The work is mysterious and important
At his job, TV show Severance's (2022-) Mark S. sorts numbers into seemingly arbitrary boxes for eight hours a day. He isn't allowed to know what it means.
$24 billion in five years. Hundreds of nonprofits. Endless plans, speeches, promises. And yet, CA's homelessness response remains a confusing rhetorical mess for anyone wondering—you know—what all that money's doing. From Hoover Institution.
Since 2019, California has spent about $24 billion on homelessness, but in this five-year period, homelessness increased by about 30,000, to more than 181,000. Put differently, California spent the equivalent of about $160,000 per person (based on the 2019 figure) over the last five years. …
There are three major problems with California’s homelessness policies that are facilitating this increase. One problem is a significant lack of oversight and information about homelessness spending. The state auditor recently evaluated this spending and submitted a report that highlights the failure of the state to track spending and outcomes:
The State lacks current information on the ongoing costs and outcomes of its homelessness programs, because [it] has not consistently tracked and evaluated the State’s efforts to prevent and end homelessness. . . . [The state] has also not aligned its action plan to end homelessness with its statutory goals to collect financial information and ensure accountability and results. Thus, it lacks assurance that the actions it takes will effectively enable it to achieve those goals.
The auditor attempted to closely evaluate the costs and benefits for five separate homelessness programs, though they only found data that permitted this for two of those programs.
More broadly, the failure of investing in adequate information technology infrastructure and data collection within California’s state government has been a chronic problem and has been very costly. …
A second key problem with California homelessness policy, one that is rarely, if ever, discussed, is that there are too many California households who simply do not earn enough to live sensibly in California, given the state’s very high cost of living. For example, nearly half of California households rent, and of this group, about 30 percent—about 1.9 million households—pay 50 percent or more of their pretax income as rent. This is far too high based on the standard recommendation that a household pay a maximum of 30 percent of pretax income as rent.
This group of people, who are considered “extremely rent burdened,” are remarkably vulnerable to losing their housing. Given that the average household size among renters is about 1.5 individuals, this group represents about 2.8 million people. If just 1 percent of this group become homeless annually because they lose their ability to pay, then the rolls of the homeless will rise 28,000 each year. …
These statistics about the number of Californians who don’t earn enough to realistically live here, particularly in the expensive areas near the coast, raise important questions about the state’s approach to homelessness and how taxpayers should view its homelessness safety net. A social safety net exists to provide support for those who experience an adverse event that they cannot realistically insure themselves against. Our homelessness safety net should exist for those who become homeless as a result of family crises, such as a child running away or a family dissolution that results in a parent and children with nowhere to go. It should also exist for those who suffer disabilities and for seniors who may have a limited ability to relocate. However, there is no justification for reliance on the safety net to pay for those who do not have the resources to responsibly live in California.
Perhaps the most important reason that many Californians are financially burdened is housing affordability. The sensible policy response to this is to facilitate building housing in the state that low-income households can realistically afford without significant public assistance. …
But the state’s policy toward building housing for the homeless is the opposite of this approach and is the third reason why our homelessness policies are not working as intended. New housing for the homeless can cost over $1million per unit, such as a recently approved Santa Monica 120-unit apartment complex that will cost $123 million to build and which will be located about three blocks from Santa Monica beach. The estimated cost of this complex does not include the value of the land, which might approach $10 million.
The state’s existing practice of building over-the-top expensive housing for the homeless is not fiscally responsible, nor is it feasible within the context of a realistic budget. And reducing building costs to a level commensurate with the budgets of those who are vulnerable to financial risk also means freeing up funds for mental health, drug addiction, and physical therapy services that can help many homeless individuals get back on track.
Read the whole thing here.
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