There are many flawed theories that underlie housing and homeless policies in Los Angeles. To name a few: “Housing first,” first endorsed by Obama’s Dept. of Housing and Urban Development, which prioritizes funds to provide shelter before using any government money for treatment or counseling. The concept of “wet shelters,” which admit homeless individuals regardless of their sobriety. And the most misguided of all, “inclusive zoning,” the preposterous theory that the most appropriate way to house the homeless is to construct shelters on some of the most expensive real estate on earth.
This notion, that somehow anyone who is homeless, for whatever reason, has a right to live for free in a wealthy neighborhood, would be material for hilarious satire, except for the fact that the purveyors of this nonsense are dead serious. Some of the proponents of inclusive zoning are motivated by compassion unfettered by the numerous reality checks that should apply, others are stone cold communists, determined to destroy the rights of property owners. But the most influential advocates for inclusive zoning are the government union-backed special interests that correctly recognize it as a scam they can ride to riches.
On January 13, the City of Los Angeles Planning Commission is going to vote on whether to approve the “Reese-Davidson Community,” a proposed 140 unit monstrosity to be built on 2.8 acres that straddle the main thoroughfares connecting Venice Beach to the rest of Los Angeles. Located just a block from the beach, the city-owned property is currently used to provide parking for beach visitors. The most virtuous choice for the city would be to keep the property as it is, at least if they ever manage to make the beach a safe place again for families to visit on the weekends. But there are other options.
Real estate in the heart of Venice Beach and close to the ocean is extremely expensive. The market value of this land, if it were sold to a developer to build an unsubsidized, 140 unit multi-family complex, is conservatively estimated at $35 million. Imagine how this money might be spent by a resourceful city council committed to helping more people at a reasonable cost. Low income housing can be built in low income areas of Los Angeles for a fraction of the cost for the Reese-Davidson project, as can “permanent supportive housing” for the homeless. The construction cost alone is estimated at over $1,000 per square foot, over $68 million. Taking into account the value of the land and the parking structure, this project is going to end up costing over $735,000 per unit – most of them studios.
This isn’t unusual for taxpayer subsidized housing projects in Los Angeles. In 2019 the City Controller, Ron Galperin, published an embarrassing audit of how the city used its voter approved Prop. HHH funds, which authorized the city to issue $1.2 billion in general obligation bonds to partially subsidize the development of supportive housing units. The gist of that report? Galperin writes: “The current median cost per unit for projects in the Proposition HHH pipeline is $531,373, and more than 1,000 units are projected to exceed $600,000.”
The implications of these findings, which represent not only a scandal for Los Angeles, but dozens of other cities in California under the same mismanagement, illustrate the futility of this approach. To house the more than 60,000 homeless living in Los Angeles today at these prices for shelter would cost $32 billion. Since these projects are also designed to accommodate low income residents of Los Angeles, easily ten times more numerous than the homeless, the true cost to get the job done is in excess of $300 billion. And this is the low estimate.
The current theory of “housing first” means that until all the homeless are housed, money cannot be allocated to treating their addictions, even to the extreme of not requiring sobriety as a condition of their residency in these permanent housing units they’re being given. This means that Los Angeles, with its mild winters and inviting beaches, is a magnet for the indigent from across America, from sea to sea. This is already a demonstrated fact, as a street culture reminiscent of Lord of the Flies plays out daily in Venice Beach. The party never stops, and the only heat comes from gangs.
But even if the number of homeless in Los Angeles were capped somehow, meaning that someday they all would find permanent supportive shelter, why would the developers that are building and operating these housing projects ever want to solve the problem? This is where the concept of “inclusive zoning” becomes extremely useful. One of the besieged Venice Beach residents, Soledad Ursua, recently interviewed by the Epoch Times, explained how the racket works. “Developer fees are a fixed percentage. If you’re one of these nonprofit developers, what which project would you work on, one that pays 10 percent of $10 million or 10 percent of $100 million?”
This ten-to-one range of potential costs is not far fetched. Taking into account the value of the land and the inevitable cost overruns, it is possible, even likely, that the apartments of the Reese Davidson project in Venice Beach will come in at a total project cost of around a million dollars per unit. If the many amenities were dispensed with, and these studios were constructed efficiently in some of the inland neighborhoods of Los Angeles, it ought to be possible to build studios at a cost of $100,000 per unit. And for that matter, why aren’t homeless, especially the significant percentage that would be sane and able bodied if they were denied drugs and alcohol, not just rounded up and offered shelter in a supervised tent encampment? Such facilities could be built quickly and cheaply, and overnight, not only would taxpayers save billions, but Los Angeles would lose its status as a magnet for the stoners of the world.
One must ask, and ask again, why aren’t these solutions being pursued, or even seriously considered? Why isn’t Eric Garcetti using the resources of his city to change the legal and legislative environment to make practical solutions possible? What aren’t taxpayers demanding these reforms? The reason is because too many people are getting rich on this fraudulent masquerade of compassion. They are making billions in fees, receive additional billions in tax credits, to create projects that operate exempt from property taxes and business taxes. As the problem just gets worse.
Los Angeles mayor Eric Garcetti may or may not deserve all of the unflattering descriptions leveled at him by his critics. He is part of a much larger hypocrisy. But Garcetti knows exactly what is going on, and nobody is in a better position to do something about it than him. The homeless and housing policies of Garcetti’s administration are destroying Los Angeles. With the lone exception of government unions and the relative handful of bureaucrats, consultants, builders and operators that are making a killing, everyone in this vast city are victims of this failed policy. Not just the hard-working residents who can still afford their rent or their mortgage, but the homeless themselves.
This article originally appeared on the website American Greatness.