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$700k Apartments and $300k Toilets For LA Homeless in Housing Crisis Scandal

Homeless-Civil Rights activists Ted Hayes at sidewalk encampment in downtown Los Angeles Central City East District, dubbed Skid Row, the national capital, "ground 0" and "black hole" of homelessness.
Homeless-Civil Rights activists Ted Hayes at sidewalk encampment in downtown Los Angeles Central City East District, dubbed Skid Row, the national capital, "ground 0" and "black hole" of homelessness. (Photo: Theodore Hayes)

Reducing the costs of housing and increasing availability is the only way to really make a difference in our homelessness crisis.

The city of Los Angeles is attempting to address the problem of homelessness, but the approach it’s taking to the situation is questionable, to say the least. It is currently spending more than the median house price of $618,000, according to CoreLogic, a real estate tracker, to build expensive apartments in trendy Koreatown for some homeless and low-income senior citizens.

What Has Been Achieved With the $1.2 Billion?

Mayor Eric Garcetti, according to his spokesman, is looking for innovative solutions that can be scaled to deal with the problem. In 2016 he supported the passing of a $1.2 billion bond measure with the hope of building about 10,000 permanent housing units for the homeless. The problem is that there is not much to show for the money spent and the homelessness crisis continues to grow.

The building of 72 units is currently taking place in Koreatown at a projected cost of $690,692 each. The keys to these apartments will be handed to some lucky homeless people and low-income senior citizens next year. They will have access to a fitness center, common areas and various services.

Rushmore Cervantes, general manager of the Los Angeles Housing and Community Investment Department, points out that the costs of building are largely outside of the control of the city. He also draws attention to the fact that the price of the apartments includes communal spaces and services to help with addiction, mental illness and ease the adjustment to permanent living.

Too Much Money Spent With Little to Show For It

In contrast to the expensive apartments being built by the City, the Union Rescue Mission is approaching the homelessness problem in a different way at a fraction of the cost. CEO Rev Andy Bales says that the large fabric structure being built will have air conditioning, heating and access to clean restrooms. It will provide 120 beds for homeless women who currently sleep in the chapel. Rev Bales says he can’t believe how much money has been spent by the city and how little there is to show for it.

Los Angeles City Controller, Ron Galperin has criticized the pace at which the city has used the $1.2 billion in bond funds. He says building units that are not going to be seen for years and costing $400,000 to $500,000 per unit is not a solution.

Investment in Affordable, Low-Cost Housing Necessary

Cities worldwide are grappling with the problem of homelessness and how to deal with it. Should the homeless be entitled to permanent housing? Are there lower-cost alternatives? Where should permanent units for homeless people be located? Should they be situated in lower-income neighborhoods where land is cheaper or scattered throughout the city?

Megan Hustings, managing director of the National Coalition for the Homeless in Washing, DC says that across the board, there has not been an investment in affordable, low-cost housing.

A Fundamental Change in Approach is Necessary

Government programs have achieved little to address the problem of homelessness. Reducing the costs of housing and increasing availability is the only way to really make a difference. Less taxation and reduced effort and cost to obtain approvals are just two measures

What is evident is that the city’s attempts are failing and a different approach is needed. The first step should be calling a halt to the development of apartments costing nearly $700k, that could make a difference. It would also be helpful to address the problem of homeowners using zoning and environmental protection as a cover to prevent development that could devalue their homes.

Charles Laverty

Charles Laverty is CEO of Nuzuna Zone Fitness in Costa Mesa in California. Charles has served as CEO or on the board of several healthcare and fitness related companies over the last few decades including InfusionCare and Curaflex. He is also an active commentator on healthcare public policy and business and political topics. Inc. Magazine, in association with Merrill Lynch and Ernst & Young, once awarded me the US Turnaround Entrepreneur of the Year award. Now I am building Nuzuna Zone Fitness which I founded in 2018 and is already two dozens locations open or under development.


  1. Msrgieg.k. August 24, 2019

    Who are they trying to impress with the cost of this. Who’s pocket is the money going into?

  2. John August 25, 2019

    This is a challinging sitch to say at least. Thanks all we have caring talented civlil leaders to take on with compasion and action.

  3. Linda August 26, 2019

    What the city needs to do is lower the rent on existing rentals and also make it easier to rent whether or not your credit score is high or low due to being disabled or working a low income job we all deserve to have a home it doesn’t need to be new or excessive all it needs to be is livable and affordable!

  4. Jack July 15, 2020

    Crooks! All of them. Huizar is only the beginning. They should all be investigated at City Hall and prosecuted to the fullest extent of the law.
    Ridiculous! $700,000 to build one small flat for a homeless person? You’ve got to be kidding. Well, at least we know now Huizar had his hand in the cookie jar, but this time he got caught. I hope he does the 20 years. There should be no plea bargain for crimes violating the public trust, period!!


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