For $25 Billion you might cure homelessness, but also, you might not
Trying to Calculate How Many Billions it will Take to "Solve" Homelessness Pt. 1
After the homeless subway performer Jordan Neely was killed by former Marine Daniel Penny, there were protests, fundraising, a redefinition of “threats”, and a common lamentation. Many were mourning not just Jordan Neely but a society that could have allowed a vulnerable person like Jordan Neely to fend for himself to such a cruel end.
The thinking was that if we, as citizens had addressed the real problem, then the mentally ill homeless man who was hungry and thirsty would have been a housed, well fed, slaked man in therapy causing no discomfort to anyone.
“If we cared”, the complaint went, “We’d solve homelessness.” But homelessness is a seemingly intractable problem that, to one extent or another, besets every society. On the other hand, other societies do not have the degree of homelessness and maltreatment of the mentally ill as the United States does. So the questions are, is a cure to homelessness really possible, and if so how much would it cost?
HOMELESSNESS ELSEWHERE
Norway has rate of homelessness of about half as that of the United States. Denmark has between 5000 and 15,000 homeless, but many of them self-identify as choosing to live nomadically. Sweden, a country of 10 million, is home to 4500 homeless living on the streets or in shelters, contrasted with New York, a city of 8 million which had had 81,461 on the day I posted this, though 30,000 of them were migrants bused into the city from southern states. However, as measured by rate, not total number of homeless, Sweden is much worse off than the United States.
Canada, not a full-blown socialist-democracy, but one with generous national health care, has a homelessness problem somewhere between the Nordic countries and the United States. Toronto is experiencing a homelessness crisis, as they define it, meaning in the context of that city of 3 million people, there were over 10,000 actively homeless in the last three months. So not as bad as in the U.S., but not good, and not “solved”.
As in the United States, drug addiction and high housing prices conspire to exacerbate the problem. Even in Europe, where Fentanyl has not yet penetrated, mental health issues and substance abuse are prevalent among the homeless.
What To Do About It
As the evidence shows, homelessness is hard to completely eradicate, but to make some inroads the interventions that are most needed aren’t counseling, jobs. or vouchers. The homeless need homes. Not shockingly, the price of housing is enormously high in the states and cities that constitute the majority of the U.S. homelessness problem.
Nothing $1Million, per homeless person, won’t solve
Accounts out of California of the cost of building a unit of government-funded housing lead with the scare price of...
Those seven particular boondoggles might be the exception, but studies reliably show that each unit of housing in the state with the most homeless costs well over half a million dollars. This is a particularly worrisome reality because California accounts for 30% of the homelessness population of the United States
The state recently had a budget surplus which saw Governor Gavin Newsom dedicating $1billion to tackle the problem. It was entirely insufficient. Now the state’s mayors are asking for $2 billion per year, and the largest advocacy organization is asking for $3 billion every year. That budget surplus by the way, is now a big deficit.
That’s clearly a lot of money, yet also wholly inadequate. California has an unsheltered homeless population of roughly 115,000 and a total homeless population of 171,000 according to HUD’s annual homeless assessment report. The $3 billion figure works out to $17,000 per homeless person, in a state where building a unit of housing for the homeless is touching 7 figures.
So What’s it Really Cost ?
The best estimates are that it will cost over $8 billion, per year to tackle homelessness in one state.
This works out to a bit more than $45,000 a year, per homeless person, which is a lot of money but also is a realistic estimate given all the costs we’ve discussed. Since California accounts for 30% of the national homeless population a back-of-the-envelope would indicate that about $25 billion a year is a realistic price tag to actually have a chance to tackle homelessness. $25 billion is about a quarter of the yearly expense of the war in Afghanistan, which makes an aggressive homeless initiative sound worth it because we mostly have come to believe that the war in Afghanistan was wasted money. But it’s also more than the total expense to educate all the K-12 students in the states of Alabama, Arkansas, Kentucky, and Mississippi combined.
But is it fair to base the national number off of California estimates? Fortunately, not all municipalities are as expensive as Los Angeles and San Fransisco. Unfortunately, the place with the countries most intractable homelessness problem is even more expensive.
In the next Pesca Profundities…