The Problem of Homelessness in America: Will Our Elected Officials Ever Stumble Across an Adequate Solution?

Written by Landlord Property Management Magazine on . Posted in Blog

By Daniel Yukelson, Executive Director of AAGLA

The homelessness problem has become more pervasive throughout California’s major cities and has now shocked our nation.  This condition will soon hopefully gain the attention of voters heading to the polls in the upcoming presidential election season.  So far, it has been a “joke” how the majority democratic leadership in Sacramento and our local elected officials serving city and county governments throughout the Southland have failed to put forth just one (let alone many) constructive solution to address homeless encampments, sanitary conditions on our streets, and the dire need for more shelters and “wrap-around” services such as mental health care.  Will our elected officials every understand the true causes of homelessness, address these causes, and address the problem head-on? Can our elected officials deliver the “right” solutions to homelessness, or will they continue to ride their favorite political wave and continue blaming the one segment of society that actually provides housing to people in our California communities, those of us that own and manage rental property?

There are numerous causes of homelessness, but elected officials never seem to acknowledge them, and that the solution to homelessness requires a multi-pronged approach.  Unless addressed strategically and quickly, we will see even more rapid growth in the homeless population here in California and the Southland. It seems that the most popular cause sighted by super Democratic majority electorate is the widening gap between wages and housing costs in California.  As a result, we hear solutions like higher minimum wage, increased government spending on housing, rent control, laws, eviction restrictions (e.g., “just cause” eviction), government paid-for attorneys (e.g., “right to counsel”), relocation payments, and now, even laws taxing property owners for vacant units.  Yet, more and more regulation, the old playbook of retreaded rent control and housing policies, have only caused more housing shortages by forcing us landlords to exit the rental housing business and by discouraging construction of new housing. These failed policies only caused the price of those few units that become available for rent to continue increasing.  It is a simple “supply and demand” thing! Remember your “Econ. 101” class!

Homelessness Defined

Homelessness is defined as living in housing that is below the minimum standards or lacks secure tenure. However, we most often see people as being homeless when they are: living on the streets, which is technically referred to as “primary homelessness” or moving between temporary shelters such as houses of friends, family and emergency accommodations referred to as secondary homelessness.  Tertiary homelessness refers to individuals living in private boarding houses without a private bathroom or security of tenure. The legal definitions of homeless varies from country to country, or among varying jurisdictions in the same country or region.

Poverty in America: A Brief History

Poverty has existed in some form in America since its founding in the late 1700’s.  By the beginning of the twentieth century, poverty was estimated at 40 percent of Americans as of the year 1900, which was largely due to two interrelated problems; (i.) an economy that was unable to sustain each of its citizens, and (ii) inequitable distribution of wealth – the middle class was virtually non-existent.  Back in the early 1900’s, there was no unemployment insurance, virtually no public welfare or pensions.

By the end of the 20th Century; however, things were different. By the early 1960’s, a welfare state was created out of the nation’s experiences during the Great Depression. Additionally, post-World War II America occupied a position of World dominance with the expansion of the American economy that dramatically raised living standards for most Americans. However, despite numerous policies aimed at reducing poverty among Americans, poverty still existed as a major economic problem.  By the early 1990s, the poor constituted 14.5 percent of the total American population – approximately 40 million citizens. Economists at the time noted that the “income gap” between rich and poor was the largest since at least 1947 when statistics started being kept. For the first time in United States history, America witnessed the emergence of a “class” of homeless people dating back to the mid-1970s.

Structural changes within the American economy over the last twenty years have also had a profound impact on the economic landscape for the “bottom” segment of American society as is evident in the shift from well-paying manufacturing jobs to minimum wage service jobs and temporary or part-time positions.  Some of this shift was caused by America’s integration into the world economy and various trade agreements entered during the last 30 years that have resulted in the job losses in the manufacturing sector. In addition, the labor market is increasingly segmenting workers by education and skills, and according to the Federal Department of Labor, approximately three-quarters of all jobs now require post-high school education for entry-level positions.  Accordingly, these structural changes have left more and more Americans behind and incapable of earning enough, even with multiple jobs.

The Extent of Homelessness

In 2005, an estimated 100 million (approximately 1 in 65 at the time) people worldwide were homeless and as many as 1.0 billion people lived as squatters, refugees or in temporary shelter, all lacking adequate housing. In the Western countries, the majority of homeless have been men (50%–80%), with single males particularly overrepresented.  As of 2015, the United States reported that there were 564,708 homeless people within its borders, one of the highest reported figures worldwide. These figures are likely underestimates as surveillance for and counting of the homeless population is challenging and highly inaccurate. In a recent count within the County of Los Angeles, the number of homeless people increased 12% year over year to almost 59,000, with reportedly more young and old residents and families on the streets.  The 2019 increase was registered just one year after the previous year’s count found a slight decrease in the county’s homeless population with approximately one-quarter of those counted stating they are recently homeless. More than likely, the accuracy of homeless counts taken during the previous year was lacking.

Homelessness counts taken between 2010 and 2017 apparently showed that the number of homeless people across Los Angeles County went from 38,700 to over 55,000 – an increase of 42%.  Many factors contributed to such large increases in homelessness, including Los Angeles County’s housing supply issues. Estimates made have concluded that Los Angeles County needs an additional 568,000 affordable housing units in order to meet the demand of its lowest-income renters.

New York has the largest population of homeless at 76,500 and the Bay Area is closely behind Los Angeles with 28,200 according to data collected by these cities.

The severity of homelessness fluctuates greatly by state with half of all people experiencing homelessness being from five states: California, New York, Florida, Texas and Washington.

What is Being Done About Homelessness?  Solutions Are Stagnated by Politics

California lawmakers have approved more than $2.0 billion in new state spending on housing and homelessness. That’s a huge number!  Although it is not sufficient. Most of this funding will target the state’s homeless population, including $650 million in grants for local governments to build and maintain emergency shelters and $100 million for wrap-around care for the state’s most vulnerable residents. That is roughly a 50% increase over the amount former Governor Jerry Brown approved to fight homelessness last year at the urging of California’s big-city mayors.  Another $500 million will go to quintuple the size of the state’s premier affordable housing financing fund, a long-sought after victory for low-income housing advocates who have sought an augmented funding source for years. The state Low Income Housing Tax Credit Program provides tax credits that subsidize the creation or rehabilitation of housing reserved for low-income residents.

Our state’s lawmakers and Governor Gavin Newsom have expressed their willingness to write sizeable checks to address the homeless situation, but unfortunately, the politicians are still fighting among themselves over who should receive the money and the “strings” that are to be attached.  Large-city mayors and lawmakers want homelessness grants directed towards the state’s largest 13 cities, while Governor Newsom wants to spread out the money to include counties. Major cities like Los Angeles, San Francisco and San Diego argue that the largest share of the state’s homelessness epidemic is concentrated there, right in these cities’ backyards, while smaller cities and counties argue they too have been dealing with increasing homeless populations and lack resources to adequately address their situations.   The homelessness problem is growing ever worse and somebody, our Governor perhaps, needs to “step-up” and act quickly to address the crisis head-on. The money must begin flowing.

This past January, Governor Newsom in another well thought out move (just kidding folks) proposed a polemic idea that would withhold transportation funds to cities that do not build enough housing. His plan did not take into consideration reforming the California Environmental Quality Act (C.E.Q.A.) or provide tax incentives to facilitate construction or make any attempt to streamline the entitlement process – the Governor merely said to California’s cities “do as I say.”  Fortunately, there’s no certainty Governor Newsom’s ill-conceived proposal will ever see the light of day. Another Newsom proposal would speed construction of homeless shelters by circumventing environmental laws – this too is uncertain.

Unfortunately, all the bond money and tax revenues being poured into homelessness will barely make a dent.  Once one considers that the cost to build an affordable unit from land acquisition to entitlements and through construction can cost approximately $550,000 to $600,000 per unit, $1.0 Billion only builds about 1,700 to 1,800 units.  With an estimated 55,000 plus homeless people on the streets in Los Angeles County, the cost to solve homelessness in Los Angeles County alone could be more than $25.0 Billion. Accordingly, Newsom, Garcetti, Bonin and City Council members, County Supervisors and our State Legislators need to do some “out of the box” thinking rather than “out of their minds” thinking here on how to solve the issue in the most efficient and expeditious manner.  Housing solutions like “micro” units, dormitory style construction with shared kitchen and living areas, motel conversions, density bonuses and permit streamlining, and fast tracking are all solutions that must be a part of the “solve for homelessness” equation.

This stagnated response to the homelessness crisis and housing production thus far has been no more than the “same-old blame game” by singling out rental housing as “price gougers’ and proclaiming that evictions are the sole cause of homelessness in California.  Sadly, rental housing providers are politically expedient for our politicians and as a result, we have seen a tsunami of tenant protections being thrown upon us with more to follow. 

Why Do We Have Homelessness?

What politicians always fail to acknowledge is the significance of mental illness and substance abuse in the homeless community.  A recent U.S. Housing and Urban Development report noted that 45 percent of homeless suffer from mental illness, and according to a University of Pennsylvania report, about 50 percent suffer from alcohol or drug dependence.  

There are many other causes of homelessness too.  California continues to “early release” our state’s prisoners into local communities without providing housing or supportive services.  Our state’s foster care system is broken and jettison’s those turning 18 and exiting the program directly to the streets without further means of support.  Many homeless on our streets today were once abused at the hands of a parent or spouse. For women, domestic violence is a leading cause of homelessness. In addition, mental health policies of limiting involuntary commitment and allowing state hospitals to discharge patients with nowhere to go have been a complete disaster.  Moreover, many experts attribute contemporary homelessness to the increase in dysfunctional and single, female headed households. 

Unfortunately, our politicians ignore the obvious causes of homelessness and always seem to place blame on rental property owners for political expediency.  For example, a report by Los Angeles Country lists the top causes of homelessness among families were: (1) lack of affordable housing, (2) unemployment, (3) poverty, and (4) low wages.  We’re #1 on the list! Yet, very sadly, each of these four reasons are mostly caused by poorly thought-out and implemented housing policies and other regulations that have led to shortages of affordable housing and stifled job and wage growth.  And even more sadly, Los Angeles County ignores the main reasons people become homeless: drug and alcohol abuse, mental illness, lack of supportive services, and domestic violence. As a further example, a report by several large city mayors omits entirely that substance abuse is one of causes of homelessness let alone the biggest cause.  In fact, in an entire 106-page report prepared for mayors Kevin Johnson (Sacramento), Stephanie Rawlings-Blake (Baltimore), Helene Schneider (Santa Barbara), and A.C. Wharton (Memphis) never once mentioned the word “drugs” or “alcohol.” But the mayors’ report did cover “rent burdened” renters and evictions as a primary cause of homelessness.

Los Angeles’ Mayor, Eric Garcetti, now facing a recall campaign due to his mishandling of the homelessness crisis, has pledged huge increases in spending to solve the issue. Los Angeles taxpayers should be aware that one of Mr. Garcetti’s proposed uses for the money is to pay homeless people to pick up their own trash.  Liberal Los Angeles City Councilman Mike Bonin, who is facing a major homelessness crisis in his Council District that includes the Venice neighborhood, also has shared some brilliant ideas (just kidding again folks) on how to address the issue: “So if somebody is living on the street, they have to go to the bathroom, so let’s provide some toilets,” he said. “If somebody is living on the street, there is trash that they will generate, so let’s provide trash receptacles.  If somebody is living on the street, let’s provide showers.” You cannot make this stuff up! More recently, Councilmember Bonin has proposed taxing vacant units to raise money for homelessness – Mr. Bonin is obviously sniffing model glue again as he once did before he shut town two highly trafficked lanes along the ocean in Playa Del Rey.

Some communities throughout the Southland have begun to take matters into their own hands by creating task forces made up of volunteers committed to compassionately address homelessness issue.  It is these private, local solutions being supported by local contributions that seem to work. Smaller cities such as Beverly Hills and Santa Barbara, or local neighborhoods such as Koreatown in Los Angeles deploy trained community liaisons that patrol the streets and assist the homeless in getting off the street and into shelters.  Task force members and trained community liaisons’ approach and talk to homeless people to assist them and provide compassionate, effective services, and to assist them with finding housing and locating family members.

So far, the Democratic presidential candidates have been avoiding the topic of homelessness crisis.  However, as the crisis continues, these candidates will soon be forced provide answers for our state’s failed policies.  In June, President Donald Trump issued an executive order that establishes a White House Council to address housing affordability issues that will be chaired by Secretary of Housing and Urban Development, Ben Carson.  The White House Counsel mission will focus on “eliminating regulatory barriers to affordable housing.” There is no telling what impact President Trump’s executive order will have on the current homelessness crisis.

Final Thoughts

One of the central issues of homelessness in America is the need for “goal setting” of policies that are aimed at dealing with homelessness in America and throughout California and identifying the most effective methods for achieving the goals.  Our elected officials should look at what is being done in the City of Austin, Texas, which created a homelessness task force that meets twice per month, and after several meetings recruited two homeless individuals to serve on the task force.  The two homeless individuals, having had the unfortunate experience of living on the streets, offered incredible ideas. As a result of this type of “out of the box” thinking by the City of Austin, the city has created some very interesting solutions that are quickly being passed by the City Council and being implemented, including providing soap, toiletries and cosmetics to people living on the streets; providing locked storage lockers in areas where the homeless reside on streets so that the can secure their belongings while at appointments such as seeing a doctor or in many cases attending a job interview; and providing locations for the homeless to receive mail to access to computers.

Ultimately there is no “right” answer to the diverse causes and needs of the homeless population, and any significant progress in resolving them depends upon a collective response on the part of every American citizen – not by singling out one segment of our population: “Landlords.” What is needed is for our elected officials to recognize the root causes of homelessness and the creation of programs that address these causes head-on, and for social activism in our  local communities to take charge to address the problem of homelessness.

Daniel Yukelson is currently the Executive Director of The Apartment Association of Greater Los Angeles (AAGLA).  As Certified Public Accountant, Yukelson began his career at Ernst & Young, the global accounting firm, and had served in senior financial roles principally as Chief Financial Officer for various public, private and start-up companies.  Prior to joining AAGLA, Yukelson served for 12 years as Chief Financial Officer for both Premiere Radio Networks, now a subsidiary of I-Heart Media, and 3 years for Oasis West Realty, the owner of the Beverly Hilton and Waldorf Astoria Beverly Hills where he was involved with the development and construction of the Waldorf.

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