Straight Talk from Al Jacobs

THE IDIOCY OF OUR HOMELESSNESS EFFORTS

 

According to the annual report of the U.S. Department of Housing and Urban Development, on any given night about 134,000 Californians are without shelter. Whether they’re bedding down on a street corner bench, curling up alongside a dumpster, or provided with a cot in a shelter, they’ll awaken the following morning to spend another day roaming the streets.

 

And what’s being done by the establishment to ameliorate the problem? Committees are formed to study the matter; survey crews are hired to count the homeless; bond issues are passed to throw money here and there; and elected officials issue proclamations castigating one another. An analysis by the National Low Income Housing Coalition reveals our state has only 22 affordable and available rental homes for every 100 very low-income households. Simply stated, California is short more than a million rentable units needed for its impoverished citizens.

 

So what’s being considered? The Terner Center for Housing Innovation at UC Berkeley reports that a 100-unit affordable housing project can be built for $42.5 million. On this basis, our rental unit shortage is resolvable for $425 billion. With three months still to go in office, perhaps Governor Jerry Brown can push this through the legislature.

 

I have a better way to fix the problem. The federal government’s Section 8 rent subsidy program, which supplements low-income tenants’ payments in the competitive rental market, averages out at about $600 monthly per family in modestly priced areas. In this way, the government’s cost to house the million families works out to $7.2 billion annually. With market rents available, the prospective landlords will build and pay for each apartment – and not at the $425,000 envisioned by UC Berkeley, but on the cheap. And if the poor can’t live in high priced areas, it’s likely all for the better.

 

A final thought: I don’t believe there’s any possibility the homeless crisis will be approached in a thoughtful manner by our elected officials. There’s a reason for this: I’m convinced most of those persons who run for and get elected to public office specialize in only one thing: it’s running for and getting elected to public office. Actually viewing and approaching real life problems in some sensible fashion is beyond their abilities. And as we citizens vote the way we do, we deserve what we get.

 

 

Al Jacobs, a professional investor for nearly a half-

century, issues weekly financial articles in which he

shares his financial knowledge and experience.

You may view them on http://www.roadwaytoprosperity.com