Unsheltered In the Land Of Plenty

Thousands live in the streets in America’s richest cities. The article below offers only a superficial grasp of why -- and offers only the tired old "solution" of more government spending.  Unleashing liberty would however make a big difference -- without a penny of government spending.  As ever, the basic problem is one of government regulation.

An immediate start could be made by abolishing all land-use regulations so you can buy a farm or other lightly used land and build houses on it, without more ado. In SanFrancisco, local regulations prohibit that.  Opening up new land for housing anywhere near SF is almost impossible.  Result:  Scarcity of housing drives costs sky high. Either to buy or rent is prohibitive in SF.  In Houston, by contrast, there is very little land use regulation and prices are much lower than in SF.

And the second most effective change would be to stop treating tenants like saints and landlords like devils.  When a tenant "skips" without paying rent or leaves property damage behind it should be treated as just another theft -- which it is.  It leaves the landlord as out of pocket as if he had been mugged.  So tenant offenders should be pursued and prosecuted by the police.  And the government should show that it is in general on the side of landlords

The present lopsided system is very deterring to potential landlords because of the risk of big losses involved.  If potential landlords had more protection from ferals, many would enter the market -- many who are at present rightly scared off.  I know.  I was a landlord in my younger days and did get burned on several occasions -- but fortunately in only minor ways.  Even for me, however, it eventually became too much so I sold off my rental houses and now own just the house I live in.

Another bugbear is building regulations.  There is a great list of things you must and must not do in building a house that greatly increase costs and reduce flexibility.  High density accommodation like the old terrace houses is now very hard to get approved in most places -- even though such houses could be built more cheaply than freestanding homes.  And regulations about how many people can be allowed to live in a given house are also strict.  But many people would rather live in a crowded house than live in the streets.

So deregulation would reduce the cost to buy, and  full legal rights for landlords would fill more and more houses with low-income tenants.

The headline of the press release announcing the results of the county’s latest homeless census strikes a note of progress: “2018 Homeless Count Shows First Decrease in Four Years.” In some ways that’s true. The figure for people experiencing homelessness dropped 4 percent, a record number got placed in housing, and chronic and veteran homelessness fell by double ­digits. But troubling figures lurk. The homeless population is still high, at 52,765— up 47 percent from 2012. Those who’d become homeless for the first time jumped 16 percent from last year, to 9,322 people, and the county provided shelter for roughly 5,000 fewer people than in 2011.

All this in a year when the economy in L.A., as in the rest of California and the U.S., is booming. That’s part of the problem. Federal statistics show homelessness overall has been trending down over the past decade as the U.S. climbed back from the Great Recession, the stock market reached all-time highs, and unemployment sank to a generational low. Yet in many cities, homelessness has spiked.

It’s most stark and visible out West, where shortages of ­shelter beds force people to sleep in their vehicles or on the street. In Seattle, the number of “unsheltered” homeless counted on a single night in January jumped 15 percent this year from 2017—a period when the value of Amazon. com Inc., one of the city’s dominant employers, rose 68 percent, to $675 billion. In California, home to Apple, Facebook, and Google, some 134,000 people were homeless during the annual census for the Department of Housing and Urban Development in January last year, a 14 percent jump from 2016. About two-thirds of them were unsheltered, the highest rate in the nation.

At least 10 cities on the West Coast have declared states of emergency in recent years. San Diego and Tacoma, Wash., recently responded by erecting tents fit for disaster relief areas to provide shelter for their homeless. Seattle and Sacramento may be next.

The reason the situation has gotten worse is simple enough to understand, even if it defies easy solution: A toxic combo of slow wage growth and skyrocketing rents has put housing out of reach for a greater number of people. According to Freddie Mac, the government-sponsored housing giant, the portion of rental units affordable to low earners plummeted 62 percent from 2010 to 2016.

Rising housing costs don’t predestine people to homelessness. But without the right interventions, the connection can become malignant. Research by Zillow Group Inc. last year found that a 5 percent increase in rents in L.A. translates into about 2,000 more homeless people, among the highest correlations in the U.S. The median rent for a one-bedroom in the city was $2,371 in September, up 43 percent from 2010. Similarly, consultant McKinsey & Co. recently concluded that the runup in housing costs was 96 percent correlated with Seattle’s ­soaring homeless population. Even skeptics have come around to accepting the relationship. “I argued for a long time that the homelessness issue wasn’t due to rents,” says Joel Singer, chief executive officer of the California Association of Realtors. “I can’t argue that anymore.”

Homelessness first gained national attention in the 1980s, when declining incomes, cutbacks to social safety net programs, and a shrinking pool of affordable housing began tipping people into crisis. President Ronald Reagan dubiously argued that homelessness was a lifestyle choice. By the mid2000s, though, the federal government was taking a more productive approach. George W. Bush’s administration pushed for a “housing first” model that prioritized getting people permanent shelter before helping them with drug addiction or mental illness. Barack Obama furthered the effort in his first term and, in 2010, vowed to end chronic and veteran homelessness in five years and child and family homelessness by 2020.

Rising housing costs are part of the reason some of those deadlines were missed. The Trump administration’s proposal to hike rents on people receiving federal housing vouchers, and require they work, would only make the goals more elusive. Demand for rental assistance has long outstripped supply, leading to yearslong waits for people who want help. But even folks who are lucky enough to have vouchers are increasingly struggling to use them in hot housing markets. A survey by the Urban Institute this year found that more than three-quarters of L.A. landlords rejected tenants receiving rental assistance.

It’s not bad everywhere. Houston, the fourth-most-populous city in the nation, has cut its homeless population in half since 2011, in part by creating more housing for them. That’s dampened the effect of rising rents, Zillow found.

Efficiency can go only so far. More resources are needed in the places struggling the most with homelessness. McKinsey calculated that to shelter people adequately, Seattle would have to increase its outlay to as much as $410 million a year, double what it spends now. Still, that’s less than the $1.1 billion the consultants estimate it costs “as a result of extra policing, lost tourism and business, and the frequent hospitalization of those living on the streets.” Study after study, from California to New York, has drawn similar conclusions. “Doing nothing isn’t doing nothing,” says Sara Rankin, a professor at Seattle University’s School of Law and the director of the Homeless Rights Advocacy Project. “Doing nothing costs more money.”


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