The Homeless Crisis

 There has been a lot of talk about homelessness in the past few years.  It's a problem.  There's no doubt about that.  Where the conflict comes in is when people start talking solutions.  At one end of the spectrum are the "ride them all out of town on a rail" people.  At the other end of the spectrum are the "Governments should spend tons of money on either new construction or housing subsidies for the poor" people.

The former strategy has been employed with modest success in the past.  It drove numbers down, at least temporarily, and only in some places.  What it mostly did was move the problem around without actually eliminating it.  The later strategy has also been moderately successful in the past.  It too drove the numbers down. at least in some places.  And it had the virtue of not moving the problem around.  But it too did not eliminate the problem.

These two strategies are only two examples of the many strategies that have been tried in the past.  That means that we can look to history for guidance as to the likelihood of success of any strategy we might now consider.  And that means, as anyone who has read my previous work knows, it's time for a dive into history.

For my historical dive I am going to stick with Seattle's history on the subject.  The historical experience of every city and every region is distinct.  Seattle, for instance, featured a large "Hooverville" encampment during the Great Depression.  The homeless congregated in large numbers on then undeveloped land.

Hooverville was the historical equivalent of the "Tent Cities" we now see, but on a much larger scale.  Back then the homeless built shacks out of tarpaper and scrap lumber rather than scrounging up cheap tents.  And they congregated in one place.  But the idea was the same.

Not every city had a Hooverville, but many did.  It was one of many common patterns that have emerged and reemerged over the years in response to the periodic bouts of homelessness the country has suffered through.

Seattle's experience with homelessness has some unique components.  But there is enough commonality of experience to permit Seattle to stand in for all those other places without loosing anything essential.  And away we go.

And I am going to start with a simple question?  Seattle didn't always have a homeless problem, did it?  And the answer is NO.  Seattle didn't always have a homeless problem.  That's why history, which is almost always helpful, is even more helpful than usual. We can see how things were when there wasn't a problem.  Then we can see what changed to cause the problem, and to make it go away.

And we know there is a solution:  go back to the way things were when homelessness was at most a minor concern.  So, let's start with the way things were during some of those periods.  Early in Seattle's history it had something called "Skid Road".  Over time this phrase morphed into the now widely used term "Skid Row".  A skid row is a neighborhood full of cheap, crappy housing.  As a result, poor people live there.  They do so because that's the only place they can afford to live.

Skid Road came about because of Seattle's early connection to the timber industry.  '49ers flooding into San Francisco and surrounding areas in search of gold set off a local construction boom.  The completion of the first transcontinental railroad a decade or so later caused the San Francisco metropolitan area to continue to flourish for more decades.  That extended the construction boom.  Both events also cemented San Francisco's position as the financial capital of the west coast until well into the twentieth century.

But for our purposes what's important is that the wood used to build all of those buildings in the then booming metro San Francisco area had to come from somewhere.  And a major source for that wood was the Puget Sound region.  The headquarters of the regional timber industry was Port Townsend, now a sleepy tourist destination, but then a very big deal.  But Seattle, in the form of the Yesler Sawmill, got in on the action.

The big industry in Seattle in the early years was cutting down trees, milling them into lumber, then putting them onto ships bound for San Francisco.  Seattle had, and still has, steep hills.  Back then the hills were covered with trees.  If Seattle was to grow into a metropolis the trees had to go.  Luckily, trees were valuable due to the San Francisco construction boom.  This allowed the timber industry to power a lot of Seattle's early growth.

But it is harder than one would think to get the trees down Seattle's steep hills and into the mill.  So, something called a "log flume" was constructed.  Instead of water, the thing a flume normally moves, Seattle's flume moved logs.  And it was, in essence, a giant slide.  The process of cutting down the trees, turning them into logs, putting the logs into the top of the flume, letting them slide down into the water at the bottom, then floating them to the sawmill, was called "skidding".

And after all the trees had been cut down the flume no longer had a purpose, other than being an eyesore and being in the way, that is.  So, it was then taken apart and the timber it had been constructed from was fed into the sawmill.  What was left was a road.  But before that Skid Road was a neighborhood.  It was an undesirable neighborhood.  No one wants heavy logs flying by their house.  And, of course, there was always a chance that a log would pop out of the flume and crash into someone's house.

Given all that, it is no surprise that the only people who lived in that particular neighborhood were poor people who had no better option.  So, the association between a Skid Row neighborhood and poor people dates back to the origin of the term.   And the term originated in Seattle and nowhere else.

Back in those early days there were no zoning laws.  If someone wanted to build a log flume in the middle of town there was no law against it.  In fact, it was encouraged.  After all, it would bring money into the local economy.  Similarly, if someone wanted to throw up crappy housing that only poor people could be induced to live in, there was no law against that either.  That's how things worked back in the day.

People always had a place to live.  It was substandard, dangerous, and often uncomfortable, but it was.  It put a roof over the head of almost everybody.  When it came to housing poor people, and thus keeping them off the street, all that was necessary was to have Skid Row type neighborhoods in your city.  Poor people found hanging out in the more desirable parts of the city could be herded into the less desirable parts.

And it worked.  Cities were cut up into neighborhoods.  The poor people lived in the slums, i.e. the Skid Row parts of town.  Rich and powerful people lived in the fancy parts of town.  There were usually gradations in between.  Some parts of the city were closer in nature to the slums.  But they were a step up from the worst slums.  Some parts were quite nice, just not quite as nice as the nicest parts of town.

Eventually, this got formalized in the form of zoning laws.  City Governments started putting rules in place to designate the boundaries of the various neighborhoods.  And they started mandating construction standards.  These varied from pretty much anything goes in the slums to allowing only high quality construction in the fancy parts of town.

Codes for the fancy parts of town might mandate minimum square footage, both of the house and of the lot, forbid activities like multifamily dwellings, manufacturing, retail, warehousing, and the like.  Other neighborhoods permitted all of the activities prohibited in the fancy parts of town, and were silent on things like minimum square footage and the like.

These zoning laws worked.  There was a place for everybody and everybody knew their place.  One modern twist on this idea was called Redlining.  Supposedly, lines on a map were used to delineate the boundaries of the various neighborhoods.  Red lines were used to delineate the boundaries of the neighborhoods set up for the undesirable groups, Asians or Blacks, for instance.  They weren't allowed to cross the "red line" and move into the rest of the city.

Seattle, had a Chinatown, for a long time the only place where people of Chinese extraction were allowed to live.  It was eventually joined by Japantown (Japanese), Little Saigon (Vietnamese), and others.  Each maligned group got its own ghetto.

The term "ghetto" was coined in Europe.  It referred specifically to the neighborhood Jews were confined to.  But the usage of the term was eventually broadened by Americans.  In the U.S. it was most commonly used in association with the neighborhood were Black people were forced to live.  In Seattle, the Black neighborhood was called the "Central District".

One feature of ghettos of all kinds is that housing prices are lower there.  One popular excuse for creating and maintaining ghettos is that "those people drive housing prices down".  The point of ghettos was to discriminate against the people who were forced to live there.  That made living in or near a ghetto unpopular.  And popularity is really what determines the desirability of a particular location.

There is only a modest correlation between the actual desirability of a location and its price relative to land in other locations.  There are intrinsic factors that go into how desirable a specific location is.  They are things like convenience, the view, amenities like being on the waterfront, and so on.  But a study of these intrinsic factors only gets you so far when it comes to predicting a piece of property's market value.

Subjective factors also figure into the calculation.  If we study actual land values for a typical U.S. city in the 1950s, a city like Seattle, then we can subtract the intrinsic factors to determine the how much subjective considerations affect a property's value.  It turns out that subjective factors are very important.  Land in a "rich" neighborhood was highly overvalued while land located in a ghetto was highly undervalued.  Zoning had a large influence on land values.  But that, after all, was the point.

Since then, a number of forces eventually substantially diminished the ability of zoning to distort land values.  Two big ones were suburbanization and civil rights.  Suburbanization had two effects.  First, a lot of middle class and rich people moved to the suburbs.  That siphoned off a lot of the people occupying the top financial tiers.  This made it harder to maintain inflated land values in pricier neighborhoods.

In Seattle's case the metropolitan population was growing just enough to exactly offset suburban flight.  As a result, migration to the suburbs did not cause Seattle's population to decline.  On the other hand, it didn't grow either.  Instead, it remained essentially unchanged for several decades.  That meant that enough rich and middle class people continued to live in the city to keep prices stable, or increasing slowly, in rich and middle class neighborhoods.

To this day there are lots of neighborhoods in Seattle that are filled with nice houses occupied by middle class people.  These kinds of neighborhoods provide more than half the housing currently available in Seattle.  And these neighborhoods have seen little change.  Change has been confined to the poorer neighborhoods.

The other impact of suburbanization eventually had an equally large effect.  Seattle got hemmed in.  The last time Seattle expanded its borders was in the '60s.  That meant that Seattle couldn't implement the "sprawl" strategy used by cities like Huston and Phoenix.  Given a choice, people preferred to live in detached single family homes.

But there was just no place inside Seattle's city limits to build more.  So, Seattle built high density housing, apartments and condos.  This should have caused the population to increase.  But there was a countervailing trend.  The number of people living in the typical house declined.  In Seattle's case, these two opposing trends balanced out.  It wasn't until the '90s that the high density trend got the upper hand and Seattle's population started growing again.

Initially, suburban living was very desirable.  Cheap land allowed suburban developments to be reasonably priced.  Huston, Phoenix, and other similarly situated cities, were able to grow by annexing more and more land, which they filled with suburban sprawl.  But that sprawl eventually meant that new suburbs kept getting farther and farther away.  And that has caused the commute to anywhere interesting to get longer and longer.  So these new outer suburbs have gotten less attractive over time.  As a result, they now attract poorer and poorer people.

What civil rights did, starting in the  '60s, was to make discriminatory zoning practices like redlining illegal.  Initially, these anti-discrimination laws were honored in the breach.  But over time enforcement slowly ramped up.  Eventually, this made it harder and harder to use zoning to enforce the rigid boundaries that used to characterize neighborhoods.  The eventual result was gentrification.

People started viewing neighborhoods not by who traditionally lived in them but by the intrinsic factors they provided.   Previously undesirable neighborhoods started becoming sought after.  Take, for example, Seattle's aptly named Central District.  As the name implies, it is centrally located.  That is a very desirable feature.

Gradually, many of the Blacks that had traditionally lived there were pushed out by white people with more money.  And besides being able to pay more in the first place than many Blacks could afford, they had the money to fix up the housing they found there.  Early adopters took advantage of what had been undesirable, and therefore cheap, to snap up properties that they otherwise couldn't have afforded.  These properties eventually became desirable, and therefore valuable.

Over a period lasting more than thirty years all of the less expansive parts of Seattle have gotten gentrified.  And what that meant was that all of the cheap housing got replaced by expensive housing.  Contemporary Seattle no longer has a Skid Row.  And that means that there is no place in Seattle for the poorest people to live.  Seattle used to have a bunch of SRO (Single Resident Occupancy) hotels.  These were essentially flop houses where even very poor men could afford to live.  They are now all gone.

Seattle is an extreme case.  But the general trend is universal.  Not every city has lost all of its "flop house" quality housing the way Seattle has.  But pretty much every city has far less of it now than it had fifty years ago.  And pretty much every city has lost a lot of the housing that people occupying the bottom few rungs of the economic ladder could afford.

Seattle used to be an easy place for a person making the minimum wage, or perhaps a little above it, to find housing that was both affordable and decent.  That kind of housing is now effectively nonexistent.  Again, the near universal trend is for people in those income brackets to find it very hard to find a place they can afford to live in, even if they live in a place that is thousands of miles away from Seattle.

That has put a lot of people into a severe squeeze when it comes to finding housing they can afford.  Then there are drugs and mental health.  We are more than fifty years into the War on Drugs.  It has been a failure all along the way.  But one side effect is that people who end up with serious drug problems too often find that they have little access to effective treatments.  As a result, a lot of them end up on the street.

People having mental health problems also have trouble getting effective treatment.  Their illness causes them to have poor judgement.  And that leads to the kinds of actions that lead to them also finding themselves out on the street.

Finally, there are the otherwise squared away people who for one reason or another have hit a serious financial problem.  That is often enough to put them out on the street.  The street has become the dumping ground for all the problems that society does not want to deal with.

Tents are cheap.  Sleeping bags are cheap.  Grocery carts are cheap.  Derelict cars and motor homes are cheap.  The result is a lot of people living on the street, in a tent tucked back somewhere, or living in a junker vehicle.  Things have gotten out of hand.

There are several problems here that need to be fixed.  We tried dealing with drugs by locking lots of people up.  What we ended up with was a fantastically expensive prison industry and no relief on the drug front.  We used to have mental hospitals.  But we got rid of them and decided that "community based" treatment was the way to go.  That too has been a failure.

If we give the squared away people a helping hand they will take it and soon be off the streets.  But the number of helping hands are far fewer than the number of people who could use the help.  At the other end of the spectrum are the people who have become comfortable living on the street.  They steadfastly refuse all offers of help.  I have no interest in making their lives easier.  In fact, I am okay with some of the yesteryear tactics that were designed to get them to go elsewhere.

I am firmly of the opinion that throwing money at this particular problem is a mistake.  Government, no matter what level you want to talk about, doesn't have enough of it.  Nor am I convinced that an infinite amount of money, should it become available, would be effective.  Even if a lot of money was available, this is the kind of problem where the need will always expand by the amount necessary to consume however much resource is thrown at it.

But the problem is not insolvable.  It didn't used to exist.  It can be made that way again.  History tells us that the proper approach is a legal/regulatory one.  Before discussing the main change, let me address some changes in the law that would not solve the problem, but they would help.  Current law make sit almost impossible to deal with junker vehicles and the people living in them.

The law should be changed so that it is illegal to park a vehicle on a public street that is not "street legal".  All vehicles parked on city streets would have to conform to all safety standards and the like; and they should be required to have current "tabs".  This would get the worst of the junker vehicles off of public streets.  If people want to allow people to live in junker vehicles parked on their private property, okay.  But not on public streets.

It should also be illegal for someone to pitch a tent on a sidewalk, in a public park, etc.  Again, if people want to allow other people to pitch tents on their private property, that's another thing.  Will these changes make it harder for homeless people to find a place to lay their head?  Yes.  But it will also free up a lot of resources that are currently playing whack-a-mole.  That's not enough to fix the problem.  But it is a start.

Then there's the big one, zoning.  Zoning is the most powerful tool in the government toolbox.  Lots of zoning changes have been made over the last few decades that have increased the minimum standards for major remodels or new construction.  This has made it illegal to construct slum housing.  A tight housing market has made it a good idea for owners to upgrade cheap housing to the point where it is no longer cheap.  What has been done can be undone.

But there is no political will to do this.  And for a very good reason, NIMBY.  I own my house.  It has increased tremendously in value since I bought it.  I like that.  And a significant contributing factor to its increase in value has been tight zoning.

Tight zoning floats all boats.  Even if you don't fix your house up the fact that the housing market is tight means that prices have been going up and up and up.  It has also made deciding to fix up your house (and maybe flip it) into a no brainer for anyone owning a house at the low end of the market.  (Flipping houses has now been a thing since This Old House went on  the air in 1979.)  All of this has had a positive impact on my net worth and the net worth of the pretty much every other home owner in Seattle.

The single largest class of housing in Seattle is single family residences.  All those people have a vested interest in keeping prices increasing at a good clip.  They are the silent majority in this discussion.  They don't say much, but politicians hear them anyhow.  These voters want the homeless problem fixed.  But they want it fixed in a way that doesn't interfere with the steady rise in the value of their house.

That kind of thinking blocks the best way to fix the homeless problem.  If cheap, slum-quality housing was readily available then lots of people would move off the street.  If developers can make a profit building cheap slum-quality housing, they will build it.

But nobody (meaning all the people who own single family homes in Seattle, and many of the ones who live in multi-family units) wants a bunch of slum-quality housing being built in Seattle.  And the resistance is especially fierce to building such housing nearby.  Not.  In.  My.  Back.  Yard.

Most slum-quality housing comes about as a side effect of the real estate cycle.  Prices go up and builders build.  They keep building and building as long as demand is strong.  Then something happens.  Demand dries up.  But construction involves long lead times.  They can't just stop on a dime.

When the market turns by the time all the projects that were in the pipeline complete a substantial housing surplus has built up.  This causes the value of some properties to drop by a lot.  This drop puts downward pressure on the entire housing market.  In a declining market often the only way landlords can keep their financial heads above water is to turn some of their property into slum-quality housing.

In this scenario nobody has any real say in the matter.  Market pressures overwhelm people's normal inclinations.  So, the fact that some people (those still hanging on who live near the newly created slum-quality housing) object vigorously to what is happening doesn't matter.  They don't have the leverage necessary to stop it from happening.  So, it happens.  The market now has slum-quality housing and poor people have some place to get off of the street and out of the weather.

Historically, this is what has happened in Seattle.  The Roaring Twenties turned into the Great Depression.  That produced a lot of cheap housing.  Besides the creation of Hooverville, a significant number of large houses that had been occupied by a singe family got turned into boarding houses.  The landlady maintained some public spaces in common, living room, dining room, etc.  Tenants got a room of their own.  But that was it.  They shared a bathroom down the hall and did all their entertaining in the shared public areas.

There are no rooming houses in contemporary Seattle.  Nor are there any apartments where tenants share a bathroom.  And nobody now lives an a unit where their bed swings down from behind a door in the wall (a "Murphy" bed).  Most people would find these kinds of accommodations appalling.  Not surprisingly, current zoning laws make these types of units illegal.  But they are how we used to have cheap housing.

The closest we come in the modern era is the Tiny House.  These feature a minimum of amenities and very little in the way of square footage.  Tiny Houses initially violated all kinds of Seattle's zoning laws.  I think a loophole has since been introduced that makes them legal, but I'm not completely sure about that.  And, of course, nobody wants Tiny Houses in their neighborhood.  And heaven forbid that anyone would propose the apartment equivalent of Tiny Houses.

So we continue to go in circles.  The thing that would actually work gets vetoed.  And, as I pointed out above, it gets vetoed for good reason.  It is also important to note that people who buy newspapers or who watch the local news on TV are the people doing the vetoing.

And it is bad business to alienate the people your business depends on.  So, the people who write for the newspaper, or report the news on local TV, go out of their way to avoid pointing out the obvious.  But I don't own a newspaper or TV station.  So, there it is.

Not surprisingly, I don't expect anything to change any time soon.  Lots of whining.  No effective action.  Before leaving the subject, let me make a couple of additional observations about what does not work.  The first one is rent control.  New York City is the poster child for rent control gone badly awry.

NYC has a lot of apartments, and has had them for a long time.  Not surprisingly, landlords sometimes get up to mischief.  About a century ago NYC put in some laws that were supposed to reign in this mischief.  But times changed and markets evolved.  NYC kept updating and updating their rent control laws in an attempt to stay ahead of the situation.

In spite of cycle after cycle of updates the regulations could never keep up.  Eventually, the rent control rules were so byzantine that nobody could understand them.  Support for rent control in its then current state slowly collapsed.  That led to successful efforts to roll back and simplify rent control regulations.  NYC still has rent control.  But the current system is a shadow of its former self.

The point is that in the long run it didn't work.  It got so bad at one point that NYC had more slum-quality housing than any other type.  At that point nobody was happy.  Rent control is one of those things that sounds like a good idea.  And it can work pretty well for short periods of time.  But in the end it doesn't deliver the desired result, enough low cost housing to satisfy demand.

What does deliver large quantities of low cost housing is zoning.  With proper zoning laws the market can deliver housing in quantities sufficient to make a difference.  Builders will build if they can do so profitably.  But right now they can't build cheap housing profitably.  That is unlikely to change any time soon for the reasons listed above.  But it needs to be said.  Rent control discourages construction.  Over time, it makes things worse.

Another idea that keeps getting proposed is to severely restrict the ability of landlords to evict tenants.  This idea comes from a good place.  Lots of landlords have engaged in discriminatory practices of one kind or another in lots of places and at lots of times.  Restricting the rights of landlords to evict tenants seems like a good way to fix this problem.

It too is another problem that can work well in the short run.  Seattle had an eviction moratorium during COVID.  As a short term measure it kept people housed in a time of severe economic distress for many.  But to see how things play out over the long term when a landlord's ability to evict is severely constrained we need to look no farther than Cabrini Green.

Cabrini Green was a large public housing development that was built in Chicago.  Its goal was to humanely house poor people at a price they could afford.  It was part of a federal program that reached its peak in the '60s.  And in the early years Cabrini Green was a big success.  It consisted of a series of large apartments that provided decent housing at subsidized prices.  A lot of God fearing and law abiding families moved in and were initially happy.

But it soon became almost impossible to evict anyone from Cabrini Green.  The ostensible reason was to avoid discrimination as most of the tenants were Black.  But over time an unintended consequence surfaced.  In a population as large as the one at Cabrini Green there were bound to be a number of bad apples.

They formed gangs and things soon got out of control.  That led to a situation where nobody was safe.  And it became impossible to deal with vandalism.  Later, drug use, drug dealing, and shootings became rampant.  Eventually Cabrini Green became one of several projects that gave public housing a bad name.  It was eventually torn down.  By that time it had degenerated into a lawless slum.

Appropriate eviction regulations are not something where a black-and-white solution is possible.  Landlords need to be able to kick bad apples out.  Discrimination needs to be controlled.  There is no simple solution that delivers both objectives simultaneously.  Only a nuanced approach can do that.

People like bright-line laws and regulations.  This is where some behaviors are always permitted and other behaviors are always prohibited.  But that kind of approach has been tried many times and has failed every time.

We need to allow the enforcers to exercise a degree of discretion.  Then we need to monitor the enforcers to make sure they are using that discretion wisely.  That's not something that we as a society are good at.

If we continue to avoid doing what works when it comes to homelessness, remember that there is another way to fix the problem.  We can just have another Great Depression.  Maybe continuing to bump along ineffectually is not such a bad idea after all.