Last week, I visited Venice, a neighborhood in LA that is full of wealthy tech entrepreneurs and homeless people. While strolling along one of the canals, I noticed a sign, “Stop the Monster”. This led me to google the phrase in order to learn more about the issue.
The monster is a proposed 140 housing project that would be built on a parking lot along Venice’s grand canal, just over a block from the beach in the very center of town. Roughly half the units would go to the homeless, while the other half would be provided to low-income workers and artists. The LA Times suggests that the project would cost $75 million, or just over $500,000 per unit, while critics suggest that the full cost could be as high as $1.4 million per unit. I believe the critics are adding in the opportunity cost of using 3 acres of prime Venice real estate, and some other opportunity costs.
I was struck by that fact that critics often complained that the project was an example of YIMBYism, the advocacy of more housing construction as a way of addressing America’s housing crisis. I consider myself a YIMBY, but have trouble understanding the logic behind this particular housing proposal.
While I’m not as wealthy as the residents who live along Venice’s canals, my economic situation is certainly much closer to the typical Venice homeowner than the typical Venice homeless person. So my views may be biased by the fact that it’s easier for me to put myself in the shoes of those who oppose the “monster”. But I don’t see why this project makes sense even if one prioritizes the interests of the homeless, as philosopher John Rawls would have encouraged us to do. Venice has between 1000 and 2000 people living on the streets, and this project does nothing for the least fortunate of that group, i.e. those who would not be lucky enough to get one of the 68 units set aside for the homeless in the new project. Indeed one would not even have to be a Venice resident to qualify. (Venice is not a separate city like Santa Monica; it’s a neighborhood within Los Angeles.)
Let’s suppose there are 1500 homeless people in Venice. Also assume that the opportunity cost of this proposed project is $150 million, when the land costs are included. In that case, instead of housing 68 homeless people, why not house all 1500 at a cost of $100,000/person. That’s roughly the cost of housing a typical American. (I’m assuming a $300,000 home with three residents.)
You might argue that my proposed policy would not solve Venice’s homeless problem, as the supply of homeless in California is somewhat elastic. I agree! Indeed, I was criticized for making this “elasticity” claim a while back, as commenters pushed back against my claim that California attracted homeless people from other areas. In fairness, I should have been more specific and referred to “street people”, rather than “homeless.” Consider this data from Reason magazine:
In San Francisco, 73 percent of the city’s homeless population is considered unsheltered. That’s not normal, even for a big city: In New York City, the figure is about 3 percent.
The homeless live in many areas, but California is a relatively desirable spot for street people. Obviously I don’t mean absolutely desirable, just that it’s preferable to live on the street in California rather than in New York. Due to its high housing costs, New York has plenty of homeless people, but only 3% of them live on the streets.
If I’m wrong about street people, if incentives do not influence their behavior, then Venice really could solve its homeless problems at a relatively low cost. I imagine there are some tech billionaires in Venice that are rich enough to write a check for $150 million, enough to buy ranch houses in the Midwest to house every single homeless person in Venice. If they did so, however, another 1500 homeless people would quickly replace them on the streets of Venice. That’s not “effective altruism”.
I’m not sure if progressives are willing to face the fact that the quantity of street people is to some extent a function of how attractive we make the solution to homelessness. Venice will have more street people if their solution to homelessness is $1.4 million dollar units a block from the beach in the center of Venice, and it will have fewer street people if the solution involves buying a massive unused warehouse in a hot, polluted industrial area of East LA, and then installing hundreds of military style barracks inside.
Yes, my proposed solution is punitive. The progressive solution is completely ineffective. I don’t particularly like either solution. Is there a third way?
Here we need to return to the distinction between the homeless and street people. The vast majority of homeless people in America do not live on the streets. Many have jobs. For that group, the best solution is building more market rate housing. Lots more. Most homeless people will not be able to afford that new construction. They certainly wouldn’t be able to live in new construction in central Venice. Nonetheless, building new houses, even mansions, helps the homeless by reducing the price of existing housing, just as building new cars helps lower income people by reducing the price of old used cars. (Did you notice what happened to used car prices when a chip shortage limited production of new cars?) In that sense, I’m a YIMBY.
For those who do live on the streets, I have no easy answers. Many have drug, alcohol, and mental illness problems. Some people claim that a “tough love” approach works best, encouraging the unfortunate to get treatment. If so, my punitive “barracks” proposal might actually reduce the problem. Or maybe not. I don’t know enough about the problems faced by street people to have a firm opinion one way or another. All I know is that the sort of solutions advocated by progressives in Venice won’t work. So perhaps it’s time to at least try something else?
There seems to be some confusion as to the meaning of “YIMBY”. Critics of the Venice “monster” blame the YIMBYs. So let me just say that I’m a fan of “Market priced housing in my backyard”. Call me a MIMBY.
PS. I’m simultaneously appalled and impressed that the US is willing to fund such projects. Appalled that we try to solve homelessness with such an expensive and ineffective policy. Impressed that we have enough compassion to spend lots of money housing homeless people in million-dollar housing units placed in desirable SoCal beach areas right next to the homes of the wealthy. Most other countries would not be willing to do this. Indeed I wonder if any other country would enact this sort of program.
READER COMMENTS
Tsergo Ri
Jun 30 2022 at 5:05am
In Paris, we do have social housing in the city.
Scott Sumner
Jun 30 2022 at 12:17pm
What part of the city? Near the Arc de Triomphe? And does it cost more than a million euros per unit?
Tsergo Ri
Jul 4 2022 at 11:24am
There is at least one in my 13th arrondisement near Parc Montsouris. The rent for 30 m2 apartment in this area is around 1000 euros per month. If you want to buy an apartment, the cost is around 10,000 euros per m2. These are very expensive considering median monthly income net of taxes is probably around 2500-3000 euros per month.
john hare
Jun 30 2022 at 5:24am
I more or less favor you barracks solution though I think more of privately owned rental units. With legal cover for the owners need to operate with a particular type clientele. I am a small business owner living with my wife in a small camper until we get our house built. Somehow I just don’t get the idea that homeless must have expensive housing in an exclusive area.
A small no frills motel room style should be preferable to living on the street. 24 hour rental (to match short term thinking of this clientele) with locks so they can sleep safe and to protect whatever belongings they have while they are out. 150 square foot safe living
MarkW
Jun 30 2022 at 11:14am
My progressive college town is doing a similar thing — building an expensive low-cost housing high-rise on some of the most expensive downtown real-estate. The cost per unit is going to be crazy. But young progressives love the idea, not because they envision the currently homeless living there, but because they envision themselves living there (being under the x% of median income threshold to qualify) — living right downtown where they want to be but otherwise could not afford. The Venice project sounds similar in the sense that initially only half of the project is for the formerly homeless, and I fully expect the system will be changed and/or gamed after that (how long would you have to be on the street — or claim to have been — before qualifying for one of the ‘homeless’ units?)
TGGP
Jun 30 2022 at 10:27pm
Instead of “barracks” Robin Hanson instead proposed “Universal Basic Dorms”:
https://www.overcomingbias.com/2020/11/universal-basic-dorms.html
Michael Rulle
Jul 1 2022 at 8:56am
I have no relevant knowledge about homeless people or street people. I read there are more today than “before”——but I have never seen any evidence one way or the other (probably not looking hard enough).
In any event, it would be useful to know the history of homeless and street people. Certainly, even if the percent of such people are lower today, it does not preclude that in absolute numbers there are more today.
I will even question whether this is an actual problem. In other words what percent of these people are truly attempting to escape these conditions. For sure,this is a problem for them——-but not for those who are not seeking to escape their condition.
If the “homed” population don’t mind if there are homeless people and homeless people or street people do not actively seek to change their condition—-is there really a problem?
Finally, what did we do before, when supposedly there were less homeless? I always thought there were shelters and a semi-forced requirement to stay in those shelters over night.
But as I said I do not know much about this topic—-even after reading Scott’s well written essay.
Ridahoan
Jul 1 2022 at 9:43am
I appreciate your honesty, and willingness to ‘go there’ and discuss the elasticity problem, but … really you should go all the way and be honest enough to embrace your NIMBY motives. NIMBYism is after all, in all its messy and self-interested glory, the foundation of local democracy.The ‘elasticity’ issue doesn’t stop with street people, and drives affordability problems throgh market based development in many areas. Take a mid-size city in the relatively uncrowded West, for example, as it absorbs SoCal refugees — the elasticity of that privileged population with their large pensions and outsized equities means that they readily displace locals from the housing market.
Rajat
Jul 1 2022 at 10:30am
Australian cities also have public housing, often in expensive inner-city (gentrified) areas. It’s hard to get clear information on the value of these dwellings, or whether those values include land. But this article discusses the Victorian Government’s recent $A5.3 billion ‘Big Housing Build’ initiative to fund the development of 12,000 homes (that’s $A441k each), which will include “$532 million to build on public land…, resulting in 500 social housing homes and 540 affordable and market homes.” That’s a cost of $A511k per dwelling, not including the land value. And many of these homes will be built in expensive areas. For example, the Simmons Street project in my suburb of South Yarra (where the median apartment price is $A620k, which would include the land value) will add 310-330 dwellings on public land at a cost of $A160m (that’s $A500k each). To avoid triggering moderation, I haven’t included a second link, but you can Google the Simmons St project quite easily by including “homes victoria” in the search terms.
Barracks for ‘homeless’ people sounds like a fine idea, but I think it mistakes the sentiment driving many of these projects. It’s not about providing plentiful basic safe and clean accommodation for poor people. It’s about incorporating a small sample of poor people into well-off communities so affluent people can feel virtuous (or less guilty). That’s why many private building applications in affluent areas include or are obliged to include a small share of social housing or housing reserved for low-income earners in the development. That way, affluent liberals get bragging rights for living in ‘diverse’ communities where poor people get to live in ‘decent’ homes – as opposed to barracks, which would be regarded as dehumanising. The ostensible reason for these reservation requirements is to provide housing for poor people “where the jobs are”, but of course what it also achieves is a disincentive for the lucky residents to raise their incomes. Not to mention that it hardly seems like a crime to expect poor people to commute 60-90 mins each way by public transport from cheaper outer suburbs to work at jobs in richer CBD and inner-city locations.
Re ‘street people’, as you’ve noted, because many of these people have other problems, high density social housing like barracks often becomes a locus of crime – and violent crime, not just drug crime. Making them work would require them to be run almost like jails, with security staff, etc.
Scott Sumner
Jul 1 2022 at 3:08pm
Rajat, Thanks for that info. I don’t know much about Australia, but in America I regard social housing as very different from housing for the homeless. Many people in social housing are working class.
Rajat
Jul 1 2022 at 5:04pm
I think once you move away from a definition of homeless as ‘street people’, you will inevitably find many working class people to be ‘homeless’ at least according to the Australian definition. The Australian Bureau of Statistics defines the homeless to include people whose “current living arrangement: is in a dwelling that is inadequate; or has no tenure, or if their initial tenure is short and not extendable; or does not allow them to have control of, and access to space for social relations.” The last category includes people living in ‘severely overcrowded dwellings’, which are those “which require[s] 4 or more extra bedrooms to accommodate the people who usually live there”. In other words, where dwellings have 4 or more people than bedrooms, all the people living in that dwelling are regarded as homeless. Barracks would not reduce such homelessness. According to the ABS definition, Australia had 116,427 homeless people in 2016, of which nearly half were homeless due to the severely overcrowded criterion, leaving about 65,000 living rough or in temporary or supported accommodation.
By contrast, the US definition of homelessness you referred to in a previous post mainly includes people living long or short term in shelters. According to this definition, the US had about 550,000 homeless people. This probably compares to the 65,000 figure from Australia, although even then, I find it surprising that the US only has 9 times the homeless as Australia with a population 13 times the size.
It’s possible some or many of the people in Australia’s social housing dwellings were originally working class or have become working class, but I don’t think the new projects being developed now will be offered to working class people. Most assistance being provided nowadays is to women or single-parent families fleeing domestic violence situations, indigenous Australians, and people with mental health problems.
Scott Sumner
Jul 2 2022 at 12:42pm
Good points. It’s frustrating that it’s so hard to get data on street people. Most Americans conflate street people with the homeless (as I used to do.)
Andrew M
Jul 2 2022 at 6:46pm
I think we have to say that the word “homeless” is ambiguous (though perhaps becoming less so). Among the laity there is (still) a usage on which it indeed refers to street people. But among activists there is a more recent usage on which it refers to a broader class of people (or possibly just a different class).
I would guess that the more recent usage reflects efforts on the part of activists to make the number of people suffering from homelessness seem larger. Compare the classification of anyone under the age of twenty as a child in some gun-policy contexts.
However, I could easily be wrong about all this, and would welcome well-informed correction.
Bobster
Jul 6 2022 at 12:04am
MIMBY is great, that’s the correct solution.
Sadly many of the California YIMBY just want ineffective social housing projects like the ones described above.
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