BY THE NUMBERS - In my last column, I mentioned I intend to detail what I believe is an effective model for responding to the homeless crisis. Before I do that, however, I want to ensure readers have a thorough understanding of how and why current programs have failed so badly. Then the proposed model will make more sense.
As a professional auditor, I often heard the cliché, “Figures lie and liars figure.” If that were true, I would have been out of a job. Numbers never lie. You can try to spin them, ignore them, obscure them, or fabricate them, but numbers are as immutable as gravity and just as unforgiving. They don’t care what your politics or prejudices are. Two plus two always equals four, no matter how much some people want to believe it can be three or five.
One thing that helps people understand the meaning and value of numbers is context. Showing how numbers relate to one another gives us a deeper understanding of the cause and effect of many problems. The numbers regarding homelessness and housing are shocking.
Let’s consider the costs of homeless interventions as they relate to the unhoused population. According to a March 2023 McKinsey & Co. study, LAHSA’s budget has increased by 13 times since fiscal year 2014-15, from $63 million to more than $800 million in FY 2022-23. At the same time, L.A. County’s homeless population has increased from just over 40,000 to about 69,000. The expenditure per unhoused person has increased almost eight-fold. In 2015, LAHSA’s $63 million budget divided by 42,000 equaled an expense of $1,500 per person. By 2023, the agency’s $808 million budget was an expense of $11,710 per person. According to the study, LAHSA’s budget is just one component of the County’s total expense of $3 billion on homelessness programs, or about $43,480 per unhoused person.
Now let’s add some context with another layer of numbers. The City of Los Angeles’ current budget for homelessness is $1.3 billion, or $31,700 per unhoused person in the city, (currently estimated at 41,000). Added to the County’s expense, that’s $75,185 per homeless person in the city. According to the US Census, the median family income in 2021 was $69,778; Los Angeles spends 107 percent of the average family’s income on each homeless person.
Spending more than the median family income on each unhoused person would be understandable if there were tangible results for the expense. However, not only has the total number of the homeless increased, more people—and families—are falling into chronic homelessness. The McKinsey study, as well as others, show that chronic homelessness grew by more than 50 percent in just one year, between 2019 and 2020. This population consists of people who are more likely to have serious mental health or substance abuse problems, and are therefore less likely to benefit from the government’s No Barrier/Housing First policy, especially given LAHSA’s dismal track record of providing support services to people in public shelter or housing.
Numbers tell the story of just how badly L.A.’s housing programs have failed. Between 2015 and 2022, L.A.’s unhoused population increased 56 percent, while the City of New York’s declined by 18 percent. The increase in L.A.’s homelessness can be traced back to the fixation on building affordable housing. Ironically, political leaders’ and advocates’ insistence that housing is the key to curing homelessness has not been translated into action. Per the McKinsey report, “In 2016, a $1.2 billion bond, Proposition HHH, was passed to build housing. Since then, just over 2,250 units have been built—or 23 percent of Proposition HHH’s ten-year goal. Under the Mental Health Services Act, about 1,100 affordable housing units have been leased or occupied since 2008, with only 43 of 140 funded projects being completed based on latest publications.” Besides being behind schedule, housing units are obscenely expensive, averaging $600,000 each, per a 2022 City Controller’s report.
Numbers can sometimes point to inconvenient truths. For years, the accepted wisdom has been that L.A.’s homeless problem is an affordable housing crisis. That belief has been the lynchpin of the Housing First programs that have driven expensive housing projects throughout the city. However, two sets of numbers show the fatal flaw in the affordable housing narrative. First, we are dealing with an unhoused population that has an increasing component of people who gain no benefit from traditional housing: those with substance abuse and mental illness problems. Placing such people in housing, without support, contributes to the continuous streets-to-housing-to-streets cycle McKinsey describes. Second, the decreasing numbers of unsheltered homeless in New York invalidates the economic argument supporting housing first. New York is one of the few places in the nation that has higher housing costs than L.A., yet it has far fewer unhoused people. That points to a programmatic failure rather than underlying economic problems.
Certainly, L.A.’s housing costs have priced far too many working people out of the market, as the McKinsey report describes. But that is a crisis of policy, affecting working people. At the heart of the homelessness crisis lies a refusal to recognize its true causes. By concentrating the majority of its resources on building housing, local government has starved transitional shelters and supportive services of resources. As the McKinsey report said, 70 percent of L.A.’s unhoused are unsheltered, eight times the number in New York City. L.A. County only has enough beds for 36 percent of the homeless population.
Even if we accept the advocates’ belief that housing is the one true remedy for homelessness, Los Angeles is failing. As McKinsey said, “…if LA achieved all Proposition HHH and Measure H goals in 2023, the county could add 7,750 affordable housing units and 11,000 permanent placements. Yet LA would still lack about 492,000 affordable units, and chronically homeless individuals could still be without permanent supportive housing…..at the current pace of construction, it would take more than 35 years to achieve this goal, rather than the eight years mandated in the state Regional Housing Needs Assessment, at an estimated cost of about $134 billion,” or 100 times the City of L.A.’s entire FY 2023-2024 budget.
What do all these numbers tell us? Los Angeles’ homeless programs are moving in the wrong direction, spending increasing amounts to serve far too few people, while providing them with the wrong interventions.
What should we be doing? I’ll go into that in more detail in a future column, but many experts, including those with real-world experience, like Rev. Andy Bales of Union Rescue Mission, say we must start from the ground up, and offer services on an individual basis instead of one blanket Housing First policy. According to McKinsey, of the 227 people who become homeless every day, 144 self-resolve within six months to a year. These are people with tenuous employment and who can’t always afford normal housing. The best solution for this group would be prevention-stabilizing their housing situation so they don’t become homeless in the first place. This could include job training targeted at the millions of skilled trades jobs that remain unfilled, or it could be as simple as a relatively low-cost subsidy to help pay the rent. This would free up funding for people at the other end of the scale, those who need support in a structured institutional environment. In short, treat each homeless person as a unique human with unique needs.
Homeless agencies’ stubborn refusal to adapt their programs to the reality of the homeless population is a case study of the Law of Diminishing Returns; an organization applies ever-increasing resources to achieve ever-decreasing incremental benefits. In this case, that law results in the most tragic number of all: five unsheltered people die every night on the streets of Los Angeles.
(Tim Campbell is a resident of Westchester who spent a career in the public service and managed a municipal performance audit program. He focuses on outcomes instead of process.)