SCANPH Response to HHH Audit

By Alan Greenlee, Executive Director, SCANPH

If there ever was a moment to support the contention that long term housing investments pay off, i.e. permanent supportive housing as a lasting intervention for homelessness, then perhaps 2020 has one redeeming quality. After all, the pandemic has laid bare the undeniable nexus between public health and housing and the fundamental role that housing plays in people’s lives—often with life and death implications.

We must not overlook the lessons of the COVID-19 pandemic. If we are to be better prepared for another public health emergency, we must prioritize effective housing interventions with tested models like supportive housing. Permanent supportive housing (PSH) is the antithesis of a hasty patch and should be viewed as both an infrastructure investment and public health program because it provides effective solutions for the long haul. Affordable housing and PSH are public assets that serve a societal need now and in the future, particularly when we have public health emergencies. In the long term, it is cheaper to pay for the costs of building covenanted housing now than employing other, short-term solutions like shelters.

But Los Angeles City Controller Ron Galperin is recommending we take shortcuts in another report/audit critical of project costs for Proposition HHH-financed developments for the homeless. He contends that the city should only pursue shelters, interim housing, and hotel rehabs and redirect Proposition HHH funds from PSH. But notably, the audit made no findings that suggest any irregularities in spending or that the program was not well run.

Costs are certainly an area for improvement and our industry and partners continue to make progress on that front; however, notably the report found that total development costs per unit have risen by only 1.9% in one year. The report also selectively cites two outlier projects with higher costs and complicated histories to suggest the hard work of SCANPH members is not an optimal use of taxpayer dollars. Case in point, one of these two projects (developed by a SCANPH member) has 7,500 square feet of retail space that adds to the project costs and secondly, the development received less than $60,000 per unit from HHH funds and a four-year delay left the developer on the hook to close an $8 million cost increase.

At the end of the day, cost containment is part of the competitive nature of the public financing system, and our members' missions call upon them to make the most of every dollar. We must be constantly vigilant about cost so that we're good stewards for public funds.

Galperin is not the sole authority on strong public stewardship of taxpayer dollars; rather, it’s the voters who possess this authority and they support solutions that work and it remains true that the value of a good investment pays off in the long run. This means a multi-faceted approach as part of a comprehensive homelessness plan that includes bridge housing facilities, shelters, AND permanent supportive housing. The LA Times quotes Ann Sewill, general manager of the city’s Housing and Community Development Department, to note that “savings from motel conversions, while appealing, are unproved,” with few models going through.

We’ve said it before and we’ll say it again: true progress never happens overnight. SCANPH members know first-hand the challenges of navigating difficult financing, tricky land acquisitions, entitlement issues, community opposition, high labor/construction costs, increases in cost of materials, and more. And we’ll continue to support our members’ hard work because together we’re investing in the right, long term solutions that will help us end homelessness.