LA’s Homeless Industrial Complex (updated)

The homeless crisis in Los Angeles has turned into an administrative program to be managed, with special interest players and connected industries profiting handsomely.

(This February 2022 essay is updated at the end)

Los Angeles loves the attention it gets when it hosts televised events such as the Oscars, the Tournament of Roses parade and, most recently, the Super Bowl. Images of sun-drenched beaches, palm tree-lined streets and the iconic Hollywood sign conjure up feelings that this laid-back West Coast center of entertainment, sports and culture is a dreamy California paradise. Those of us who live here experience a different reality that is not broadcast to TV viewers, one that has gotten progressively worse over the past two decades.

One of the more spectacular failures in Los Angeles is the growing homeless crisis and the appeal it represents to every troubled person in America. The drug-addled, mentally ill and emotionally disturbed around the country are tempted by LA’s warm weather and generous free benefits to live on LA’s beaches and in LA’s parks with no rules and no fear of being held accountable for harmful or illegal behavior. 

Rational people understand that handing out free food, shelter and living supplies will naturally attract those who do not wish to actually pay for such items. Distributing these items in a warm climate with no strings attached is inviting disaster. And that disaster is out in the open for everyone to see.

One such LA disaster area is Venice Beach, a 3-1/2 mile-long seaside community in Los Angeles, which now counts more than 2,000 people living on its streets in tents, cars and RVs. With a homeless population second in size only to that of infamous Skid Row, the town is now nicknamed “Venice-zuela” by locals. Fires originating from within homeless encampments have destroyed businesses and private homes, accounting for over 50 percent of all fire responses by the LA Fire Department (more than 24 fires per day). And law enforcement, in response to COVID, has effectively been neutered to the point where drug dealing, shoplifting and even assault are not prosecuted and those committing these acts are released back onto the streets within hours and with no cash bail.

The Road to Perdition

How did we arrive at this point? The actions taken by Los Angeles elected officials that were originally intended to address the homeless population has led to semi-permanent encampments lining city streets, cluttering beachfronts and settling under freeway overpasses.

Is it due to a lack of funding? For the 2021-2022 fiscal year, LA County has budgeted $527 million and the city of Los Angeles has allocated $1 billion, nearly 10 percent of all spending, “for the homeless crisis.” That’s a lot of money for sure, yet it is not even close to what would be required to actually house everyone living on the streets.

In 2020, there were an estimated 66,000 people experiencing homelessness in Los Angeles County, or approximately 25% of all homeless in the United States. That amount is surely higher today because, as LA County Sherriff Alex Villanueva accurately proclaims, Los Angeles is a national magnet for homeless migration.

The median housing price in Los Angeles was $841,834 in 2021, 129% higher than the national average. Assuming a unit cost of $500,000 and assuming nobody else arrives, it would cost $33 billion to house every homeless person in Los Angeles. That would require the entire county and city operating budget to more than quadruple within two years, which would, in turn, require state and local taxes to skyrocket to unsustainable levels. It is clearly a strategy that is certain to fail.

Maybe failure is the strategy. Maybe the entire homeless crisis and the primary solution – taxpayer subsidized housing, provided free and with no conditions, along with ongoing food, clothing and living supplies for free – is a special interest scam that is guaranteed to never solve the problem but to continue shoveling state, local and federal funds into a newly-created cottage industry that thrives on failure. A confluence of players including public bureaucrats, powerful nonprofits and politically connected housing developers have identified an opportunity to cash in on this crisis. Billions pour in, the problem gets worse, and a vicious cycle of untenable policies coupled with the lucrative administrative contracts with no end in sight…a Homeless Industrial Complex is born.

Is Housing the Only Answer?

The Homeless Industrial Complex was a logical progression of the U.S. Department of Housing and Urban Development’s Housing First policy, introduced in 2014. Housing First was a rapid-response program to put the homeless into permanent housing without any conditions related to drug use, employment or treatment seeking. But putting people into housing is missing a crucial point: Homelessness is not simply a housing problem to be solved with more housing. It is primarily a mental illness, drug addition and crime problem. This is well-known among experts, politicians and activists, yet they continue to focus solely on the lack of housing.

News Flash: There is no shortage of housing – anyone qualifying to rent or purchase a dwelling can do so. The availability of free housing in ultra-expensive Los Angeles with no strings attached? Yes, that is in short supply and that is what the Homeless Industrial Complex wants.

That’s because they want MORE homeless, not less, and they’re pushing measures to guarantee the homeless population in Los Angeles increases. That increase in homeless population means more city contracts, more outreach programs, more budget increases, more administrative staffing, more hideously overpriced property development, and vastly more taxpayer dollars forever spent. The homeless crisis in Los Angeles has turned into an infrastructure to be managed, with special interest players and connected industries profiting handsomely.  

The Six Year Pivot

Someday, perhaps, common sense will prevail. Los Angeles and the state of California could deregulate home construction, eliminate “open space” land requirements and allow the free market to lower home prices to relatively affordable levels. LA and CA can stop harassing private employers, let them create jobs and hire the most productive people. We can have inexpensive and safe shelters built on inexpensive real estate. We can fire district attorneys who refuse to enforce laws and perpetuate vagrancy and crime. And we can reject the absurd notion that drug addiction and criminality are legitimate “lifestyles.” Get the addicts off the streets and into treatment. Get the thugs off the streets and into prisons.

Los Angeles will be hosting the 2028 Summer Olympic and Paralympic Games. Over the next six years, LA can reform its homeless strategies to actually help those in need. It will require a hard pivot away from the opportunistic nihilism being demonstrated by the Homeless Industrial Complex. Those who are profiting off this crisis will have to reject their ill-gotten wealth in favor of actually helping those troubled souls to recover their dignity. Re-direct funding away from wealthy developers and put it toward rehabilitation and therapy that will actually reduce the homeless population.

By the summer of 2028, LA can turn this crisis around and clean up the human stain it has created. Or it can perpetuate this homeless housing scam that is incentivizing the increase of the homeless population. By 2028, it will not only be us Angelenos noticing but the entire world.

UPDATE 11/22

As of this writing, it looks as though the recent Los Angeles mayoral race has been called for California State Representative Karen Bass over developer Rick Caruso, who pretty much made the L.A. homeless disaster the center of his $100 million campaign. You might be thinking “why would you not vote for someone with a long history of business and police support in L.A., a proven developer who promised “30,000 beds in 100 days” and delivered a plan to build many more thousands low-income dwellings sorely needed in expensive L.A.?”

I think that because Caruso, a Democrat, wanted to actually fix the problem, he was torpedoed by rival developers, his own party, and the powerful L.A. city council who are just getting started in making this a permanent issue. If mitigating the homeless plight by getting them off the streets and into shelters became a reality, funding for the bloated administration of “homeless services” would dry up and homeless advocates, political grifters and rival developers would have less opportunity to cash in.

No, I think Karen Bass was a much safer choice for L.A. mayor than Rick Caruso to those who are connected to this gravy train. Bass has proven to be malleable and “on board” with the current thinking that we can spend our way out of this crisis. Bass even admitted that she “cannot fix the homeless issue within her four-year term.”

The ballot counting is still ongoing, now a full two weeks after Election Day. It’s becoming obvious this late in the game that a Caruso victory would not be tolerated by the L.A. power structure, and as each post-Election Day hour passes Bass’ lead widens.

So there you have it; a homeless-industrial complex determining a mayoral election outcome that serves their interests and not the interests of those they are purportedly serving. They’re not even hiding it.