LA Spends $20M to Shelter Just 32 Homeless People

The city's costly housing project remains unfinished after 5 years, raising questions about the homeless crisis.

Mar. 16, 2026 at 10:12pm

Got story updates? Submit your updates here. ›

The City of Los Angeles purchased a former Ramada Inn in 2020 for $10.2 million as part of an effort to rapidly expand housing through the state's Project Homekey program. The 33-room property was initially used as interim housing for people experiencing homelessness, but in 2022 the building was shut down so it could be converted into permanent supportive housing. Nearly four years later, construction is still ongoing, with the total project cost now standing at roughly $20 million - or $625,000 per unit. This raises questions about the city's approach to addressing homelessness, as the problem appears to be worsening despite significant public funding.

Why it matters

The high cost and slow progress of this housing project highlights the challenges and inefficiencies in the city's efforts to tackle homelessness. With the average housing cost in LA just over $900,000, the exorbitant price tag of this project suggests deeper issues within the "homeless industrial complex" that may be preventing meaningful solutions.

The details

The City of Los Angeles purchased the former Ramada Inn in 2020 for $10.2 million as part of Project Homekey, a state program to rapidly expand housing for the homeless. The 33-room property was initially used as interim housing, but in 2022 it was shut down so the building could be converted into permanent supportive housing. Nearly four years later, construction is still ongoing, with the total project cost now standing at roughly $20 million - or $625,000 per unit. The city has approved an additional $1.5 million in Proposition HHH housing funds to close the financing gap, and the project has also received loans and grants from public and private sources.

  • The City of Los Angeles purchased the former Ramada Inn in 2020.
  • In 2022, the building was shut down so it could be converted into permanent supportive housing.
  • Nearly four years later, construction is still ongoing.

The players

City of Los Angeles

The local government of Los Angeles, California, which purchased the former Ramada Inn property and is overseeing the housing project.

Got photos? Submit your photos here. ›

The takeaway

This case highlights the ongoing challenges and inefficiencies in Los Angeles' efforts to address homelessness, with significant public funding being spent on housing projects that appear to have limited impact. It raises questions about the broader "homeless industrial complex" and whether the current approach is truly effective in providing meaningful solutions.