Los Angeles spent $24 billion on homelessness over five years – and the streets got worse.
Now Karen Bass is billing taxpayers $625,000 per room for a beachside hotel that has sat empty for years.
Here's what she bought with your money.
Los Angeles Homeless Hotel Has Cost Taxpayers $20 Million and Housed Nobody
In December 2020, the city of Los Angeles handed $11 million in taxpayer funds to a nonprofit called PATH Ventures to buy a former Ramada Inn near Venice Beach.
The plan was simple: house homeless people there temporarily, then convert it to permanent supportive housing.
The building operated briefly – for about 18 months – before the city emptied it in October 2022 to begin the conversion.
That was over three years ago.
The hotel sat dark and vacant while PATH Ventures spent nearly three years navigating permits and financing approvals across multiple city agencies.
Construction didn't begin until October 2025.
Completion isn't expected until December 2026 – six years after the city cut the check.
By then, the total bill will have reached $20 million – for 32 rooms.
That works out to $625,000 per unit.
For a converted Ramada Inn.
Near a beach.
That has never housed a single permanent resident.
Project Homekey Fraud and the $3.75 Billion Program Newsom Wants to Take National
The Venice hotel isn't a fluke.
It's the whole model.
Los Angeles County received $550 million in Project Homekey funds between 2021 and 2024, using the money to acquire 32 buildings with 2,157 rooms. An investigation by Westside Current found that 71% of those units were still vacant as of May 2025 – locked up in construction delays and financing gaps.
Citywide, a Los Angeles Administrative Officer report found that of the roughly 3,098 beds and units the city had acquired for homeless housing, more than 1,000 remained completely offline.
The city bought the hotels. It just can't open them.
And the homeless population kept growing anyway.
California has spent approximately $24 billion on homelessness over five years. The result: roughly 183,000 homeless people in the state – a 30% increase over that same period.
Gavin Newsom has called Project Homekey a "national model" and is openly preparing to run for president on it in 2028.
The state spent $3.75 billion on the program.
It doesn't track whether people placed in housing actually stayed housed.
That's not an oversight. That's the point.
Federal investigators found out what the tracking would have shown. In 2025, charges were filed against multiple Homekey developers who took the money and built nothing – including one former CFO who used state homeless housing grant funds to pay off his personal credit card bills. A federal audit gave California's housing department its lowest possible ranking for anti-fraud controls, finding $319.5 million in federal funds left wide open to theft. Gavin Newsom wants to bring that system to the rest of America.
Bass Called It Accountability. Council Members Called It a Boondoggle.
After federal prosecutors announced the fraud charges last fall, Karen Bass issued a statement declaring her administration had "zero tolerance for corruption."
One of her own council members wasn't buying it.
Councilwoman Traci Park lit into Bass' spending during the 2025-26 budget debate – and didn't mince words.
"It's bloated with homeless spending," Park said. "A bottomless pit, a taxpayer boondoggle that doubles down on failure year after year. And frankly, at this point, it's just embarrassing."
She voted against the budget.
She was one of three.
The other twelve council members voted to keep the machine running.
Meanwhile, a federal judge was weighing whether to strip the city of control over its homelessness spending entirely after a court audit couldn't verify the basic numbers – how many beds Los Angeles had available at any given moment.
Karen Bass was subpoenaed to testify.
Councilwoman Monica Rodriguez put the real price of Bass' signature Inside Safe program on the record: $7,000 per month to house a single individual – just room, board, and services.
She built a system so opaque that no one could say with certainty how many beds her city had – and she still got twelve votes.
Los Angeles residents watched their city burn in January 2025 – the LAPD is now at its lowest staffing levels since 1995, and the fire department was chronically underfunded when the Palisades ignited. Bass had the money for $625,000 hotel rooms.
She just didn't have it for firetrucks.
And the man who designed this machine wants to run it from the White House.
Sources:
- Jaime Paige, "LA taxpayer-funded homeless hotel slammed over $625K rooms," New York Post, March 14, 2026.
- "Venice motel-to-housing conversion moves ahead after years on back burner," The Real Deal, November 5, 2025.
- "Exclusive: LA Poured Over $1 Billion into Homeless Housing – But Thousands of Units Sit Empty," Westside Current, November 20, 2025.
- "Newsom's 'National Model' for Homeless Wracked by Fraud," RealClearInvestigations, December 11, 2025.
- "Feds announce charges alleging LA-based developers misused public homelessness money," LAist, October 17, 2025.
- "Councilwoman Traci Park Blasts Homeless Spending in Fiery 'No' Vote on LA's $13.9 Billion Budget," Westside Current, May 23, 2025.
- "LA City Council approves revised $13.9B budget," NBC Los Angeles, May 23, 2025.
