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Los Angeles Proposition HHH

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Los Angeles Proposition HHH

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Overview

Los Angeles voters passed Proposition HHH in 2016, which enabled City officials to issue $1.2 billion in bonds for the development of permanent supportive housing units for people experiencing homelessness. In addition to funding permanent supportive housing development, the bonds can be used to help build temporary shelters. The passage of Proposition HHH is notable because it received the support of a broad and unique coalition of public and private stakeholders in LA, including labor unions and private and nonprofit housing developers. In this case study, we describe the proposition and the coalition that helped secure its passage.

Key takeaways

  • The development of housing solutions is strengthened by strong partnerships between government agencies and nonprofits. These partnerships are instrumental to identifying issues, writing and implementing measures, assessing public opinion, and advocating for solutions.
  • Political will and public support for homelessness initiatives can be bolstered through various outreach and media campaigns. 
  • While a measure like Proposition HHH can provide resources to combat homelessness, extensive planning is required to use those resources quickly and efficiently. Regulatory barriers, rising construction costs, and limited availability of qualified developers can significantly reduce the number of units that can be placed in service and how quickly people experiencing homelessness can be assisted.

Description

Proposition HHH authorized a $1.2 billion Homelessness Reduction and Prevention, Housing, and Facilities Bond to support the development of 7,000 permanent supportive housing units for people at risk of or experiencing homelessness. Permanent supportive housing is a form of affordable housing where tenants receive both housing and supportive services, like case management, access to health care, and substance use treatment. Rent and utilities are limited to a percentage of tenants’ income, typically no more than 30 percent. It is permanent in the sense that the assistance is indefinite. HHH funds subsidize approximately 30 percent of a project’s total development cost (supportive services for eventual tenants are funded by other means). Housing developers assemble the remaining financing needed by applying for public funding sources from the City of Los Angeles, Los Angeles County, and the state of California. Nonprofit developers awarded HHH funds must propose projects in which 50 percent of units, or 20 units total (whichever is greater), are dedicated for permanent supportive housing. Fifty percent of those units must be dedicated to chronically homeless individuals or families.

Process

The passage of HHH was unique in that it was supported by a broad coalition of affordable housing organizations, government agencies, labor unions, and private developers. In 2018, Abt Associates published a report that detailed how HHH was developed and passed, including the role of the coalition in the effort. This section, drawn primarily from Abt’s report, describes how the coalition came about and led to increased awareness about and collaboration to address homelessness in Los Angeles, and ultimately led to the passage of Proposition HHH.

Early efforts to alleviate and increase awareness around homelessness

In 2005, LA’s first Point-in-Time (PIT) count confirmed the pervasiveness of homelessness, estimating that about 83,000 people experienced homelessness in one night in January. Over the next decade, several initiatives, programs, and task-forces were created by nonprofits and government agencies to address homelessness. For example, the LA Area Chamber of Commerce and the United Way of Greater Los Angeles established the Business Leaders Task Force on Homelessness in 2009, which assembled and disseminated information on best practices to address homelessness. The Home For Good initiative was created in 2010 to bring together philanthropic, private, and public funding to address homelessness in a coordinated way. In 2012, the County created the LA County Interdepartmental Council on Homelessness to coordinate services across County agencies. Overall, these initiatives fostered community support and encouraged collaboration across LA to address homelessness.

Collaboration to develop solutions to homelessness

Despite increased coordination and efforts to end homelessness, a subsequent study conducted by Los Angeles Homeless Services Authority found that there was a large unmet need among the homeless population for permanent supportive housing, rapid re-housing, transitional housing, and emergency shelter units. As a result, the City and County worked together to develop two related homelessness plans to optimize housing resources and service delivery. From these efforts, officials determined that the City was best positioned to invest in and build affordable housing units, while the County had the necessary systems in place to provide health services. The City and County’s final plans reflected this and referenced each other’s strengths and strategies. Once the City’s plan and County’s Homeless Initiative were developed and passed by the City Council and County Board of Supervisors, respectively, in February 2016, community leaders needed to develop long-term funding sources to finance the plans.

Developing HHH

In determining the funding source for new housing units, City leadership worked with many public and private community stakeholders, including County leadership, United Way, and the Corporation for Supportive Housing. After conducting polls, they determined that a bond measure would garner the most public support relative to other funding options. To address LA’s housing shortage, the Corporation for Supportive Housing estimated the resources needed to build permanent supportive housing. The City Council’s Homelessness and Poverty Committee, the City Administrator’s Office, and community organizations wrote and finalized the bond proposal. Community organizations identified permanent supportive housing as the highest-priority housing need. The United Way, Corporation for Supportive Housing, and Los Angeles Homeless Services Authority were instrumental in determining the final amount of $1.2 billion.

Gathering support to pass HHH

Once Proposition HHH was on the ballot, stakeholders worked to increase public support and awareness of the measure. Labor groups like the LA County Federation of Labor supported HHH because it would create well-paid employment opportunities for local residents, while developers supported HHH because it provided a new and significant funding stream for housing development. Organizations like the United Way and LA Voice successfully advocated and gained support for HHH among LA’s various communities.

The United Way, along with other homeless service providers, additionally led voter education and public outreach efforts. SG&A Campaigns, a political campaign consulting firm in LA, led the media campaign. Their efforts involved a postcard campaign that mailed hand-written postcards to voters; a media campaign in which public officials and community organizations advocated for the measure to local media sources; a digital media campaign in which SG&A and United Way included information about HHH in their listserv messages and social media accounts; and phone banking.

HHH passed on November 6, 2016 with support from 77 percent of voters.

Outcomes

In the first two years after HHH was passed, project development was slow and construction costs greatly increased. A report released by the LA City Controller in September 2020 found that estimated building costs rose to $531,000 per unit (earlier estimates were $350,000 for a small unit and $414,000 for a large unit). Construction was hindered by a limited pool of qualified developers and a lengthy pre-development process—a typical HHH-funded project is estimated to take three to six years to complete. The report estimated that LA was on track to complete 5,873 units towards the goal of 7,000 units; as of August 2020, 179 supportive units have been built with HHH funds and another 5,522 are under construction or in pre-development.

In response to the slow pace of development of HHH-funded units, the LA City Council established the HHH Housing Challenge, which set aside $120 million of HHH funds to support the fast-tracked development of 1,000 units. These funds will be used to identify innovative housing types and alternative funding strategies for projects, with a goal of reducing development costs and completing projects within two years. According to the City Controller’s report, as of August 2020, 652 units funded through the Challenge are in pre-development with an average estimated unit cost of $425,122.

Policy significance

HHH provides a significant source of funding for the development of a large number of permanent supportive housing units and helps add critical housing supply to Los Angeles’ increasingly tight rental market. Additionally, HHH may help the City reduce costs associated with serving its homeless population. When coupled with supportive services, permanent supportive housing has been shown to save costs—relative to allowing individuals experiencing chronic homelessness to remain unhoused—by reducing the costs of common public services for the population, such as treatment facilities or emergency room visits. One study of costs associated with serving individuals experiencing homelessness in Los Angeles County found that housing with supportive services saved over $80,000 per individual over two years, a cost savings of 43 percent.

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