Feeding LA’s Homeless Industrial Complex

Election season 2022 is in full bloom.  Activists, with clipboards and ballot initiatives, are abundantly flowering outside supermarkets.  They want signatures – your signature – in support of new legislation that would increase funding for various whacky and zany ideas.

In California, and particularly in Los Angeles, initiatives that would fire off more dollars to combat the abundance of shanty favelas blighting urban areas are flourishing.  The rationale is compelling…

As of 2020, there were over 161,000 homeless people in California.  In Los Angeles County alone, the homeless population, as of 2020, was precisely 66,463.  Both those counts are now likely much higher.

Who doesn’t want to do something about the profusion of tented bivouacs, barrel fires, medieval disease, human excrement, public drug use, crime, and mental illness that is running rampant across the southland?

Surely something must be done.  But what?

One state measure that will be on the 2022 ballot,  the California Solutions to Homelessness and Mental Health Act, promises hundreds of millions of dollars each year to fight homelessness in California.  These hundreds of millions of dollars would come from taxing online sports betting.

The City of Los Angeles also has its own citywide measure.  It’s called the Los Angeles Program to Prevent Homelessness and Fund Affordable Housing.  According to the United to House LA campaign, the measure would deliver about $875 million annually through imposing a new two-tier assessment on the sale of high value property in LA City.  High value being properties selling for over $5 million.

Could these measures be the answer to the homeless crisis?

If they were, the homeless crisis would have been solved long ago.  Here’s why…

Forced Philanthropy

Here at the Economic Prism we don’t own a $5 million home.  Nor do we bet on sports.

Still, we can see these measures for what they are: Giant money grabs for California’s homeless industrial complex.

These measures won’t do a lick to address the homeless crisis that gets worse with every passing year.  How do we know this?

We know this because these money appropriation and forced philanthropy schemes have been tried over and over again.  With respect to helping the homeless, they are an utter failure.  But for the supervising agencies and the non-profits – the homeless industrial complex – they are extraordinarily lucrative…

The homeless problem in Los Angeles County is an utter disaster – approximately 70,000.  The homeless population in the City of Los Angeles alone is over 40,000.  And all this despite the fact that the City and the County passed $4.7 billion in tax-increased funding – via Proposition HHH and Measure H – in 2016 and 2017.

Proposition HHH is a bond measure designed to build permanent supportive housing.  Homeless professionals call this “housing first.”  Measure H is a 0.25 percent sales tax increase in the County, pushing the minimum sales tax in many cities within the county above 10.25 percent.

What does Los Angeles have to show for its nearly $5 billion increase in spending on homelessness?

The major philanthropic groups that helped push the initiatives have delivered moronic platitudes.  Fred Ali, president and CEO of LA-based Weingart Foundation, humbly attests:

“We can’t let our sense of what’s possible be limited to what we’ve been able to do so far.  Philanthropy can be the laboratory for an agenda to overturn racial injustice, challenge white supremacy and nurture equity.  It can also build support for new funding streams and new governance structures.”

And United Way Los Angeles claims on its website:

“We’re on a mission to permanently break the cycle of poverty for our most vulnerable neighbors: low-income families, students, veterans and people experiencing homelessness… By focusing on local, state, and national public policy, we fight poverty’s root causes through the systems that sustain them.  We led the fight that resulted in nearly $5 billion in civic funds being dedicated to solutions to ending poverty.”

What “root causes” of poverty is the United Way Los Angeles fighting?

Feeding LA’s Homeless Industrial Complex

Fighting poverty’s “root causes” has led to an obsession on the “housing first” approach to homelessness.  Philanthropic groups like United Way reject mere “bandaid” approaches to homelessness.  Temporary shelters, bridge housing, safe overnight parking sites, etc. are not ideologically acceptable.

Housing first has been an dismal failure if you go by the tens-of-thousands of more homeless people sleeping on the streets since its adoption.  But if you go by the boon of money this has unlocked for the homeless industrial complex it is a smashing success.

You see, when fighting the homeless crisis, dollars alone equal victory.  Results are an afterthought.  Money – more of your money – is the ultimate objective.

Unfortunately for taxpayer, more money isn’t limited to securing private funds.  Rather it involves appropriating public funds and directing them towards the progressive-technocratic vision of the philanthropy experts.

According to a recent City audit, in the City of Los Angeles, where over 40,000 homeless people thrash about, it now costs $837,000 to build a single housing unit for one homeless person.  This price tag is the magic of housing first.

Since voters approved the Proposition HHH spending in 2016 about 1,200 units have been completed.  That comes to about 200 units per year.

Certainly, there’s plenty of grift built into LA’s homeless industrial complex, which merely exercises the malady to keep the money flowing.  But at this rate, to construct “housing first” for 40,000 homeless people it will take roughly 200 years.  And at a cost of $837,000 per housing unit it will cost roughly $33.5 billion.

Still, Democratic Mayor Eric Garcetti claims the program is a success.  According to Garcetti, the program “is producing more units than promised, at a lower cost than expected.”

Garcetti, without question, is providing cover for the failures of housing first.  Perhaps when his second term in office is up later this year he can make bank working for a non-profit in LA’s homeless industrial complex.

It’s a well fed group.  And with the host of new measures on the ballot it will only get fatter.

Sincerely,

MN Gordon
for Economic Prism

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