Exposing the Homeless Industrial Complex

Earlier this month a guest column in San Jose Spotlight defended efforts by homeless nonprofits to end homelessness in Santa Clara County. The author, Ray Bramson, is Chief Impact Officer at the nonprofit “Destination Home,” a tax exempt organization that collected over $62 million in contributions and grants in 2020. The CEO of this organization made a reported $335,404 in that year, and one of the directors made a whopping $754,871, of which a hefty $693,186 was “base compensation.”

Let’s suppose these salaries are justifiable, since it isn’t unusual for an organization with revenue of $62 million to have executives who make that much. The problem is that this organization is the product of perverse incentives. The management of public space has been taken over by what has now become a homeless industrial complex. Organizations like Destination Home will not flourish if homelessness is eliminated. Instead, like many other prosperous nonprofits and heavily funded government programs, the more they fail, the bigger they get.

In his column, Bramson attacks his critics. He writes, “The rhetoric machine likes to foment discord with the general public. It’s either that nothing is being done or it’s being done the wrong way. We need to criminalize, blame the individual for their shortcomings, complain about costs, or find a way to protect the community first, which almost always means putting the needs of the most vulnerable people last.”

Well, in deference to Bramson, plenty is being done. But it’s being done the wrong way. Earlier this year, Santa Clara County announced a plan to spend $75 million to build 758 apartments for the homeless. That’s 100,000 per unit, which, believe it or not, is considerably less than many other counties and cities in California are spending. Then again, it isn’t clear what matching funds may not be included in that total. But when the response to homelessness is to spend millions, or billions, to build subsidized housing, these homeless advocates are missing a more fundamental point: The doctrine of “housing first,” is flawed.

“Housing First” is defined as “an approach to quickly and successfully connect individuals and families experiencing homelessness to permanent housing without preconditions and barriers to entry, such as sobriety, treatment or service participation requirements” (italics added).

It is difficult to imagine an approach that is more naïve, more corruptible, or more counterproductive. When it comes to giving people free housing with no conditions, the more you build, the more people will come. Free housing is not only a magnet for the indigent, it breeds indigence. And yet Housing First has been the governing principle in homeless policy for nearly twenty years – precisely the period in which rates of homelessness have exploded.

California’s homeless industrial complex is not populated by idiots. They ought know that if you don’t put behavioral conditions on subsidized or free housing, you will never stop attracting people to avail themselves of your service. In some cases the offer of free housing will even corrupt the character of individuals who are teetering between becoming unproductive and letting the system take care of them, or trying harder to maintain sobriety and personal independence.

When Bramson accuses critics of the homeless industrial complex of being a “rhetoric machine” that likes to “foment discord,” he’s being more than a bit hypocritical. Whenever public meetings are held over where to site subsidized apartment buildings in peaceful neighborhoods, objections from the local residents are overwhelmed by well organized and belligerent homeless activists who don’t live there, who shout them down, calling them privileged, racists and YIMBYs. The comments that followed Bramson’s column, overwhelmingly skeptical, offer an authentic perspective from the community:

“How about actually treating severe mental illness and substance abuse as opposed to putting chronically homeless people in the wrong programs with the wrong interventions while not addressing root causes? This is the Housing First model defined – and people like you aimlessly support it, while never questioning why the issue has gotten worse, a lot worse, over the last 10-years.”


“The homeless around my home have dehumanized themselves by defecating in my yard and bushes, burning down tree after tree, stealing water and power from my porch, creating and leaving piles of putrefying waste everywhere, screaming and yelling constantly, parading around without pants, etc. I’d be more than happy to pay taxes to reopen the state’s mental health system, but no politician is trying to do so. The theory that more housing will reduce homelessness is laughable when one actually comes into contact with the homeless people currently occupying all the encampments. These people don’t want housing, they want to just be left alone to do as they please.”

These comments are evidence of a failed scheme. Housing First costs too much, takes too long, creates its own inexhaustible demand, corrupts individuals who might otherwise get their life in order, cannibalizes funding for mental hospitals and shelters, and it has created a monster – the Homeless Industrial Complex – a coalition of organizations in California that have already collected and spent tens of billions of dollars to execute a scheme that has only made the problem of homelessness worse.

It is an opportunistic lie for defenders of Housing First to claim that critics of the Homeless Industrial Complex don’t care about the less fortunate, or that these critics haven’t done their homework. In speaking with people running homeless shelters from San Diego to Sacramento, and asking them what has to be done, every one of them ultimately gave the same answer: At least two thirds of the homeless are either alcoholics, drug addicts, or mentally ill, and they must be treated, and the only way to treat them is to incarcerate them.

Michael Shellenberger, a progressive activist that has done extensive research into the homeless crisis in California, has made this clear in countless articles as well as in his book, “San Fransicko.” As he wrote in May of this year, “Three times more homeless die under ‘Housing First’ than ‘Shelter First’ policies. Shellenberger is right. For their own sake, homeless people need to be moved off the streets, sorted according to their afflictions, and placed in shelters. These shelters can be located on less expensive real estate, and the money saved can be used to treat them.

There is nothing compassionate about letting substance abusers and psychotics live on the street. Housing first, a policy cooked up by HUD during the Obama administration, has created what is now an extremely profitable scam for public bureaucrats, powerful nonprofits, and politically connected developers. But it is not working for anyone else.

This article originally appeared in Epoch Times.

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