The More Public Money Gets Spent To Solve "Homelessness," The More Homelessness There Is
/San Francisco is the latest American city to try to solve the problem of “homelessness” by throwing more and yet more taxpayer cash at it. Should we check in on how it’s going?
You may recall that I last visited the issue of homelessness in San Francisco about a year ago, October 2018, in a post titled “The Morality Of Our Progressive Elite.” At that time, the number of “homeless” in San Francisco was estimated at about 7000, but there was an initiative on the November 2018 ballot, known as Proposition C, calling for a new payroll tax on large employers in San Francisco, intended to raise some $300 million per year to solve this homelessness problem once and for all. On October 25, 2018, one Marc Benioff, co-CEO of Salesforce, had an op-ed in the New York Times supporting Proposition C. My post noted that Benioff was only too happy to advocate that others should be forced to spend hundreds of millions on this project through a new tax, while he himself offered to put up none of his own personal fortune, estimated at $6 billion, for the purpose.
So where are we now, a year later? The payroll tax initiative passed last November with 61% of the vote, and the new tax started getting collected. Opponents then brought litigation that has prevented the spending of the money so far. (The opponents’ claim — that a special tax like this requires a two-thirds majority — was rejected by a trial-level court in July; but appeals are ongoing.)
However, the delay in this new open spigot of funding has not prevented San Francisco’s spending on “homelessness” from continuing to soar. The basic budget for homeless services has gone from about $155 million annually in the 2011-12 fiscal year, to $271 million annually in San Francisco’s most recent 2018-19 spending plan. And then there’s the newly uncovered honeypot of money in something called the Educational Revenue Augmentation Fund. What’s that? According to a piece in May from the San Francisco AIDS Foundation, “ERAF is a state program that requires counties to set aside a portion of local property taxes to a fund to be used for their school district. When the fund reaches its state-imposed cap, the remaining funds are then returned to the local government to be used for other purposes at the local government’s discretion.” According to that piece, San Francisco Mayor London Breed intends to spend much of this year’s ERAF “windfall” on “housing and homelessness initiatives,” including “$15 million for a new homeless navigation center, $40 million for anti-eviction measures, $14 million to buy land for affordable housing, $9 million to improve public housing and $42.5 million to complete construction of a homeless housing site.” That would look to be another $120 million or so in a year. Apparently, the idea is that this money will get repaid to the ERAF fund when the Prop C payroll tax money gets freed up from the litigation process.
Even without the ERAF additions, the $271 million per year would place San Francisco right near the top of the heap in per capita spending by a municipality to solve the homelessness problem. With a population of about 900,000, $271 million would come to about $300 per capita per year. By comparison, champion spender New York City, with a population close to ten times that of San Francisco, is up to spending some $3.2 billion annually on the homeless, which would be about $375 per capita. That means that San Francisco is now pushing past us with this ERAF money, and is poised to blow way past us — to around $600 per capita per year — when the full Prop C money kicks in.
So surely, with all this spending, homelessness in San Francisco must have at least begun its inevitable rapid decline? No, I’m sorry. Once again, it is the opposite. According to a piece in the City Journal by Erica Sandberg on October 10, the official count of homeless in San Francisco is now 9,780. That represents an increase of at least 30% just since 2017. (Maybe more than 30% — there appears to be some dispute as to the appropriate methodology for counting exactly who is “homeless.”)
No, even $600 per capita per year is just not going to cut it. Something called the Bay Area Council Economic Institute (“a think tank focused on policy issues”) came out with a report back in April that finally provided the real numbers. Here is a piece summarizing same from CNBC. Excerpt:
“By virtually every measure, the Bay Area’s homeless crisis ranks among the worst in the United States,” said a report released by the Bay Area Council Economic Institute, a think tank focused on policy issues. California’s nine-county Bay Area — from Sonoma in the north to Santa Clara in the south — has roughly 28,200 people experiencing homelessness, ranking it third nationally after New York and Los Angeles, respectively, according to the report. It estimated the average per unit cost of housing each homeless person in the Bay Area region at $450,000. . . . Using the $450,000 per unit cost of Bay Area housing, the report estimates it would cost $12.7 billion “to end homelessness under current methods of building and providing services.”
The $12.7 billion is not just for San Francisco, but for the entire Bay Area. With San Francisco having about a third of the Bay Area’s homeless population, that would make the San Francisco share of this building project about $4.2 billion. Note that that is just for building the housing. The $450,000 is for every individual. A family of four would get a place costing $1.8 million. And yet there’s nothing in there for ongoing maintenance, let alone for services to the needy people in question. Thankfully, BACEI does also helpfully provide a cost figure for how much the appropriate services will cost. That will be $25,000 per homeless person per year, thank you very much. Between the cost of the new housing (at premium Bay Area prices, of course) and the services, it will run you at least about $50,000 per homeless person per year to do right by them. Should any of them have formed a family of four, that will be $200,000 per year.
Note that not a penny of this $50,000 per person per year goes to the homeless people themselves. All of it goes to the people who build the homes and provide the services. Nice gigs if you can get them.
Meanwhile, Mr. Benioff seems to have made a major contribution on the subject: $30 million to the University of California at San Francisco for the “Benioff Homelessness and Housing Initiative.” None of that goes directly to the homeless people either. It’s for academics to do research on how supposedly to solve this problem.
So after all the spending increases to date, and homelessness only inexorably going up, spending is set to close to double yet again. Does anyone want to place a bet on whether the homeless population will go up versus down?