Los Angeles Homeless: Shelter Done on the Cheap

Los Angeles went through a lot of bad press after Proposition HHH passed and reports came to light about one project that was costing the extraordinary amount of $630,000 per unit. And then there was the report about 64 square foot sheds costing $130,000 per unit while Riverside was spending just over $17,000 per unit. 

The city got some good press a few months back when the LA Times (Jan 18) reported on the 232-unit Vignes Street homeless housing project:

Unlike traditional homeless housing projects that are either designed for permanent residency with services or for short-term shelter, the Vignes complex will have both.

. . . In some ways the project was shaped by the COVID-19 pandemic. The bulk of the funding came from the federal CARES Act, allowing the county to sidestep the usual convoluted process of finding money for affordable housing. And the health emergency provided justification for exemptions from environmental review and competitive bidding.

. . . The modular construction kept the basic cost to just over $86,000 per bed for the main buildings and $50,000 per bed for the trailers. Exterior elevators, the administrative building and site preparation, including removal of underground gas tanks, brought the total to $48 million, or $206,000 per unit, not including the county’s cost of $24 million for the land.

First, if you include the land, the per unit cost goes up to $310,000 per unit. I believe that is more aligned to the LA Controller's 2019 audit of Proposition HHH that stated the lowest total development cost for a housing project was coming in at $346,678 per unit. So let's be honest that we're talking about a project that is coming in at about 10% lower than the lowest cost Proposition HHH project. Significant, but not extraordinarily so. On the other hand, the average Proposition HHH project was reported at $511,386 at the time. Note: I don't believe this Vignes Street project falls under Proposition HHH.

This project is taking just 5 months to complete. The article states that the CARES Act and pandemic "provided justification for exemptions from environmental review and competitive bidding." Hmm, is it really necessary to go through all those processes in the normal course of business? Should the city of Los Angeles streamline their business practices better for future projects? 

And let's just think about this for a second: if there was competitive bidding, would the cost of the project have come in even lower? 

The driving force for the lower costs associated with the Vignes project is likely driven by the use shipping containers. Should this option be given greater consideration for other projects? 

I'm not going to lie that I think that providing free housing will lead to the desire for more free housing by many. Yet, let's give Los Angeles credit for building a project at relatively low cost. One can only hope they can duplicate this on future projects.