The Spark

the Voice of
The Communist League of Revolutionary Workers–Internationalist

“The emancipation of the working class will only be achieved by the working class itself.”
— Karl Marx

Los Angeles:
Homeless Housing Debacle

Sep 4, 2023

The Skid Row Housing Trust, a non-profit organization that ran more than 2,000 single-room-occupancy rental units for low-income residents in Los Angeles, has collapsed.

The Trust’s finances had been spiraling down for years. Already in 2018, the Trust had a budget deficit of more than 17 million dollars, and it was being sued by unpaid staff.

When an L.A. Superior Court judge finally put the 29 buildings owned by the Trust under receivership in April, more than half of the Trust’s units were empty, most of them due to code violations that had not been fixed. According to a class-action lawsuit filed by 67 tenants in two buildings last year, unfixed problems included pest infestations, damaged flooring, broken windows and doors, sewage odor, water damage, mold, and electrical problems. Tenants in other buildings have also reported broken elevators causing disabled tenants to be trapped in their rooms, as well as lax security and non-functioning alarm systems, which encourage crime.

The court-appointed receiver, a lawyer called Mark Adams, was supposed to secure bank loans to get the problems fixed, and then sell the buildings to new owners. But two months into receivership, nothing had been fixed, and Adams resigned under pressure from the city council that had initially recommended him.

So today, as months go by, the ordeal of the Trust’s tenants, many of whom are elderly and disabled, continues, without any relief in sight.

When the Skid Row Housing Trust was launched in 1989, its founders and local politicians touted it as a solution to L.A.’s chronic homelessness problem. But in reality, the funding scheme for the Trust, known as “tax credit financing,” had doomed it to failure from the beginning.

Tax credit financing is a complicated scheme, based on a 1986 federal program called Low-Income Housing Tax Credit (LIHTC). Every year, the federal government dishes out nine billion dollars in tax credits to big corporations—supposedly to provide an incentive for corporations to fund housing for low-income people. But in reality, this program provides little affordable housing. And companies often pull out their investment after 10 years, when the tax credits expire. This eventually leaves operators like the Skid Row Housing Trust without enough funding to maintain their buildings.

In other words, under the pretext of helping low-income people, the LIHTC program is nothing but another scheme to offer big tax breaks to banks and other corporations.

No, in this profit-driven, capitalist economy, capitalists have no interest in providing housing for low-income people—which has created a permanent crisis of housing and homelessness for the working class. And for the politicians who run the government, this deep social crisis is just another excuse to hand out huge amounts of taxpayer money to big companies.