Intro: (Edward Ring) Everything could be perfectly legal, you know, you can do something that’s corrupt, and it’s still legal. You know, there are moral issues that govern how this money should be spent that, you know, you don’t have to be breaking any laws, but you’re still doing the wrong thing. I mean, what’s the goal, the goal is to get these people under a roof and get them treatment, help them, help them get back on their feet, help them overcome their addictions or their alcoholism, help them manage their mental illness. That’s the goal.
(Siyamak Khorrami) How do you feel when you see people living on the streets? Have you ever wondered who these people are and why we are not helping them? In fact, about half of the nation’s homeless population live in California. My guest today, Edward Ring, is the co-founder of California Policy Center, who has done extensive research on this issue. He will help us understand what the root cause of homelessness in California is, and how we can solve this problem.
Siyamak Khorrami: Welcome to California Insider.
Edward Ring: Thank you for having me.
Siyamak: We see a lot of homeless people, and who are these people that are on the streets?
Edward: You know, that’s an interesting way to frame it because you can’t necessarily characterize them in one box. The homeless, if you talk to professionals that are in the, working in homeless shelters, typically they’ll say there’s three groups. I heard this characterized by someone in San Diego who has a successful program in his homeless shelter. It’s a privately operated homeless shelter. He said there are the can nots, the will nots, and the have nots. And very rough numbers. He’d say they divide up where you’ve got about 40% have nots. And these are people who, you know, for some reason or another, a medical catastrophe or loss of a job, something happened And they’re not economically able to take care of themselves. That’s about 40% of the homeless population. And it’s the easiest segment to help, because these are folks that if they get some help, if they get a hand, get some job training, some kind of opportunity, get some shelter for a while, they’ll usually get back on their feet. That’s about 40% of the homeless in California. The other two categories were classified as will not and cannot, the will nots are people who are to some extent homeless by choice, there’s a lot of drug addiction, a lot of alcoholism. You know, in in Venice Beach, which is the area that I studied in particular, you have a much higher percentage of them because they like it there. They like being on the beach. The other 20% is the most problematic, those are the cannots, and these are typically mentally ill people who really probably should be in mental hospitals.
Siyamak: So it makes sense some people live paycheck to paycheck and they may have a bad luck or bad situation and then they end up losing everything.
Edward: That’s correct. And you know, I think in California the number of have nots may be a little bit overstated. What happens, and this isn’t generally acknowledged in reports on the homeless, is the have nots find shelter. The people who are down on their luck but willing to try to figure out how to get back on their feet and capable of doing that, they still get counted among the homeless. If you don’t have a mailing address, you are considered you know, in the eyes of the census and so forth, to be homeless, but they live in cars, a lot of them are RVs. A lot of them live with friends or they find shelter, they live in homeless shelters. But the ones who are on the street are typically the other categories of homeless, the will nots and the cannots, the mentally ill people, the people that have succumbed to alcoholism and drug addiction. So, you know, when you have a portrait of the homeless, you have to recognize that the ones that we’re coping with that are, you know, suffering on the sidewalks are not typically the ones that have had an economic calamity of some kind. You know, and when you talk about what’s causing that, and I’m sure it carries over to everyone who’s homeless to some extent or another, then you get into the other problems in California, which even though we’re such a prosperous state, we by far have the highest cost of living and it carries over into everything, but especially into the cost of housing.
Siyamak: And are we not putting in enough resources behind this? Is it something that we have ignored, as we don’t want to pay for it? Or is it something that we have worked on?
Edward: Yes, we’re definitely spending enough. We’ve spent billions of dollars to try to help the homeless in California. But we’ve spent that money in all the wrong ways. If you look at again, the the case study I did was Venice Beach, and they’re building a shelter on a three-acre parcel in Venice Beach, that’s a former bus depot. That shelter is going to cost $16 million to put 154 beds in the shelter. So that’s over $100,000 a bed. But the city, it’s worse than that, though, because the city could sell that land, just, well there’s some services. It’s a shelter, though. It’s not, they’re not going to have apartments and so forth. There’s going to be beds. I don’t know if they’re bunk beds or just beds in a row, and it’s a big tent. It’s supposed to last three years. It’s actually temporary. Well, it’s one of those semipermanent tents, you’ve seen the, they’re getting pretty good at building these tent structures. But you’re talking about spending $16 million to provide temporary shelter to 154 people, which again, is over $100,000 per bed. Now, I don’t know about you, but I could imagine ways to provide shelter for less than $100,000 a bed. And then there’s a pastor in Los Angeles. I can’t remember his name, but he’s been very outspoken about this. He’s been able to come up with shelter at a small fraction of that amount. And it gets worse because, you know, now let’s get into some of the laws because these laws affect the cost. There was a court case, Jones versus the city of Los Angeles in 2006. And that court case found in the Ninth Circuit, that you couldn’t arrest someone for vagrancy unless you could provide them permanent supportive housing. And that’s not even a shelter. That’s an apartment. So, for example, the citizens of Los Angeles in 2016, passed proposition HHH. Bond measure HHH was a $1.2 billion bond to build homeless housing, you know, supportive housing. Well, that’s just one example. And that money’s already been used up. It’s three years later. I think the first units are expected to be ready later this year. Now, I don’t know if that slipped because that report was over the summer. And they said by November, they’ll have the first units, but they’ve only built, when it’s all said and done, they’ve only built units at $550,000 per unit. That’s the average cost. So because they get matching funds, the developers get matching funds from other sources, that actually translate if you did the math, that would only be about 2000-2500 units, they’re actually they think they’re going to be able to build about 7000 units. Because the developers get tax credits that they can use in other enterprises. They get funds from other sources. But the cost to society, because the tax credit also costs the taxpayers money, is $550,000 per unit. They’re wanting to build on a parking lot in Venice Beach. This is another city-owned property in Venice Beach, it’s worth $100 million. It’s three acres of land, there’s actually been bids presented to the city to buy this land for $100 million. But the city instead wants to put permanent supportive housing on these three acres, and they’re going to spend $105 million on the structure. And that’s the low estimate because there’s a high water table, there’s concern about storm surges in the future. It’s a block from the beach. So they’re they’re going to really have to overbuild this thing to make sure it can withstand some of these, you know, seismic concerns and storm concerns. You’re talking about spending $105 million for what will amount to 140 apartments. So that’s $750,000 per apartment, but the land is worth $100 million. So you’re really looking at about $1.3, $1.4 million per apartment. So look at Venice Beach with those two projects, you’re spending $320 million roughly, I think it’s, $321 is the latest estimate, $321 million to get about 250 people under a roof. That’s insanity. That’s absolute insanity.
Siyamak: And how many people are homeless in Venice Beach?
Edward: Venice Beach, they estimated to be over 1000 people.
Siyamak: So that only solves a small percentage.
Edward: For $300 million. And you know, the city argues well, you shouldn’t be taking into account the value of the land. Okay, we’re still looking at $125 million to get about 250, 300 people, you know, they say they’re not going to double up in those apartments. So if that’s true, if they’re not going to, you’re looking at less than 300 people for, you know, $125 million. But why wouldn’t you take into account the value of the land?
Siyamak: So it looks like we’re spending a lot of money to solve a small portion of the problem the wrong way?
Edward: Yes, that’s very well put.
Siyamak: And so we’re willing to pay for it. We’ve already as citizens of California, residents of California, we’ve decided that we want to pay for it. We care about the homeless people. And we want to solve this problem. Somehow it looks like there is, is there special interest behind these initiatives, or there are groups that are making money from this?
Edward: Well, you know, There’s a, there’s a phrase that was coined about four or five years ago, called the homeless industrial complex. And people that I’ve talked with, especially in Los Angeles who are watching what the city council does, they’re watching who’s making contributions to the city council members, you know, and they’re reading these contracts and really trying to study this and understand what’s going on, will confirm that we really do have what could be called a homeless industrial complex, which is a, you know, a coalition, a informal coalition of special interests that benefit greatly from this. You have nonprofit developers, and one of the things that, you know, it’s not really acknowledged, it’s beginning to be acknowledged, is the power of nonprofit organizations these days, you know, because you have these very, very successful billionaires that are putting billions of dollars into nonprofits, and they are agenda-driven nonprofits, you know, all over the world, especially in the United States. So when you talk about corporate power, it’s a mistake to think that it’s just government and corporations. There’s also this nonprofit sector now that’s become extremely powerful. And what’s interesting, and I’d really like to learn more about this, is a lot of these nonprofit institutions have for profit subsidiaries, which is fascinating. I mean, there’s a lot of work that needs to be done to dig through this. Because what you’ve got is, you know, you’ve got nonprofits, which don’t have caps on salary. They’re allowed to keep retained earnings. They’re allowed to have for profit subsidiaries, and they’re the ones that are developing all of this housing for the homeless, you know, and you gotta ask yourself, why does it cost $105 million? This is a fact, this is in the proposal. Why does it cost $105 million to build 140 apartments? What’s going on? You know, they’re getting relief from setback requirements. So they can build these things right up to the curb, which no other type of development is allowed to do. They’re giving relief from minimum height requirements, density requirements. They don’t have to have parking. They don’t have to have the required number of parking places. And they’re exempt from California’s Environmental Quality Act review, which, you know, you can argue the sequel, the California Environmental Quality Act is abused, you can argue that it’s goes too far. And you’d probably be right. But why are we exempting just this segment, you know, of development from CEQA and leaving everyone else subject to CEQA. So these nonprofit groups are getting tremendous benefit from using this public money to very inefficiently build public housing, which you know, we’re not supposed to call them housing projects. Because we know what happened with housing projects in the 60s. We’re supposed to call them permanent supportive housing or municipal housing. I think community housing is one of the new euphemistic terms to describe housing projects. But they failed in the past.
Siyamak: So it looks like special interest groups like these nonprofits and developers and government organizations are working together. There may be some level of corruption in this process.
Edward: Well, you know, I don’t have a smoking gun. But it seems to me that when the city councils in Los Angeles are just cramming these projects down the throats of the council districts where everywhere they go, the residents are against this, something’s wrong. And so, you know, you should be tracing the campaign contributions, you should be following the money. But you know, you have this alliance of service providers who go in and operate these things afterwards, and nonprofit development companies who build them, and then the city council members and the government bureaucrats who administer all of this? And you’ve got all this money that’s being just thrown at this issue, and they’re getting that money. And you have to ask the question, I mean, everything could be perfectly legal, you know, you can do something that’s corrupt, and it’s still legal. You know, there are moral issues that govern how this money should be spent that, you know, you don’t have to be breaking any laws, but you’re still doing the wrong thing. I mean, what’s the goal, the goal is to get these people under a roof and get them treatment, help them, help them get back on their feet, help them overcome their addictions or their alcoholism, help them manage their mental illness. That’s the goal. And if you’re only getting a fraction of these people help, and you’re not even giving them the help they need. Well, you’re ignoring 90% of the people, but the 10% of the people that you’re supposedly helping, you’re just giving them a roof. You’re not giving them treatment. Imagine how much of that money could be used for treatment. If we were building the roofs for less, you know, why aren’t we going out to industrial parts of Los Angeles City and County or even rural parts of Los Angeles City and County and building bigger facilities where they can go and they can be treated according to what’s the matter? You know, if you’re an alcoholic, you go to the alcoholic shelter and you’d get treatment. If you’re mentally ill you’d go there and get get help. So, none of that, it doesn’t appear that any of that’s being done.
Siyamak: How can we solve this problem? What are your thoughts on that?
Edward: There are several things that have to happen. The Jones versus the city of Los Angeles requires permanent supportive housing. You can’t arrest someone for vagrancy unless you can offer them a place to live. That probably should be either overturned, or the definition of what a place to live is needs to be changed. So that needs to be challenged in court and it needs to be clarified. But at the same time, California passed a couple of propositions that sounded really good at the time. And one of them was Prop 47, which was approved by voters in 2014. And Prop 47 was, the goal of Prop 47 was to stop over-sentencing. And that’s important. I mean, there were people that were doing years in prison for minor crimes. But what happened was Prop 47 went to the other extreme, and what it did was downgrade felonies for drug possession and theft up to $950, turned those into misdemeanors and more significant than that, is it kept them as misdemeanors, even for repeat offenders. And as a result, there’s really no practical benefit to arresting somebody for stealing something up to $950 in value, or for having what used to be felony drug possession. We’re not just talking about marijuana, we’re talking about harder drugs as well, if those so called drugs are for your personal use. You’re not selling them, then it’s not a felony. And this can be over and over again. So the police call this law, the catch and release law. And they’re very disappointed in it, because they can’t go to people that are disrupting, you know, the neighborhoods in places like Venice Beach or downtown Los Angeles or San Francisco. Property crimes in San Francisco are through the roof. You know, I don’t have the exact statistics on that, but it’s out of control. Because for example, a cell phone is worth, typically less than $950. So you can just snatch people’s laptops, you can snatch their cell phones, or you can steal their catalytic converter out of their Prius, because all of those things are great, you know, to sell on the black market because, while they’re not worth more than $950, they’re usually worth several hundred dollars. And so, you steal those and you can support your your lifestyle, whatever it is on the street. So this is something that’s got to change, Prop 47 has to be rewritten.
Siyamak: And you can do that you can steal today and you can steal tomorrow and you can steal the day after.
Edward Ring: It’s a misdemeanor every single time.
Siyamak: You can be doing it. You can have a lifestyle out of it.
Edward: Sure because it’s just a misdemeanor, and if you can’t pay the fines, you don’t go to jail. So you’re really kind of immune from prosecution in many respects. Another thing that has to change is, this started with what’s called the Lanterman Petris Act of 1967 that was a state law passed in California, which again was very well intentioned, and something had to be done because until that law passed, it was too easy to incarcerate someone for mental illness. You know, and even today, there’s this growing realization that it’s much easier to diagnose someone with mental illness than to evaluate somebody who’s been diagnosed with mental illness and say they’re no longer mentally ill. And people get stuck in psychiatric hospitals and they never get out. You know, and the movie, One Flew Over the Cuckoo’s Nest in the 70s, dramatized that problem. And so there’s been a steady progression towards giving mentally ill people more rights, and that’s important, but it’s gone, just like Prop 47 has gone too far. It’s gone too far to the other extreme. And now it’s almost impossible to get people who are obviously mentally ill incarcerated. There are situations and again, I’ve heard about this, you know, from personal recounts, from people in Los Angeles, they have family members who have the means to put them in private mental hospitals where they can get the best treatment. And the police are forbidden from arresting them and incarcerating them, because they’re not displaying enough of the signs of mental illness to get themselves committed. And there’s been attempts to change the laws to make it a little bit easier so that somebody who’s, you know, hearing voices in their head and screaming, you know, just I mean, you may have seen it, I have, you know, these are troubled, you know, these are seriously mentally ill people, and you have to wait until they’ve tried to harm themselves or somebody else. And it’s not even that, that sounds like well, I don’t want to wait till that happens, but it’s actually is worse than that. They have to do it repeatedly. And only after they’ve done it a certain number of times within a finite period of time, because then the clock starts over, can you actually commit them. That’s got to change. So changing Prop 47, which downgraded crimes, changing the laws that require, that determine how you can incarcerate people who are mentally ill. And changing the conditions or the requirements for what constitutes supportive housing, so that it doesn’t have to be so expensive. I think those are the things that could help fix this. But the whole emphasis on housing first is flawed. One of the biggest, you know, moral failures is that idea that if we give them housing, they’ll get better. You can’t just give them housing. You have to give them treatment, and if you spend all your money on housing, you have no money for treatment. One of one of the examples that we’ve seen, and this isn’t in California, this was actually in Seattle. But this was written about by Chris Rufo in City Journal where he’s done some tremendous stories on the situation up in Seattle. And he talked to shelter operators, who in the beginning, were, you know, very idealistic about trying to house and treat the homeless, but as the organization grew, and as the funds became more and more widely available, and as you know, it’s ironic, but as the regulations that are intended to govern how we help the homeless became more strict and more restrictive, they found that there became this sort of bureaucratic momentum, where it was more about how do we get the next grant and how do we expand, and it became sort of a self perpetuating entity with its own special interests. And the emphasis on helping the homeless started to become secondary. Now that’s not happening to everyone who’s doing this, but it’s a good example of how we’ve got this giant machine we’ve created, you know, we’ve thrown billions and billions of dollars at helping the homeless, and it’s certainly enough money if the money was being applied properly. But again, you develop, whenever you have that much government money pouring into a goal, you risk creating some kind of complex, you know, there’s some kind of informal coalition of special interests. And that’s definitely what’s happened with the homeless in California and elsewhere in the country, is you have the so called homeless industrial complex of nonprofit developers, and service providers and the government.
Siyamak: Essentially they’re taking away from the homeless. The benefits that are supposed to go to the most vulnerable people in this society, and they’re taking from that?
Edward: Well, they are. And you know, the sad thing is they’re doing everything by the book. You know. So while you can say it’s morally corrupt, you cannot say that it’s legally corrupt. I mean, maybe something’s going on that’s legally corrupt. But that’s not, you know, even if that were true, there’s a bigger issue, which is a moral issue. Why are we spending, you know, again, I comeback again and again, to the example in Venice. Why on earth are they building an apartment complex that costs $105 million to get 140 people a roof over their heads? That’s crazy.
Siyamak: While there are thousands that need that.
Edward: There’s 60,000 street homeless in Los Angeles, and there’s 130,000 in California, and you’re never going to solve that problem if you just throw money at very expensive housing. There has to be solutions that involve, you know, things that sound unpleasant unless you really carefully examine the moral choice. Are we going to have a tent city in some industrial part of Los Angeles, where we can get people into shelter for let’s say, $5000 or $10,000 a head, and then all that money could be used to treat them. But instead, we’re building luxury. I’m not saying the apartments are luxury apartments, but it’s a luxury to be building something on the most expensive real estate on Earth. That’s crazy. And the mentality that just giving them a roof is going to make them get well is dangerous. It’s dangerous not only because it’s wrong, and it means they don’t put money into treatment, but it’s dangerous because the, one of the other, I guess I would call it conventional wisdoms about how to do this, is because they don’t want to make larger facilities in inexpensive areas. They feel like every council district has to have its share of homeless shelters. And so they’re they’re doing everything they can, for example, every council district in Los Angeles, Sherman Oaks, Koreatown, San Pedro, downtown Venice, they all have a couple of big projects, but then they’re also, they’re purchasing homes. And they’re turning those into group shelters in the middle of residential neighborhoods. Now, that’s problematic. I mean, if you carefully screen and you make sure that only people who are, you know, not drug addicts, they’re not convicted of property crimes. They’re not, they don’t have substance abuse problems or mental illness problems, and you put them into the neighborhoods, it’s still problematic, because now you have people that are paying these incredible property taxes. They’re paying mortgages on $800,000 starter homes, you know, and they’re struggling and working so hard to live in a safe neighborhood, and right next door, their taxes are paying for somebody who was living there on a subsidized rent. And maybe they deserve that. But you can’t expect that to just be a panacea. You can’t expect to do that all over town and not have some kind of social disruption.
Siyamak: So Ed, thank you so much for being a California Insider.
Edward: You’re welcome.