California's Homelessness Spending Under Scrutiny: Billions Unaccounted For
An audit reveals that billions in funding for homelessness initiatives have gone missing, raising concerns about mismanagement and corruption within California's housing programs.
Special Investigative News Report by Carmine Lombardi,
An oxymoron is a figure of speech that combines contradictory terms, often for rhetorical effect. "Affordable housing" is a prime example of this linguistic paradox, especially when viewed through the lens of government-led initiatives.The very nature of state involvement in housing creates a cascade of cost-inflating factors. Bureaucratic oversight, complex regulations, and the multi-layered bidding process from architects to general contractors to subcontractors inevitably drive up expenses. Each step adds its own markup, turning "affordable" into an aspiration rather than a reality. - Jon Forrest Little
In California, this issue is further exacerbated by skyrocketing labor and energy costs. The result is a system where the more the state tries to create "affordable housing," the less affordable it becomes. The term thus becomes an oxymoron in practice, with good intentions paving the way to unaffordable outcomes.
Recent investigations have raised serious questions about the management and allocation of California's homelessness funds, with Governor Gavin Newsom facing criticism over $24 billion in spending that has seemingly vanished without clear accountability.
An April 2024 state audit revealed a startling lack of oversight in California's homelessness programs. The audit found that the state spent $24 billion over five years to address homelessness but failed to consistently track outcomes or program effectiveness.
This revelation has sparked concerns about potential mismanagement and even allegations of embezzlement.
Governor Newsom's response to the audit was surprisingly nonchalant. He stated that the results "did not surprise" him, while simultaneously touting California's "unprecedented investments" in tackling homelessness.
This apparent contradiction has left many questioning the state's commitment to transparency and effective use of public funds.
Astronomical Costs and Questionable Deals
The investigation uncovered several housing projects with eye-watering price tags:
A $145 million project for 407 units
A $150 million project for 270 units
These costs raise suspicions about whether these are genuinely public housing initiatives or luxury developments masquerading as solutions to homelessness.
The Chelsea Investment Corporation: A Key Player
At the center of many city housing deals is the Chelsea Investment Corporation, a developer specializing in "affordable housing." Several red flags surround this organization:
Incorporated in the Cayman Islands, a known tax haven
Headquarters in Carlsbad, California
Founded by Jim Schmid, with Charles Schmid as CEO
Suspicious Property Transactions
The company's headquarters property has seen questionable value increases:
2016: Sold for $3.5 million, with $3.15 million financed
2023: Transacted for an "undisclosed price," but with $68 million financed
Remarkably, the San Diego Housing Authority acted as the lender in the 2023 transaction, raising questions about the relationship between public agencies and private developers.
Political Connections and Potential Conflicts of Interest
The investigation revealed potential conflicts of interest:
Todd Gloria, chair of San Diego's Budget and Finance Committee, received significant campaign donations from Chelsea Investment Corp.'s founder and then-CEO
This connection suggests possible quid pro quo arrangements between political figures and developers benefiting from public housing contracts.
Wider Implications
The issues uncovered in California may not be isolated. Chelsea Investment Corp.'s financial activities extend beyond the state, with UCC filings and liens found across the country. This suggests a potentially systemic problem in the management of public housing funds nationwide.
The apparent mismanagement of billions in homelessness funding in California raises serious concerns about government accountability and the effectiveness of current approaches to addressing homelessness. With astronomical project costs, questionable property deals, and potential conflicts of interest, it's clear that greater oversight and transparency are urgently needed.
As investigations continue, citizens and watchdog groups are encouraged to scrutinize local housing initiatives and the financial relationships between developers, politicians, and public agencies. Only through rigorous examination and demand for accountability can we ensure that public funds truly serve their intended purpose of addressing homelessness and providing affordable housing to those in need.
Jon Forrest Little's critique of our debt-based economic model highlights the systemic issues that arise from unchecked money creation, whether for wars or development projects. The "affordable housing" initiatives in San Diego exemplify this problem, where the term itself becomes an oxymoron due to the inflated costs driven by the current financial system.
The ability to create money through loans, especially with no reserve requirements, allows bankers to generate funds based on projected values rather than tangible assets. This "mouse click money" creation, based on construction documents and appraisals, inflates property values and perpetuates a cycle of increasing debt and costs.
Little argues that a return to silver and gold standards could address these issues. Precious metals, being finite and physical, cannot be loaned out or created at will. This inherent scarcity would limit the money supply, potentially curbing inflation and preventing the easy manipulation of currency for political or financial gain.
Under a metallic standard, the revolving door of campaign donations in exchange for lucrative building projects would be more difficult to sustain. The limited money supply would force more careful allocation of resources and potentially lead to more genuine affordability in housing projects.However, transitioning to such a system would face significant challenges and resistance from those benefiting from the current model.