Update On California Homelessness

March 09, 2023 Francis Menton @ Manhattan Contrarian 

A recurring theme here is the utter failure of progressive government social service spending programs to ever make a dent in, let alone solve, the problems they have been created to address. Whatever the problems may be — poverty, food insecurity, housing, etc., etc. — once massive government spending programs to “solve” them are put in place, the problems never show significant improvement, and more often than not get worse, at least according to official measures, the longer the programs continue and the more is spent.

An extreme case of this phenomenon is the problem of “homelessness” in California. This issue deserves special attention for two reasons. First, compared to issues like, say, poverty or hunger, which are massive and have indefinite boundaries, homelessness is much smaller and far more discrete. The “homeless” are a specifically identifiable group, and even in the very worst cases are fewer than 3% of the population of any given city. And second, in the major California cities of San Francisco and Los Angeles, advocates several years ago called for large but specific amounts of spending to address the problem, and explicitly promised that they had identified the appropriate solutions, and if the voters would go along, this spending would end the scourge of homelessness once and for all.

I first addressed the issue of “homelessness” in San Francisco in an October 26, 2018 post with the title “The Morality Of Our Progressive Elite.” The occasion for the post was a referendum about to be put to the voters of San Francisco in November of that year, imposing a new payroll tax on all employers in the city intended to raise some $300 million per year of fresh funding to address the problem of homelessness “from every angle” and solve it once and for all. The $300 million would more than double the then level of city spending on homelessness, which was $285 million per year. The advocacy for the referendum was led by Salesforce, Inc., San Francisco’s largest employer, and its billionaire founder and co-CEO, Marc Benioff. Benioff had penned an op-ed for the New York Times the day before my post, explaining that the new tax was a matter of basic morality (“It’s time for the wealthiest businesses and business owners to step up and give back to the most vulnerable among us.”), and would definitely work because there was a “comprehensive” plan that had been “developed by experts” and would address the problem “from every angle.”

The latest detailed data I can find on the San Francisco homeless population and spending come from this Hoover Institution Report from May 2022, with 2021 data. The title is “Spiraling Out of Control.” The Report gives the level of spending on homeless services in San Francisco as $1.1 billion per year — meaning that even after adding the $300 billion from the voter-approved payroll tax to prior annual spending of $285 billion, the level of spending had again doubled. And for that, here’s what San Francisco got:

Since 2016, the number of homeless in San Francisco has increased from 12,249 to 19,086, which comes out to about $57,000 in spending per homeless person per year. With a total population of about 860,000, roughly 2.2 percent of San Francisco residents are homeless, which is over 12 times the national average. There is little doubt that as San Francisco spends more, homelessness and its impact on the city worsens.

For a more recent update without comprehensive data, here is a piece from the AP on December 28, 2022:

San Francisco [is] a city that has come to be seen as an emblem of California’s staggering inability to counter the homeless crisis. Homeowners, businesses and local leaders in San Francisco are frustrated with visible signs of homelessness — which includes public streets blocked by sprawling tents and trash.

And now that Salesforce’s advocacy has gotten all San Francisco employers saddled with a special payroll tax supposedly to “solve” the homelessness problem, I hope that you weren’t counting on Salesforce itself to stick around to pay the tax. A few weeks ago it announced big layoffs, many concentrated in its San Francisco headquarters. From Market Watch, January 12:

Salesforce, Inc. . . . has disclosed a wave of layoffs at its San Francisco headquarters in a filing with the State of California. A total of 752 job cuts will become effective March 24. . . . The letter said the cuts . . . affect employees at three locations in San Francisco.

So what is San Francisco’s plan going forward? You guessed it: the Board of Supervisors is recently out with a new Report proposing to add approximately $500 million of additional annual spending on homelessness, on top of amounts already being spent. ABC7 News in San Francisco reports on February 2 that one San Fran supervisor is at least skeptical:

[The new Report] suggests spending nearly $1.5 billion over the next three years in addition to the money already expected to be spent. That comes out to about $70,000 per shelter bed per year, according to [Supervisor] Mandelman. "That just seems like way too much to me. It's more than other communities spend on shelter," said Mandelman.

Don’t expect Mandelman’s lonely voice to slow this one down. In San Francisco, faith in the efficacy of government programs and spending to solve social problems like homelessness is completely impervious to evidence.

Meanwhile, down in Los Angeles, the voters thought they got out in front of the homelessness issue with a somewhat different approach, approving a $1.2 billion bond issue back in 2016 to build supportive housing for the homeless. The referendum went by the name Proposition HHH. Here is a description of the initiative:

Los Angeles voters passed Proposition HHH in 2016, which enabled City officials to issue $1.2 billion in bonds for the development of permanent supportive housing units for people experiencing homelessness. In addition to funding permanent supportive housing development, the bonds can be used to help build temporary shelters. The passage of Proposition HHH is notable because it received the support of a broad and unique coalition of public and private stakeholders in LA, including labor unions and private and nonprofit housing developers.

And how did that one work out? Here is a table of the number of homeless in Los Angeles City and County going back to 2015, from something called the Los Angeles Almanac:

The numbers just march inexorably up and up year after year. Looks like the $1.2 billion approved by the voters in 2016 either failed to make a dent, or was counter-productive. So what is the latest? The City of Los Angeles agreed in 2022 on another round of massive spending to build housing for the homeless, this time $3 billion instead of the paltry $1.2 billion in the last round. This time, the agreement to spend the money is in the form of settlement of a lawsuit, which I guess circumvents the need to go back to the pesky voters for approval. From NBC News, April 1, 2022:

The city of Los Angeles has agreed to spend up to $3 billion over the next five years to house some of its 41,000 residents who are homeless, according to a proposed settlement announced Friday. . . . The settlement stems from a complaint filed in 2020 by a group of business owners, residents and community leaders that accused city and county officials of failing to address the desperate circumstances homeless people face, including hunger, crime, squalor and the coronavirus pandemic.

We’ll check back in another year or two to see how close this new funding has come to “solving” the homelessness crisis.