LA Offers $3 Billion to House 60% of Homeless to Settle Case

(Bloomberg) -- Los Angeles agreed to spend as much as $3 billion over five years on a program to house about 60% of the homeless in the city, ending a lawsuit that claimed it wasn't doing enough to deal with the unfolding crisis.

“This settlement seals our commitment to finding solutions for our unhoused neighbors, holds us accountable to make the necessary investments, and will help us to build a future where no one has to suffer on our streets,” Mayor Eric Garcetti said in a statement on Friday. The lawsuit was filed by the LA Alliance for Human Rights, a group of downtown residents, homeless individuals and small business owners.

The settlement follows a federal appeals court's reversal last year of a judge's sweeping order that required the city and county of Los Angeles to quickly shelter all homeless people living on downtown's Skid Row, where tents and cardboard shelters line the sidewalks. The appeals court in San Francisco said U.S. District Judge David O. Carter “impermissibly resorted to independent research” to form his opinion.

Carter last year toured and held hearings in Skid Row before issuing his order. Carter, Los Angeles City Council and Garcetti must still approve the settlement.

Under the agreement, the city will create at least 14,000 housing units, which may include shelters and homes. The exact number will depend on the 2022 count of the homeless, which is set to be released later this year. In 2020, more than 66,000 individuals in the county of 10 million people were unhoused, a 13% increase over the previous year, the appeals court noted in its ruling.

Homelessness has been increasing even after voters in 2016 approved a $1.2 billion bond to build 10,000 supportive housing units. The program has been beset by slow progress and soaring costs, with the average price per unit running at almost $600,000, according to findings by the city controller.