Critics Blast $72 Million Price Tag for Converted Motel Turned Into 111-Unit Homeless Housing

Los Angeles Mayor Karen Bass celebrated the opening of a new homeless housing project this week, cutting the ribbon on a converted Motel 6 that cost the city $72 million to develop. The facility includes 111 units, putting the cost at roughly $650,000 per unit, according to figures reported by The California Post.

Critics have seized on the math. With a typical motel room measuring about 300 square feet, the per-unit cost translates to more than $2,000 per square foot — a figure that has drawn sharp criticism of the city’s homelessness spending, especially given that the building was an existing structure rather than new construction.

The project has become the latest flashpoint in a long-running debate over Los Angeles’s homelessness strategy. Bass, like former Mayor Eric Garcetti and Gov. Gavin Newsom, has backed a “Housing First” approach, which prioritizes getting people into housing without requiring sobriety or treatment as a precondition. Critics argue the policy has produced billions of dollars in spending with little measurable reduction in homelessness.

Opponents of the current approach argue that pouring money into homeless services, rather than enforcement and treatment requirements, has created what they describe as a “homeless-industrial complex” of nonprofit organizations that depend on government grants to operate. They contend some of these organizations have little incentive to actually reduce homelessness, since doing so would eliminate their funding source.

Critics also argue that expanding services and housing in California, where warmer weather already draws homeless populations from other states, risks attracting more people rather than solving the underlying problem. They are calling instead for stricter enforcement of existing anti-camping laws, mandatory sobriety programs as a condition of shelter placement, and expanded mental health treatment options for homeless residents who need them.

City Councilmember Nithya Raman has pledged to cut homelessness in half before the Olympics arrive in Los Angeles. Critics of the current approach say her plan amounts to an expanded version of the same policies they blame for the city’s spending problems, rather than a fundamental change in direction.