https://infogram.com/jail-to-homelessness-pipeline-1hxr4zxv9gqqq6y
CA is home to 30% of the nation's homelessness. Study linked above says biggest problem is lack and loss of income vs rents, and notes most homelessness developed from an exposure to violence (e.g., criminal victim), incarceration, and other traumas Twenty-one percent of lease- holders cited a loss of income as the main reason that they lost their last housing. Among non-leaseholders, 13% noted a conflict within the household and 11% noted not wanting to impose. For leaseholders, economic considerations interacted frequently with social and health crises. The usual suspects such as mental illness are viewed as less of a factor.
Nine out of ten participants lost their last housing in California, which also suggests migration to sunny CA is not the main culprit. Also the homelessness age is increasing and for prolonged peroids, and not surprisingly is more minority. This suggests that recent approaches to homelessness are not working.
Not a surprise to me is that substance use, particularly methamphetamine use, is a common thread. Many participants reported using drugs and alcohol to help them cope. Almost one third (31%) reported regular use of methamphetamines, 3% cocaine, and 11% non-prescribed opioids. Sixteen percent reported heavy episodic drinking. Only 6 percent of participants reported receiving any current drug or alcohol treatment. Twenty percent of those who report current regular use of illicit drugs or heavy episodic alcohol use reported that they wanted treatment, but were unable to receive it.
The disappointment to me was the lack of creativity to the proposed solutions. The ubiquitous we need to increase low income housing is suggestion number 1. How you get there seems to be a problem. The let's provide more tax credits to these projects was the first point. Next, was the usual let's give these people more money for rent vouchers, In the backdrop is the conventional wisdom to normalize project by taking some portion of at least more, moderate income housing projects for the low income (this is a response to urban tenement "projects" that was created when all the poor were given housing together). But CA has been throwing money through tax credits and rent vouchers around for a long time without success.
The credits are supposed to flow through to tenants in the form of lower rents, but studies suggest that investors, developers, and financial companies gain most of the benefits. The credit/voucher program has complex administration, is prone to abuse, and produces VERY costly low income housing. It also does little to stop CEQA and other legal challenges from people that don't want any low-income housing near them, or zoning and other limitations that don't want any low-income housing near them. But the academics don't want to step on third rails, so there is no suggestion about reducing the burden of building and zoning and environmental regulations to increase the supply of housing, including multifamily housing for low income tenants. The only guy actually saying this is of all people, Governor Newsom. The other big problem is that there is no money in managing and owning these projects because the projects are fee driven: most of the tax credits go for soft development costs like paying off lawyers, developer, lender, expert, and city development fees. Investors receive benefits from these deals other than the tax credits. The projects typically generate operating losses due to high operating costs dealing with trouble tenants, vandalism, insurance costs, etc. coupled with restricted rents. The losses may flow through to investors' tax returns and offset their taxes on other income (they are tax shelters), but they also provide no economic incentive to invest to keep up the building. Investors may gain on the disposition on their ownership usually after year 20 or more (see the prior comment about no investment incentive) when rents control are taken off, but most local jurisdictions, under local political pressure, put in rent control to allow rent increase in small percentages.
These project also are ripe targets for fraud and abuse, which is perpetrated by tenants, developers, and government officials. Tenants abuse the program by occupying housing units to which they are not eligible, often by claiming a false income level on disclosure forms. Developers abuse the program by inflating their reported costs to receive excess tax credits. Government officials abuse the tax credit program for personal gain. Because there is a limited amount of valued credits that are handed out in a discretionary manner to developers, it creates an open invitation to corruption. In the California and particularly Los Angeles City Council scandals are well documented. And what does that mean - remarkably the lower income units cost way more than the equivalent unit in the same projects.
It seems bizarre to me that academics can demonstrate that current programs are not working, and then say put more money into the same program and ways of doing things.
Which then gets us to the social structure grab bag of wants to support to the housing projects. The academics say let's pour more money into social service agencies, healthcare settings, domestic violence services, community organizations, and anti-discrimination centers. Expand prevention and transition services at institutional exits (jails, prisons). Expand and strengthen eviction protections (because during C-19 moratoriums and the previously taking several months to evict a low income tenant provided landlords any ability, no less economic incentive to get rid of problem tenants).
The eviction comment suggests just how far removed academics are from the real world. Which gets to the owner not wanting to rent to substance abuser, but having no real recourse to deal with these tenants. Some of these PC program spending opportunities arguably might have some benefit, but if the bill is to be borne by the developer, count on the end of any private funded project.
The State says it spends nearly $10 billion annually on trying to house the homeless. And despite all that, at the end of each year, the vast majority of Californians who are homeless still didn't end up with a roof over their heads. They did, to some degree, get some other benefits such as tent cities, food, etc. Nevertheless, the number of unsheltered Californians continues to swell.
Newsom last week went a very different direction. He called for a ballot initiative for public housing to be partially funded by general obligation bonds that would raise between $3 billion and $5 billion annually to go toward construction of "campus-style" facilities and long-term residential setting, with mandatory substance abuse treatment centers(is this legal?) and policing focus. I suspect there will be CEQA and zoning exemptions.
This comes amid challenging times, where California has an estimated $22.5 billion and rising deficit, State revenues keep falling and Newsom is threatening to veto any tax increase. So how do the bonds get paid? Newsom will overhaul California's Mental Health Services Act, an initiative approved by voters back in 2004 that charges a 1 percent tax on top income earners from whatever that money goes to now (expect some pushback from progressives), to these public housing and other savings from the current programs that Newsom rightfully thinks doesn't work.
The biggest issue Newsom probably faces (besides getting the legislation on the ballot) is that academics abhor isolating the poor in government "projects" which turned in the '60s into gruesome places to live as vividly described in movies and TV shows of the '60s and '70s and even in later media, such as the iconic "The Wire."
CA is home to 30% of the nation's homelessness. Study linked above says biggest problem is lack and loss of income vs rents, and notes most homelessness developed from an exposure to violence (e.g., criminal victim), incarceration, and other traumas Twenty-one percent of lease- holders cited a loss of income as the main reason that they lost their last housing. Among non-leaseholders, 13% noted a conflict within the household and 11% noted not wanting to impose. For leaseholders, economic considerations interacted frequently with social and health crises. The usual suspects such as mental illness are viewed as less of a factor.
Nine out of ten participants lost their last housing in California, which also suggests migration to sunny CA is not the main culprit. Also the homelessness age is increasing and for prolonged peroids, and not surprisingly is more minority. This suggests that recent approaches to homelessness are not working.
Not a surprise to me is that substance use, particularly methamphetamine use, is a common thread. Many participants reported using drugs and alcohol to help them cope. Almost one third (31%) reported regular use of methamphetamines, 3% cocaine, and 11% non-prescribed opioids. Sixteen percent reported heavy episodic drinking. Only 6 percent of participants reported receiving any current drug or alcohol treatment. Twenty percent of those who report current regular use of illicit drugs or heavy episodic alcohol use reported that they wanted treatment, but were unable to receive it.
The disappointment to me was the lack of creativity to the proposed solutions. The ubiquitous we need to increase low income housing is suggestion number 1. How you get there seems to be a problem. The let's provide more tax credits to these projects was the first point. Next, was the usual let's give these people more money for rent vouchers, In the backdrop is the conventional wisdom to normalize project by taking some portion of at least more, moderate income housing projects for the low income (this is a response to urban tenement "projects" that was created when all the poor were given housing together). But CA has been throwing money through tax credits and rent vouchers around for a long time without success.
The credits are supposed to flow through to tenants in the form of lower rents, but studies suggest that investors, developers, and financial companies gain most of the benefits. The credit/voucher program has complex administration, is prone to abuse, and produces VERY costly low income housing. It also does little to stop CEQA and other legal challenges from people that don't want any low-income housing near them, or zoning and other limitations that don't want any low-income housing near them. But the academics don't want to step on third rails, so there is no suggestion about reducing the burden of building and zoning and environmental regulations to increase the supply of housing, including multifamily housing for low income tenants. The only guy actually saying this is of all people, Governor Newsom. The other big problem is that there is no money in managing and owning these projects because the projects are fee driven: most of the tax credits go for soft development costs like paying off lawyers, developer, lender, expert, and city development fees. Investors receive benefits from these deals other than the tax credits. The projects typically generate operating losses due to high operating costs dealing with trouble tenants, vandalism, insurance costs, etc. coupled with restricted rents. The losses may flow through to investors' tax returns and offset their taxes on other income (they are tax shelters), but they also provide no economic incentive to invest to keep up the building. Investors may gain on the disposition on their ownership usually after year 20 or more (see the prior comment about no investment incentive) when rents control are taken off, but most local jurisdictions, under local political pressure, put in rent control to allow rent increase in small percentages.
These project also are ripe targets for fraud and abuse, which is perpetrated by tenants, developers, and government officials. Tenants abuse the program by occupying housing units to which they are not eligible, often by claiming a false income level on disclosure forms. Developers abuse the program by inflating their reported costs to receive excess tax credits. Government officials abuse the tax credit program for personal gain. Because there is a limited amount of valued credits that are handed out in a discretionary manner to developers, it creates an open invitation to corruption. In the California and particularly Los Angeles City Council scandals are well documented. And what does that mean - remarkably the lower income units cost way more than the equivalent unit in the same projects.
It seems bizarre to me that academics can demonstrate that current programs are not working, and then say put more money into the same program and ways of doing things.
Which then gets us to the social structure grab bag of wants to support to the housing projects. The academics say let's pour more money into social service agencies, healthcare settings, domestic violence services, community organizations, and anti-discrimination centers. Expand prevention and transition services at institutional exits (jails, prisons). Expand and strengthen eviction protections (because during C-19 moratoriums and the previously taking several months to evict a low income tenant provided landlords any ability, no less economic incentive to get rid of problem tenants).
The eviction comment suggests just how far removed academics are from the real world. Which gets to the owner not wanting to rent to substance abuser, but having no real recourse to deal with these tenants. Some of these PC program spending opportunities arguably might have some benefit, but if the bill is to be borne by the developer, count on the end of any private funded project.
The State says it spends nearly $10 billion annually on trying to house the homeless. And despite all that, at the end of each year, the vast majority of Californians who are homeless still didn't end up with a roof over their heads. They did, to some degree, get some other benefits such as tent cities, food, etc. Nevertheless, the number of unsheltered Californians continues to swell.
Newsom last week went a very different direction. He called for a ballot initiative for public housing to be partially funded by general obligation bonds that would raise between $3 billion and $5 billion annually to go toward construction of "campus-style" facilities and long-term residential setting, with mandatory substance abuse treatment centers(is this legal?) and policing focus. I suspect there will be CEQA and zoning exemptions.
This comes amid challenging times, where California has an estimated $22.5 billion and rising deficit, State revenues keep falling and Newsom is threatening to veto any tax increase. So how do the bonds get paid? Newsom will overhaul California's Mental Health Services Act, an initiative approved by voters back in 2004 that charges a 1 percent tax on top income earners from whatever that money goes to now (expect some pushback from progressives), to these public housing and other savings from the current programs that Newsom rightfully thinks doesn't work.
The biggest issue Newsom probably faces (besides getting the legislation on the ballot) is that academics abhor isolating the poor in government "projects" which turned in the '60s into gruesome places to live as vividly described in movies and TV shows of the '60s and '70s and even in later media, such as the iconic "The Wire."