Susan Shelley
How much money is enough to solve the homelessness crisis, and on what should it be spent?
Every poll shows that Californians list homelessness as a top concern, and the posturing by politicians has reached theatrical proportions.
For example, Gov. Gavin Newsom announced on November 3, five days before the statewide general election, that he was pausing the distribution of what remained of the third round of grants under the state’s Homelessness Housing, Assistance and Prevention program.
“Californians demand accountability and results, not settling for the status quo,” the governor said five days before the November election, citing the “urgency of this moment.”
The funding was released two weeks later.
According to the governor’s office, the state has provided “over $1.5 billion of flexible emergency aid to address homelessness through the Homeless Emergency Aid Program and the first two rounds of HHAP funding.”
That $1.5 billion is just part of “a $15.3 billion, multi-year state effort to turn the tide on homelessness,” the governor’s office said.
Before releasing the grants that he decided to “pause,” Newsom called local leaders to Sacramento for a meeting and instructed them to make plans that “must include a landscape analysis” and “outcome-driven results and strategies” with “clear metrics.” The local plans must also “identify all existing programs and all sources of funding.”
That answers any questions about how the money should be spent. It could cost $15 billion just for consultants and bureaucrats pushing paperwork from desk to desk.
Novelist and philosopher Ayn Rand wrote, “When you’re on the wrong premise, you will always achieve the opposite of what you intend.” She could have been explaining California’s homelessness problem, growing worse by the hour as billions of dollars are spent to improve it.
Consider the “housing first” premise that is deeply embedded in federal, state and local funding. “Housing first” holds that the solution to the growth of sprawling tent encampments on sidewalks and other public spaces is to construct and award free supportive housing to individuals without requiring sobriety, mental health treatment, job training, school attendance or anything else as a condition of receiving or keeping that housing.
There is no evidence that this model works at all to reduce homelessness in a community. The “housing first” program in Utah that was promoted as a success was exposed in 2015 by economist Kevin Corinth as a successful statistical trick — the number of “chronically homeless” people fell only because the definition of “chronically homeless” was changed. The policy did not “end” chronic homelessness as advertised.
But advertising makes it happen, and in Los Angeles, voters have just approved Initiative Ordinance ULA, a tax on real estate transfers. Starting April 1, 2023, property sold for more than $5 million, which typically will include apartment buildings, shopping malls and other places where the prices paid by tenants and consumers pay the bills, will be taxed an amount equal to 4% of the sale price. Property sold for $10 million or more will be taxed at the rate of 5.5%. The measure was promoted as a solution to homelessness in Los Angeles.
This new real estate transfer tax will raise an estimated $600 million to $1.1 billion per year, depending on how many properties in Los Angeles are sold. An appointed governance board will spend the money on homelessness housing and related services, but none of the money may be spent on temporary housing or emergency shelters.
The law on the power to clear encampments in California and other western states is controlled by the decision in the Martin v. Boise case, in which the Ninth Circuit held that it is unconstitutional to arrest people for sleeping on the sidewalks unless there are a sufficient number of shelter beds available. The court’s ruling didn’t require individual apartments.
If California had spent $15.3 billion on the premise that sleeping on the streets should never be an option, therefore the state’s first priority must be to get people off the streets and into safe shelters and temporary housing, where they can be triaged into services that will help them get well and get on their feet, the crisis might have been over by now.It’s not too late.
Write Susan@SusanShelley.com and follow her on Twitter @Susan\_Shelley
