The Long, Ignoble History of the ‘Homeless Industrial Complex’ in America

by Edward Ring

 

In his final speech from the White House in January 1961, President Dwight D. Eisenhower warned the nation that the military had joined with the arms industry and had acquired unwarranted influence over American politics. His term for this alliance was the “military industrial complex.”

Since that time, Eisenhower’s term has been co-opted by other critics of special interests pooling their resources to exercise a dangerous influence on America’s democracy; one example would be the so-called “homeless industrial complex.”

This label has been around awhile, and has bipartisan origins. In 2012 a guest editorial appeared in the liberal Washington Posten titled “Dismantling the social services industrial complex.” In it, the author explains “an odd mirror image of this huge complex has emerged in the very ‘industry’ that seeks to feed, clothe and otherwise meet the needs of the poor and vulnerable in our society. It’s a social services-industrial complex, if you will, one that could prove even more difficult to subdue than its military counterpart.”

In 2013, writing for Poverty Insights, author John Roberts asked “Is There a Homeless Industrial Complex That Perpetuates Homelessness?” And in January 2017, a former homeless activist published in the ultra-liberal Huffington Post an article entitled “The Homeless Industrial Complex Problem.”

The alliance of special interests that constitutes what has now become the Homeless Industrial Complex are government bureaucracies, homeless advocacy groups operating through nonprofit entities, and large government contractors, especially construction companies and land development firms.

Here’s how the process works: Developers accept public money to build projects to house the homeless—either “bridge housing,” or “permanent supportive housing.” Cities and counties collect building fees and hire bureaucrats for oversight. The projects are then handed off to nonprofits with long term contracts to run them.

That may not sound so bad, but the problem is the price tag. Developers don’t just build housing projects, they build ridiculously overpriced, overbuilt housing projects. Cities and counties create massive bureaucracies. The nonprofits don’t just run these projects—the actual people staffing these shelters aren’t overpaid—they operate huge bureaucratic empires with overhead, marketing budgets, and executive salaries that do nothing for the homeless.

None of these dynamics are terribly unique. Government funded programs are rarely considered bargains. And despite prodigious waste, America’s military is nonetheless the most fearsome in the world. Similarly, despite mismanaging literally billions in proceeds from bonds and taxes collected to help the homeless, in absolute numbers America’s population of homeless may actually have declined over the past 10 years.

How Many Homeless Are There in America? 

This surprises a lot of people, but there’s a lot more to that story. According to the U.S. Department of Housing and Urban Development (HUD), in 2007 there were 647,000 homeless people in the United States, but by the time the most recent count was released in 2018, that number had declined to 543,000.

Why, if so much money is being wasted, and the homeless crisis seems to be more acute than ever, are the absolute numbers of homeless actually falling? First of all, the numbers may be incorrect. These counts may be grossly understated.

CityLab in March published an illuminating critique of how HUD’s “point-in-time” homeless count may be understating the numbers. Author Alastair Boone participated in an official count, covering a section of Oakland, California, in the early hours of January 30 this year. HUD requires cities and counties to complete the count on this day every two years in order to receive federal funding for homeless programs. But canvassing the streets of any city during the pre-dawn hours during the coldest month of the year (even in California) is bound to miss a lot of people.

“The count is during the winter early in the morning, when it’s harder to actually find folks because they’re seeking some sort of refuge,” Boone writes. “They want to stay out of sight in general for their own safety.”

Knowing just how many Americans are homeless is further complicated by competing definitions of homelessness. The National Center for Educational Statistics (NCES) claimed in a 2015 report that 1.3 million K-12 students were homeless in that year. But NCES defines the homeless as not only those who are unsheltered or in homeless shelters, but those sharing housing due to loss of their own home, or living in hotels or motels.

Even in California, a state where homelessness is now a crisis célèbre for state legislators in Sacramento, and a cautionary horror story for conservative critics of California politics, at first glance, the overall numbers suggest the problem is overblown. On the map depicted below, using HUD data, the state by state homeless trend is shown for the 10 years from 2007 to 2017. California’s total homeless population actually dropped by 3.4 percent.

But reports from around the state dispute the HUD assessment. According to a June 2019 article published in the New York Times, “in Alameda County, the number of homeless residents jumped 43 percent over the past two years. In Orange County, that number was 42 percent. Kern County volunteers surveying the region’s homeless population found a 50 percent increase over 2018. San Francisco notched a 17 percent increase since 2017. When Los Angeles officials released the results of their most recent count, homelessness was up by 12 percent over last year in the county and up 16 percent in the City of Los Angeles.”

Nobody seems to know whether these flaws and ambiguities in how the homeless are counted mean that the crisis is in fact worse now than ever, despite official numbers showing a decline. But total numbers alone don’t tell the whole story. How the homeless are treated, and where the homeless are concentrated, has changed a great deal in the past ten years. This is the real reason the homeless crisis today is worse than ever.

The next map, below, using data from the United States Interagency Council on Homelessness, shows 2018 estimates of the total homeless population by state. Viewed in this context, the states where homelessness increased dramatically over the past ten years, North Dakota, South Dakota, and Wyoming, nonetheless confront a relatively insignificant challenge. As of 2018, the estimated homeless population of all three of those states combined totaled only 2,340 people.

Most homeless, on the other hand, are concentrated in states that share one or more of three characteristics; a mild winter climate, large urban centers, and liberal politics. New York, with the nation’s second largest homeless population, fulfills two of those three criteria. Sunny California, in first place with an estimated homeless population exceeding 129,000 in 2018, fulfills all three.

Whether the numbers of homeless people are up or down in California is only half the story. How California’s homelessness has worsened over the past ten years represents a qualitative change. The mismanagement of California’s homeless can be attributed to the Homeless Industrial Complex, but other policy failures are also to blame. All in all, California’s response to homelessness is a textbook example of how to get almost everything wrong.

Policies That Made California’s Homeless Crisis Worse 

An assortment of policy failures can be directly linked to why homelessness in California is a bigger problem than ever, even in the unlikely event the numbers of homeless have not dramatically increased. These policy failures have taken the form of overzealous court rulings, citizen approved ballot measures that wreaked havoc in their unintended consequences, and flawed legislation.

Court Decisions: The 9th Circuit Court of Appeals, unsurprisingly, is the author of at least three rulings that have tied the hands of law enforcement in dealing with the homeless. The first of these is Jones v. the City of Los Angeles, decided in 2006, that ruled that law enforcement and city officials can no longer enforce the ban on sleeping on sidewalks anywhere within the Los Angeles city limits until a sufficient amount of permanent supportive housing could be built. Subsequent to the Jones ruling, activist attorneys have repeatedly sued cities and counties to force them to define “permanent supportive housing” with specifications that make it far more difficult and expensive to get anything built.

An analysis published by Washington State based municipal law attorney Oskar Rey in June 2019 describes similar cases in other states. The Jones ruling was reinforced in September 2018, quoting from Rey, “in the case of Martin v City of Boise, where the 9th circuit found that the City of Boise’s enforcement of ordinances prohibiting camping, sleeping, or lying in public violated the Eighth Amendment ban on cruel and unusual punishment if an individual does not have a meaningful alternative (such as space in a shelter or a legal place to camp).”

Rey continues:

A different Ninth Circuit case, Lavan v. City of Los Angeles, decided in 2012, addresses a related issue—due process requirements for the removal of unauthorized encampments on public property. Prior to clearing encampments, local governments must provide notice to camp resident (72-hour minimum notice is common). It is also important to have outreach personnel present during encampment removal, whose job it is to help individuals in an encampment identify shelter options or alternative locations to go to. Personal property found during the encampment removal must be held for a certain amount of time so that it can be claimed by the owner.

The practical impact of these cases is to create private space wherever a homeless person camps on publicly owned property. Apart from trying—often ineffectively—to prevent the homeless from blocking passage on roads and sidewalks, if a homeless person wants to camp in a public space, they cannot be removed.

State Ballot Initiatives: In 2014 California voters approved Proposition 47, which downgraded drug and property crimes. Prop. 47 has led to what police derisively refer to as “catch and release,” because suspects are only issued citations with a court date, and let go. With respect to the homeless, passage of this initiative has made it a waste of time for police to arrest anyone for openly using illegal drugs or for petty theft. Only very serious crimes are still investigated. Prop. 47 has enabled anarchy among the homeless and in the neighborhoods where homeless are concentrated.

In 2016, California voters approved Prop. 57, intended to make individuals convicted of nonviolent felony crimes eligible for parole. About 7,000 inmates became immediately eligible, and as of early 2016, there were about 25,000 nonviolent state felons who could seek early release and parole under Proposition 57. One can hope most of these released inmates reintegrated successfully into society. But those among this at-risk population who did not reintegrate joined California’s homeless.

State Legislation: Flawed legislation by California lawmakers would include AB 109, passed in 2011, which released tens of thousands of “non-violent” criminals out of county jails due to overcrowding without providing adequate means to monitor and assist their transition back into society. Thousands of these inmates were coping with drug addiction and mental illness, and they have found their way onto California’s streets and parks. Many of them are “non-violent” drug dealers or convicted thieves. As with Prop. 57, AB 109 has changed the character of California’s homeless population.

And then there’s the infamous AB 953, a ridiculous bit of legislation that epitomizes the mentality of California’s utopian leftist politicians. As if there weren’t enough laws and court rulings tying the hands of law enforcement, AB 953, the “The Racial and Identity Profiling Act of 2015” makes it even harder. This law, supposedly intended to address dubious claims, especially in California, of discriminatory policing, requires police departments to submit to the State of California an annual report of their “stop data.” The following table, drawn from this report, shows the “Officer Reporting Requirements.”

When it comes to the practical effect of AB 953, it’s hard to find anything good. Every single time they interact with a citizen, officers have to input 17 variables into a form that is either paper (four pages, requiring reentry into a database), or onto a tablet, cell phone, or in-car laptop. The mere fact that this is a time consuming process will prevent a police officer from making as many stops during a normal shift, and may deter them from even making some stops. Worse, the data collected is designed either to prove or disprove that officers in any given police department are stopping a disproportionate number of citizens who are members of “protected status groups.” Needless to say, officers, and their departments, may become reluctant to exceed their “quotas,” and as a result have an incentive to not make stops when stops are warranted.

No summary of counterproductive state legislation would be complete without mentioning the laws that make it nearly impossible to get treatment for mentally ill homeless people. According to a report published by CalMatters, this problem began way back in 1967 in California with “a law signed by then-Gov. Ronald Reagan. Aimed at safeguarding the civil rights of one of society’s most vulnerable populations, the Lanterman-Petris-Short Act put an end to the inappropriate and often indefinite institutionalization of people with mental illnesses and developmental disabilities.”

Ever since, and especially in recent years as the percentage of homeless who suffer from mental illness has increased, attempts to reform the Lanterman-Petris-Short Act have been resisted tenaciously by the ACLU and other homeless advocacy groups. As reported by San Francisco’s public radio station KQED, during 2018 three laws were introduced by California legislators that would “attempt to change conservatorship rules to allow city health workers to help homeless people with substance abuse and mental health problems by legally and temporarily stepping in to force a mentally ill person into treatment.” Only one, SB 1045, became law, and the final version was so watered down that San Francisco’s Mayor London Breed, a liberal Democrat, claimed “As drafted, SB 1045 would allow us to help fewer than five individuals.” There are an estimated 7,000 homeless living on the streets of San Francisco.

Most of these court rulings and laws, nearly all of them passed or decided in the last decade, have made it far more difficult to manage California’s homeless population. Their effect has been to increase the proportion of mentally ill, drug addicts, and criminals as a percentage of the homeless, at the same time as police and social service workers have far less ability to detain, relocate, or even offer help to the homeless.

A New Threat of Medieval Disease Epidemics 

Notwithstanding the many passed or proposed state laws that attempt to create more housing, or throw additional billions at the Homeless Industrial Complex only to be largely squandered, another set of state laws—either proposed or already passed—threaten to turn California’s homeless epidemic into a serious disease epidemic. In 2014 the California Legislature passed AB 2657, banning rat poison that uses anticoagulants. The reason for this legislation was to protect endangered species who feed on the poisoned rats and themselves become poisoned. While the law didn’t explicitly prohibit use of the poison within inner cities, the City of Los Angeles has stopped relying on the poison, and instead is setting traps and considering bringing in “working cats” to control the rodent population. It’s not working. An even more restrictive ban on effective rodenticides, AB 2422, is currently moving through California’s state legislature, and is expected to pass.

Most people agree that using poisons this potent should be restricted in suburban areas bordering wildlife habitat. But the consequences of denying its use in the downtown core of Los Angeles could be catastrophic to the human population. And the mountains of trash that create rat habitat are not just coming from homeless people, they are a product of a disastrous decision by the Los Angeles City Council that has led to mountains of uncollected trash from businesses and residences.

In 2017, the Los Angeles City Council began to implement the “RecycLA” program, where they gave seven companies the exclusive right to collect trash. Putting small haulers out of business in the name of saving the streets from excessive traffic, the measure was sold as a way to create economies of scale. Instead, these companies were unable to manage a smooth absorption of the additional work, at the same time as in many cases they doubled or tripled their collection fees. The consequences of these failed schemes are that Los Angeles now has two sources contributing to the mountains of trash in the city—homeless encampments, but also illegal dumping by disgruntled businesses and residences.

Where there’s trash, there are rats, and where there are rats, there are disease carrying fleas. Dr. Drew Pinsky, an outspoken celebrity doctor and Los Angeles native, was recently quoted on Fox News, saying: “Rats have taken over the city. We’re the only city in the country, Los Angeles, without a rodent control program. We have multiple rodent-borne, flea-borne illnesses, plague, typhus. We’re going to have louse-borne illness. Measles could break into that population. We have tuberculosis exploding.”

All of this is easily confirmed. Los Angeles has already had outbreaks of typhus, hepatitis and tuberculosis, as have other cities in California. Shigella, a communicable form of diarrhea, is now common among the homeless. There have even been outbreaks of trench fever, spread by lice. As reported by the Atlantic earlier this year “Medieval Diseases Are Infecting California’s Homeless.”

To-date, except for those people living and working in proximity to the many encampments, the homeless crisis in America has been an abstraction. But now there is a possibility that this perfect storm of neglect, indulgence, and corruption may lead to disease outbreaks on a scale not seen in this country for over a century. The homeless problem has become a timebomb.

Homelessness Around the United States 

When it comes to mismanaging the homeless, California may be the leader of the pack, but other major urban centers are not far behind. The following table shows which American cities have the largest homeless populations. While four out of the top ten—Los Angeles, San Diego, San Jose, and San Francisco—are in California, it is New York City that has the most homeless. An estimated 78,000 homeless are living on the streets of the Big Apple. As usual with numbers, however, there’s more to this story. According to a report from the Department of Housing and Urban Development, New York City has one of the lowest levels of unsheltered homeless at 5 percent, while in Los Angeles, 75 percent of people were found in unsheltered locations. Overall, over half of all homeless people live in one of the country’s 50 largest cities. In fact, nearly a quarter of all people sleeping unsheltered did so in either New York or Los Angeles.

But how is it that New York City manages to get 95 percent of their homeless into overnight shelters, whereas Los Angeles only gets 25 percent of their homeless into shelters? An interesting analysis published in Medium in May 2018 explains how New Yorkers addressed the problem of homelessness. The approach was first to simply build more shelter beds. The correlation between the number of available shelter beds and the number of sheltered homeless is high across the nation, as the graphic below illustrates.

What New York City did was to prioritize getting people under a roof for the night. In other cities where this has been tried, such as Columbus, Ohio, the number of unsheltered homeless has been brought under control. But New York City has gone a step further, offering reasonable conditions and incentives to their sheltered population even at this most basic first step of assistance. Quoting from Medium:

In New York, shelters have common areas and guests are allowed during certain hours. People can leave during the day—they are expected to look for a job if they’re able to work, and they receive assistance in that pursuit—but must come back by 10 p.m. in most cases, unless they receive a job-related exemption. All facilities have access to laundry and showers, and residents receive 3 meals a day. New York shelters provide a small platform from which people can rebuild their lives, but are also affordable enough to be able to scale to meet the city’s immense problem.

As the next chart shows, New York City’s nearly 800 shelters with an overnight capacity of over 62,000 individuals gives them a rate of unsheltered homeless of only 45 per 100,000 residents. San Francisco and Los Angeles, by contrast, have a rate of unsheltered homeless ten times higher; Seattle, five times higher. What’s different in these cities?

Part of it is New York’s legacy of providing assistance to the homeless dating back to the Great Depression of the 1930s. New York’s network of overnight shelters were acquired over decades, meaning New Yorkers today are able to allocate a higher percentage of the nearly $1.7 billion in city, state and federal money on caseworkers and shelter subsidies, and relatively less on acquisition of new shelter capacity. And because New York City prioritizes providing immediate shelter over the far more expensive “permanent supportive housing,” what seems like a prodigious amount budgeted to help the homeless comes out to only around $21,000 per homeless person.

One obvious challenge facing cities such as Seattle, San Francisco, Los Angeles, and other West Coast cities facing a homeless crisis is the high cost of housing. But other policies have helped cause the problem, and are making the problem worse. As described, state and local laws, court rulings and citizen initiatives have all made California’s homeless crisis much harder to manage. Not only is it harder to compel the homeless to seek shelter, or get them into treatment for addiction and mental illness, or prosecute them for criminal offenses, but the emphasis on permanent supportive housing takes money away from funds that could be used for overnight shelters. Up north, Seattle faces similar policy failures.

Four articles published in City Journal over the past six months by Christopher Rufo, a research fellow at the Discovery Institute’s Center for Wealth and Poverty, offer a blistering critique of Seattle’s inept response to homelessness, and the growing backlash from residents. For starters, the Seattle metro area spends more than $1 billion fighting homelessness every year. That equates to nearly $100,000 per homeless individual living in Seattle, nearly five times as much as New York City spends. And yet, as previously shown, Seattle’s rate of unsheltered homeless is five times greater than New York City. By these measures, New York City is twenty-five times more efficient at battling homelessness than Seattle.

Why is it that Seattle, the “Emerald City,” home to what is arguably the second biggest high-tech nexus on earth, a locus for fabulous wealth and a place of dazzling scenic beauty, with per capita income 50 percent higher than New York City, can’t begin to manage their homeless problem?

Rufo attributes the root cause of Seattle’s failure to what he calls “unlimited compassion,” and calls for a complete rethink of the assumptions that guide policies towards the homeless. It would not be much of an overstatement to characterize Rufo’s lengthy first article, from Fall 2018, titled “Seattle Under Siege,” as a seminal manifesto challenging the entire ideological framework of the “compassion brigades” that dominate Seattle politics. This ideology is not unique to Seattle. It informs failed homeless policies across the country, especially in blue states, and especially on the West Coast.

The Ideology That Fails to Help the Homeless 

What Rufo identifies as the “four ideological power centers” that frame the homeless debate in Seattle (and elsewhere) are “the socialists, the compassion brigades, the addiction evangelists, and the homeless-industrial complex.” The first three fit nicely into a Socialist/Liberal ideology. The last of Rufo’s categories, his shared concern about the “homeless industrial complex,” is a bit more complicated, and motivated not by ideology but by desire for power and profit. More on that later.

An interesting fact about the urban centers on the West Coast is that their high-tech driven wealth is highly correlated with higher wealth inequality, along with higher home prices and higher rents. And where the rich and poor live elbow to elbow at the same time as the cost-of-living soars, socialists come out of the woodwork, offering indignant soundbites and instant solutions. In Seattle, along with San Francisco, Los Angeles, and elsewhere, avowed socialists sit on the city councils, offering a political agenda that’s guaranteed to make everything worse for the people it is supposed to help.

In Seattle, the “Socialist Alternative” city council member is Kashama Sawant, who along with Adrienne Quinn, the new boss of the homeless activist group “All Home,” promotes an agenda that is all too familiar for anyone watching urban politics in cities controlled by liberals. For Sawant, that agenda includes rent control, public housing, minimum-wage hikes, and punitive corporate taxation. As for Quinn, Rufo writes: “In an op-ed in the Seattle Times, she lays out her plan to ‘address the root causes of homelessness’ by solving ‘racism,’ ‘wage inequity,’ ‘climate change,’ ‘housing costs,’ ‘public transportation,’ ‘green building,’ ‘sanctuary cities,’ the ‘child-welfare system,’ ‘brain injuries,’ and ‘mental-health and addiction services.’”

Needless to say, this socialist agenda will never solve the problem of homelessness. Rent control discourages investment in housing; public housing is rarely built cost-effectively, especially in blue cities with extreme environmentalist building codes and costly labor laws, minimum wage hikes are job killers, and punitive corporate taxes send corporations packing for Texas. The most ironic thing about the socialist agenda in 21st-century America is that it is inevitably co-opted by the corporate Left. The only thing these two special interests have in common, ultimately, is a vested interest in never seeing lasting solutions to any of the problems they’re supposedly fighting to solve. Lasting solutions would end their revenue streams.

Compassion brigades, as Rufo puts it, “are the moral crusaders of homelessness policy, the activists who put signs on their lawns that read: ‘In this house, we believe black lives matter, women’s rights are human rights, no human is illegal,’ and so on. They see compassion as the highest virtue; all else must be subordinated to it.”

What Rufo refers to is expanded on by the idea of six universal moral foundations, first expressed in 2004 by Jonathan Haidt, a professor of social psychology at the University of Virginia. These virtues (and their opposites) are: “Care/harm, Fairness/cheating, Loyalty/betrayal, Authority/subversion, Sanctity/degradation, and Liberty/oppression.” Needless to say, Haidt’s paradigm is fodder for ideologues of all stripes. Liberals are accused by conservatives of possessing only two of these virtues—Care (compassion), and Fairness. As an aside, conservatives accuse Libertarians of only possessing one of these virtues, Liberty. For themselves, conservatives familiar with Haidt’s work rather immodestly consider themselves to possess all six universal virtues.

But regardless of what social psychologists theorize, or how those theories are latched onto by various ideologues, Rufo’s assertion that the “compassion brigades” ascribe inordinate emphasis to compassion, at the expense of other moral considerations, is evidence based. And understanding this moral weakness in the moral arguments of liberal advocates for the homeless is a prerequisite to developing counter arguments that offer equivalent moral worth.

Which brings us to Rufo’s third ideological power center, the “addiction evangelists,” who he describes as the intellectual heirs of the 1960’s counterculture. This time, the counterculture wants to “elevate addicts and street people to a protected class.” Rufo identifies Seattle’s proponents of this ethos, but they’re found everywhere. One primary justification for the pro-addiction movement is “harm reduction” by providing clean needles, and safe injection sites. But providing addiction infrastructure has the predictable consequence of attracting addicts, and the more addiction infrastructure is provided, the more addicts are attracted.

In all of these ideological movements—socialism, compassion, addiction evangelism—Rufo documents how the unintended consequence has been to increase the number of homeless people and the number of drug addicts on the streets of Seattle. Another consequence has been to invite a growing backlash from residents who have had enough. But progress is slow, especially when the will of the people isn’t enough. When over 70,000 Seattle residents submitted a ballot measure to ban safe injection sites, it was thrown out in court. Apparently “public health policy is not subject to veto by citizen initiative.”

The Homeless Industrial Complex 

As is usually the case with leftist movements in America, public policies would not embrace the movement unless powerful special interests saw an economic benefit in the status quo. In the case of the homeless, this economic benefit has grown over time. Litigation and legislation, as described, have increased the cost of providing shelter for the homeless. These costs have also increased because the character of the homeless population has changed due to a variety of causes, making it more costly to effectively help them: permissive drug laws combined with easier access to harder drugs such as opiates, mass release of nonviolent prison inmates, and laws restricting the ability to compel treatment for addiction or mental illness.

At the same time as per capita costs have risen, public awareness has led to massive increases in funding to provide assistance. Institutions have arisen that benefit from perverse incentives. If the problem gets worse, they get more money. Seattle provides dramatic examples of this. Again, from Christopher Rufo:

It wasn’t always this way. When I spoke with Eleanor Owen, one of the original co-founders of Seattle’s Downtown Emergency Service Center, she explained that the organization’s mission has shifted over the years from helping the homeless to securing government contracts, maintaining a $112 million real-estate portfolio, and paying a staff of nearly 900. ‘It’s disgraceful,’ she said. ‘When we started, we kept our costs low and helped people get back on their feet. Now the question is: How can I collect another city contract? How can I collect more Medicaid dollars? How can I collect more federal matching funds? It’s more important to keep the staff paid than to actually help the poor become self-sufficient.’

Nowhere, however, is the mismanagement of homeless more acute than in the deep blue state of California, where land values and anti-development legislation, along with a host of other laws and court rulings as previously described, combined with the most forgiving winter weather in America, have combined to make it America’s homeless capital.

California’s homeless are estimated to number over 130,000, living on sidewalks, parks and parking lots, vacant lots and on the beach. In Los Angeles County, the most recent count puts the number of homeless at 59,000. And in greater Los Angeles, there is plenty of money available to help the homeless. In 2016, Los Angeles voters approved Measure HHH, allocating $1.2 billion in bonds to build 10,000 units to house the homeless. Since then, Los Angeles voters approved a quarter cent sales tax increase, also to help the homeless. Additional hundreds of millions are coming from the state to help the homeless.

Every major city in California is spending tens of millions or more on programs for the homeless. But most of the money is being wasted. Why? Because there is a Homeless Industrial Complex that is getting rich, wasting the money, while the homeless population swells.

A disgraceful example of wasteful spending can be found in the homeless shelter being built in Venice Beach, where a permanent population of over 1,000 homeless have taken over virtually every public venue, including the beach. Because their tents are now protected by law as private space, they not only serve as housing, but as pop-up drug retailers and brothels. To get these folks off the streets and off the beach, a 154-bed shelter has been approved by the Los Angeles City Council. It will be a “wet” shelter, meaning druggies and drunkards will be able to come and go as they please. The estimated cost for this shelter so far is at least $8 million, which equates to over $50,000 per bed.

These costs, grossly inflated and far too expensive to offer a solution scaled to the overall problem, are nonetheless unsurprising if you consider the cost of any new construction in exorbitant California. But this isn’t new construction, it’s “temporary” construction of very large tents on three acres of land. Eight million dollars (or more), to put up some large tents and plumbing for bathrooms and a kitchen. As a “wet” shelter, it will become a hotel for freeloading partiers as much as a refuge for the truly needy. Not only is it only capable of housing a small fraction of the 1,000+ homeless already in Venice, it will attract more homeless people to relocate to Venice.

The story gets worse. This property, owned by the Los Angeles Metropolitan Transit District and located on some of the most precious real estate on earth, could have been sold to private investors to generate tens if not hundreds of millions of dollars. Why wasn’t that choice made? Why, for that matter, aren’t homeless shelters being built in Pacific Palisades, or Brentwood, or Beverly Hills, or the other tony enclaves of LA’s super rich? The answer speaks to the hypocrisy of the proponents of these “solutions” as much as it nurtures the cynicism of its critics. Because as with all boondoggles that destroy neighborhoods in the name of compassion, the Homeless Industrial Complex knows better than to foul their own nests.

The Homeless Industrial Complex’s expensive maltreatment of Venice Beach in particular, and taxpayers in general, is an example of how “bridge housing” projects are co-opted and corrupted. But even more horrendous waste is exemplified by the efforts to construct “permanent supportive housing.”

According to an NPR report from June 2018, “when voters passed Measure HHH, they were told that new ‘permanent supportive housing’ would cost about $140,000 a unit. But average per unit costs are now more than triple that. The PATH Ventures project in East Hollywood has an estimated per-unit cost of $440,000.”

A privately funded development company, Flyaway Homes, has debuted in Los Angeles with the mission of rapidly providing housing for the homeless. Using retrofitted shipping containers, the company’s modular approach to apartment building construction is purported to streamline the approval process and cut costs. But the two projects they’ve got underway are too expensive ever to offer a solution to more than fraction of the homeless.

Their 82nd Street Development will cost $4.5 million to house 32 “clients” in 16 two-bedroom, 480 square foot apartments. That’s $281,250 per two-bedroom apartment. The firm’s 820 W. Colden Ave. property will cost $3.6 million to house 32 clients in eight four-bedroom apartments. That’s $450,000 per apartment.

These costs are utterly unsustainable. But the Homeless Industrial Complex has grown into a juggernaut, crushing the opposition. At community hearings across California, “homeless advocates,” who are often bused in from other areas expressly to shout down local opposition, demand action, because “no one deserves to live on a sidewalk.”

Money is squandered, and the population of homeless people multiplies.

The “Transformation” vs. “Containment” Approaches to the Homeless 

San Diego has the fourth-highest number of homeless of any city in American—more than 8,500. According to Paul Webster, operator of a privately funded homeless shelter in San Diego, there are two ways to treat the homeless, the “transformational model” and the “containment” model. The transformation model works to identify homeless individuals who are able to transition back to self-sufficiency and gives them the training and services to accomplish that. The containment model emphasizes getting shelter for the homeless before offering additional services. Webster is critical of a relatively recent federal law, the 2009 Hearth Act, that bureaucratized the process of getting public money to combat homelessness at the same time as it made it harder to secure funding for transformational programs.

Since 2009, all organizations set up to help the homeless have to submit applications through regional quasi-government organizations called “continuums of care.” The applications have to be “evidence based” and reliant on data such as the HUD “point in time” counts. All grant requests as well have to include “homelessness management information systems” that facilitate “coordinated entry” of the homeless into supportive care.

The new guidelines, enforced by HUD, also incorporated “low barrier entry” requirements in order to “reach the most vulnerable.” This meant applicants could not prohibit drug use, they can’t require work, and they cannot require program compliance. Applicants for state and local grants have to adhere to these same HUD guidelines.

Webster’s organization, Solutions for Change, requires no drug use, work, they have roommate restrictions, partying restrictions, and they do drug testing. This means that they can’t accept federal funds and they also aren’t eligible for state funds because of the “housing first” rule, meaning that housing has to be provided before providing any other solutions to homelessness.

The implications of the Hearth Act on how the homeless are treated go well beyond determining who gets funds. It has created an incentive for homeless organizations to prioritize helping drug addicts, because one of the ways to attract benefits to help the homeless is by getting Social Security Disability income. The so-called “housing navigators” who help qualify people for SSDI know it is easier to secure this benefit if the person is afflicted with drug addiction.

Webster says there are three types of homeless. The “cannots” who are mentally ill or disabled; these comprise about 15 percent of the homeless. Then there are the “have nots” who could succeed if they were trained to acquire new skills and had access to services. The have-nots are often not counted; they live doubled up in homes, with friends, in cars, many of them are single mothers who want to avoid living on the street. These have-nots are about 42 percent of the homeless. The third group are the “will nots” who do not want to change. Most of these are drug addicts or alcoholics. These are the most problematic of the three.

The will-nots know they have safe havens on the street, where they can get drugs cheaply and readily. The will-nots become very sophisticated at getting things for nothing—the government doesn’t make a distinction between the unwilling and the unable—as a result the unwilling will always have the ability to crowd out the unable. The result of laws aimed at helping the homeless, the Federal Hearth Act, or at criminal justice reform, California’s Prop. 47 and AB 953, are that the will-nots generally receive the bulk of the services aimed at helping the homeless, despite the fact that their treatment is invariably more expensive, and the likelihood they will ever change is much lower. Left behind are the cannots and the have-nots. Also left behind, at least when it comes to funding, are organizations that work on permanent transformation, instead of mere containment.

Solutions to America’s Homeless Crisis

To state the obvious, all of this must change. Here are some ways to make that happen.

Pick Up the Trash: With Los Angeles, San Francisco, Seattle, and other cities already facing the imminent threat of a breakout disease epidemic, this measure comes before all others. It ought to be easy, America’s cities in the second half of the 20th century were not inundated with tons of uncollected trash on the streets. In the case of Los Angeles, if their recently launched “RecycLA” program is truly the corruption riddled, ineffective, price gouging, trash neglecting disaster it appears to be, then cancel the program and go back to what worked in the past.

The failure of large urban cities even to pick up their trash points to larger shifts in culture and governance that have to be addressed. Some cities, notably New York City, still manage to fulfill most of these basic obligations of local government. To the extent that piled up trash remains a problem after waste management contracts are restructured and the system of garbage collection works again, these larger structural issues have to be addressed—starting with the homeless encampments.

Time could be running out. If rodent populations aren’t brought under control—perhaps also by temporarily permitting application of otherwise problematic rodenticides in infested urban settings—large numbers of innocent people may become afflicted with deadly diseases. If this does happen, it will be something that was totally avoidable. Look for an avalanche of lawsuits and possible criminal prosecutions against negligent local politicians.

Lower the Cost of New Housing: This is a monster topic, but cannot be excluded from any discussion of the homeless crisis. In some respects it is an excuse, since with other policy revisions it would be possible to shelter the homeless without having to engage in ridiculously expensive housing solutions. But the cost of housing, especially in blue states that are dominated by extreme environmentalists and labor unions (in that order), is artificially high as a result of policies that must change if costs are to come down.

California, ever the cautionary example, needs to eliminate or dramatically reduce the scope of extreme environmentalist inspired mandates, starting with the California Environmental Quality Act. This law, passed in 1970, has been abused by opportunistic attorneys and state bureaucrats to stop most housing developments in their tracks. It takes years, if not decades, to approve housing projects that in other states would take weeks or months to get approval. CEQA and similar California laws are the reason why the median price of a home in California is $547,700, whereas in Texas it’s $196,100.

Also afflicting blue states is what might be termed the “density delusion,” that is, the delusional conventional wisdom among liberal policymakers that the only environmentally correct way to permit housing construction is to engage in “infill” within the borders of existing urbanized areas. Somehow, the theory goes, if everyone lives in tightly packed cities, “greenhouse gas” emissions will be reduced. That, and preservation of “open space,” are the moral arguments for high density housing. But these arguments are flawed.

The “climate” argument for high density housing ignores the extra fuel burned as more and more commuter vehicles idle on a finite allocation of congested roads. It ignores the fact that jobs move to the urban periphery when new homes are constructed out there, relieving rush hour congestion. It also ignores the fact that high rise housing costs far more per unit, because of the massive quantities of cement and steel required for any construction over three stories. And it is cruelly indifferent to the destruction of established suburban neighborhoods as apartments are seeded onto lots right next to single family dwellings. America is less than 4 percent urbanized. There is plenty of extra “open space,” and it is futile to expect infill alone to enable housing supply to increase enough to lower prices.

Politically contrived housing scarcity creates a real-estate bubble, something that is in the economic interests of wealthy investors and speculators, pension portfolio managers, and local governments who collect higher property tax revenue. It also increases profits to those mega-development firms that have the financial clout to push their projects through the approval process. This is perhaps the true motivation for “smart growth.” Reversing these policies will not solve the homeless crisis, but it will make it less likely for the hard working “have nots” (roughly 40 percent of the homeless population) to lose their homes and rentals, and it will make it easier for them to afford housing once they get back on their feet.

Quit Blaming Homelessness on Prejudice and Privilege: According to the National Alliance to End Homelessness, African Americans make up 13 percent of the general population, but more than 40 percent of the homeless population. Similarly, American Indians/Alaska Natives, Native Hawaiians and Pacific Islanders, and people who identify as two or more races make up a disproportionate share of the homeless population. Clearly, minority communities are disproportionately represented among the homeless.

While these statistics are probably accurate, they are used to reinforce the liberal catechism that finds all disparities by race to be the result of white racism. Accepting this catechism results in policies that are ineffective, expensive, and divisive. Rather than granting preferences and entitlements to people based on their alleged status as victims of racism, it would be far more productive to identify the more likely cause of individual criminality, addiction, unemployability, which is the parental status of the homes they grew up in.

The next table, below, shows parental status by race for children under 18. As shown, 57 percent of black children in 2014 were being raised by single mothers, compared to only 18 percent of white children. Note the remarkable degree of correlation between the proportions of homeless by race, and the proportions of single parent households by race.

It’s easy, and plays well to the crowd, to attribute minority homelessness to racism. But a growing body of evidence suggests that intact families are the prevailing indicator of individual success in life. Until that evidence is confronted by the communities affected by it, other suggested causes for minorities being disproportionately represented among the homeless lack authenticity, and smack of opportunism.

Untie Hands of Law Enforcement: The theory of “Broken Windows,” or “order maintenance” policing argues that “tolerating too much local disorder created a climate in which criminal behavior, including serious crimes, would become more likely, since criminals would sense that public norms and vigilance were weak.” Broken Windows policing, whereby police crack down on low level crimes, was begun in the 1990s in New York City and is often credited with greatly reducing crime rates.

At the other extreme is the near lawlessness that prevails on the streets of Seattle, San Francisco, Los Angeles, and other cities experiencing a homeless crisis. In California, as described, well-intentioned citizen approved ballot measures and ill-conceived legislation have tied the hands of law enforcement. Public intoxication, petty crime and vagrancy are all either decriminalized or have been downgraded to the point where offenders have to be released almost immediately after apprehension. California’s legislature has even passed laws supposedly necessary to prevent “racial profiling” which in practice make police hesitant to make stops both because of possible repercussions and because of the time consuming new reporting requirements.

The consequences of tying the hands of law enforcement are obvious. It is preposterous that criminals, drunks, drug addicts, and insane people are permitted to take over entire sections of cities and neighborhoods, but that’s exactly what’s happened. It is important to stress that while a little over 40 percent of the homeless are so-called “have nots,” these people almost all find shelter, often with friends or family. The remainder, the “cannots” and the “will nots,” are the ones found living on the streets. Virtually all of these “cannots” and “will nots” are either mentally ill, alcoholics, or drug addicts; many of them are criminals.

In every state where they’ve been enacted, measures that tie the hands of police have to be overturned by voters or repealed by the legislature. The police need to be allowed to do their jobs.

Make it Easier to Incarcerate the Mentally Ill: It’s worth wondering how anyone can think it is compassionate to allow a raving schizophrenic, terrified by their own thoughts, to roam unmedicated on crowded city streets. But that’s exactly what’s been happening in the purported interest of protecting their human rights. Certainly it is important to avoid overreach, but at this point laws available to compel the mentally ill into treatment are inadequate. Often the afflicted have family members who have the means to help, and are desperate to get their relatives into treatment, but the laws prevent them.

Approximately 15 percent of the homeless are mentally ill; arguably, the alcoholics and drug addicts are also suffering from a form of mental illness. Together these cohorts constitute well over half of all homeless, and nearly all of the unsheltered homeless seen on the streets. Families, caseworkers, and mental health professionals need to be given the legal tools to help these people.

Overturn Jones vs Los Angeles and similar court rulings: Starting over a decade ago with the 2006 decision in the case Jones vs the City of Los Angeles, homeless cannot be prohibited from sleeping on the street unless “permanent supportive housing” is available. Similar rulings have been issued in Idaho and Washington State. The impact of these rulings, combined with the other constraints on law enforcement, make it nearly impossible to clear the streets of homeless encampments. The problem has been exacerbated by subsequent lawsuits to enforce the Jones decision which have defined “permanent supportive housing” in ways that make it more expensive. The practical impact of the Jones case has been to make it financially infeasible to ever deliver adequate housing alternatives to the homeless. A major city with the financial wherewithal to pay for a sustained legal battle needs to challenge the Jones decision all the way to the U.S. Supreme Court, with the objective being a ruling that will permit less elaborate, more cost-effective housing and shelter solutions to be allowable.

Set Limits on Costs: In Los Angeles today, a temporary shelter (designed to last three years) is being constructed at a cost of over $50,000 per bed, and “permanent supportive housing” units are being constructed for, on average, over $400,000 each. Los Angeles is also planning to deploy mobile toilets for the homeless to use, with the expected cost per unit of $339,000 per year. In Seattle, the cost for existing programs to help the homeless is approximately $100,000 per homeless person per year. Given the number of unsheltered homeless in Seattle, this spending is totally ineffective. These costs are absurd. Designing solutions that cost less, but offer shelter to 100 percent of the homeless, is vastly preferable to solutions that cost so much that only a fraction of the homeless get assistance.

Creative solutions exist that cost far less. Off the shelf tents, sheds, prefab “tiny homes,” and prefab homes made from shipping containers are all less costly options. Relocating the homeless to repurposed industrial or retail sites that are already built out and not on premium real estate would cut costs. Putting shelters in the middle of some of the most expensive real estate on earth not only squanders finite available funds, but when the unused property is government owned, the chance is lost to sell that property and invest the proceeds in less expensive locations. Somehow, pressure needs to come to bear on politicians so they will recognize that costs are out of control and act accordingly.

Assert the Moral Argument for a New Approach: Most citizens who live in neighborhoods or commercial centers overrun with homeless people feel a justifiable anger at the failure of civic leaders to get the problem under control. But no serious conversation about solutions should fail to acknowledge the fact that the homeless are people who deserve compassion. For every predator, opportunist, or slacker, there are far more who have simply lost their way. Who knows what happened in the life of an inmate just thrown back onto the streets, or a teenager who just aged out of foster care?

When discussing new policies to manage the problem of homelessness, the importance of compassion can remain first among equals when considered along with other moral virtues; fairness, loyalty, authority, sanctity, liberty. When offering new solutions, practical solutions, solutions that work for everyone affected by homelessness, reformers have to emphasize the moral worth of their ideas. They may have to shout this over the well-orchestrated objections coming from the compassion brigades. But fighting the compassion brigades does not require one to lack compassion.

The culture of normalizing drug use, protecting the rights of the mentally ill to their detriment, insisting on prohibitively expensive accommodations for the homeless—these are all morally flawed arguments. The deterrent value of strictly enforced laws against vagrancy has moral worth, because individuals—specifically, the “will nots”—will not be enabled more easily to choose a life of idle indulgence. Compelling the mentally ill to submit to treatment is a humane policy, not oppression. Similarly, compelling addicts and alcoholics into treatment facilities where they can detox and work productively is often the only way to offer them a chance to recover their dignity and regain control of their lives.

Part of this moral conversation must examine the wisdom of the “housing first” policy of containment that is now a condition of receiving federal funds for homeless programs. Proponents of new approaches to helping the homeless should consider the success of transformational programs, which offer job training, counseling, and sobriety programs in addition to shelter.

When discussing the moral worth of a new approach to combating homelessness, perhaps the most urgent area to demand reform is to put an end to the waste and corruption that infests the entire process as it is today. The absurd costs of any sort of construction, the myriad parties to the process, all with their hands out, all of them hiding behind righteous rhetoric. The Homeless Industrial Complex has spawned far too many charlatans and opportunists. They must be exposed and expelled.

America’s Homeless Industrial Complex has acquired money and power by presiding over a problem that has only gotten worse, year after year. The worse the problem has gotten, the more money and power they have acquired. Creative solutions exist, and only await a critical mass of networked citizens and conscientious policymakers to insist on change.

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Edward Ring is a Senior Fellow of the Center for American Greatness. He is a co-founder of the California Policy Center, a free-market think tank based in Southern California, where he served as their first president. He is a prolific writer on the topics of political reform and sustainable economic development. Ring, a fifth-generation Californian, has an undergraduate degree in political science from UC Davis, and an MBA in finance from the University of Southern California. 

 

 

 

 

 

 

 

 

 

 

 

 

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