California's Government Has Turned Homelessness Into Big Business

The new money will be consumed in a bureaucratic hiring frenzy, used to pay state-level salaries and pensions, and build a bigger "homeless industrial complex."


At a leftist event years ago, I heard a speaker disparage economist Adam Smith and his idea that a nation can best prosper by letting individuals make their own decisions. With the Bernie Sanders candidacy on the rise, anti-market attitudes have gained steam—even among people who express them on nifty electronic gadgets and do so, presumably, with a full belly. Attendees seemed to find the Smith approach crazy.

Granted, the "invisible hand" of the marketplace is, well, invisible. One doesn't see the millions of individual decisions that place the exact widget you need for your repair project in your hardware store. I'm not sure why leftists don't see the marvel of this process. If they want real insanity, they should look at the alternative: the clenched and visible fist of government.

You might have noticed California is enduring housing and homeless crises. The market solution to housing shortages is simple: Government should reduce regulations, slow-growth restrictions, rent controls and fees that limit supply and drive up prices. Let builders build. Homelessness is a more complicated problem because homeless people often have addiction and mental-health issues, but more housing would help.

I can't say exactly how it will work, just as I can't say exactly how a molly bolt gets from the foundry in India to Home Depot in Sacramento. But I can tell you what won't work—namely the policies our government now is championing. Gov. Gavin Newsom spent most of his recent State of the State speech detailing a blueprint for dealing with the "disgraceful" homeless situation, which involves more public spending and programs.

But, as The Sacramento Bee reported following the talk, the governor's ambitious plans "depend on a state department that is understaffed, lacking permanent leaders and struggling to adjust to change, according to documents and interviews." You can take this to the bank: The new money will be consumed in a bureaucratic hiring frenzy, used to pay state-level salaries and pensions, and build a bigger "homeless industrial complex."

That's a facetious, but accurate, phrase used by critics of the state's homeless policies. They've noticed there's big money in the homeless business. I'm not referring to the serious and important work Rescue Missions and other charities do to alleviate the sting of homelessness, but rather to the armies of bureaucrats and subsidized businesses who have little incentive to reduce homelessness—and every reason to seek more public revenues.

An investigation from this newspaper group found that a third of the apartments being built through the $1.2 billion Prop. HHH bond measure, which voters approved in 2016 to fund supportive housing, "will each cost more than $546,000, the median sale price of a condominium in Los Angeles." The report found it "uncertain if the program will reach its goal of 10,000 new permanent housing units."

I'd think it's fairly certain the bond will run out of cash before its targeted numbers are met and city leaders will be back asking voters for more money. It's also certain such projects will at best help a fraction of LA's homeless. Some projects in Southern California have seen per-unit costs approaching $700,000. This is nuts. So, too, is a widely discussed tweet Gov. Newsom recently made regarding the homeless situation.

Newsom's initial tweet was fine, albeit mostly pabulum: "We need to start targeting social determinants of health. What's more fundamental to a person's well-being than a roof over their head?" Well, sure, no one suggests that sleeping in the cold near a freeway interchange is healthy. But then he tweeted this eye-opener: "Doctors should be able to write prescriptions for housing the same way they do for insulin or antibiotics."

This shows a fundamental lack of seriousness on the part of our governor. I doubt he really would want doctors to prescribe such things. I can imagine what Blue Cross would say when it received a bill for a three-bedroom bungalow in Santa Monica. (I'd hope my doctor would say my health depended on beachfront living.) As others have noted, this amounts to the "magic wand" theory.

The federal Boise decision limits the ability of localities to remove homeless people from public places—unless officials have a place to house them. Apparently, our governor hasn't followed the ensuing problems. Cities don't have a place for all of them. When cities build these units, they end up costing more than a mini-mansion in Texas, so cities run out of money fast.

It gets zanier. Assemblywoman Lorena Gonzalez, the San Diego Democrat who authored the anti-contracting law (Assembly Bill 5) that is decimating the freelance industry, just announced her "Housing for All" package. I fear she'll do to the housing market what she already has done to the labor market. At some point, even Californians might realize that free markets are the best way to address problems and that trusting officials is true madness.

This column first appeared in the Orange County Register.

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  1. Must be something in the water there.

    1. All that crap on the sidewalks has to end up somewhere.

  2. In college I learned that any problems in blue states are always the fault of Republicans in red states, or in the federal government. To the extent that California has a “homelessness problem,” it’s Drumpf’s fault. He’s completely destroyed the American economy so it’s no surprise many people cannot afford a place to live.


    1. You pretty funny man. Do you do standup comedy?

      1. I’m not a “man” just because I have XY chromosomes. I’m non-binary (they / them).

        1. We’re plural and youre erasing our identity with your appropriation of they/their.

        2. Y’all are vaguely bouncing off a topic here that isn’t being addressed fair and square:

          HOW MANY of today’s homeless are formerly self-sustaining bakery-store owners, who put themselves out of business by stubborning refusing to bake gay wedding cakes, LGBT wedding cakes, etc.?

          We need some stats here, stat! If this problem is as bad as I suspect it might be, we need to have Government Almighty subsidize mass armies of therapists, to therapeutracize and educate away, the biases and prejudices of these many-many cake-bakers who are becoming homeless, due to them stubbornly clinging to their biases!

          1. That might have been a little funny if you didn’t bleat it out so idiotically. Points for trying I suppose.

          2. to put a number to your question:

            Five. No more.

            And at least four of them are using their skills, creativituy drive, integrity, to make an adequate living on some other way, despite the government having or trying to bankrup them.

        3. Not a man, eh? Are you a mouse?

    2. picked the wrong “college” didn’t we?

      Now you’ve got a boatload of lies to unlearn. Including the one that holds that there are more then two sexes.. we gots male, and we gots female, and anyone who thinks they belong to any other gots delusions.

  3. Face it: the western world is on a multi-decade indulgence of empathy. The kind of empathy that is irrational, consuming, and pushes people to Do Something.

    Beyond the non-trivial influence from politicians and social workers who share personal gains from the industrialization of homelessness, the majority of people also gain, by satisfying their empathetic urges. And like most emotional reasoning, these urges do not have to be based in fact; just worried about feelings (i.e. feelings about feelings) is more than enough. An example: we read about the angst that caring people feel not about people going hungry, but about people worrying about going hungry (“food insecurity”).

    I speculate that life has gotten too easy, and the big challenges have been largely overcome. But the empathy impulse is still urging people to find something, anything, to latch onto. And to Do Something.

    1. But we really DOOOO need to “Do Something”!!! About the homeless…

      Here’s an idea: “Set asides” in the medical and medical-related arenas. Currently, one needs a prescription (from a full-blown MD, no less) in order to buy a cheap plastic flute to blow on!

      As an economic stimulus for the homeless, allow a special exemption, ONLY for certified homeless people… They should be allowed to take a 5-minute special training course, and then be allowed to prescribe “lung flutes”!

      Till such a time as my brilliant idea is put in place, PLEASE stay safe from the Flute Police!

      To find precise details on what NOT to do, to avoid the flute police, please see … This has been a pubic service, courtesy of the Church of SQRLS!

    2. This, “food insecurity”, has got to be one of the most ridiculous causes du jour of the past decade. I got a call from an organization in my college town asking me to help curb the problem of “food insecurity” among the student population. They had all kinds of statistics about the dire and hopeless situation of struggling young academics.

      It was only 15 years ago I was in college, and living off peanut butter, Ramen, and Keystone Light was simply part of the experience. Hell, you learn quite a bit about personal finance and budgeting when you’ve only got 20 bucks to eat for a week, but you sure as shit don’t starve.

      1. Do poor people still go hungry in America? I still give to the local food pantry when I can, but it appears to me that the poor in America have an obesity problem.

        1. Interestingly enough there used to be until recently a food bank down the hall of my office. Every summer people donated fruits and vegetables from their garden. A good percentage (the majority) of those who routinely used the food bank (not the ones who used it only in emergencies) would refuse the fresh fruit and vegetables (or thore it away in the dumpster as soon as they went outside). In order for it not to rot, the food bank workers would give it to everyone in the office at the end of the week. They couldn’t give it away to the people they were trying to help. Frozen vegetables and fruits were hardly any better but being frozen they could keep them preserved much longer. Living in cattle country people also routinely donate hamburger from their culled cows that they slaughter for their own personal use. Again they could only give away about half of this. The routine patrons wanted pre-prepared foods, boxes dinners etc. It got so bad that the food bank stopped taking fresh milk donations from the store because it just ended up having to be thrown out at the end of the week.

          1. My church used to host a weekly, free dinner for the community (town about 10k). The grocery store donated their bakery loaves getting stale and fruit/veggies that were overripe. Same issue, we ended up throwing most of it away.

            In reply to Conchfritters: some people do still go hungry (very very few starving), but those are typically ones that have separate issues compounding things (drug abuse, disabilities, etc.)

            1. Yep. You have to be mentally ill or trapped somewhere to starve in this country. And being ‘food insecure’ Is a bullshit made up progtard thing.

          2. This is utterly insane. Offered free food only to refuse it or throw it away. This is the problem with government hand outs. We use to worry about the hand outs leading to dependency, but now it is even worse. Hand outs lead to expectations, or a feeling that your owed something.

            1. Yes on both accounts. It is even worse that the community members donating food were doing it out of true altruism for the most part, only to have it slapped in their faces. It makes people jaded and less likely to give when people truly need it.

            2. Learned Helplessness + Envy = “You Owe Me More”!

              /Not Hihn

    3. An example: we read about the angst that caring people feel not about people going hungry, but about people worrying about going hungry (“food insecurity”).

      I don’t think that’s empathy gone mad. I think it means that, now that hardly anyone actually goes hungry in this country, the busybodies are inventing new crises in order to justify their jobs.

      Same idea as calling prostitution “human trafficking.” Cops gotta invent new, scary crimes in order to justify their jobs now that actual crime is at an all time low.

      1. Nah, the middle class women that want to fuck anyone they want, but dont want to worry about the consequences’ catch phrase, “my body, my choice” was taken literally and lowers their sexual value. They have to make it look like hooking isnt a womans choice so they can keep it illegal.

        1. Right, it’s “my body, my choice”, not “her body, her choice”.

    4. I agree with your point in general, but I think you’ve fallen into the all too common trap of confusing empathy with sympathy, or more specifically paternalistic pity. That may seem pedantic, but I think it’s an important distinction. Our overlords aren’t trying to put themselves in our shoes. That would be undignified. They don’t need to understand our problems to know what’s best for us.

      1. I was using “empathy” to echo the term as used by Paul Bloom in Against Empathy.

        And I do distinguish between the power hungry, who do not need and probably are not motivated by empathy/sympathy, and the bleeding hearts who have reflexive empathy/sympathy.

  4. Societal problems exist (indeed, must exist) to justify the transfer of wealth from taxpayers to a permanent class of government bureaucrats … without solving the problems. If the problems were solved, there would be no need for a boundless government bureaucracy.

    California is a lost cause. Once all the money is squandered (and, it will be squandered) California will be hollowed out and decimated just like Detroit, except on a much, much larger scale.

    1. And when It happens, the Left will call it bad luck.

      1. or blame it on republicans

      2. No, they’ll call it Fascism.

      3. No, like the OBL parody account stated it will be the Republicans fault (and to a lesser extent the LP, but they have no real power). By opposing more taxes on the wealthy (or anyone deemed wealthy) we obviously underfunded it. It is like a Slate article yesterday. The cause of high student loan debt isn’t borrowing but chronic underfunding of universities (not sure how that applies to private universities, maybe they want us to fund those too – Harvard /Yale/Stanford/Brown good, charter schools and private k-12 bad). No the cost of all increases in education, at any level is the growth of the bureaucracy. The bureaucrats often make more than the professors considerably more. Do you really need an assistant Dean of LGBTQ+ diversity? How does that help you train electronic engineers?

        1. Progressives seem to enjoy marching into the mass grave of their own misery — feeding upon their own, warring internally, confiscating resources and property, stomping on individualism — so long as they as they feel morally justified in doing so. Societal collapse due to government mismanagement is just so …. bohemian, so romantic.

          At the end of the day, California is governed by petulant children, and it is therefore no surprise that it has turned into a massive rendition of “Lord of the Flies.”

        2. What’s especially funny about it is that they’ll vote for every possible government expenditure, and when it comes time to raise taxes to pay for it they get all “HOW DARE YOU!?” about it.

          It’s one of the wealthiest places on earth filled with progressives, and even they don’t want to pay for their own ideas.

        3. What would Harvard DO without taxpayer funding? How would they fiscally cope with a mere $41 billion endowment?

  5. From the front lines:

    “SF homeless chief to take over city’s troubled encampment street operation”
    “Jeff Kositsky, who helped create San Francisco’s Department of Homelessness and Supportive Housing when he was picked as its first director in 2016, is leaving his post to take charge of the city’s front-line team tackling its homelessness crisis on the streets.
    “I’m really proud of what we’ve done, and I’m as optimistic as I was the day I took the job,” Kositsky told The Chronicle.”

    Pretty sure the bum population has come close to doubling during his tenure; he’d have been fired if he had the same ‘success’ washing dishes.

    1. As the article points out, these people aren’t trying to “solve” homelessness. They’re trying to look like they’re solving it while collecting as much Other People’s Money as possible.

      In that regard, the bum population doubling is a rousing success. With twice as many of them, they’ll need twice as much Other People’s Money to solve it!

    2. Well, duh. Basic economics or logic should tell us that if we encourage something we get more of that thing.

      Now, why people want to encourage something is a different question.

    3. Not quite on topic, but I just thought of it so I’ve got to say it.

      The market is messy, inefficient and takes too long to get things done.

      The government is messy, inefficient and never gets anything done — but you have to pay for it anyway.

    4. “I’m really proud of what we’ve done, and I’m as optimistic as I was the day I took the job,” Kositsky told The Chronicle.”

      There are two kinds of dishonesty in the above statement. First of all, nothing has been accomplished, but he says that he’s proud of “what they have done.” In government, just “trying” counts as an accomplishment. Secondly, he says that he’s as optimistic as the day he took the job. But the guy doesn’t have “a job”. He’s being paid to worry about the homeless, but that doesn’t mean he’s engaged in any kind of productive activity. A job means doing something productive, with a measurable outcome. Government employees don’t do anything constructive, and there is no measurable outcome. They are just a bunch of deadbeats.

      1. Well, you can say “nothing has been accomplished”, and that’s true wrt actually *resolving* the problem, but MUCH has been accomplished wrt hiring a lot of activists, and poli sci grads and the children of the politically well-connected.

        Same with his “optimism” about his new role. He’s optimistic he’ll have the opportunity to create many more patronage-distributed, well-paid, public employee union jobs. And this optimism is probably justified.

        His statement only seems out of touch with reality if one assumes that he views his work as having anything at all to do with actually helping those wretches who are shitting on the streets.

  6. The first thing California needs is a State and Local Government that isn’t kowtowing to the Unions. You have to break the circle. You know. The one where the government increases the bureaucracy, resulting in more Public Sector Union employees, who pay more dues to the Unions. Then the Unions give support and money to the politicians that make up the Government. Repeat, repeat, repeat.

  7. “We need to start targeting social determinants of health.”

    This is why Newsom makes the big bucks.

  8. It continually amazes me how people ignore the inefficiency of government tax collection and redistribution. They’ll budget $100M or some figure and brag about $100M towards fighting homelessness, when the reality is that the overhead of taxing and redistributing that $100M probably consumes half of it right off the top.

    Markets have inefficiencies too, such as price stickers and cashiers, but at least management recognizes that and does reduce the overhead over time, and prices self-report so much information to both buyers and sellers that it’s hard to keep a straight face when calling it overhead.

  9. Why can’t they all live in FEMA trailers?

    1. There’s no graft in setting up FEMA trailers, or at least way less of it. When you’re building a $700k house for someone who isn’t paying for it, there are lots of opportunities for the Top Men to make sure they’re properly compensated for their noble work.

  10. Appreciate the article, Steven, but you’re about 5 years too late with this one.

  11. Granted, the “invisible hand” of the marketplace is, well, invisible … I’m not sure why leftists don’t see the marvel of this process.

    Because the “invisible hand” has slapped them upsides the head so many times they have cumulative brain damage.

  12. Assemblywoman Lorena Gonzalez, the San Diego Democrat who authored the anti-contracting law (Assembly Bill 5) that is decimating the freelance industry, just announced her “Housing for All” package.

    Nobody needs to live in a house more than 35 days per year.

    1. Nobody should have to own 2 or 3 houses.
      I don’t think you realize how bad this situation really is. There are literally presidential candidates that have to own 3 houses!

  13. Let Californians reap what they sow…

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  15. Why is “homelessness” a crisis on the US West Coast and not on its East Coast?
    It’s a climate crisis!

    1. Sooo…can I view my feverish efforts to pollute the atmosphere as an attempt to increase global warming, thereby ameliorating the harsh winters of the East Coast and Midwest? This will have the apparently desirable effect of making those areas more amenable to “outdoor living”, with the ultimate goal of creating “Big Homelessness” bureaucracies, similar to the very remunerative and much-envied administrative empires of the Left Coast.

      Just doin’ what I can.

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