The irrationality of California’s “permanent” approach to homelessness

A well-intended policy begat a decades-long humanitarian crisis and created a bureaucratic Leviathan that impedes actual solutions

In Los Angeles’s Mid-Wilshire neighborhood, a homeless man gazes at a luxury apartment building under construction that will do absolutely nothing to help him when it’s completed. Photo by Christopher LeGras

It sometimes seems as if California is the place bad ideas go to live forever. The state that once led the world in technological as well as social and political innovation has become a land of ossified ideological skeletons that haunt the halls of power and hypnotize their inhabitants. Thanks to term limits the name plaques on the doors change every few years but that’s barely window dressing. The bad idea zombies have taken over and they devour any healthy idea that wanders too close. Fear the walking dead K Street staffers.

It’s grimly, even grotesquely appropriate that the most carious policies have slouched their way to the state’s thousands of homeless encampments. In the face of ever-mounting evidence to the contrary, California’s political class and much of the media continue to insist that the crisis is the result of a literal insufficiency of housing. This “housing first” approach is not so much a policy as a mantra: If someone is homeless, give them a house (or, more accurately, an overpriced one-bedroom or studio shoebox in a stack and pack somewhere south of Crenshaw or east of Lake View Terrace). The idea is that while there are many reasons people fall into homelessness, all of them require a degree of basic stability to address and/or treat. You cannot enlist someone in, say, long-term weekly or daily substance abuse treatment if you don’t know where they’re going to be from one day to the next. Therefore getting people into housing is an essential first step, the prerequisite to all that follows in terms of support, services, and treatment, hence the term “permanent supportive housing.”

It’s seductively simple, but the fatal flaw is right in the name: Permanent supportive housing. Not transitional, get-back-on-your-feet housing or shelter. Not a helping hand for tough times. Permanent. By insisting that the only way to solve homelessness is by providing homeless people with what amounts to life-long public housing California’s leadership has created a perpetual crisis. It’s also a self-sustaining one, requiring billions of dollars over many decades.

Homelessness, a relatively recent phenomenon in human society, should be a temporary, transitory situation. Yet thanks to policy decisions at the state and local levels over the last two decades, homelessness has come to be viewed as not something to be overcome but as insidiously irreversible. Conveniently for the political class, permanent supportive housing requires, well, a permanent bureaucracy. It’s the social equivalent of permanent war-time footing. We have always been at war with the scourge of homelessness.

It’s utterly insane, and deeply inhumane.

Simple in theory, impractical in reality

Housing first is a one-size-fits-all solution to a crisis with endlessly personal, individual challenges. Not every homeless person needs housing in the first place, much less for the rest of their lives. Many people who are homeless or at risk of it just need a place in the short term to get back on their feet. They need a helping hand, some basic services, a chance to regain a modicum of control over things. Others may need temporary or medium term shelter with a focus on mental health care, drug and/or alcohol abuse treatment, job opportunities, or skills training. Some people fleeing domestic abuse literally need a place to be safe for a few nights until they can connect with extended family for support.

The point is homelessness is the opposite of a one-size-fits-all crisis. And permanent supportive housing is the most extreme solution to situations that often are transitory. It’s like treating every conceivable human ailment with chemotherapy. Some people just need a band-aid and a kind word.

Housing first isn’t just the most extreme solution. In many ways it’s one of the worst ways to approach homelessness, full stop. By definition, it dramatically extends the timeline along which people who need help get it. All that housing needs to be built, purchases need to be negotiated, and even with new state laws that streamline permit processing and approvals it still takes several years to bring new housing online from pushing dirt to moving people in. It’s a sort of cognitive dissonance: It’s a crisis, it’s costing lives every single day, but the solution is to spend years building brand new apartments that once completed still take months or even years to fill with residents.

One of the tragic unintended (we hope) consequences is that people who may have started off in less severe situations cannot get more basic help and services. This leaves them to struggle longer to get back on their feet, dramatically increasing the chance that they will slide into worse situations and even “hardcore” street homelessness. In this way the housing first approach actually contributes to the very problems it’s supposed to solve.

Second, since housing first is considered a “complete” solution, it takes the air out of other, limited but effective, interventions. It pushes every policy, every initiative, toward permanence. During the COVID pandemic, for example, a state program called Project Roomkey provided state and federal money to assist cities and counties with securing long-term leases with hotel and motel owners to provide rooms for homeless people. While like every initiative in California’s homeless crisis it was eye-wateringly expensive — the city spent as much as $5,000 a month for rooms in what often amounted to no-tell motels — it did get some people off the streets and into shelter. Yet like clockwork, those temporary sites are themselves in the process of being converted into permanent supportive housing. It’s a novel concept: Trickle down homeless housing.

Worse, intentionally or otherwise the housing trickles in the wrong direction, away from immediate solutions. As we covered previously, seven years ago the Los Angeles Homeless Services Authority offered 1,254 emergency winter shelter beds. This year, with historic storms repeatedly battering the southland, the authority is offering just 207. For several weeks during the depths of the pandemic the agency’s emergency shelter hotline was down altogether. These are prime examples of how other solutions have been getting short shrift.

Two decades of “housing first” have done more harm than good

When Gavin Newsom ran for his first term as mayor of San Francisco in 2003, a cornerstone of his campaign was a policy his consultants dubbed “Care Not Cash.” The idea was that the city would never solve homelessness by handing out traditional monthly welfare payments because too many homeless people just spent the money on drugs and alcohol, perpetuating their spiral. Cash benefits sustained a broken system and helped break lives. Instead, Newsom argued that taxpayers’ money should be used to create and sustain compassionate and comprehensive services, treatments, and housing.

In 2002 as a Supervisor Newsom introduced a motion that to cut city-funded homeless cash assistance from a maximum of $410 to about $60 a month, with the dollars shifted into housing and services. After the Board of Supervisors rejected the proposal Newsom turned it into a voter initiative. It passed by a nearly two-to-one margin. Newsom himself narrowly won the mayor’s race and over the next eight years his administration set about creating a new ecosystem of nonprofits, service providers, consultants, experts, lawyers, advocates, and others. Later as Lieutenant Governor and now as Governor he has taken the policy statewide, with broad support from the state’s political establishment.

In retrospect, Care Not Cash was one of the earliest seeds of what would become known as housing first. Care not Cash put the city and county of San Francisco in the position of caregiver for its homeless population. For better or worse, under traditional welfare cities functioned primarily as pass-through entities for federal cash payments and housing subsidies. Care Not Cash was the first time a city or county promised to affirmatively care for the homeless.

Care Not Cash also augured an unfortunate feature of California’s approach to homelessness ever since: All too often the “Care” was nowhere to be found.

Housing and services first … in theory

As we’ve noted before, many factors have contributed to and exacerbated the crisis, many of which are well beyond the control of homeless policies. As captured in the Oscar-winning movie Nomadland the transition from the industrial/manufacturing economy to the information economy has left millions of traditional blue collar workers behind, left to fend for themselves. California used to build cars and airplanes, these days we develop apps that depend on gig workers making a few bucks an hour. Overall the state’s record of job creation since the turn of the millennium leaves much to be desired, with five low income/minimum wage jobs created for every good-paying career track one. It’s is no way to sustain an economy, yet here in supposedly progressive California we lead in low-paying job creation.

And as we’ve also reported previously, the arrival of synthetic crystal meth and — especially — fentanyl, took addiction to levels quite literally never seen in human society. People can become addicted without even realizing it as drug manufacturers and dealers lace fentanyl into everything from meth itself to marijuana and counterfeit prescription and over-the-counter pills.

Certainly, no policymaker, no one at all, could have been expected to anticipate this accumulation of factors.

It’s one thing to be caught flat-footed by floods of previously unknown, insanely addictive drugs and a succession of economic upheavals. It’s something different to double, triple, and quadruple down on the same, twenty year old policies in the face of those new realities. California is using water buckets to fight a raging two thousand degree chemical fire.

Costly failures

They are some very, very expensive buckets. In 2005, Newsom’s second year as mayor, officially there were 5,404 homeless people in San Francisco. After 17 years of “Care Not Cash” and many billions of dollars – $1.1 billion in 2021-22 alone – in 2022 the city’s homeless population was 7,754. That works out to an incomprehensible $141,862 per homeless individual, nearly $20,000 more than the city’s average per capita income, itself one of the highest in the country. It’s also in addition to unknowable amounts of money from private charitable spending, corporate giving, in-kind gifts and contributions, even individual hand-outs. Cut another way, it’s enough to send two kids to Harvard, complete with room and board. It makes other profligate cities like Santa Monica, which spends $55,000 per year on its homeless population, seem downright thrifty.

There are questions also about how the money is being spent. According to a February 2022 audit by the city controller’s office L.A. is spending upward of $800,000 per unit of homeless housing, with one proposed project exceeding $1.25 million for 600 square foot studio apartments. Even at the more modest average per unit cost of $400,000 under Project Homekey it would require $18 billion to provide permanent housing to all 44,000+ of the city’s homeless people, nearly double the city’s entire annual budget, with billions more required for annual operating costs.

California must break its addiction to housing first as the primary and often only serious solution to homelessness. The state simply is not going to build its way out of the crisis. For a sizable percentage of the homeless population, likely a sizable majority, PSH is too slow, too unreliable, too unavailable. For everyone it has become prohibitively expensive. Even if the state could somehow wrangle costs statewide to $400,000 per unit of housing (a virtual impossibility outside a handful of rural, lower income counties) it would cost more than $50 billion to house all 116,000 (officially) homeless Californians, again with billions more in annual property maintenance costs, support and treatment services, debt services, and other expenses. These are simply not realistic numbers. And all of this in a state that can’t even lay train tracks anymore.

One size does not fit all

Even if the state somehow could find a way to fund all that housing, and even if it all got built in a reasonable amount of time — again, more wildly optimistic assumptions — it very likely would to little to address the underlying causes of homelessness. As it is people cycle in and out of shelter and PSH all the time, for all kinds of reasons. Short of physical lockdowns (and lord knows we’ve been down that road) it’s impossible to guarantee people will stay in their new apartments or rooms. Here at the all aspect report we’ve documented personal stories of homeless people who received housing only to lose it as a result of criminal behavior, addiction, mental breakdowns, or a combination. None were receiving promised, not to mention budgeted, services when their house was revoked.

There’s another problem with housing first and PSH. Many homeless people do not want permanent shelter. Last year as part of our investigation and exposure of major flaws with the annual homeless count, we interviewed a community of homeless people living at Westchester Park in L.A.’s Venice Beach neighborhood, where the crisis has made international news over the last few years. In this particular camp, which is only 15 or 20 people, most residents are former federal prison convicts who are adamant that they neither want nor will accept any sort of multifamily, much less communal living arrangement.

For many former prisoners and other people who have been institutionalized, with the traumas it inflicts, the idea of any sort of multiperson living arrangement is a non-starter. That’s just one of the reasons people may reject PSH, and even within that one reason are myriad individual experiences. One of the residents at the camp said he had been in prison for second-degree murder for stabbing another man to death on the Venice Boardwalk (in self-defense, natch). He worries that if he’s put in another communal or even multi-family living situation he might “snap.” Who is going to force someone like that into anything he doesn’t want to do, much less a permanent living arrangement? Some people should affirmatively be selected out of PSH.

Another of the camp’s inhabitants, said flatly, “I want a house. Doesn’t have to be fancy, but I need my own space. I won’t live in an apartment.” Unless and until he gets a house, he said, he’s content with life on the street. Or more accurately, in the park. These are hard cases, people who will not be pushed into any situation they don’t want to be in.

On the other end of what we may think of as the “homeless spectrum” are people who have become homeless only recently, or who are in and out of stable housing. Victims of domestic violence living in temporary circumstances, people with mental health and/or addiction problems who still have networks of friends and family to rely on, individuals who lost housing only recently. Many of them do not need permanent so-called “wraparound” solutions. They need temporary and/or specific kinds of help, and they need it now. Of course, permanent supportive housing is neither immediate nor temporary. The 100-unit building under construction and due for completion in 18 months, or the motel recently purchased by a city housing authority and still standing empty as it’s upgraded to meet current standards, these are of no use to the fentanyl addict languishing in a gutter in his own filth tonight.

Here’s a basic snapshot of L.A.’s homeless population (we will be writing about this issue in more detail soon):

It doesn’t take a Ph.D. in psychology or sociology to recognize that the challenges and needs of this enormous cross-section of human beings will not be met with a single policy. As noted, many former convicts are highly resistant to any form of communal or even multifamily living arrangements. That’s nearly three-quarters of the entire homeless population (70%) for whom PSH does not work and may well never work. And yet PSH is where three-quarters of the funding, resources, and energy goes. The disconnect is manifest, and the results are visible in our public spaces every minute of every day, for all to see.

How many more dots must be connected?

At a certain point we can no longer ignore what amounts to the essential cruelty of what might be called the California School of homelessness. It comes into undeniable, can’t-look-away, what-the-hell’s-going-on-here relief.

It turns out that, far from being unemployed or marginally employed, California’s homeless people have one of the hardest full-time jobs in the world. They exist to prop up that multi-billion dollar system some people have come to call the Homeless Industrial Complex. It’s a job that quite literally would kill most people, and in short order. It’s relentless, and there’s no such thing as a coffee break much less a day off. Their job description includes ensuring that those in charge of the agencies and nonprofits retain their comfortable six-figure salaries and providing the political class with bullet-proof talking points and reliably heart wrenching photo ops when budget season comes around.

California has constructed a highly profitable system of human exploitation. After nearly two decades the statewide body count is well in excess of one hundred thousand. There’s a grotesque, Masque of the Red Death aspect to it all. And still state and local leadership extols “housing first.”

One of the most difficult jobs in the world. Photo courtesy of CBS L.A.

Compounding the tragedy is the way in which the Complex, like most big government bureaucracies, makes it all but impossible for good people to do good. Suffice it to say, most people who go to work for homeless nonprofits or public agencies that serve and assist homeless people do so with good intentions. Nevertheless, there’s an inherent Faustian aspect to the bargain: If they were to actually solve homelessness they themselves would be out of a job. And no rational person puts themselves out of work.

Which is where we come full circle to the fatal (literally) flaw in the entire edifice. In order for the Complex to survive, thrive, and expand homelessness must be a permanent condition. Indeed, not just permanent but in a sense contagious, catching. It must expand, for homeless people are the machine’s most essential raw material.

Also, if homelessness were indeed “first and foremost a housing crisis,” there’d be little need for permanent wraparound services. A safe space to rest, recover, and access services would help many thousands of people. Unfortunately that’s not the profitable, permanent solution for which the political class is so hungry.


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