It could be said that California and one of its most famous attractions, Disneyland, were both known as a “Magic Kingdom.” Now, due to the rampant mismanagement of our state at every level, none more visibly prominent than our homeless crisis, it feels like a “tragic kingdom” for many.
Even as homelessness declined in most states between 2018 and 2019, California’s homeless population exploded by an alarming 16 percent. Since the onset of the COVID-19 pandemic, that figure has risen by an additional 20 percent in San Francisco alone. This is a human disaster on an epic scale. More than 150,000 souls – one out of every four of the nation’s homeless – live in the Golden State.
To date, California and all three of its largest cities have deployed a failed strategy. It’s time for new thinking on getting housing costs under control along with a fresh, more humane approach to treating those in need.
I think we ought to demand new thinking be applied to the failed approach to caring for the homelessness. The “Housing First” model adopted ten years ago started out by providing “high utilizers” (a small fraction of the homeless population) with subsidized permanent housing. It was effective on a limited, individual basis. But when Housing First was scaled up to include all elements of the homeless population, not only was it ineffective at ending community-level homelessness, but it failed miserably in slowing the increasing rate of homelessness.
A 2019 UCLA report found that 84 percent living on the street have a physical health condition, 78 percent have mental health disorders and 75 percent have substance abuse problems. These are real people with real problems that housing alone will not solve. That’s why California should shift to the “Treatment First” model emphasizing rehabilitation of those people who suffer from drug and alcohol addiction as well as those with mental disorders.
In a successful clinical trial of homeless cocaine-addicted men, 44 percent were stably housed and 53 percent were stably employed after a one-year period. If 40 percent or more of a population can have their lives turned around rather than merely being warehoused, the community enjoys a higher quality of life. It’s a big win from a financial resource standpoint as well. With positive outcomes possible within just nine to 12 months, more housing would be available to more people in a shorter amount of time.
The Housing First model is as unaffordable as it is ineffective. California would run out of money long before it could construct new housing for every resident who needed it. That would cost up to $30 billion every year, according to the Legislative Analyst Office. Putting that figure in perspective, it’s the equivalent of the combined average annual salaries of more than 4.2 million Californians; nearly one out of every four in the entire state’s workforce.
Worse, the $30 billion estimate is probably too low. In Los Angeles, where it costs an average of $531,000 just to build one homeless housing unit, two recent projects came in at nearly $750,000 per unit. When costs for building a modest homeless housing unit far exceed a luxury high-rise condo, the approach is sheer madness.
Rolling back homelessness will have to involve getting a handle on the 1.4 million shortage of affordable homes. The extreme housing scarcity is causing rents to skyrocket at a rate twice the national average. A single-family home now carries a ridiculous statewide median price tag of $615,000. Roughly 50 percent of metro area residents allocate half their income to rent. Many of the 1.3 million families making less than $25,000 per year teeter on the edge of homelessness.
Getting back on track will mean taking steps such as creating a statewide standard for development fees, a major factor in adding 6 to 18 percent of a home price. While development fees are trending lower nationwide, California’s development fees, already America’s highest, continue to rise. Municipal fees, permitting, codes and regulations, which add 6 to 18 percent to building costs, must be reviewed. Environmental regulations, abused as “the tool of choice for preventing cities from approving high-density housing,” as one critic put it, delay projects by two-and-a-half years, on average, and drive up costs. While the Governor has approved case-by-case exceptions, he has not sought meaningful reform.
Gov. Newsom has shown that he knows how to spend billions of dollars on a failed approach to homelessness and housing. Hopefully, he won’t fail to notice a recent poll in which 55 percent of likely voters said that he has done a poor or very poor job of handling homelessness. Reversing homelessness in California will require fresh thinking and innovative new leadership.
John Cox is a former Republican California gubernatorial candidate and founder of C.H.A.N.G.E. CA.