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.