Death Spiral

How do you kill a city?

So many people complain about the homeless problem (which is very visible in many California cities), but these people and their plight are a symptom of a deeper malaise.

It is claimed that people are homeless because they cannot afford an apartment. Actually, many of the homeless are homeless, because they get kicked out of any normal apartment due to mental illness, drug habit or just for being nasty neighbors and tenants. Poverty is a common companion of mental illnesses, drug habit and antisocial behavior. Supportive housing rarely works, the restrictions to their lifestyle are considered intolerable and most of the hardcore homeless prefer their freedoms. Which in California are accommodated. Not saying that freedoms are intrinsically wrong, I just would weigh them against infringement of other people’s rights for safe enjoyment of parks and other public places.

In any case, California has some freedoms not available in other states, such as freedom to use cannabis products and the de facto freedom to shoplift wherever and, in many cities, to camp on sidewalks. This has led to an exploitable situation as the fuming taxpayers are told that the reason the sidewalks are choked by drugged out homeless that support their habit by shoplifting because there is not enough affordable housing. Let’s collect a new tax or municipal bond (funded by taxes) to build affordable housing to homeless.

Homeless advocacy organizations mobilize for this initiative, after all someone must administer the funds to the indigents. Signature collectors are hired to ask good citizens (“are you a registered voter here?” to sign a petition for the tax / bond initiative. Politicians speak warmly for (or rarely against) the initiative. There may be an advertisement campaign, at which point a thinking voter should get alarmed – why would anyone pay for an advertisement campaign when hundreds of millions or even billions of dollars are proposed to be raised for ‘common good’?

Nevertheless, many voters will back an initiative that sounds good without thinking about the long term effects. Once the initiative passes, property or sales taxes are raised, and now the small property owners and small retail businesses are in trouble. The property owners increase the rents making both apartments and small businesses renting their spaces less affordable, Poorer tenants fall behind and get evicted or move somewhere cheaper. The business owners may hang on a bit longer, raising their prices until the customers disappear, and they, too disappear. With loss of tenants, the properties will undergo distressed sales. Which was the purpose of the original initiative.

A property developer (with sufficient contacts to the municipal bureaucracy and politics to smooth the permitting) will buy the distressed property cheaply and develop it into ‘affordable’ housing. Which somehow does not reduce the swarms of homeless camping on the sidewalks, possibly because they are still free to camp there and the homeless advocacy organizations are flush with funds to use on homeless services.

Meanwhile, the older residents are losing their homes and the main streets are becoming ghost towns of shuttered and graffitied empty shopfronts. The city is hemorrhaging jobs and residents, with homeless numbers increasing, despite well-funded homelessness services and more affordable housing being built.

The solution is obvious – let’s raise the taxes to deal with the homelessness and lack of affordable housing! Or maybe, stop using the homeless to exploit the tax payers to enrich the local moneyed interests.