By Vanguard Staff
LOS ANGELES, CA – A scathing new audit released Wednesday by Los Angeles City Controller Kenneth Mejia reveals that the Los Angeles Housing Department (LAHD) is failing to adequately protect tenants and enforce basic standards across thousands of affordable housing units in the city. The report highlights widespread problems in financial oversight, habitability enforcement, and regulatory compliance—issues that threaten the long-term viability of the city’s affordable housing stock.
The audit, which examined LAHD’s oversight from 2020 to 2023, found that a staggering 33 percent of properties with affordable units failed to comply with the Department’s own standards in 2023. These violations include charging rents above allowable limits, ignoring income restrictions, neglecting maintenance and health hazards like mold and pest infestations, and failing to monitor the financial stability of affordable housing projects.
“Our audit’s identifying of the problems LAHD is facing is a step toward making sure affordable housing reaches the people who need it the most,” said Controller Mejia. “To ensure that every single affordable unit serves its intended purpose of assisting lower-income households, it is extremely important that the City effectively monitors these units and that rent and income limits are strictly enforced.”
Among the most troubling findings, auditors documented one property that had been charging rents more than 30 percent above the legal limit since at least 2019, while also renting to tenants with incomes exceeding LAHD thresholds by as much as 60 percent. Roach infestations and mold problems were documented at other properties, which LAHD failed to cite or remediate, despite federal regulations requiring such oversight in federally funded affordable units. At multiple sites, property managers admitted to ignoring formal waiting list requirements and instead filled vacant units with friends, family members, or outside referrals, bypassing fair housing practices.
In one case, auditors found a financially distressed property that had operated at a loss since 2016 and was not flagged by the city for any oversight or support. Another site had been running a deficit since 2021 and had nearly three dozen code violations. Auditors discovered unsanitary conditions, including a stairwell strewn with trash and feces leading to an unsecured emergency exit. The situation was so severe that property managers had to pause their meeting with auditors to respond to an unauthorized entry incident at the exit. Despite these issues, the property was not on LAHD’s internal list of at-risk sites.
The audit describes LAHD’s oversight as siloed and reactive, with little coordination between divisions, poor data management, and a lack of meaningful enforcement when violations are discovered. LAHD outsources many compliance responsibilities to a contractor, but the Department lacks direct access to contractor data, rarely assigns staff to follow up on violations, and seldom refers problematic cases for legal action. Over-income tenants, insufficient affordable units, and unverified rent certifications were frequently found by contractors with minimal subsequent enforcement.
The audit also found LAHD to be out of compliance with federal rules. It often fails to conduct the required on-site audits every three years and does not inspect for mold and pest infestations as mandated. In many cases, LAHD’s limited enforcement capacity has allowed serious violations to persist, potentially placing vulnerable tenants at risk.
Financial oversight is another major shortcoming. The Department does not regularly assess the financial health of projects with city loans, nor does it track whether loan conditions—such as maintenance obligations or reserve requirements—are being followed. The city’s affordable housing loan portfolio includes nearly 1,100 loans valued at $2.9 billion, but many financially distressed projects are not even on LAHD’s radar.
In response to the findings, city leaders emphasized the need for reform and collaboration. “I asked the Controller to conduct this review because of serious concerns regarding the exact issues raised today—occupancy, livability and more,” said Mayor Karen Bass. “This is exactly why I brought new leadership to the department in Tiena Johnson Hall to challenge the existing system, and I look forward to working with General Manager Johnson Hall and Controller Mejia to use this report as a roadmap for reforming the department to maximize the building of affordable housing, preserve existing housing stock and make sure that Angelenos have housing that is safe and habitable. This is the kind of collaboration among City leaders that the people of Los Angeles deserve.”
Johnson Hall, who was appointed to lead LAHD by Mayor Bass, acknowledged the problems and committed to change. “LAHD is committed to its mission of preserving, protecting and producing safe and affordable housing for all Angelenos. This audit sheds light on where the Department can and should improve its policies and protocols. I appreciate the partnership between LAHD, the Mayor and the City Council in providing the Department with the tools we need to effectuate more robust asset management, occupancy monitoring, and Code enforcement to ensure habitability standards are met.”
Councilmember Nithya Raman, chair of the Homelessness and Housing Committee, welcomed the audit and the opportunity for accountability. “While some of the recommendations in the audit are already being studied and implemented, I welcome the opportunity for the Housing Department to further improve on its mission and thank Controller Mejia for his continued focus on improving our city’s capacity to serve those most in need.”
The audit provides a lengthy set of recommendations, including developing an enforcement protocol for noncompliant properties, implementing a risk-based monitoring system for financially distressed projects, ensuring on-site audits every three years, and creating clear standards to address mold and infestation. It also urges LAHD to conduct annual performance reviews of contractors, improve its data systems, and propose a strategic preservation program for vulnerable affordable housing.
As of 2022, Los Angeles had roughly 47,000 affordable rental units across 1,600 properties regulated by LAHD. Yet, according to the audit, the city would need to add over 400,000 more to meet demand. More than 568,000 lower-income households rent in Los Angeles, and 78 percent of them are considered cost-burdened—spending more than 30 percent of their income on housing. These families rely on the promise that affordable housing will be both accessible and livable. The audit shows that the city is falling short—and offers a clear roadmap to begin correcting course.
The full audit is available at: bit.ly/ah-audit
