Residents frustrated with Bass and a nonprofit file a lawsuit, alleging the city wasted millions on housing for the homeless.

Los Angeles Taxpayers Sue over Controversial Homeless Housing Deal

Residents in Los Angeles are taking their city government to court, claiming that Mayor Karen Bass and housing officials rushed a deal for homeless housing that was both overpriced and inadequately vetted.

The lawsuit, filed on Tuesday, features two local residents, Samantha Nussbaum and Howard Grossman, as plaintiffs against the city, the Los Angeles Housing Authority, the California Department of Housing and Community Development, as well as the Weingart Center Association, which is a nonprofit focused on homelessness.

The legal action centers on the $27.3 million purchase of an assisted living facility in Cheviot Hills. This facility was reportedly sold just days earlier for about $11.2 million, raising eyebrows over the substantial markup.

According to the lawsuit, city officials proceeded with the Homekey transaction despite missing the state filing deadline, as indicated in court documents. It claims that the project was pursued based on a non-compliant assessment, which led to the displacement of elderly residents from a previously viable senior housing location.

The complaint alleges that city officials and their nonprofit affiliates pushed the deal through the City Council, utilizing incomplete or inaccurate data and neglecting essential due diligence protocols.

Interestingly, the complaint states that city officials weren’t even aware of the property in Shelby Drive until after a vital Homekey deadline had passed, yet they still rushed to finalize approval.

A representative from Mayor Bass’ office responded, asserting that the Shelby site is regarded as a highly valued property for transitional housing in a market that offers limited options. They emphasized that an agreement had been established to ensure exclusive use of the site for senior residents.

Furthermore, the office mentioned that a federal investigation into the private developer involved is currently underway, asserting the city’s intention to fully cooperate. According to them, a private developer has recently been arrested in connection with serious fraud allegations against lenders in Los Angeles and Ventura County, part of which involved acquiring properties for homeless seniors.

In October, federal prosecutors took action against a real estate agent named Steven Taylor, accusing him of falsifying financial records to secure funding and misrepresenting the intended use of the Cheviot Hills property before selling it to the Weingart Center Association for the inflated price.

The U.S. Attorney emphasized the misuse of taxpayer funds, which were meant to assist the homeless, illustrating the rapid acquisition of the property less than two weeks after Taylor’s original purchase.

While no charges have yet been filed against the city or Weingart Center officials, the plaintiffs argue that the ongoing investigation underscores the necessity of halting further public expenditures. They’re requesting the court to issue emergency measures, which include freezing construction, stopping additional public spending, voiding sales contracts, and recovering funds that taxpayers have already spent. Additionally, they are seeking a judicial ruling stating that the city exceeded its legal boundaries.