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PLANNING WATCH - The city, county, and state of California are spending billions to eliminate homelessness, yet the number of homeless people is still increasing. For example, by mid-2023, the State of California had spent $17.5 billion on homelessness. LA County has allocated about $800 million for fiscal year 2024-25, and the City of Los Angeles has budgeted $961 million.
Let me explain why I think the numbers of homeless and overcrowded people are still increasing, despite so much local spending.
The problem is NOT a housing shortage. Even though well-funded pressure groups, public officials, and the corporate media endlessly repeat this bogus claim. What they rarely say, however, is that the basic problem is a lack of low-priced housing, and that private sector solutions only make the low-priced housing shortage worse.
For example, in San Jose there are 11 empty housing units for each homeless person, and in San Diego there are three (3) empty housing units for each homeless individual. Since some people have roommates, spouses, or partners, the ratio of vacant houses and apartments per homeless persons is actually higher. As for Los Angeles, the ACCE Vacancy Report documented 93,000 vacant housing units, half of which are withheld from the housing market. This is more than LA’s 45,000 homeless people.
If a housing shortage is not the underlying cause or the housing crisis, then what is?
A good place to look is the wealth of the President-elect’s first buddy, Elon Musk. According to the Bloomberg Billionaires Index, Musk has a fortune of $447 billion, which makes him the world’s richest person.
To better understand this vast accumulation of enormous wealth at the very top, like Musk’s, we need to realize that most of it has appeared since 1980. The fortunes of the top .01 percent increased by 800 percent in this period. The rest of the population were stuck in place because of inflation.
This enormous redistribution of wealth and income upward is primarily responsible for the twin crises of homelessness and overcrowding. This is because the price of housing has increased much faster than the consumer price index, a crude government measure of inflation. From 1980 through 2023 the median family income increased by about 375 percent, similar to inflation, while the cost of the median family home increased by 675 percent. Apartment rents have followed a similar trajectory. in Los Angeles the average monthly rent is now $2,795. Of course, the monthly rent in some areas, like Beverly Hills, is considerably higher.
In addition, several related factors have contributed to the housing crisis.
President Richard Nixon suspended most public housing programs in 1973, a policy reinforced by all subsequent Presidents, as well as local city and county officials. For example, California Governor Jerry Brown, a Democrat, – with full support from the Democratic Party-controlled State Legislature --axed California’s 400 + Redevelopment Agencies in 2011. This ended local funding for public housing in the state. In Los Angeles, as well as most other cities, like New York, housing policy has subsequently relied on increasing densities of private parcels through up-zoning, zoning waivers, and density bonuses. Since these policies also increase land and housing prices, this is a related reason why housing prices have risen faster than incomes.
Other causes of both greater income inequality and higher rates of homelessness are evictions and the use of software that maximizes rental income.
In combination these factors are responsible for most of the housing crisis. Personal pathologies, such as mental illness and drug addiction, despite the media’s focus, are not the main causes!
Until the Federal, State, and local governments address the social pathology responsible for the housing crisis, increasing financial inequality and housing costs, the billions spent by state and local government agencies to reduce homelessness by focusing on personal pathology will be in vain.
(Dick Platkin ([email protected]) is a retired LA city planner, who reports on local planning issues. He is a board member of United Neighborhoods for Los Angeles (UN4LA). Previous columns are available at the CityWatchLA archives.)
