The Homeless Crisis Is Getting Worse in America’s Richest Cities

(Bloomberg Businessweek) -- It was just after 10 p.m. on an overcast September night in Los Angeles, and L. was tired from a long day of class prep, teaching, and grading papers. So the 57-year-old anthropology professor fed her Chihuahua-dachshund mix a freeze-dried chicken strip, swapped her cigarette trousers for stretchy black yoga pants, and began to unfold a set of white sheets and a beige cotton blanket to make up her bed.

But first she had to recline the passenger seat of her 2015 Nissan Leaf as far as it would go—that being her bed in the parking lot she’d called home for almost three months. The Late Show with Stephen Colbert was playing on her iPad as she drifted off for another night. “Like sleeping on an airplane—but not in first class,” she said. That was in part by design. “I don’t want to get more comfortable. I want to get out of here.”

L., who asked to go by her middle initial for fear of losing her job, couldn’t afford her apartment earlier this year after failing to cobble together enough teaching assignments at two community colleges. By July she’d exhausted her savings and turned to a local nonprofit called Safe Parking L.A., which outfits a handful of lots around the city with security guards, port-a-potties, Wi-Fi, and solar-powered electrical chargers. Sleeping in her car would allow her to save for a deposit on an apartment. On that night in late September, under basketball hoops owned by an Episcopal church in Koreatown, she was one of 16 people in 12 vehicles. Ten of them were female, two were children, and half were employed.

The headline of the press release announcing the results of the county’s latest homeless census strikes a note of progress: “2018 Homeless Count Shows First Decrease in Four Years.” In some ways that’s true. The figure for people experiencing homelessness dropped 4 percent, a record number got placed in housing, and chronic and veteran homelessness fell by double digits. But troubling figures lurk. The homeless population is still high, at 52,765—up 47 percent from 2012. Those who’d become homeless for the first time jumped 16 percent from last year, to 9,322 people, and the county provided shelter for roughly 5,000 fewer people than in 2011.

All this in a year when the economy in L.A., as in the rest of California and the U.S., is booming. That’s part of the problem. Federal statistics show homelessness overall has been trending down over the past decade as the U.S. climbed back from the Great Recession, the stock market reached all-time highs, and unemployment sank to a generational low. Yet in many cities, homelessness has spiked.

It’s most stark and visible out West, where shortages of shelter beds force people to sleep in their vehicles or on the street. In Seattle, the number of “unsheltered” homeless counted on a single night in January jumped 15 percent this year from 2017—a period when the value of Amazon.com Inc., one of the city’s dominant employers, rose 68 percent, to $675 billion. In California, home to Apple, Facebook, and Google, some 134,000 people were homeless during the annual census for the Department of Housing and Urban Development in January last year, a 14 percent jump from 2016. About two-thirds of them were unsheltered, the highest rate in the nation.

At least 10 cities on the West Coast have declared states of emergency in recent years. San Diego and Tacoma, Wash., recently responded by erecting tents fit for disaster relief areas to provide shelter for their homeless. Seattle and Sacramento may be next.

The reason the situation has gotten worse is simple enough to understand, even if it defies easy solution: A toxic combo of slow wage growth and skyrocketing rents has put housing out of reach for a greater number of people. According to Freddie Mac, the government-sponsored housing giant, the portion of rental units affordable to low earners plummeted 62 percent from 2010 to 2016.

Rising housing costs don’t predestine people to homelessness. But without the right interventions, the connection can become malignant. Research by Zillow Group Inc. last year found that a 5 percent increase in rents in L.A. translates into about 2,000 more homeless people, among the highest correlations in the U.S. The median rent for a one-bedroom in the city was $2,371 in September, up 43 percent from 2010. Similarly, consultant McKinsey & Co. recently concluded that the runup in housing costs was 96 percent correlated with Seattle’s soaring homeless population. Even skeptics have come around to accepting the relationship. “I argued for a long time that the homelessness issue wasn’t due to rents,” says Joel Singer, chief executive officer of the California Association of Realtors. “I can’t argue that anymore.”

Homelessness first gained national attention in the 1980s, when declining incomes, cutbacks to social safety net programs, and a shrinking pool of affordable housing began tipping people into crisis. President Ronald Reagan dubiously argued that homelessness was a lifestyle choice. By the mid-2000s, though, the federal government was taking a more productive approach. George W. Bush’s administration pushed for a “housing first” model that prioritized getting people permanent shelter before helping them with drug addiction or mental illness. Barack Obama furthered the effort in his first term and, in 2010, vowed to end chronic and veteran homelessness in five years and child and family homelessness by 2020.

Rising housing costs are part of the reason some of those deadlines were missed. The Trump administration’s proposal to hike rents on people receiving federal housing vouchers, and require they work, would only make the goals more elusive. Demand for rental assistance has long outstripped supply, leading to yearslong waits for people who want help. But even folks who are lucky enough to have vouchers are increasingly struggling to use them in hot housing markets. A survey by the Urban Institute this year found that more than three-quarters of L.A. landlords rejected tenants receiving rental assistance.

It’s not bad everywhere. Houston, the fourth-most-populous city in the nation, has cut its homeless population in half since 2011, in part by creating more housing for them. That’s dampened the effect of rising rents, Zillow found. Meanwhile, the nonprofit Community Solutions has worked with Chicago, Phoenix, and other cities to gather quality, real-time data about their homeless populations so they can better coordinate their interventions and prioritize spending. The approach has effectively ended veterans’ homelessness in eight communities, including Riverside County in California.

Efficiency can go only so far. More resources are needed in the places struggling the most with homelessness. McKinsey calculated that to shelter people adequately, Seattle would have to increase its outlay to as much as $410 million a year, double what it spends now. Still, that’s less than the $1.1 billion the consultants estimate it costs “as a result of extra policing, lost tourism and business, and the frequent hospitalization of those living on the streets.” Study after study, from California to New York, has drawn similar conclusions. “Doing nothing isn’t doing nothing,” says Sara Rankin, a professor at Seattle University’s School of Law and the director of the Homeless Rights Advocacy Project. “Doing nothing costs more money.”

Then there’s the moral argument for action. “It’s outrageous to me that in a country with so much wealth—and certainly enough for everybody—that there are people who lack even the basics for survival,” says Maria Foscarinis, founder and executive director of the National Law Center on Homelessness & Poverty. Appeals to humanity were part of the strategy in the 1980s, when she and other activists helped push through the first major federal legislation to fight homelessness. Her organization has led a charge against laws that make it a crime to sleep outside in public places, one of the more insidious ways politicians have addressed the crisis. In July the U.S. Court of Appeals for the Ninth Circuit affirmed the unconstitutionality of such bans in a case that Foscarinis’s group—along with Idaho Legal Aid Services and Latham & Watkins—brought against two such ordinances in Boise. “As long as there is no option of sleeping indoors, the government cannot criminalize indigent, homeless people for sleeping outdoors, on public property, on the false premise they had a choice in the matter,” the court wrote. The ruling has led cities, including Portland, Ore., and Berkeley, Calif., to change their policies.

In L.A., Mayor Eric Garcetti has fought to add more shelters and supportive housing, and residents have voted to tax themselves to boost funding by more than $1 billion. But efforts to build are often delayed or blocked by people who don’t want homeless or lower-income people nearby. A strong undercurrent of Nimbyism—motivated by fear of falling property values, ignorance, racism, or concern over crime—can get nasty. Opponents of proposed homeless shelters took to the streets to protest in Koreatown and spewed boos and catcalls at a town hall in the beach community of Venice. In February the Los Angeles Times editorial board implored Garcetti to “step up” and warned that his legacy and political future “will rise or fall on how he handles this colossal urban crisis.” (Garcetti, who took office in 2013, is considering a presidential bid in 2020.) Garcetti spokesman Alex Comisar says the city expects to have 15 new emergency shelters opened by mid-2019 and is ahead of schedule with a goal to build 100,000 new housing units by 2021. “Homelessness is the great challenge of our time,” he says, “and ending it is Mayor Garcetti’s top priority.”

To placate angry constituents, officials too often settle for temporary solutions, such as sweeps of tent encampments and street cleaning. San Francisco Mayor London Breed recently scored some publicity, carrying a broom out to the “dirtiest” block in the city for a photo op with the New York Times. In other places, there’s simply a vacuum of leadership coordinating the patchwork of agencies, nonprofits, and religious organizations trying to help. After reporting intensively for a year on homelessness in the Puget Sound region, the Seattle Times put it bluntly: “No one is in charge.”

Meanwhile, the businesses responsible for much of the area’s economic fortunes, as well as rising housing costs, have been slow to throw their weight behind solutions. Amazon CEO Jeff Bezos recently earmarked a portion of his $2 billion philanthropic pledge for homeless services—only months after his company fought aggressively to beat back a modest tax on large employers in Seattle that would have raised less than $50 million a year for the same.

Blaming people who are trying to get back on their feet is probably the least productive way to solve the crisis. Consider Mindy Woods, a single mother and U.S. Navy veteran who lives in a Seattle suburb. In 2010 she developed autoimmune diseases that made her chronically tired and caused so much pain she struggled to work at the insurance company where she’d been selling disability policies. “I was just a mess,” she says. “I had to quit my job.” To help pay rent for the apartment where she lived with her son, she babysat, watched neighbors’ pets, and led a Camp Fire youth group. Still, she and her son ended up having to leave the apartment because of a serious mold infestation, kicking off an eight-month period when they couch-surfed and spent time in a motel and shelter. It was a challenge just to refrigerate her son’s diabetes medicine.

They eventually were accepted into a transitional apartment, where they stayed for 3 ½ years. But in 2015 her landlord stopped accepting vouchers. Woods had to race to find another apartment owner who’d take her voucher before it lapsed. Application after application got rejected. “The discrimination was alive and well,” she says. Another eight months passed. When she finally found an apartment, there wasn’t room for her son. They had no choice but separate, and he now lives nearby. Woods bristles when people blame the homeless for their predicament. “This is not about drugs, this is not about mental illness, this is not about lazy people,” she says. “We were doing everything we could to stay in houses.”

There were signs on Election Day that voters on the West Coast want to help. In Portland, a measure to raise more than $650 million for affordable housing won easily. In California, $6 billion in bonds to build more low-income and homeless housing got approved. And in San Francisco, voters supported a measure, backed by Salesforce.com Inc. co-CEO Marc Benioff, to raise taxes on employers to pay for homeless services. These are positive steps. But the hard work of making sure the money gets people housed is just beginning.

To contact the editor responsible for this story: Howard Chua-Eoan at hchuaeoan@bloomberg.net

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