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California hasn’t spent $24 billion on homelessness

Every newspaper in the world is reporting today that California has spent $24 billion on homeless programs over the past five years. This is because the state auditor released a report saying:

According to the Legislative Analyst’s Office, the State allocated nearly $24 billion for homelessness and housing during the last five fiscal years, or from 2018–19 through 2022–23.

In other words, this isn't news. It's something the LAO tallied up months ago. What's more, it sure seems to be wrong. Here's the most recent LAO report on homeless spending:

This adds up to $17 billion, and even that total is hugely inflated by COVID-19 funding that has since ended.¹ On average, in normal years, California has been spending about $2.5 billion annually.

That's still a lot. If you just handed it over to our 181,000 homeless people you could give them each $1,200 per month. It's hard not to wonder if that would be more efficient in the end.

It's very hard to say, though, because California has a huge tangle of different homeless programs—and the tangle is even bigger if you count city and county programs. One way or another, though, we spend a tremendous amount on homelessness and seem to get awfully little in return. The reason is sadly obvious: homelessness is not really a money problem in the first place. It's a housing problem, and it will keep getting worse if California resists building more housing and bringing down rents.

This is common knowledge. Everyone knows it, but local resistance to more housing continues regardless. So instead we spend enormous amounts of money trying to fix an unfixable problem. There is, after all, no way to house the homeless if housing doesn't exist.

¹Which is a mystery in itself. In 2021 and 2022, COVID funding allowed California to spend an extra $9 billion or so, and the result was an additional 14,000 people in shelters and housing. That's about half a million dollars per person housed, which doesn't seem especially cost effective, does it?

38 thoughts on “California hasn’t spent $24 billion on homelessness

  1. Dana Decker

    "local resistance to more housing continues" Densification reduces the quality of life. The resistance is merited and rational. Those who want densification should tell us why they are so enthusiastic about population growth (which also, by the way, contributes to speeding up climate change).
    The 50 years of California's population growth, from 20 to 40 million, was completely avoidable. Policies enacted in the mid-1960s are responsible. The United States now is 330 million. Should it be much, much higher? 2.5 billion? No limit?

    1. Austin

      “Densification reduces the quality of life.”

      Pandemic aside, somehow people keep moving to cities like NYC, London, Tokyo, Toronto, Paris, etc though. Almost as if densification actually improves their lives, no? Otherwise wouldn’t they all leave those cities for the freedom of living where there are no urban services (or they are prohibitively expensive to obtain)? Even in Texas, something like 20% of the counties gets 100% of the population growth, with the other 80% actually losing population. It appears that around the world more people vote with their feet in moving to a city than move to the middle of nowhere to minimize their density, but what do they know, right? Dana enjoys places that aren’t densely populated so everyone else must enjoy it too!

        1. Jasper_in_Boston

          You enjoy densification, so everyone else must enjoy it too.

          The exact same comment can be made to the OP: you dislike density, so everyone else must dislike it too.

    2. TheMelancholyDonkey

      Those who want densification should tell us why they are so enthusiastic about population growth (which also, by the way, contributes to speeding up climate change).

      Because a lot of us understand that what affects climate change is global population growth, and that local population growth is almost entirely irrelevant. If anything, it's the other way around, as there are several ways in which those living in dense neighborhoods reduces carbon footprints.

      But, sure, do your best to make sure that poor people have to pay ever higher percentages of their income on rent in order to live anywhere near their jobs.

      1. illilillili

        I notice you didn't discuss your plans for providing water to that population, and didn't discuss how you plan on providing transportation for people to their jobs.

        "We must have rapid growth with absolutely no planning!!"

        1. jdubs

          And you haven't provided a detailed water supply and transportation plan for a population that lives in a less dense area.

          This doesnt appear to be a good faith argument....im not even sure its an argument of any kind.....more of a 'hey look a squirrel!' attempt at a distraction.

      2. Jasper_in_Boston

        Because a lot of us understand that what affects climate change is global population growth, and that local population growth is almost entirely irrelevant.

        This.

      3. OwnedByTwoCats

        And adding urban population has a lower carbon footprint than the same addition to suburban or rural population.

      4. rick_jones

        Because a lot of us understand that what affects climate change is global population growth, and that local population growth is almost entirely irrelevant.

        Certainly in the nation with the largest per-capita emissions on the planet (save for some particularly small nations) population growth at the national level is very relevant.

    3. Jasper_in_Boston

      The United States now is 330 million. Should it be much, much higher?

      Yes. We need to compete with China. They wouldn't even be in the ballgame (given how much poorer they are) were they not so much larger than us. When Francis Fukuyama is finally correct, and history ends, we can stop worrying about population growth. We don't need to grow as fast as we used to, but we should guard against a precipitous slow down (which, by the way, is what we're now seeing: the 2020 census revealed an America that is seeing the slowest population growth in its history).

      Also, quality of life has inarguably gone up for most Americans since the mid 1960s: better air quality; better food; better TV; safer cars; better cancer treatments; the ability to work from home; better electronics; better coffee; better access to air travel. Maybe we'd enjoy most of these things without the population growth, but at minimum recent history suggests an increase in population doesn't hurt the quality of life for most people.

      1. KenSchulz

        I hope this is some kind of satire too subtle for me to grasp.
        All the improvements in quality of life that you cite are the product of investment in R & D and infrastructure, made possible because of the US’s high per capita GNP; in turn, increased productivity further increases per capita GNP. What keeps us as a leading economy is this high ‘disposable national income’, which enables us to support world-class universities, research institutes, projects and programs. Also, diverse, free societies like the US and Europe attract talent from around the world, not just from their own populations.

    4. Crissa

      *citation needed

      Why is dense housing the most expensive to rent, then, and considered so desirable?

      Personally, I would like a place my mother, and then I, could live when we're unable to drive.

  2. rick_jones

    So the State Auditor and/or the Legislative Analyst's office are off by $7 billion or over 40%? That seems like an awfully large error for an auditor to make.

    1. kingmidget

      The State Auditor is an independent power in California, unanswerable to anybody. The office's audits always find something wrong and frequently get things wrong themselves. It's not surprising that they might have been wrong on this.

  3. KenSchulz

    I used to volunteer at soup kitchens and homeless shelters. Homelessness is in part a problem of affordable housing, in part a problem of unmet mental health needs, in part a problem of substance abuse. Universal medical care coverage, including mental health and drug and alcohol treatment programs, is essential to fully deal with homelessness..

    1. middleoftheroaddem

      KenSchulz - pre Covid, I too was a volunteer at a homeless support organization. While I agree with your list of items (housing, mental health, substance) I also believe that list is inadequate.

      It is not uncommon for homeless, when offered, to refuse shelter. In California (or anyplace within the 9th circuit ) officials can't force someone to accept shelter. Further, it is very difficult, and seldom successful, to force someone to accept medical care, substance treatment etc.

      The estimate is that approximately, 50% of homeless have significant mental health and or substance challenges. Without a forcing options, I fear, homelessness totals will not materially change...

      Final point,

      1. jdubs

        Reducing it by 50% would be a massive, material victory. I realize you kind of pulled that figure out of thin air......Houston received some positive press in recent years for effectively reducing homelessness by 60-70%.

        Thats a big number. A lot of people.

        1. middleoftheroaddem

          jdubs - the 50% figure I mention is based on a Stanford study of the homeless. Clearly, its no more than an educated guess but not "pulled that figure out of thin air."

      2. KenSchulz

        Many if not most refusals are refusals to comply with rules (sobriety, participation in treatment). ‘Housing First’ programs minimize qualifications and have a high take-up rate. Once people have a permanent residence, social workers can find them and work to get them into appropriate programs. And folks are more likely to show up at their AA or NA or therapy if they can lock up their stuff.
        https://www.npr.org/2015/12/10/459100751/utah-reduced-chronic-homelessness-by-91-percent-heres-how

      3. Crissa

        This is not true, middle, and you're lying for some reason.

        The courts have said camping bans are only valid if there is housing.

        They have also said that housing that has undo restrictions - like queues you have to be in or curfews or religious requirements - doesn't count. See Ken's comment.

        Because someone can't go get a job if they're required to queue up at 4pm for their shelter or have no place to leave their stuff. And the government can't for e religious adherence.

  4. MF

    In 2021 and 2022, COVID funding allowed California to spend an extra $9 billion or so, and the result was an additional 14,000 people in shelters and housing. That's about half a million dollars per person housed, which doesn't seem especially cost effective, does it?

    Kevin, you are assuming that the objective of the spending was to reduce homelessness.

    That spending was very effective at lining the pockets of the politically connected class that spend $10K on dinner bills are Gavin Newsome's restaurant and winery. The money that actually ended up housing some people was unavoidable waste to fool rubes like you.

      1. MF

        You mean the ones who voted to spend $500K per person housed?

        Hint: Just because a law says its intention is to provide housing does not mean that is its actual intention. After all, if that really was the intention don't you think they could have housed more people with 9 god-damned BILLION dollars?!?

  5. illilillili

    > it will keep getting worse if California resists building more housing and bringing down rents

    In order to bring rents down, the number of housing units built would need to be astronomical. NYC has lots of housing, the building of which never caused rents to drop. If you built on the order of 10 million housing units in a year, you might be able to get rents to drop.

    And, of course, we don't need a plan for how we will handle the transportation needs nor water needs created by 25% more housing.

    In order to get housing costs below half-a-million per person housed, the state would need to invest in public housing. Something along the lines of a 100-unit building, with 400 sq foot hotel rooms, costing on the order of $80K to build, after you acquire the land and permits. Not hugely more efficient than the quoted $500K/unit. And, it would concentrate below market rate housing. Which is pretty much the opposite of the goal.

    1. Crissa

      *citation needed.

      New York didn't build units equal to basic population increases, and California has long built below basic population growth.

      But cities that have, have seen housing prices drop.

      Yes, we probably need public investment. But we also need to penalize people sitting on fenced in barren holes and parking lots.

  6. Jim Carey

    "So instead we spend enormous amounts of money trying to fix an unfixable problem."

    Shouldn't that be: "So instead we spend enormous amounts of money trying to avoid fixing a fixable problem."

    The world is going to change without asking our permission. Our response will be adaptive or maladaptive. The maladaptive MAGA movement response is "The world changed without asking our permission and we are going to turn back the hands of time." The adaptive response is: "For better or for worse, we're all in this together, so let's do what needs to be done to make it better."

    "Which side are you on?" - Florence Reece (1900-1986)

  7. realrobmac

    But it IS a money problem. If you gave someone enough money, they could find a place to live SOMEWHERE. People can use the money you give them to move, for goodness sake. No one HAS to live in Los Angeles or New York. The only questions are a) who should get money earmarked for the homeless, and b) how much money should they get?

  8. golack

    Two different issues.
    Price of housing is way too high--but new housing stock is not being built. And it CA (and other states), insurance rates are skyrocketing is it is available--to many "natural" disasters, aka wildfires, floods, mudslides, etc.
    Many of the homeless have unmet mental health needs, which takes a lot of resources to deal with. That's complicated by many things, including the piecemeal approach scattered across federal, state and local programs.

  9. ddoubleday

    It is not just a housing problem. Many of the homeless are hopelessly addled by drug/alcohol dependency and/or mental illness. The elimination of state mental hospitals where such people could be (involuntarily if necessary) committed was a joint project of the strange bedfollows, the do-gooders and the tax cutters.

  10. Bardi

    "…homelessness is not really a money problem in the first place."

    At a Pasadena City Council meeting a couple of years ago, four "homeless" were given time to speak. All four agreed that one quarter to one third of those designated as "homeless" did not want "homes" or even a place. One veteran lived in the Rose Bowl arroyo, without a tent. I took him to the Santa Monica VA hospital several times, saw him in the local grocery store, we had time to talk. Good honest man who just wanted to be left alone.

    Psychologically (I have no medical degree) I would say we are doing them a real disservice by "offering" them four walls.

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