side economics, the policy favored by the Reagan administration. Grossly oversimplified, it posited that if people and businesses at the top of the income spectrum made more money, that money would flow down the economic chain to mid-managers and workers.  Tax cuts, deregulation, and investments in technology that make business more efficient were the major elements of supply-side economic theory. Unfortunately, in practice, many of the people at the top of the chain tended to accumulate more wealth rather than allowing money to flow downwards. When the theory failed to produce the expected results, it was derisively called “trickle-down economics” for its policies favoring the wealthier strata of society. 

We are seeing a form of trickle-down economics in the systemic failure of California’s homelessness programs, with the difference being failure is being transmitted downwards far more efficiently than wealth. From the State, to counties, to cities and nonprofits, there is an unbroken chain of ineffective policies, wasted money, and lack of results. Reports from the State Auditor, news from Orange County, and the City’s own numbers show how widespread and common failure is, and how widely it is accepted in the homelessness industry. 

On April 9, California’s State Auditor released a damning report on the failure of the California Interagency Council on Homelessness (Cal ICH) to require counties and other agencies to properly account for billions in homelessness funding, and it has imposed few meaningful performance measures on those agencies. According to the report, the state has little to show for spending $24 billion between 2018 and 2023  except  increasing homelessness. In language that echoes reports on the City and County’s homelessness programs, and criticisms from federal judge David Carter, the state auditor documented the lack of reliable data from Cal ICH. Among a host of problems, the audit report says: 

  • “Cal ICH has not established a consistent method for gathering information on homelessness programs’ costs and outcomes. As a result, the State lacks information that would allow it to make data‑driven policy decisions and identify gaps in services.

  • Cal ICH has neither ensured the accuracy of the information in the state data system, nor has it used this information to evaluate homelessness programs’ success.

  • The data [the state audit team] analyzed from four CoCs (Los Angeles, San Diego, San José/Santa Clara, and San Francisco) showed that nearly one‑third of the exits from HHAP [Homeless Housing, Assistance, and Prevention] Round 1‑funded services left those services for unknown destinations. Because an unknown destination can indicate that the person did not know the destination, that the person refused to answer, that the data was not collected, or that the exit interview was not conducted, we [the auditors] cannot determine whether these people actually exited homelessness”.

 Consider the auditor’s report in light of LAHSA’s August 2023 admission that it doesn’t know when someone moves out of an Inside Safe room. Or this report from the March 19, 2024, meeting of the City’s Housing Strategy Committee, reviewing program statistics from 2023. The  statement on the number of placements stands out because of its caveats: 

“LASHA notes that these placement numbers are not directly comparable to the 22,540 housing placements reported as part of the 2023 Greater Los Angeles Homeless Point in Time (PIT) Count. The placements reported in the 2023 PIT Count include clients placed into permanent housing outside the City of Los Angeles. The data used for the PIT Count placement number includes placements from other aggregated sources, such as the U.S. Department of Veterans Affairs (VA), that cannot be broken down by those that occurred within the City. Additionally, the number used for the PIT Count is a count of “placements” instead of “clients placed,” and clients may have multiple placements. According to LAHSA’s System Key Performance Indicator (KPI) data, in FY 2022-23 there were 2,934 PSH placements for adults enrolled in City interim housing programs, 1,800 PSH placements for families enrolled in City interim housing programs, and 336 PSH placements for transitional-aged youth (TAY) enrolled in City interim housing programs”. 

The key phrase is “the number used for the PIT Count is a count of “placements” instead of “clients placed,” and clients may have multiple placements”. This goes to the issue of counting the number of actions as opposed to the number of unique individuals housed. Note there is no follow-up estimate of the number of repeated clients. Based on the context of the report, neither LAHSA nor the City knows how many multiple service intakes there were.  

As an example of what the City considers to be acceptable performance data, see the section on the City’s homelessness website concerning its Safe Parking program, including a report sent to the City from Safe Parking LA, (SPLA) a service provider managing the City’s Safe Parking program. Although titled a metrics report, most  of the document consists of a program description and general statements on how Safe Parking LA defines successful outcomes. It also provides a specific case description of a family in Long Beach, which is in no way indicative of program performance. 

The document covers SPLA’s La Cienega lot, its largest facility. Near the bottom of page 2, SPLA provides some performance measures.  Between June 2023 and March 2024, 70 unique clients, 51 (72%) exited the program for all reasons, e.g. housed, self-resolved, or simply left. 21 (30%) were placed into permanent or transitional housing; there is no breakdown of what type of housing the clients entered, nor what their long-term dispositions were. Unfortunately, these numbers reflect all actions since the lot was established in June 2023 through March 18, 2024, so there is no way to reconcile the performance numbers with the billings described below.  Also, it is unclear if the 21 people housed are included in the 51 who exited the program. Housing 21 people over the nine months in the report is an average of about 2.3 people per month. Interestingly, SPLA’s report indicates its lots are underutilized, which raises the question why the City almost universally refuses to enforce parking regulations even though there appears to be excess safe parking capacity. 

As evidence of performance, this document is of limited value.  Although it shows referrals to other housing modes, that is an output measure and does not show long-term outcomes. It really reads more like a public relations piece for SPLA.  It should show more detail on the reasons for program exits and where the clients were referred (e.g. Homekey, PSH, etc.) so there is some continuity with other providers’ measures. It should also show actions relevant to each billing period. Using numbers since program inception means there is no way to relate current activity with current billings. Also, the narrative seems to use time frames and numbers that make it appear the program is working better than it actually is. For example, the report states, “In the first half of fiscal year 23-24 (July 1, 2023 – December 31, 2023), we placed clients at nearly 48%”. Forty-eight percent is much higher than the 30 percent housed over the life of the program, and based on the context, the 48 percent may be for all SPLA sites, even though the billing is specific to the La Cienega lot. 

Finally, a review of the HSC’s January 2024 meeting shows an agenda letter requesting  additional funding for LAHSA outreach teams.  There are a couple of interesting things in the agenda letter: 1) the City gave LAHSA $4.6 million to fund Homelessness Engagement Teams (HET)'s without a scope of work or even knowing the job description of the positions they were paying for.  This letter suggests the committee recommend that Council accept the scope of work after the fact. 2) The letter says there were no performance metrics for successful housing engagements and maybe it'd be a good idea if the City asked LAHSA to develop them. The City is willing to pay millions of dollars to LAHSA and its service   providers with no requirements for proof of performance.  And remember, this is from January 2024, less than three months ago, well after assurance from the City and LAHSA they were ushering in a new era of performance-based programming. 

This is not the first time the State Auditor has called out the poor performance of California’s homelessness agencies. In July 2020, the auditor’s office issued a report on the County’s poor track record of helping people, including the homeless, with serious mental problems. Among other findings, the auditor discovered L.A. County had unspent funds equal to 175 percent of its Mental Health Services Act (MHSA) revenues.  In 2021 the Auditor’s office released a report detailing how poorly the State does coordinating its homelessness programs, and how that telegraphs to a lack of consistent performance in county Continuum of Care agencies (LAHSA is L.A. County’s official CofC agency). 

Failure trickles down and out from the State. Since Cal ICH doesn’t require accurate and timely data from the County, it allowed the County to ignore the quality or relevancy of its own data, much of which comes from LAHSA. LAHSA, in turn, had no incentive to enforce its data requirements on its service providers.  As a client of LAHSA’s services, the City did not demand accurate data because there was no reason to send updated statistics to the County or anywhere else. The lack of quality data allows ineffective programs to continue (and in some cases grow) with no expectation of success.  An article from the Voice of OC shows how the same pattern repeats itself elsewhere; this is not a crisis unique to Los Angeles. The common language is that of programmatic failure: lack of useful data; inconsistent or ineffective services, lack of accountability, and lax enforcement of written requirements. 

The State and City are facing significant budget deficits for the fiscal year starting July 1, 2024. Can we, as taxpayers, continue to allow this kind of waste and lack of performance to continue? Can we accept that more than 75,000 of our fellow residents are living on the streets, in large part because agencies entrusted with their care cannot do their jobs?

(Tim Campbell is a resident of Westchester who spent a career in the public service and managed a municipal performance audit program.  He focuses on outcomes instead of process.) 

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