Exposing the Homeless Industrial Complex

Exposing the Homeless Industrial Complex
Homeless people wait to be checked into a hotel room in Venice Beach, Calif., on April 26, 2020. (Apu Gomes/AFP via Getty Images)
Edward Ring
Earlier this month, a guest column in the San Jose Spotlight defended efforts by homeless nonprofits to end homelessness in Santa Clara County. The writer, Ray Bramson, is the chief impact officer at the nonprofit Destination: Home, a tax-exempt organization that collected more than $62 million in contributions and grants in 2020 (pdf). The CEO of this organization made a reported $335,404 that year, and one of the directors made a whopping $754,871, of which a hefty $693,186 was “base compensation.”
Let’s suppose these salaries are justifiable, since it isn’t unusual for an organization with revenue of $62 million to have executives who make that much. The problem is that this organization is the product of perverse incentives. The management of public space has been taken over by what has now become a homeless industrial complex. Organizations like Destination: Home won't flourish if homelessness is eliminated. Instead, like many other prosperous nonprofits and heavily funded government programs, the more they fail, the bigger they get.

In his column, Bramson attacks his critics. He writes: “The rhetoric machine likes to foment discord with the general public. It’s either that nothing is being done or it’s being done the wrong way. We need to criminalize, blame the individual for their shortcomings, complain about costs, or find a way to protect the community first, which almost always means putting the needs of the most vulnerable people last.”

Well, in deference to Bramson, plenty is being done. But it’s being done the wrong way. Earlier this year, Santa Clara County announced a plan to spend $75 million to build 758 apartments for the homeless. That’s $100,000 per unit, which, believe it or not, is considerably less than many other counties and cities in California are spending. Then again, it isn’t clear what matching funds may not be included in that total. But when the response to homelessness is to spend millions, or billions, to build subsidized housing, these homeless advocates are missing a more fundamental point: The doctrine of “housing first” is flawed.
The Housing First model is defined by the Department of Housing and Urban Development (HUD) as “an approach to quickly and successfully connect individuals and families experiencing homelessness to permanent housing without preconditions and barriers to entry, such as sobriety, treatment or service participation requirements.”

It's difficult to imagine an approach that's more naïve, more corruptible, or more counterproductive. When it comes to giving people free housing with no conditions, the more you build, the more people will come. Free housing is not only a magnet for the indigent, but it also breeds indigence. And yet Housing First has been the governing principle in homeless policy for nearly 20 years—precisely the period in which rates of homelessness have exploded.

California’s homeless industrial complex isn't populated by idiots. They ought to know that if you don’t put behavioral conditions on subsidized or free housing, you will never stop attracting people to avail themselves of your service. In some cases, the offer of free housing will even corrupt the character of individuals who are teetering between becoming unproductive and letting the system take care of them, or trying harder to maintain sobriety and personal independence.

When Bramson accuses critics of the homeless industrial complex of being a “rhetoric machine” that likes to “foment discord,” he’s being more than a bit hypocritical. Whenever public meetings are held about where to site subsidized apartment buildings in peaceful neighborhoods, objections from the local residents are overwhelmed by well-organized and belligerent homeless activists who don’t live there, who shout them down, calling them privileged, racists, and NIMBYs (an acronym that stands for "not in my backyard"). The comments that followed Bramson’s column, overwhelmingly skeptical, offer an authentic perspective from the community:

“How about actually treating severe mental illness and substance abuse as opposed to putting chronically homeless people in the wrong programs with the wrong interventions while not addressing root causes? This is the Housing First model defined—and people like you aimlessly support it, while never questioning why the issue has gotten worse, a lot worse, over the last 10-years,” one commenter, who goes by Time to Be Honest, writes.


“The homeless around my home have dehumanized themselves by defecating in my yard and bushes, burning down tree after tree, stealing water and power from my porch, creating and leaving piles of putrefying waste everywhere, screaming and yelling constantly, parading around without pants, etc.," a commenter named Bob writes. "I’d be more than happy to pay taxes to reopen the state’s mental health system, but no politician is trying to do so. The theory that more housing will reduce homelessness is laughable when one actually comes into contact with the homeless people currently occupying all the encampments. These people don’t want housing, they want to just be left alone to do as they please.”

These comments are evidence of a failed scheme. Housing First costs too much, takes too long, creates its own inexhaustible demand, corrupts individuals who might otherwise get their life in order, cannibalizes funding for mental hospitals and shelters, and it has created a monster—the Homeless Industrial Complex—a coalition of organizations in California that have already collected and spent tens of billions of dollars to execute a scheme that has only made the problem of homelessness worse.

It's an opportunistic lie for defenders of Housing First to claim that critics of the Homeless Industrial Complex don’t care about the less fortunate, or that these critics haven’t done their homework. In speaking with people running homeless shelters from San Diego to Sacramento, and asking them what has to be done, every one of them ultimately gave the same answer: At least two-thirds of the homeless are either alcoholics or drug addicts, or are mentally ill, and they must be treated, and the only way to treat them is to incarcerate them.

Michael Shellenberger, a progressive activist who has done extensive research into the homeless crisis in California, has made this clear in countless articles as well as in his book “San Fransicko.” In a blog post in May, he writes, “Three times more homeless die under ‘Housing First’ than ‘Shelter First’ policies."

Shellenberger is right. For their own sake, homeless people need to be moved off the streets, sorted according to their afflictions, and placed in shelters. These shelters can be located on less expensive real estate, and the money saved can be used to treat them.

There's nothing compassionate about letting substance abusers and psychotics live on the street. Housing First, a policy cooked up by HUD during the Obama administration, has created what's now an extremely profitable scam for public bureaucrats, powerful nonprofits, and politically connected developers. But it isn't working for anyone else.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.
Edward Ring is a contributing editor and senior fellow with the California Policy Center, which he co-founded in 2013 and served as its first president. He is also a senior fellow with the Center for American Greatness. Ring is the author of two books: “Fixing California: Abundance, Pragmatism, Optimism” (2021) and “The Abundance Choice: Our Fight for More Water in California” (2022).
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