Los Angeles Mayoral Successor Inherits $4 Billion Spending Gap and Infrastructure Backlog

Los Angeles prepares to transfer mayoral power in a city where homelessness has increased and infrastructure repairs have stalled. The next leader will inherit a $14.8 billion budget and a population of 3.8 million, facing immediate demands to address street encampments and potholes. Political analysts describe the current administration's record as a mix of high spending and slow visible results.

Under Mayor Karen Bass, the city spent more than $391 million on the Inside Safe program to clear encampments. While 140 camps were cleared and 6,500 people moved into interim housing, the Los Angeles Homeless Services Authority reported that 45,194 residents were homeless this year. That figure is up from 41,980 in 2022. Approximately 42% of those who entered interim housing through Inside Safe have returned to living on the streets.

City Controller Kenneth Mejia stated that the city underspent its homelessness budget by at least $473 million in the 2025-26 fiscal year. He cited staffing shortages and delays in affordable housing approvals as primary causes. Lee Ohanian, an economics professor at UCLA, calculated that the city allocated roughly $100,000 per homeless person over the last four years. Fernando Guerra of Loyola Marymount University noted that the mayor controls only half of the tools needed to solve the crisis, as the county manages health and jail systems.

The city’s financial health has also deteriorated. Officials declared a fiscal state of emergency last year after facing a $1 billion deficit. The deficit resulted from revenue shortfalls and liability costs tied to the Palisades fire. Rating agencies S&P and Kroll downgraded the city’s outlook to negative. The city budget has grown by approximately 25% over the past four years, driven in part by pay increases for police officers and city employees.

Infrastructure challenges compound the fiscal pressure. More than 5,000 sidewalk repair requests are pending, and tens of thousands of streetlights are out. Rick Cole, a former chief deputy city controller, described the system as broken due to dispersed authority. The city recently paused repaving for eight months to address federal curb ramp requirements. Measure LA is currently before voters, aiming to give the director of public works more authority to manage capital projects.

The next mayor must also navigate police reform and housing policy. Bass announced a 47% drop in homicides since taking office but faces pressure regarding the Los Angeles Police Department’s leadership. Challenger Nithya Raman has called for an audit of police practices and a change in departmental leadership before the 2028 Olympics. On housing, only 7,728 affordable units are under construction despite a pipeline of more than 47,000. State Senate Bill 79, which would accelerate development near transit hubs, remains a point of contention between city leaders and state lawmakers.