Homelessness, Housing Costs and Inequality

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Let’s be clear. The homeless crisis is a man made disaster, that did get worse due to city and county policies. Most jurisdictions, until recently, have tried to ignore the explosion of homelessness.

The crisis is one more symptom of income inequality, which grew over the course of the last five years. The recovery left a lot of people behind. Some cannot afford housing.

While the crisis grows in San Diego, we have learned that officials are not doing much. In October the San Diego Union Tribune reported:

San Diego officials funded fewer than 20 percent of the affordable rental housing units they hoped to finance over the past fiscal year, despite a nearly 85 percent bump in revenue from developer fees to support such projects.

The 51 rental units backed by the San Diego Housing Commission in the fiscal year that ended on June 30 fell shy of the 310 the commission had aimed for, according to an annual financial report released by officials last week. Past reports reviewed by The San Diego Union-Tribune show the public agency, which ranks as the region’s largest low-income housing developer, has failed to reach its rental housing targets in each of the past five fiscal years

Mayor Kevin Faulconer told attendants at the State of the City that there will be no tolerance for people living in the streets. He also said that the city will build a new centralized center for Homeless to navigate the system. The city will also build another storage center for the homeless to store their belongings. Presumably this will allow them to go to medical appointments, or see apartments. This is, in principle, a good idea.

However, the city is building more tents, which are temporary housing. The city is not building more affordable housing. This is partly due to the issues with permitting, how expensive it is to build and the fact that that we have a bias towards expensive developments. Just go downtown, in front of the Convention Center. Do note how many of those apartments are empty and how many more towers are going up.

This brings us to the next point, According to the Center for Policy Initiatives a third of working age families cannot make ends meet.According to the report:

Jobs that pay too little to cover basic expenses are concentrated in some of the largest industries in the region, including tourism (hotels, restaurants, and entertainment), other services, retail sales, construction. Agriculture has relatively few jobs in the region but less than half of the workers make enough to get by.

This leads to high levels of economic insecurity. This can mean temporary or permanent homelessness.

While poverty rates have dropped slightly, deep inequality, which homelessness is a sign, persists.

According to another report on poverty:

Poverty increased among Black and Asian families throughout the county, and poverty rates for both Black and Latino people remain at more than double the rate for non-Hispanic White people. Almost 1 in 4 Black and Latino children and nearly half of Native American children lived in poverty, compared to only about 7 percent of White children.

According to another piece from the the Union Tribune:

With 9,160 homeless people, the county has the fourth-largest population of any region in the nation, trailing only New York City (76,501), Los Angeles County (55,188) and Seattle/King County (11,643).

“In many high-cost areas of our country, especially along the West Coast, the severe shortage of affordable housing is manifesting itself on our streets,” HUD Secretary Ben Carson said in a statement. “With rents rising faster than incomes, we need to bring everybody to the table to produce more affordable housing and ease the pressure that is forcing too many of our neighbors into our shelters and onto our streets.”

Part of the answer to this is the cost of living, It is 44 percent above the national average. This is according to PayScale.

It is lower than New York, but it is when we get into the cost of rentals. So how much have rental costs gone up? In 2012 they were as follows:

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Simple math reveals that the inflation for housing has gone from 61 percent for a Studio, all the way to 67 percent for a 3 bedroom unit, which a family might need. This rate of inflation cannot be explained by just market forces of supply and demand, or increased costs for landlords.

This is the inflation rate by year since 2012

  • 2012: 1.99 percent
  • 2013 : 2.77 percent
  • 2014 : 2.68 percent
  • 2015 : 3.39 percent
  • 2016: 2.07 percent
  • 2017 : 2.11 percent

It is clear that the rate of housing costs is well above inflation. This is not driven by strict market forces.

Hepatitis A concentrated the mind of city and county leaders who knew people were dying in the streets. But when we have a very low supply of affordable housing, while we have plenty of high end empty housing, we must also blame development policies that encouraged the buildup of high end housing over the last twenty-five years, while affordable housing stock continues to diminish.

It is time to speak of real solutions. One is to increase the housing stock. The Housing Commission is looking into that. The other, resisted by developers and government officials, is rent control. Just the cost of housing, which is way above inflation should be telling. Also, wages remain stagnant.

Talking about housing first policies, which are state of the art right now, is navel gazing when you look at the cost of housing, high inflation, and pervasive income inequality.

Written by

Historian by training. Former day to day reporter. Sometimes a geek who enjoys a good miniatures game.

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