Money is the problem, not the solution

I noted with some cynicism an article in Rolling Stone titled "Why Can’t California Solve Its Housing Crisis?"  Here's a brief excerpt.

Google recently pledged $1 billion to help ease the Bay Area’s housing crunch — but that sum is only eye-popping until you hear experts explain it would cost $14 billion to execute the company’s vision of building 20,000 homes. Google’s is a well-intentioned gesture, but one that illustrates how the problem facing the Bay Area, and California at large, is much worse than even its brightest minds can comprehend.

. . .

Four years ago, Liccardo set a goal to create housing for all of San Jose’s 7,400 homeless. The city has just about hit that goal, sheltering 6,937 people this year. The problem, Liccardo explains, is “as quickly as we’re housing residents, we’re seeing three more getting pushed out into the street by the economy.”

It isn’t a failing economy that’s putting residents out on the streets, though. It’s a booming one. By almost every economic measure, the Bay Area is outperforming the rest of the nation. Together, the region’s nine counties boast a GDP of $748 billion — larger than Switzerland’s or Saudi Arabia’s — and an economy that’s growing at double the rate of the United States’ at large. Santa Clara County, home to San Jose, has a job-growth rate that’s twice the national one. But in the past five years, San Jose has built only one unit of housing for every six jobs it’s created — a recipe for rising rents, rabid competition for available units, and, ultimately, economic evictions ... It’s a dynamic happening across California, which, despite generating so much wealth, has the highest proportion of residents in poverty when you factor in the cost of living.

. . .

At its heart, California’s housing problem is one of scarcity: According to one analysis, the state has 3.5 million fewer homes than it needs to house all the people who live there. That gap was created over decades — largely as a result of the zoning policies of individual communities, under pressure from local residents. Randy Shaw, a longtime Bay Area housing advocate and author of the book Generation Priced Out, says the best way to describe the dynamics at play is to look at the city of Atherton. Thirty minutes from San Jose, Atherton is the most expensive city in the country: The median price of a home there is $8.1 million.

“You can’t build an apartment building in Atherton,” Shaw says. City code prohibits anything other than a single-unit building with a footprint that cannot exceed 18 percent of the land. In other words, everything but a single, detached home with a yard is verboten. “You have all of these cities in California where you can’t build anything but a luxury home,” Shaw says. “When you have zoning restrictions that prevent you from building the housing you need, you’re pretty much guaranteed to get in the situation we have.”

There's more at the link.

Some months ago, I wrote about homelessness in California, and pointed out that a major reason for the scale of the problem there is that the state, and its cities, are effectively subsidizing it.  When you're spending literally billions of dollars every year on the homeless, of course you're going to get more of them!  You're effectively making it worthwhile for them to be homeless, because as such they can get subsidies, freebies and other goodies that they couldn't get under normal circumstances.  I urge you to revisit my earlier article for more information.

The Rolling Stone article highlights another side of the problem.  By emphasizing material prosperity, residents of the state have come to regard it as their inalienable right.  That includes the value of their properties.  Anything that might threaten that value (by, for example, building high-density, affordable housing in a low-density, high-value neighborhood) will be resisted tooth and nail.  The state and municipal governments can throw money at the problem all they like, but the voters who elect the politicians are going to turf them out of office in no time if they go against their wishes in this regard.  Therefore, they talk a good fight, and throw money at any and every aspect of the problem that can be subsidized - except the one that might actually make a difference.

It's also worth noting that those who are addicted to narcotics, and/or mentally ill or unstable (often the two go hand in hand), will not be able to make the best use of the subsidized services they're offered.  They're simply incapable of dealing with modern life.  A few decades ago, many of them would have been institutionalized.  Now, thanks to misguided and ill-informed "compassion", they're out on the streets;  and, since they're not capable of settling down to a more normal existence, that's where they're going to stay.

Efforts to house the homeless have often failed, simply because the homeless don't bother to keep up their newly-acquired homes.  They let them lapse into filth and disorder within a very short time.  (That's pretty much a worldwide experience, by the way, not limited to the USA;  I've seen the same thing in several African countries, France and Italy.)  The average taxpayer is going to be irate when he learns that the hundreds of millions of dollars spent by his city or state on helping the homeless has merely contributed to the creation of a new slum!

In dealing with homelessness, money is the problem, not the solution;  but it's easier to throw money at the issue than to take concrete, practical, effective steps, so it'll continue to be the panacea that doesn't solve the problem.  At the very least, it allows politicians to say that they're "doing something!" when in fact they're not.




Peter