Sep 18, 2024
MAJOR SCANDAL Reveals Why Homelessness Is Getting WORSE
Housing non-profits are spending taxpayer money in a shockingly irresponsible way.
- 13 minutes
Is your administration
doing enough to determine
whether the money that's being plowed
into homelessness is being well spent?
We have spent 24 billion taxpayer
dollars in the last five years.
During that same time frame, we have seen
a 32% increase in our homeless population.
[00:00:18]
Do you.
Worry? I'm curious.
Do you worry that the appetite is souring
among the public for for spending more,
given the lack of progress
that's happening?
Speak for everyone in California,
but it's certainly souring with me.
A statewide audit earlier this year
found that the $24 billion allocated
[00:00:38]
to combat homelessness in California
was unaccounted for,
while the state saw an explosion in the
number of people living on the streets.
The California State Auditor's Office
found that the California
Interagency Council on Homelessness,
created in 2016 to oversee
the state's implementation of programs
[00:00:57]
dedicated to the worsening crisis,
has not ensured the accuracy of the
information in a state data system and has
not evaluated homelessness programs
success, according to the state auditor.
[00:01:12]
But the outcomes of these programs
have been pretty clear.
Homelessness grew 6% in 2023
from the year prior to more
than 180,000 people, according to federal.
Point in time data.
[00:01:28]
In fact, since 2013, homelessness
has grown in California by 53%.
Now, if that isn't infuriating enough,
the state might be gearing up
to extract more cash from taxpayers
who consistently say in polling that the
[00:01:46]
homelessness crisis is their top concern.
A recent analysis by Los Angeles city
officials urges local, state and
federal governments to more than double
their spending to tackle the problem.
Los Angeles alone is being advised
to dedicate a whopping $20.4 billion
[00:02:03]
over the next decade to produce 36,
000 permanent housing units for homeless
residents with chronic health needs,
and build or subsidize 25,000 additional
apartments for very low income residents.
The proposal assumes the city maintains
nearly 17,000 beds in shelters
[00:02:22]
and other interim housing locations
through 2029 before ramping down.
Hey, don't scroll away,
come back, come back because before the
video continues, we just want to urge you
to lend your support to TYT.
You power our honest reporting.
[00:02:38]
You do it at t.com/team
and we love you for it.
Now officials claim that if this funding
is implemented, they project homelessness
to decline annually
before reaching what's known
as functionally zero by the end of 2032.
[00:02:57]
Now, Californians, in my opinion,
should fight this effort
and they should do so aggressively.
Because one thing is clear the state
has done nothing to protect citizens
from having their money mismanaged
and misused by the very nonprofits
[00:03:12]
who claim to want to help.
One of the latest scandals
involves a Santa Monica, California based
homeless housing and services nonprofit
called Step Up on Second Street,
which actually gave Governor Gavin Newsom
the idea of converting old hotels
[00:03:28]
into apartment units for the unhoused.
Step up teamed up with a for profit
company called Shangri-La or Shangri-La
industries, and pulled in more than $114
million in state grants to convert
seven state motels into apartments.
[00:03:46]
But things didn't play out that well.
They played out a little differently.
According to the Los Angeles Times,
while Step Up and its partner
lined up business elsewhere, the seven
projects in California fell into debt.
Instead of creating hundreds
of badly needed apartments.
[00:04:02]
The properties went into foreclosure
and were taken over by lenders
for remain empty and unfinished.
The foreclosures were actually the result
of private loans that Shangri-La took out
in addition to the state grants.
[00:04:20]
For example, in Ventura County,
Shangri-La received $26.7 million
in Homekey funds to convert
a 78 room motel in Thousand Oaks.
State records show.
That was supposed to cover the purchase,
renovation and some operating costs.
[00:04:38]
However, according to property records,
Shangri-La then borrowed
more than $10 million
for the project from private lenders.
The company then defaulted on those loans.
One of the lenders, Colfax, foreclosed and
took ownership of the property in March.
[00:04:57]
So that project remains incomplete,
and it is completely unknown Known
if the former Quality Inn and Suites
will ever be converted into housing.
What we also don't know is where
the nearly $27 million in state funds
[00:05:12]
that's taxpayer money
granted for this project went.
Where did it go?
This hasn't just been an issue
in California, and there seems to be some
shady behavior in other states as well,
like in Fayetteville, North Carolina,
where Step Up and Shangri-La backed
[00:05:28]
out of a motel conversion last November.
Less than two months later,
California's attorney general Rob Bonta
sued both Step Up and Shangri-La in
civil court over their home key projects.
The complaint alleged fraud,
breach of contract and demanded the return
[00:05:47]
of more than $114 million in grants.
In response, in a response filed
on September 9th, attorneys for Step Up
denied the allegations
and pointed a finger back at state
officials for creating the situation
as well as other defendants.
[00:06:04]
Oh yeah, California definitely
created the situation by deciding
to take our money and hand it over
to these nonprofits with zero oversight,
but there are some serious allegations
floating around in court.
In a lawsuit pending in Los Angeles
Superior Court, Shangri-La has accused
[00:06:22]
its former CFO, Cody Holmes,
of embezzling housing money
and spending it on personal extravagances,
including tickets to the Coachella Valley
Music and Arts Festival, jewelry and rent
for a Beverly Hills mansion.
[00:06:37]
Step up on seconds president Todd Lipka
is also playing dumb, and says that he
had no idea about Shangri-la's defaults
until Bonta sued both companies.
Yeah, I'm personally not buying it.
And honestly, others who used
to work with Step Up that's the nonprofit
[00:06:55]
are validating my concerns.
According to multiple people who have
either worked closely with for Step Up.
Lipka also appeared to enjoy
the high flying lifestyle of Shangri-La
executives like CEO Andrew Myers,
[00:07:11]
a one time NFL player
who sometimes flew private jets out
to out of town engagements.
Todd got high off flying
in Andy's private jet, said one insider
who worked closely with Lipka.
Turns out that after partnering
with Shangri-La, after taking all
[00:07:30]
that money from our state government,
Lipka went from driving a normal,
modest car to sporting a Mercedes AMG.
Later, he traded it in
for a BMW eight series,
and that's according to former employees.
[00:07:45]
But Lipka brushed off those criticisms
by saying that, look, I have
a monthly car allowance of about $1,350.
Yeah, that's a pretty massive
car allowance.
When the nonprofit was running into money
problems, bankruptcy court filings show.
[00:08:04]
Step up as Shangri-La
for a cash infusion in late 2022.
The nonprofit agreed to sell its share
of any future profits from the home key
projects to Shangri-La for $2.7 million.
Now, Shangri-La attorneys allege
that the payments came from funds
[00:08:22]
intended for a housing project,
but Lipka says he didn't know that that
was the case and would not have approved
the transaction if he had.
Right. But it gets worse.
It really does, because apparently
there's a Boston based nonprofit
[00:08:38]
that also benefited from the very state
grants that were allocated to step up,
called the American Roundtable
to Abolish Homelessness, or Art.
Philip mangano and his Boston based
nonprofit would be paid for his advocacy
on certain Homekey projects
[00:08:58]
up to a total of $100,000 per property.
Now.
Mangano denies that Lipka was able to pay
him for his consulting services,
which he described as helping with
the broad strategy of project Roomkey.
[00:09:15]
Can we just pause right there?
What is the broad strategy?
I thought we knew what the strategy was.
The strategy is you take $114 million
in state grants to convert old motels
into apartment units.
What strategy, what consulting
is necessary for this total BS?
[00:09:35]
Now, a tax filing for the fiscal year
ending in December 2022
shows that art actually did get paid.
Art received $226,500 from Step Up.
It also shows that Lipka joined
[00:09:50]
Art's board of directors that year,
and received $149,000 in the form of a
loan from Art for Program Service venture
receivables, Whatever the hell that is.
[00:10:05]
Now, Mangano and Lipka each said in emails
that the loan was actually $149,000.
That step up still owes Mangano for his
earlier work on the Homekey projects.
Unfortunately, Step Up isn't the only
housing nonprofit that's been embroiled
[00:10:24]
in scandal in recent years or months.
Last April, an audit found that the San
Francisco nonprofit Home Rise was careless
and irresponsible with taxpayer money.
Home rise operates almost a third of
city funded units that serve formerly
[00:10:41]
unhoused people some 1500 units
across 19 properties financed by $200
million in public grants and loans.
KQED notes that the audit found widespread
financial mismanagement, fueled in part
[00:10:58]
by high turnover among its senior staff
and high vacancy rates at its properties.
Let's pause right there.
High vacancy rates.
Why do you have high vacancy rates
when the whole purpose of the nonprofit
is to house the homeless?
Maybe they're not really serious
about housing the homeless.
[00:11:15]
Maybe they're more serious
about extracting state grants
for other purposes.
The nonprofit spent money on fundraising,
staff bonuses,
lunches and gifts for staff.
The expenses reviewed showed Unallowable
imprudent or questionable spending
[00:11:34]
that did not meet the intent
of the city's grant agreement.
Home rise even held meetings
to figure out how their corporate expenses
could be covered with city grant funds
that remained at the end of the year.
[00:11:50]
They also spent lavishly
on promotions and bonuses.
One salary increased by more
than $87,000 in nine months.
That's a 74% increase.
And while their only mission
was to house the unhoused.
[00:12:06]
Home rise lost about $6.3 million
because of vacancies
during the four year audit period.
Most properties had vacancies
for a vacancy rate of 14.6%, and despite
[00:12:22]
the insane amount of cash they received
in grants, rent payments to the building
owners were either late or just unpaid.
Altogether, more than $1.7 million in rent
was more than 90 days late
and remained unpaid.
[00:12:38]
Yeah, so there hasn't really been
a robust response from California
when it comes to these nonprofit scammers.
And until there is, voters should reject
any effort to shake us down for more cash,
because if recent history
taught us anything, it's that that
[00:12:57]
money ain't going to the homeless.
We need a real plan with real oversight
that goes farther
than the failed Housing First agenda.
And yes, it's a failed agenda that's
been propagated by the very non-profits
that have been scamming us
out of our hard earned money.
[00:13:12]
We need we need inpatient mental
health facilities for those suffering
from severe mental health problems.
We need to fund rehabilitation programs,
rather than just relying on some of these
non-profits to hand out needles and crack
pipes in the name of harm reduction.
[00:13:28]
Obviously, that's not working.
The overdose deaths have exploded.
And yes, we need to build housing,
but not through partnerships with newly
formed organizations that get to do
as they please with our hard earned money.
We need a better plan, and right now, I'm
not seeing it until we see a better plan.
[00:13:47]
I don't want to hear any talk about us
spending another $20 billion on an issue
that the state has severely mismanaged.
Thanks for watching.
If you become a member,
you get to watch all this ad free.
Except for, of course,
this ad still hit the join button below.
Now Playing (Clips)
Episode
Podcast
The Young Turks: September 18, 2024
Hosts: Ana KasparianJohn Iadarola
- 16 minutes
- 12 minutes
- 13 minutes
- 11 minutes
- 11 minutes
- 8 minutes
- 8 minutes