The Homeless Industrial Complex

By Edward Ring
May 28, 2019

Los Angeles could be at risk of a deadly typhus epidemic this summer according to Dr. Drew Pinsky, an outspoken celebrity doctor and specialist in addiction medicine. Pinsky, a Los Angeles native, recently quoted on Fox News, said: “We have tens and tens of thousands of people living in tents. Horrible conditions. Rats have taken over the city. We’re the only city in the country, Los Angeles, without a rodent control program. We have multiple rodent-borne, flea-borne illnesses, plague, typhus. We’re going to have louse-borne illness. Measles could break into that population. We have tuberculosis exploding.”

All of this is easily confirmed. There has already been outbreaks of typhushepatitis and tuberculosis in Los Angeles and elsewhere in California. Shigella, a communicable form of diarrhea, is now common among the homeless. There have even been outbreaks of trench fever, spread by lice. As reported by the Atlantic earlier this year “Medieval Diseases Are Infecting California’s Homeless.”

There are estimated to be over 55,000 homeless in Los Angeles County, and at least 130,000 statewide, living on sidewalks, parks and parking lots, vacant lots and on the beach. There is no sanitation and no trash collection. The populations of disease carrying animals and insects that thrive in these conditions are exploding: rats, fleas, mosquitoes, ticks, mites, lice.

The problem of the homeless could be completely solved in a few months if there were the political and judicial will to get it done. The national guard could be deployed, working with city and county law enforcement. The homeless could be sorted into groups; criminals, substance abusers, mentally ill, undocumented aliens, and all the rest. For each of these groups, separate facilities could be built on vacant or underutilized government land in or near urban centers but away from downtowns and residential areas. They could consist of tents, porta-potties, and mobile modules providing food and medical services.

There’s plenty of money available to do this. Just in Los Angeles, in 2016 voters approved Measure HHH, allocating $1.2 billion in bonds to build 10,000 units to house the homeless. Since then, Los Angeles voters approved a quarter cent sales tax increase, also to help the homeless. Additional hundreds of millions are coming from the state to help the homeless.

Every major city in California is spending tens of millions or more on programs for the homeless. But most of the money is being wasted. Why? Because there is a Homeless Industrial Complex that is getting filthy rich, wasting the money, while the homeless population swells.

WHAT IS THE HOMELESS INDUSTRIAL COMPLEX?

Here’s how the process works: Developers accept public money to build these projects to house the homeless – either “bridge housing,” or “permanent supportive housing.” Cities and counties collect building fees and hire bureaucrats for oversight. The projects are then handed off to nonprofits with long term contracts to run them.

That doesn’t sound so bad, right? The problem is the price tag. Developers don’t just build housing projects, they build ridiculously overpriced, overbuilt housing projects. Cities and counties don’t just collect building fees, they collect outrageously expensive building fees, at the same time as they create a massive bureaucracy. The nonprofits don’t just run these projects – the actual people staffing these shelters aren’t overpaid – they operate huge bureaucratic empires with overhead and executive salaries that do nothing for the homeless.

An example of wasteful spending can be found in the homeless shelter being built in Venice Beach, where a permanent population of over 1,000 homeless have taken over virtually every public venue, including the beach. Because their tents are now protected by law as private space, they not only serve as housing, but as pop-up drug retailers and brothels. To get these folks off the streets and off the beach, a 154 bed shelter has been approved by the Los Angeles City Council. It will be a “wet” shelter, meaning druggies and drunkards will be able to come and go as they please. The estimated cost for this shelter so far is $8 million, which equates to over $50,000 per bed. Why doesn’t anyone ask why?

These costs aren’t that bad if you consider the cost of new construction in exorbitant California. But this isn’t new construction, it’s “temporary” construction of very large tents on three acres of land. Eight million dollars, to put up some large tents and plumb for bathrooms and a kitchen. As a “wet” shelter, it will become a hotel for freeloading partiers as much as a refuge for the truly needy. Not only is it only capable of housing a small fraction of the 1,000+ homeless already in Venice, it will attract more homeless people to relocate to Venice.

Finally, this property, owned by the Los Angeles Metropolitan Transit District and located on some of the most precious real estate on earth, could have been sold to private investors to generate tens if not hundreds of millions of dollars. Why wasn’t that choice made? Why, for that matter, aren’t homeless shelters being built in Pacific Palisades, or Brentwood, or Beverly Hills, or the other tony enclaves of LA’s super rich? Because as with all boondoggles that destroy neighborhoods in the name of compassion, the Homeless Industrial Complex knows better than to defecate where they masticate.

The Homeless Industrial Complex’s expensive maltreatment of Venice Beach in particular, and taxpayers in general, is an example of how “bridge housing” projects are co-opted and corrupted. But even more horrendous waste is exemplified by the efforts to construct “permanent supportive housing.”

According to an NPR report from June 2018, “when voters passed Measure HHH, they were told that new ‘permanent supportive housing’ would cost about $140,000 a unit. But average per unit costs are now more than triple that. The PATH Ventures project in East Hollywood has an estimated per-unit cost of $440,000.”

A privately funded development company, Flyaway Homes, has debuted in Los Angeles with the mission of rapidly providing housing for the homeless. Using retrofitted shipping containers, the company’s modular approach to apartment building construction is purported to streamline the approval process and cut costs. But the two projects they’ve got underway are too expensive to ever offer a solution to more than fraction of the homeless.

Their 82nd Street Development will cost $4.5 million to house 32 “clients” in 16 two-bedroom, 480 square foot apartments. That’s $281,250 per two-bedroom apartment. The firm’s 820 W. Colden Ave. property will cost $3.6 million to house 32 clients in eight four-bedroom apartments. That’s $450,000 per apartment.

These costs are utterly unsustainable. But the Homeless Industrial Complex has grown into a juggernaut, crushing the opposition. At community hearings across California, “homeless advocates,” who are often bused in from other areas expressly to shout down local opposition, demand action, because “no one deserves to live on a sidewalk.”

Money is squandered, and the population of homeless people multiplies. This is not compassion in action, rather, it’s corruption in action.

WAYS TO REIN IN THE HOMELESS INDUSTRIAL COMPLEX

(1) Acknowledge there’s a problem. Agree that it’s no longer acceptable to throw money at the homeless epidemic without questioning all the current proposals and the underlying premises. Billions of dollars are being wasted. Admit it.

(2) Recognize that a special interest, the Homeless Industrial Complex – comprised of developers, government bureaucrats, and activist nonprofits – has taken over the homeless agenda and turned it into a profit center. They are not going to solve the problem, they are going to milk it. Their PR firms will sell compliant media a feel-good story about someone who turned their life around, living in a fine new apartment. What they won’t tell you is that because of the $400,000 they charged to build that single apartment unit, dozens if not hundreds of people are still on the street with nothing.

(3) Act at the municipal and state level to set a limit on the cost per shelter “bed.” This cost must represent a compromise between ideal facilities for homeless people, and what is affordable at a scale sufficient to solve the problem. There is no reason the capital costs for a shelter bed should be $50,000 each, but that’s exactly what’s proposed in Venice – $8 million for a semi-permanent “tent” with 154 beds. Similarly, there is no reason a basic apartment unit for the homeless should cost over $400,000, but in Los Angeles, by most accounts, that’s what they cost. This is outrageous. Durable tents and supportive facilities should be set up for a small fraction of that amount. Pick a number. Stick to it. Demand creative solutions.

(4) Stop differentiating between “bridge housing” (basic shelter) and “permanent supportive housing.” Permanent supportive housing IS “bridge housing.” Amenities better than a durable, dry, sole occupancy tent and a porta-potty can belong exclusively in the realm of privately funded nonprofits and charities. Until there isn’t a single homeless person left on the street, not one penny of taxpayer money should be paying for anything beyond basic bridge housing.

(5) Accept that homeless shelters will be more cost-effectively constructed and operated if they are in industrial, commercial (where appropriate), or rural areas, and not in downtown areas or residential neighborhoods.

(6) Abandon decentralized solutions that involve seeding safe neighborhoods with mini-homeless shelters in converted residential homes. Estimates vary, but between 35 and 77 percent of homeless people suffer from substance abuse, and between 26 and 58 percent have mental illness, and by some accounts over half of them have a criminal record. It is not just too expensive, it is dangerous to mix a homeless population into family neighborhoods.

(7) Go to court. Challenge the decision in Jones vs the City of Los Angeles, that ruled that law enforcement and city officials can no longer enforce the ban on sleeping on sidewalks anywhere within the Los Angeles city limits until a sufficient amount of permanent supportive housing could be built.

(8) File a state ballot referendum to overturn Prop. 47, which downgraded drug and property crimes. Prop. 47 has led to what police derisively refer to as “catch and release,” because suspects are only issued citations with a court date, and let go.

(9) Recognize that the rights of the homeless must be balanced with the rights of local residents, and that homeless accommodations should be safe but should never be better than the cheapest unit of commercial housing.

10) Confront the fact that a lot of homeless people are homeless by choice, not because they’ve ran out of options, and they DON’T WANT HELP. Act accordingly: Do we give these people control over our public spaces, our neighborhoods, our parks and beaches? And what of the others? The mentally ill, the substance abusers, the criminals? Do we give them control of over our public spaces?

It is terribly difficult for proponents of rational policies to be heard in public hearings on the homeless. Professional activists, often hired by developers or well-heeled nonprofits, abetted by sincere homeless advocates who simply haven’t ran the numbers, will usually outnumber and shout down neighborhood “NIMBYs” who have come to raise objections. But the NIMBYs are right.

We have a moral obligation to help the homeless. But we are not obligated to cede our downtowns, our tourist attractions, and our residential neighborhoods to homeless encampments. And as a society, we also have a moral obligation to protect the general population from rampant infectious diseases. What if Dr. Pinsky is right? What if there is a major infectious disease epidemic in Los Angeles this summer? Is that what it’s going to take before we clean up our streets and get the homeless into cost-effective, safe, supervised, sanitary encampments?

The moral question of how to help the homeless cannot rest apart from financial reality. It is impossible to solve the homeless crisis under current law and according to current policies. Therefore a new approach must be taken.

Before criticizing the suggestion that we spend a $5,000 per bed (or less) instead of $50,000 per bed (or more) to build bridge housing facilities, imagine what could be done with all the money we save. We might be able to help a lot of people get their lives back on track. Instead of feeding the insatiable excesses of the Homeless Industrial Complex, which helps a few but neglects so many.

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Edward Ring is a co-founder of the California Policy Center and served as its first president. This article originally appeared on the website California Globe.

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