Why? Fat orange turd is why....

Major housing nonprofit in Los Angeles’ Skid Row facing financial collapse

The prospect of SRO Housing Corp., which operates 2,500 units of affordable housing, going under creates a significant new problem for Mayor Karen Bass and other local political leaders.

By Liam Dillon

The largest provider of housing for formerly homeless residents in Los Angeles’ Skid Row area has warned city officials it is running out of money and will collapse unless it receives more public funding or other assistance, its leader told POLITICO.

Anita Nelson, CEO of SRO Housing Corp., which operates 2,500 units of affordable housing in nearly three dozen buildings, said the city has not responded with sufficient urgency to her nonprofit’s “dire” financial situation.

“The handwriting is on the wall,” Nelson said.

The prospect of SRO Housing’s failure puts thousands of the city’s most vulnerable tenants at risk and creates a significant new problem for Mayor Karen Bass and other local political leaders who have struggled to pull Los Angeles out of an intractable homelessness crisis.

And it comes at a fraught time for the city and county, which have faced a barrage of criticism in recent months from the Trump administration and Republicans in Congress over allegations of widespread waste and corruption in the effort to address homelessness. The Department of Housing and Urban Development is attempting to withhold nearly $250 million in funding from the region, while a House Oversight subcommittee is expected to zero in on Los Angeles during a hearing Tuesday on “fraud and failure in federally funded homelessness services.” Bass, citing scheduling conflicts, declined an invitation to testify and told MS NOW that the hearing was an attempt to intimidate the region.

More than 73,000 people are homeless in Los Angeles County, according to the latest survey, and the dissolution of SRO Housing would add substantial humanitarian and financial stress to the region’s response.

The organization’s precarious finances have been known for years. Most notably, the disintegration in 2023 of another major nonprofit landlord, Skid Row Housing Trust, revealed systemic funding problems for groups trying to provide permanent housing in a neighborhood with overwhelming levels of homelessness, drug addiction and mental illness. The city pushed the trust’s 29 properties into a receivership and spent $30 million keeping them afloat for nearly two years before transferring the buildings to other owners.

At the time, Nelson and city housing officials raised alarms that SRO Housing could follow suit.

In May, a meeting between SRO Housing leaders and the city housing department showed that the organization’s financial footing had become more perilous, according to an internal department memo obtained by POLITICO summarizing the conversation.

The memo said SRO Housing needed “immediate assistance,” was facing “severe financial distress” and anticipated roughly six months of solvency. It said the organization would shut down without help.

Nelson told POLITICO that she never told the city that SRO Housing expected to close in six months — which would have meant November — and that the organization is not currently planning to do so. But she said that she communicated the nonprofit’s growing crisis to the housing department.

“They’re not feeling our sense of urgency,” Nelson said. “The sense of urgency for me is real.”

About 500 units, roughly 20% of SRO Housing’s portfolio, are vacant, Nelson said. SRO Housing has lost money every year since 2022, according to the nonprofit’s public financial reports, with the shortfall rising to a cumulative $27.8 million. Its debts and other liabilities exceed its assets by nearly $70 million, the most recent financial report said.

Sharon Sandow, a housing department spokesperson, did not answer a list of questions from POLITICO, including why the department’s account of the May meeting differed from Nelson’s on SRO Housing’s timeline for dissolution.

“The memo speaks for itself,” Sandow said in a statement. “The department is very focused on preservation and is making that a top priority to come up with creative strategies to preserve struggling portfolios.”

Bass and City Council member Nithya Raman, her opponent in the upcoming mayoral election and chair of the council’s previous Housing and Homelessness Committee until August, did not respond to questions from POLITICO.

Both SRO Housing and the former Skid Row Housing Trust were formed in the 1980s to rehabilitate 1920s-era residential hotels and apartment complexes in downtown Los Angeles to serve as permanent housing. Many of the buildings have tiny individual living quarters and shared bathrooms, and these properties remain SRO Housing’s core portfolio.

Problems began compounding about a decade ago as housing subsidies fell behind the cost of operations. Costly breakdowns of plumbing, heating and electrical systems have accelerated as the properties have aged. And changes in leasing practices to prioritize housing residents with severe mental health and drug addiction issues left providers complaining that bureaucratic delays left rooms vacant for too long and, once filled, concentrated too many disorderly people in their buildings.

Nelson commissioned a study that found in 2019 almost half of SRO Housing’s buildings were operating at a loss. During the subsequent Covid-19 pandemic, Nelson said, rent collections dwindled while property damage and insurance costs soared.

When the trust failed in 2023, city officials told the Los Angeles Times that they worried SRO Housing’s situation was no longer sustainable and pledged to help. Nelson said over the past three years she’s continued to warn the city about the organization’s worsening condition.

“It’s not a secret,” she said. “They can’t say, ‘Anita didn’t say anything.’ I’ve put out there the dire conditions we face.”

Nelson declined to say how much money SRO Housing needs to remain afloat. But she said some of the problems hurting the organization’s finances are bureaucratic.

In the May meeting, Nelson said she complained of being unable to open a new, 81-unit affordable housing development outside Skid Row because the city-owned utility had yet to provide electricity. And, in early 2023, SRO Housing received $45 million in state dollars to rehabilitate three of its older buildings in Skid Row. Today, construction is complete, but 130 of the renovated units remain empty, she said. Nelson attributed SRO Housing’s vacancy problems to regional housing officials who are responsible for matching prospective tenants to its buildings.

There have been some wins. Since May, the electricity has been turned on at the new building, which is now fully occupied, Nelson said. And she said the city has helped the organization access federal housing assistance vouchers that pay higher rents.

In the memo, the housing department noted discussing a three-year plan to stabilize SRO Housing’s balance sheet, but there is no active proposal, Nelson said. She added that city officials rejected a bid to convert some of SRO Housing’s buildings from permanent residences to interim shelters because of potential legal and logistical issues, even though the conversion would have aligned with the preferences of both the Trump and Bass administrations.

The city also has held up a request from SRO Housing to sell the Rosslyn, a historic 1923 hotel that was converted to 264 studio apartments, to another supportive housing provider, Nelson said. The organization has been looking to offload the building because of growing operational deficits.

In September 2025, a Rosslyn tenant died in a fire in his room on the building’s seventh floor. Repairs are being finished only now.

Amanda Spiva, who was relocated from her fifth floor studio because of water damage from the fire, said she’s faced numerous problems in the 11 years she’s lived in the Rosslyn.

Plumbing has been a constant concern, Spiva said. She said she’s had to pay her neighbors $25 to use their bathroom when her toilet has failed at night or over weekends. She’s also dealt with mold and vermin as well as public safety problems she attributed to trespassers.

“For people who live here and call it home, we don’t want to see people with machetes in the elevators, people who might stab you,” Spiva, 60, said as she prepared to move her belongings back from her temporary unit. “We want to feel safe and have pride of place.”