At the top of many proposals to support L.A.’s homeless population is to provide low-cost, specified housing for the growing number of people currently living in cars and tents throughout the city. Indeed, housing is critical. But it’s important that we do not just buy in to the “If we build it they will come” philosophy. As in any business venture, what we need to consider is what we’re building, where, and why.
The best use of billions.
Recently, California Governor Jerry Brown announced his support of a $2-billion plan to build housing in L.A. According to the L.A. Times, under the plan, the state would issue $2 billion in bonds that would be repaid under Proposition 63. Proposition 63 is the income tax for “millionaires” passed in 2004, which raises money for mental health services.
This funding, combined with those from other federal and local sources, could be used to build up to 14,000 new housing units for the homeless.
No builders boondoggle.
But Herb Smith, president of the Los Angeles Mission, says lack of consensus on what will be built with this money — and where the new housing will be — could result in a “building boondoggle.” Stakeholders must come together to reach agreement in these areas:
- Variety of housing types. It should not be assumed that the best housing solution involves individual, self-contained units. Some populations, often veterans or the mentally impaired, thrive in group living arrangements, in which they are surrounded by peers and appropriate caregivers. Further inspection could reveal the need for this and other options.
- Variety of locations. Smith also asserts that all parts of L.A. need housing for the homeless, and not just Skid Row. Further, these new housing units need to reflect the neighborhoods where they’re built. Housing and residents must be held to the normal standards of behavior and safety for each area. One type of housing, based on one location, should not be assumed to fit all.
- Variety of services. Finally, according to Smith, it’s imperative to assure that housing includes the proper level of services. Transitional programs, such as the Los Angeles Mission’s FreshStart, need to be located onsite or nearby, so residents can become equipped to live independently. Building without considering supportive services and other essential elements is a disservice to the people we’re building for.
Doing things right is important in both my approach to mergers and acquisitions and my efforts as a volunteer and advocate for L.A.’s homeless. From allocating billions to avoiding boondoggles, foresight, vision, and experience is a must.
Steve Pomeroy is the founder of Big Change Advisors, an M&A consulting firm in Los Angeles focusing on middle market companies in the IT services space. Since 1992, Big Change leaders have completed over 36 transactions including M&A, Capital Sourcing, and Public Offerings representing over $800 million in total transaction value. Big Change Advisors donates a percentage of all fees to help serve the homeless through the Los Angeles Mission. To request a free consultant, contact us.