All Episodes
Previous Next
Jan. 15, 2021 - Epoch Times
28:10
Why Homelessness is Growing in California | Veteran Journalist Jerry Sullivan
| Copy link to current segment

Time Text
Do you think with all that you see, the homelessness problem is anywhere close to getting resolved in LA? No.
It's worse than it was, both in terms of both countywide and citywide.
What's going to happen to LA? Great threats, I think, and one is immediate and one is longer term.
I think the first threat is tourism.
The other thing that I think people have to be very concerned about is losing the middle class.
We see that this problem is getting bigger and bigger.
But you believe that corruption is a big part.
So there's all kinds of things that don't add up and no answers.
And that's where it gets troubling.
And you have to start to wonder what is happening to this money and where it's leaking and why the mission is always being moved out further and further.
When we were talking offline, you told me about legal corruption.
That me and you would think it's corruption, but it's totally legal and people are maybe doing it.
Most of what we would think of as corrupt or not right or unethical or questionable, most of it's legal.
And it can be as simple as campaign donations.
And why is nobody watching?
In part, that's been the media.
If you're the LA Times and you've had a city hall bureau for the last 10 years and all this has happened, it's a little bit difficult to say, oh, look what happened on our watch.
LA residents are committed to helping the homeless and have agreed to spend billions of dollars in taxes to do so.
But over the last few years, the number of homeless has grown significantly.
Today, my guest is Jerry Sullivan.
He's a veteran journalist of over 30 years.
He's going to share with us how LA County has been dealing with the homelessness issue and where LA could end up in a few years if this trend continues.
Welcome to California Insider.
Jerry, it's great to have you on.
It's my pleasure.
Thank you for having me.
We want to talk to you about homelessness in L.A. You've done a lot of research on this.
From what I know, homelessness, root causes of homelessness is people that financially are facing hardship, especially in California with the housing costs.
Then we have people that have mental illness and they're on the streets.
And then we have people that Have addiction and we see that this problem is getting bigger and bigger.
But you believe that corruption is a big part in the way we're handling the homelessness problem in L.A. Is that true?
Yes, I believe so and as you noted correctly there's various aspects that Create the problem.
How it's handled is an entirely different thing, and I think that as we look and see the voters in the City of Los Angeles and the County of Los Angeles have taken it upon themselves to increase their taxes, to dedicate billions of dollars towards this problem, and it's only getting worse.
And you have to start to wonder what is happening to this money and where it's leaking and why the mission is always being moved out further and further.
Have you seen any evidence that this money is being misused?
Do you have any examples?
I have an example that I've cited.
I don't think I could say it's evidence because the story isn't quite complete yet.
A lot of outstanding questions.
But this has to do with a particular warehouse in downtown Los Angeles, on the industrial side of downtown, where the city has Agreed to lease it at a lease rate that seems to make no sense by any reasonable comparisons.
The process of leasing it was very confused, included some errors.
So how much is the price difference?
Let's say you can tell us what's the rent and what is the average?
Right now the deal that is done It was done at a rate of about twice.
It's about twice what the average price for industrial space in that area.
Okay, so double the price.
According to brokerages.
So the city is paying that, okay.
Yes, they're paying about double, based on those comparisons.
And more recently, there was some proposal to actually expand on that deal, even though that deal has yet to lead to the completion of a first phase, which would be an emergency, a homeless shelter of 100, 115 beds.
It's a year late now.
It's still not open.
But they've already proposed doing a second phase in the same building and taking more space from the same landlord.
And the initial price, at least, based on some emails I obtained through the California Public Records Act, would be about three times the price.
Three times the going rate.
For the second phase.
Yes.
So there's all kinds of things that don't add up and no answers.
And that's where it gets troubling.
We'll have to see on the answers whether there's actual evidence, but there certainly are indicators, and they certainly bear looking into.
There certainly is, at least at one level, the U.S. Attorney is looking into it, and of course the FBI has raided City Hall and actually raided the home and office of the council member who was the driving force on this deal.
But that's all in the works.
They've had already several guilty pleas from a former council member, former member of the Los Angeles City Council and a lobbyist and a fundraiser and an assistant to the one councilman.
The councilman himself, Jose Wizar, who was the fellow who was the driving force on this deal, is charged and awaiting trial on public corruption.
And the U.S. Attorney has promised that there's more to come.
So it's a mess and there's still a lot of questions and There's more to it than homeless programs.
There's also other developments in downtown.
But this example of this one particular homeless shelter may very well be part of a larger problem.
And how does a deal like that happen?
So do you know the process of something like this happen and do you think there's a, so there's a, is there a relationship and is there money going from the, from what you can put together and is there any money going from the person that owns the warehouse to this councilman?
I don't know that, and I don't know if the federal investigators are looking into that.
I will tell you that there's a fellow who owns a warehouse, and at some point, despite having a record of involvement in money laundering, in a case that the U.S. Postal Service brought some years ago, which did not lead to a conviction, but did He was responsible in some way for the money laundering, was involved in a case of commercial counterfeiting, having to do with some garment product, merchandise.
He winds up with a deal at a very attractive lease rate, with a deal that was proposed and driven through by a council member who's now under indictment.
What may have gone on back and forth, I have no evidence of that.
I have questions that aren't answered.
And how are deals like this?
Are deals like this happening all the time in this type of environments?
Or have you seen cases like this where prices are double the actual normal price?
Well, the city does deals like this all the time in various ways, and I have seen Prior in my career, I've seen instances that made me wonder.
I've never seen one quite this brazen.
This deal was brought to the city council at a dollar a square foot, they said, or 98 cents, around a dollar a square foot.
And I looked at the engineer's report, and I realized that it involved less square footage than they claimed in the original deal.
So I did a story on that and then they brought it back and they corrected the square footage.
So I know this gets a little confusing, but originally they said, we'll give you $35,000 a month for 35,000 square feet.
I looked at the engineering report and it was for about $17,500, about half the space.
So they corrected that, but they didn't change the price.
Was the price supposed to be less?
It was supposed to be half?
Well, the first, at 35,000 square feet and around 98 cents a square foot, it had a report justifying that price based on comps.
The revised deal, based on the fact that it wasn't 35,000 square feet, had another, and this is weeks later, maybe a couple months later, Had another report from a city agency justifying the price.
So the price stayed at $35,000?
Yes, so it went from a dollar a square foot to about $2 a square foot.
Because they cut the size, but they didn't adjust the price.
Right.
I see.
And somewhere in City Hall, someone came up with a report showing that also was in line with comps.
So, it was in line at a dollar, it was in line at two dollars.
If you see where I'm going, that doesn't make any sense at all.
And so I've never seen one quite this brazen.
And the entire city council approved it, and the mayor signed off on it, and away they went.
And now they're back with a proposal to lease more space there, and according to the email I obtained, the initial The bargaining position, I guess, was for an even higher rate.
It's really quite something.
I've seen examples where you say, I don't know that that looks quite up to snuff in terms of ethical standards or business standards.
I've never seen one quite this brazen or, frankly, quite ridiculous.
And now, we have about $1.2 billion that got allocated to homelessness problem in L.A. through some taxes on homes.
Is that the case?
And then we have some sales tax that got...
Yeah, the city did a bond measure that passed.
City voters approved it, and that would raise $1.2 billion.
And I think that money's all been accounted for now.
That was passed in 2016.
Was that spent, all spent?
I don't know that it's spent.
I think it is...
Allocated, yeah.
I think it's allocated, as I recall.
The county did a quarter cent sales tax increase for the specific purpose of the city's money was really dedicated to building facilities.
The county, I think, was more intended toward providing services, accompanying services to the facilities and their residents.
The county's was a quarter cent sales tax.
I believe the estimate was $335 million a year for 10 years, so more than $3 billion by every estimate.
The county and the city, according to Los Angeles Homeless Services Authority, which is a joint city-county agency and does a census or a count of homeless every year, in both countywide and in the city in particular, homelessness is up by double digits since that money was approved by the voters.
It's now almost by 40%, 30%?
Yeah, I think in the city it's in the 30s, and I think countywide it's 40%.
We're at 66,000 total.
Do you think the money went to use and got some people off the streets, and then more people came out or became homeless, or do you think the money didn't really reach the people?
I think some of the money reached.
I think a lot of it...
I think one of the problems, and you'll see is, I think the cost of a unit of housing that they're building under this program is now somewhere five or six, seven, I think $700,000 per unit.
Whatever it is, it's well over averages and everything else.
And a lot of that has been deemed, the city auditor, controller, Ron Galpern has done a study of it and deemed, a lot of that was soft cost.
And what are those soft costs?
Soft costs are lobbyists and zoning and design and...
Consulting and...
Consulting and...
What would the lobbyists do in this case?
The lobbyists might run community meetings.
To inform and get the backing or at least inform a community that this is intended for their neighborhood.
So there's all sorts of aspects to it that you could deploy lobbyists on, public affairs firms, however you want to call it.
So there's just a lot of that built in and Who knows what else?
The federal investigators alleged that there were boxes of money, cash, being paid to this council member, Mr.
Wazzaro, who's accused in the corruption case, not for necessarily homeless projects that we know of so far, but other projects in the downtown area.
So this is cash?
Cash, yes.
Hundreds of thousands of dollars in cash that we know of so far.
So, you know, it could go a lot of places.
No one's really addressing it very clearly or very well.
The federal investigators are in the middle of an investigation, so they're proceeding at their own pace.
And that's understandable in the middle of an investigation.
They release information as it serves their investigation.
But the responsible elected officials really haven't had much to say about it, and the media has been very weak on the coverage of it.
Now, when we were talking offline, you told me about legal corruption, that me and you would think it's corruption, but it's totally legal and people are maybe doing it.
Can you tell us about it, how the legal corruption works?
Yeah, I think most of what you and I, when we look at our local governments, most of what we would think of as corrupt or not right or unethical or questionable, most of it's legal.
And it can be as simple as campaign donations.
The council member, Hussara, who was charged in the corruption case, was the chairman of the Planning and Land Use Management Committee.
And the allegation is that he used that position to shake down donors.
I'm sorry, not even donors, to shake down bribes.
If he had maybe not been quite so ambitious as alleged, because he has not been convicted, but if the amounts of money had been less and written to a political action committee or his campaign or within limits, There would be nothing illegal about that.
No.
So you can donate to the campaigns and then from there people can do you?
Yeah, I mean, it's long been a practice that, you know, if you have business up before the council, you might want to write some donations.
I think The case against the current federal case, and specifically the investigation into Jose Wissar, will show what it looks like when it gets out of control.
When cash comes into play.
And I think what happens is, you know, my guess is that it goes on and the council members in L.A., there's a great tradition of they don't challenge one another.
If it's in somebody's district, you know, you don't interfere with their dealings with their constituents or anything else.
And so I think, you know, it got sloppy.
People got greedy, human nature, and they got sloppy, which is also human nature when things are easy.
And nobody was really watching.
And I think they ran wild.
And why is nobody watching?
Well, you know, that's a good question.
I think for a couple reasons.
I think there's been a little bit of access journalism where the people covering City Hall and in L.A. have traded, you know, you need your sources or they feel they need their sources and that means you need access to them and you need them to take your call.
And so maybe you're not quite as aggressive as you would be Otherwise, for fear of losing your access.
I tend to just follow the story, and if it's going to cost me access, I'll find another way to get the information.
Or I won't, but I'll try anyway.
And I think that's brought a lot of...
My coverage has stemmed a lot from that, where as...
This investigation that's going on isn't new.
It's been going on for years, which means...
According to the federal government, and according to, I think, three or four people who have pled guilty and acknowledged the existence of a criminal enterprise being run out of City Hall, you know, according to them, it's been going on for years.
So, someone's been asleep at the switch, and in part, that's been the media.
And now, I think it becomes very difficult To acknowledge it for some media.
If you're the LA Times and you've had a city hall bureau for the last 10 years and all this has happened, it's a little bit difficult to say, oh, look what happened on our watch.
And so maybe You don't cover it quite as aggressively for that reason.
That's my speculation.
I don't know.
But I don't think the coverage has been very aggressive or really much beyond stenography.
And if you look, to give the U.S. Attorney credit, they've kept very tight control of this investigation, and they've released information as they've decided it served their case.
And they've controlled the narrative for the most part.
Now, going back to homelessness, do you think that there's a group of companies and people that are involved in this industry that actually are benefiting from people being homeless?
There's always, if there's money being spent, someone is going to benefit, and that's not always bad, right?
If a company or a non-profit Does a service, provides a service in a fair and timely manner, they should be paid, they should be able to make a living doing that.
I think that, for instance, the organization that has been contracted to run this same shelter on Paloma Street, the 1400 block of Paloma Street, the one I was referring to earlier.
I believe it's a $4 million a year contract.
And looking in their tax returns, I couldn't see any evidence of them having any experience at that sort of revenue level or with the number of employees that would be required to run this operation.
And again, you know, the city engineer's report shed some light on the number of employees, and it's a very high number.
This organization doesn't seem to have that experience.
You wonder, it's a community development corporation.
I think most people would like to think that all these non-profits are well-run, altruistic, and delivering Proper services as promised.
I don't know how true that is, and I've been to some of their other facilities, and they have contracts from various other facilities, and there's questionable practices there that I've covered in other areas of LA. So, you know, that again, that might be another leak of all this money, or it's just being siphoned off in ways that it's difficult to imagine sometimes.
Do you think with all that you see, the homelessness problem is anywhere close to getting resolved in LA? No.
It's worse than it was, both in terms of both countywide and citywide.
Also in terms of sheltered and unsheltered, so of that 66,000 homeless people, there's a certain number that have shelter at least, some temporary shelter or emergency shelter, and then the others are Quite literally on the street.
That number also is up.
There's more unsheltered, significantly.
Double-digit increase since these tax increases took effect.
If you walk down the street, there's nothing to suggest that the problem's doing anything but getting bigger in every way.
The size of encampments, the almost permanent nature of some of the encampments, You can see crude building going on, which suggests more than a tent, suggests some permanence under a freeway overpass or wherever it may be.
So just a lot of real sad symptoms.
And in neighborhoods that, you know, I've never really encountered this before, so you get the sense of a spread.
So, yeah, I don't see really any, I wish there was some more hopeful sign, but I don't see any.
And what is it going to do to L.A. as a city?
What's going to, if this, as you see no sight of improvement in the homelessness issue, what's going to happen to L.A.? I think it'll do, there's two great threats, I think, and one is immediate and one is longer term.
And I think the first threat is tourism.
Los Angeles counts a great deal on tourism, and I think it will begin to erode that trade.
And that hits restaurants and hotels, and we are more and more a service economy in so many ways, and that hits right at the heart of it.
So that's probably a more immediate.
The other thing that I think people have to be very concerned about is losing a middle class.
And to some neighborhoods, some neighborhoods brought down by this and others retreat up.
How are they brought down?
You could only have so many tents and the public health hazard that comes with that.
First, let's keep our expression of concern for the people in the tent, the poor people who have no other place to go, for whatever reason.
But let us also not forget the effect on the neighborhoods where these tents happen to be.
And there is a public health hazard.
There's a lack of sanitation and a lack of medical care, some folks with serious and legitimate mental problems.
These all Can be dangerous.
How much can one neighborhood be overloaded with that before it starts to erode values, home values, and I think everybody knows a cycle that can follow from there.
And then The neighborhood that can, can sort of retreat away from it by moving up, whether it's a gate, whether that's...
I see.
So they don't let as many...
Right.
So some neighborhoods are having...
Private security.
You know, certain neighborhoods hire their own private security to supplement LAPD. The...
So, again, everyone, there's legitimate concern about the hollowing out of the middle class.
Well, I think this would put it on a fast track.
If this doesn't, you know, if you hit the tipping point on this, you could fast track that division, the hollowing out of the middle class and that very clear, rich, poor division, which is not good for anyone.
It would not make it safe, it would not make it any, the jobs, the good jobs would be gone, right, if that happens.
Yeah, you're going to have trouble recruiting the workers you need, who, you know, Los Angeles has a problem with expensive housing already.
Now, make the neighborhood rougher, And people will leave.
You know, that's just simple.
And you can't, I don't think anyone can walk or drive through the city for very far at all before you realize something, this is not sustainable.
What's going on now is not sustainable in terms of the homelessness in Los Angeles.
And what do you recommend to our audience to do, the ones that are watching?
Well if you live in Los Angeles, I think I would ask my council members for a clear account of what is being done in this district about housing and tell me about the money behind it.
How much came in?
How much went out?
What was accomplished with that?
How many units?
I mean, there's 66,000 people In Los Angeles, homeless people in Los Angeles County.
There's more than 40,000 in the city.
That tax increase in the city had a goal of 10,000 units.
That's a quarter of the problem in the city.
So that's a limited ambition to begin with, and that's been downgraded because the costs have gone up.
So you start to see There was a limited ambition to start with.
You not only have to build some housing or arrange for housing, because there's a lot of old motels or apartment buildings that might be a cheaper way to do this, but you also have to figure out what's causing this and try and get upstream on it.
I think that's going to be a key.
But to say we have 40,000 homeless and here's a program to address, bring 10,000 units, You know, let's understand that that was limited and that wasn't executed anyway.
Because there's been growth even in those numbers.
Well, the numbers have grown, but the cost of the units have grown.
So that $10,000 is probably more around $5,000 now.
Which is not going to do much.
Right.
It's not even going to cover 10% of that.
Right.
And so, you know, it's something fundamentally has to change if you really want to address this.
Or you resign yourself to that's how the city is.
Do you have any other remarks?
No, I think I've said plenty.
Well, it's great to have you on.
Absolutely.
It's my pleasure.
It's my pleasure indeed.
Thank you.
I hope to be back.
▲
Export Selection