Solve Homelessness: Cut Out The Middle Man

http://www.economist.com/node/17420321?story_id=17420321&fsrc=scn/tw/te/rss/pe

by joelrunyon • 15 years ago

87 97 15 years ago

hardik• 15 years ago

Interesting, just yesterday I read this critique of patronizing behaviour of the elite towards those whom they do charity for http://retributions.nationalinterest.in/trust-the-poor/ (In context to some welfare schemes in the Indian state of Bihar)

zackblum• 15 years ago

"Some estimates suggest the state spends £26,000 annually on each homeless person in health, police and prison bills."

So £26,000 vs. £794. I'd like to see this replicated.

nika6• 15 years ago

That's about $1,300. Or about $7.50 an hour for one month. This is about minimum wage. If they could get minimum wage jobs, they would, and they'd quickly not be homeless.

But they can't because students and recent graduates and stay at home moms, etc, get the minimum wage jobs.

If we eliminated the minimum wage, then all the jobs that need doing, but whose economic value is $2.75 an hour would come into being. This means that the homeless person would be able to earn that $1,300 in two months. If low cost housing were legalized, they'd be able to live cheaply while getting on their feet and saving for getting a better job.

Minimum wage is the idea that we'd rather have someone homeless and not working at $0 an hour than have them have a home and be digging themselves out working for $2.50 an hour.

angus772• 15 years ago

And if we removed all the oppressive health and safety rules from the heads of the poor landlords, we'd have apartments that someone could afford to live in when they make $1300 a month!

eru5• 15 years ago

Germany does not have a minimum wage (in general), but there are still homeless people.

I don't agree with minimum wage. But there are other barriers to full employment, too.

noelchurchill• 15 years ago

11 of the 13 got off the street, but how did they do it? Maybe a new TV was the motivation but did they get a job, their own home, and are they self sustaining? Or did they just move off the street into welfare housing, living off the state, which offsets the costs savings the article mentions...

eru5• 15 years ago

Actually, living in welfare housing may be cheaper for the state than living on the street. Welfare housing costs a few hundred Pound a month. The healthier living conditions, and thus reduced costs to the NHS, alone may be worth it.

(And in the USA that would be even more pronounced, because people without medical coverage often wait until their conditions become an emergency.)

There was an article a few years ago about some homeless people in L.A. or so cost the state so much, that just paying for their housing is cheaper.

TGJ• 15 years ago

So does giving the homeless small amounts of money perpetuate the problem since they don't save it? Would larger amounts be able to help them achieve some sort of first step? Like enough money to rent a apartment for 3 months which gives them a chance to get a job vs. enough money to just buy a meal?

pmorici• 15 years ago

How does, "a new pair of trainers and a television" help someone get off the street? This article is sort of light on facts.

slavak• 15 years ago

On that note, where does a "homeless" person even PUT a television?!

_mayo• 15 years ago

Maybe it's motivation to get a place to put the television.

nika6• 15 years ago

Sigh. This reminds me of the story about the poor guy in San Francisco who developed a small business (selling flowers? shining shoes? can't remember) but was caught and fined and made homeless (he'd just put down a deposit on an apartment) by the city because he didn't have a business permit.

koenigdavidmj• 15 years ago

Seems like something over which the local media would be quite willing to raise a stink.

ajays3• 15 years ago

Good memory!

You're thinking of Larry, the shoe-shine guy: http://articles.sfgate.com/2009-06-04/news/17208451_1_larry-...

The local media indeed jumped on it, and raised a stink.

nika6• 15 years ago

Thanks for digging up that link. Larry got taken care of because of the stink, but here are thousands of other stories of a similar nature, up and down the spectrum. Many small businesses started by "amateurs" run afoul of regulations, or simply discover that the tax burden is too much in the early days. Once when I started a small business it turned out I'd located my office in a special tax zone that wanted %3 of all revenue earned by the business.

I have a friend who spent 4 days in jail because he was caught near a bar without a drivers license. He didn't have ID, couldn't prove who he was and got locked up. They didn't let him make a phone call, and he stayed there until they decided he'd "learned his lesson". This one was sometimes homeless, but not a drunk or drug user. Just lost his ID.

nika6• 15 years ago

Also the motivations of the state are based on the motivations of any government. Buracracy is unavoidable.

If you're going to be handing out money, it would be better to give it to genuine charities that have an interest in helping the homeless. They generally will be better (imperfect of course, but better) at spending the money to help the most people.

The homeless oriented charities I'm aware of do amazing things with small amounts of resources, and they have to scrape by.

A real shame when we're blowing a $3.7 trillion dollar budget every year.

pyre• 15 years ago

Well, those charities are able to scrape by due to necessity (if they had more resources the likelihood of some percentage of those resources being wasted increases as their resources do) and because the people are generally more committed. Government bureaucrats generally aren't that motivated to cut corners, nor do they care for much beyond getting their paycheck (and maybe moving up the ladder).

speckle• 15 years ago

My unsupported speculation is that the public see the homeless as people that tumbled downwards because of mental issues and addictions. What's not often considered is the community that they live in - they still have social interactions; they still feel pride and depression and snark and remorse. Mommying them by giving them a bed and curfew isn't just demeaning to a homeless man, it's demeaning to anyone. I'm not sure if this is the right solution but I'm glad to see they're trying new things.

rubashov• 15 years ago

There are homeless because the flop houses and super cheap apartments (think ten to a bathroom) have been killed off by permitting and zoning laws. To solve homelessness you just need to make it legal to open up a for profit ten dollar a night mens dorm somewhere in a city. Hitler lived in one for a couple years.

As it is the shelters are all government run and sane homeless people avoid them because of rampant drugs and sexual abuse.

nika6• 15 years ago

Am I supposed to cite Godwins Law now? (Just kidding... )

There are many cities where these permitting and zoning laws work as a subsidy for wealthy people. For instance, they do not want walmart and they do not want more apartments built in my town (which is a very liberal university town) because they want to "preserve its character"... but they go way overboard.

The effect of this is that home prices go up significantly and they profit when they sell.

This seems to be common among towns up and down the west coast. I've seen it in California, Oregon and Washington.

Artificial constraint on the supply of homes means more homelessness, but also, more returns for homeowners there.

So, they have a financial incentive to vote to prevent these apartments from being built.

And I'm talking $600-$1,000 a month apartments, not even cheap housing.

mkramlich2• 15 years ago

The problem is that in aggregate terms, the more cheap housing you have in an area, the more crime, violence, graffiti and litter you're going to have.

Not because all persons who live in such places are always and inherently bad, but because a much larger percentage of the people who can only afford such places do have certain cultural, behavioral and educational qualities that cause them to breed such things. You enable the Ramen-eating college student to live there, but also the basket case. The struggling artist but also the drug-dealer or gang member. The single guy living alone for the first time with an apartment full of books, but also the extended family of 10 immigrants with 5 kids and varying degree of legality, all of whom who will be consuming government services and imposing government costs and externalities out of proportion to their taxable income contributions back. Having a town where the prices are so high only doctors and lawyers can afford to live might mean there's less diversity, but also the streets and lawns will be nice and safe and quiet, speaking in general. Given a choice only between these two imperfect extremes I know I'd take the second one.

stretchwithme5• 15 years ago

The logic is that people who can only afford 1/10 of a standard dwelling are better off living in a doorway and carrying all their stuff with them everywhere they go with no permanent address, instead of having 100 square feet to call their own. The benefits of learning to always be on guard outweigh the laziness that being able to lock a door causes people to develop.

cema4• 15 years ago

Frankly, I have no idea what it means. Care to elaborate or give me some links? (Thanks!)

khafra3• 15 years ago

I've stayed in $30/night hostels in New York City. I don't see many places they could've cut costs and still provided a safe, sanitary place to sleep, and there are still homeless people in New York City.

Qz• 15 years ago

$30/night is roughly $11000 a year, which is almost 3 times more than I pay in Pittsburgh for my share of a nice house. If there really is no way to cut those costs in NYC, the answer is to get out of NYC.

shaddi2• 15 years ago

This pretty great, but it's also pretty anecdotal. How were these 13 chosen (probably not randomly)? What is the outcome going to be in 6 months? A year? Five years?

Based on the (admittedly not extensive) work I've done trying to help homeless folks get back on their feet, a lot of people do just need some money to get their life back in order. For instance, it's hard to apply for jobs when you don't have an address or a phone number for people to call you back at. Giving someone the ability to not have to worry about making their rent payment for a couple months can be huge.

But a significant portion of the cases I've seen can't be solved this simply. Despite what this article says substance abuse issues /are/ a big factor for a lot of the homeless people I've worked with. Providing cash money can alleviate some of their problems in the short term, but there are generally more fundamental obstacles that are holding people back. If you don't address these issues people can very easily fall back into the trap.

The best intervention I've ever seen for a homeless person is an employer who is willing to give them a steady job and be understanding about the difficulty of the situation they're going through. Anything that can get a homeless person to this point should be encouraged. Sometimes that can mean covering their expenses for a while to get back on their feet. But often it means providing substance abuse support; often it means teaching job skills; often it means connecting them with the right social service or civil society groups.

nika6• 15 years ago

Or, for those who aren't quite ready to do a steady job, the legalization of interent or part time jobs. Let them work when they are sober and not when they are not.

Unfortunately the burden on businesses for "hiring someone" is so high due to regulations that it only makes sense to make positions that are full time, or part time with dedicated hours.

There are a lot of jobs that could exist where people worked some number of hours when they wanted to work, but where if they didn't show up for several weeks someone else could be doing it while they're gone.

Businesses would be willing to hire people on such terms (especially for some jobs like construction, or cleaning, etc) but they have to create positions that are focused on specific people due to the impact of regulations.

Hell, under Obamacare anyone who hires a kid to mow their lawn and pays them $400 over the course of a year has to file a 1099 on them!

angus772• 15 years ago

I've actually tried to convince a couple of employers in the past to give me more flexible hours when it was obvious that the set hours were irrelevant (e.g. I wasn't greeting guests or waiting for phonecalls or anything). They were adamant that that is just not the way things are done.

Same thing as when you try to convince an employer to let you go home early when you work a little harder and manage to get 8 hours of work done in 6 hours. That's just not the way things are done, so slow down already!

rdouble• 15 years ago

The USA has the most relaxed hiring regulations in the developed world.

shaddi2• 15 years ago

Isn't this already possible? There are plenty of day laborers who wait in the morning at "The Corner", and people with jobs for the day come pick them up. They work when they are able, and when there is a job for them. Regardless of whether or not this is legal, the market for this already exists, and it frankly isn't that great for employees. The benefit of a steady job -- or more accurately, a steady stream of income -- is that you can plan around it.

Also, I fail to see how regulation has prevented this from happening. Do you have any evidence you could point to? Lots of businesses have a big payroll of part-timers who only work a few hours a week. Speaking from personal experience, when I used to work these kinds of jobs many of my coworkers (myself included) had extremely flexible "work when you can" schedules. Lots of transient employees, too. For some industries this works, but for most non-minimum wage jobs frankly I don't see what the incentive for an employer to do this would be.

Klinky• 15 years ago

Your jab at Obamacare is also wrong, it would be $600 and most likely this provision will be removed.

There are such things as day labor positions and in many cases these people are taken advantage of because there are no regulations in place to ensure they are getting at least minimum wage.

Most low end jobs are service sector jobs that require a certain number of staff be on hand at all times to service customers. It's not going to work if you have 10 employees show up one day of which only 3 you can use, while the next day you only have 1 employee show up & you're short staffed.

In a lot of cases many part-time jobs offer rubber banding hours. You may have 25 hours one week and then 10 hours the next week. It's very hard to work around & in many cases it can interfere with your schedule. Your work usually wants you to be there regardless of other obligations or else you're fired. This has to do with workplace policies and not regulations.

As far as the employer side goes, if you are going to invest time and money into a new employee, you want to make sure this employee is going to make a good return on your investment. If the person shows up smelling bad & reeking of alcohol or is high, this person probably has issues that a three-day on the job training course making sandwiches is not going to fix and may end up costing your business a lot more money than they would bring in. Training employees is not cheap. Training 100 people, when only 20 will show up on a regular basis is essentially asking business to throw money out the window.

I laugh at the idea that you would want to hire people who have drug abuse problems to work with dangerous construction equipment or allow them on your premises, possibly unsupervised, to clean.

Usually flex-hours make sense for higher end positions where there are obvious goals set & your product may not be entirely physical in nature. Rarely will you find flex-hours viable in low-end service sector or manufacturing.

Usually the homeless have a multitude of problems. They need drug-detox, healthcare, housing and education. All of which will cost money. Putting this burden on business is not viable, there is no incentive to do it.

cosmicray• 15 years ago

> Hell, under Obamacare anyone who hires a kid to mow their lawn and pays them $400 over the course of a year has to file a 1099 on them!

Under the new health care legislation ? No. What you are describing has been an IRS requirement for many years. One that was mostly ignored. The congress wants to close the loophole (but the way they wrote it is rather brain damaged).

karzeem• 15 years ago

Milton Friedman's idea for alleviating poverty was a variation of this idea. It's called the negative income tax and the basic idea is that people below a certain threshold get cash from the government each year. The further below the threshold you are, the more cash you get.

http://en.wikipedia.org/wiki/Negative_income_tax

wisty• 15 years ago

TA idea is a bit different, the homeless guys are asked what they want. If you just handed them the cash, they'd probably blow it, but giving them a choice makes them think about the future, and how they can improve it.

arethuza• 15 years ago

That sounds a lot like the Working Tax Credit in the UK - which has had a lot of problems:

http://en.wikipedia.org/wiki/Working_tax_credit

[NB I think the problems were more to do with the poor implementation of the scheme rather than the idea itself].

eru5• 15 years ago

Those schemes (and similar) are also known as basic income.

You have to make sure that the effective marginal tax rates stay low, even on small incomes. That's something lots of welfare payments get wrong.

cletus• 15 years ago

This isn't actually too far from what we have now and is a terrible idea.

Below a certain income level in the Australia and parts of Europe (in all probability) you not only pay no taxes but you get low income credits. This is a negative income tax as you describe it.

The problem? Let me give you an example (and this is purely fictional):

Joe earns $5,000 a year in part-time work. He pays no tax. He gets $2,000 a year in government assistance.

Marginal rate of tax: -40%. Net income: $7,000 Total tax rate: -40%

Joe finds a better paying job and now earns $15,000 a year. Now he's paying $3,000 a year in tax and his low income tax credit is gone.

Marginal rate of tax: 30% Net income: $12,000 Total tax rate: 20%

Seems reasonable right? Now consider the difference:

Extra gross income: $10,000 Extra net income: $5,000 Marginal rate of tax: 50%

You see this with government benefits (that taper off and then cut out at certain income levels). The marginal tax rate low income earners end up paying can be well beyond 50%. Add in child support and this can go over 90%.

Call this a disincentive to work.

Let me give you a concrete example:

http://www.centrelink.gov.au/internet/internet.nsf/payments/...

> Income over these amounts reduces your rate of pension by 50 cents in the dollar (single), or 25 cents in the dollar each (for couples). For transitional or saved cases, income over these amounts reduces your rate of pension by 40 cents in the dollar (single), or 20 cents in the dollar each (for couples).

Bear in mind that you're losing 50 cents of tax free income for every $1 of taxable income that you gain.

wazoox• 15 years ago

That's why in France the system was changed (RMI to RSA) to allow people finding better job, by gradual reduction of their government subsidies.

elwin• 15 years ago

The disincentive is because the rates are badly chosen. If there was a wide buffer with a marginal rate of 0, it would work better.

ajays3• 15 years ago

Unfortunately, the way the system is setup, things won't change anytime soon. The reality is: often cities' homelessness departments are prime locations for employing cronies and operatives.

For example: the City of San Francisco spends $70M per year (about $10K per homeless person, given that the population of the homeless is just under 7K). On top of that you have churches and other charities helping out. And yet I see homeless people all around, sleeping in doorways, on sidewalks, etc. Heck, in the shadow of City Hall you'll see dozens of homeless people.

But the department of homelessness (I don't recall the name of the department) was filled with people from (ex-mayor) Gavin Newsom's campaign staff (from his unsuccessful run for Governor). There is no accountability. There are no metrics on how many homeless people are in the City. All we have is a massive bureaucracy that is making a living off of claiming to help homeless people.

kevin_morrill• 15 years ago

Where does the $70M figure come from? Not challenging you, just want to be able to cite toe source myself. This is outrageous.

krschultz5• 15 years ago

Is it?

Thats $87 per citizen in SF.

That accounts for 0.39% of my taxes in a given year, and I don't even make that much money because I just graduated college.

ajays3• 15 years ago

Oops, I was wrong. The figure is actually $150 million: http://articles.sfgate.com/2010-09-27/bay-area/24099065_1_ho...

It is outrageous indeed. Every time I walk by a homeless person sleeping in the cold on the sidewalk, I am reminded of this figure.

gaius2• 15 years ago

often cities' homelessness departments are prime locations for employing cronies and operatives

Yeah, that is kinda the dirty little secret of the homelessness "industry". Take Shelter, by far the most well known homelessness charity in the UK. Do they actually run hostels and soup kitchens? Well, actually, and this comes as a surprise to most people, they don't. They just transfer money from their donors to "think-tanks" and well-paid consultants. It's a huge racket, but since they have glommed onto a "worthy cause" they're untouchable.

sambeau3• 15 years ago

That's just not true. As you can see from their independently audited annual report most of the money they raise is spend on giving housing advice to people in trouble:

http://england.shelter.org.uk/__data/assets/pdf_file/0010/29...

Money out £45.9 million; Housing and legal services: £27,809,000.

prawn2• 15 years ago

Check out this (relevant) site I found this morning - a quick browser 'game' revealing some of the choices that inevitably keep many poor people poor:

http://playspent.org/

You start with $1000 and need to survive the month while trying to get a job, live, eat, etc. A few frustrating choices along the way that might not seem realistic, but may prove insightful for some.

thwarted• 15 years ago

This would be more a more convincing exercise if it didn't force me to make a choice between paying either the gas or electric bill when I could afford to pay both (and then forcing me to incur an even larger fee to get it turned back on), and made me pay to fix the leak in my rental apartment's sink. It would also have been nice to know that I've got a sick mom, a kid, and a pet at the beginning of the month, rather than springing them on me at seemingly random points. I found out on day 17 that I had a dog -- that's one hungry dog. I also held a yardsale with the explicit purpose of getting rid of stuff since I didn't have enough room for it all in my rental, and rather than feel good about that, it made me feel bad for only making $150 from the yard sale.

I mean, it was rough, and I had to tell my kid no a bunch of times and we aren't eating all that great (and I had to avoid playing the lottery and miss a friend's wedding). It was interesting, and reminded me of Morgan Spurlock's "30 Days" show.

prawn2• 15 years ago

I hear you. I feel like they could've avoided some of those situations and still conveyed the situations poorer people might find themselves in regardless of which choices they made in life.

known• 15 years ago

I think 1st world should ideally,

    1. Minimize income tax.
    2. Maximize wealth tax.
    3. Impose tax on idle cash.

danenania4• 15 years ago

How about:

1. Provide only essential government services

2. Enforce the law for everyone--no limited liability, no secret police, no pollution quotas, no wars of aggression

3. If they aren't hurting anyone or the environment, leave productive people and their wealth alone

swift• 15 years ago

A nice idea, but in the end I suspect the tricky part is the definition of "essential government services" and the criteria for determining whether a person or corporation is "hurting anyone or the environment".

cema4• 15 years ago

Sounds good in theory, but the devil is in the details: what's essential, what's aggression, is in the eyes of the beholder. The reality of politics will bring it all back to about what it is now.

forgottenpaswrd• 15 years ago

Fantastic job, that is exactly what we need:

1-Stop contributing to society. 2-Start living as parasites from more hard working, efficient people. 3-Eliminate freedom to choose what to do with your salary money, so nobody wants to work, everybody wants to parasite.

Totally brilliant, what could go wrong about that?

khafra3• 15 years ago

Libertarians always seem to assume that if people didn't have to fear starving to death, naked on the street, they wouldn't go to work any more; and that curtailing to any degree the ability of the wealthiest to add to their wealth will stop the most productive members of society from wanting to contribute.

Yet today, countries with better social safety nets have stronger economies, and Warren Buffett has consistently argued for higher effective taxes on the ultra-rich.

Zakharov• 15 years ago

Nobody has idle cash. When you put your cash in the bank, it's invested by the bank.

ulvund• 15 years ago

Inflation is a tax on idle cash

eru5• 15 years ago

You can tax wealth only so much, before it leaves the country.

jwinter• 15 years ago

The Housing First initiative in the US has seen some success: http://en.wikipedia.org/wiki/Housing_First

sethg• 15 years ago

I have a theory that “welfare” and “charity” for the poor, at least as practiced in the US, is frequently an exchange: impoverished people abase themselves in front of a representative of the government or some charitable organization, and they get benefits in exchange for portraying themselves as suitable members of The Deserving Poor. A program that merely gave money to people who don’t have any money, even if it was more efficient (because of lower overhead), would be politically unsustainable.

A local paper here just ran an article¹ about how a state rep was indignant because, out of about $50 million the state gave out in welfare-benefit debit cards last year, about $200,000 was spent on “non-essentials” (principally, at liquor stores²). $827 at Victoria’s Secret outlets! $664 at pet supply stores! For shame!

¹ http://www.bostonherald.com/news/politics/view.bg?articleid=...

² I don’t know if these guardians of the public purse confirmed that this money was spent on liquor and not on, say, chips and peanuts.

bugsy4• 15 years ago

I've worked with the homeless off and on over the years. Social workers are nice people and well intentioned do-gooders, and they tend to want to infantilize and control homeless people "for their own good". They develop a symbiotic relationship with some hopeless cases.

But there are a lot of homeless that find participation in a system that is designed to control them demeaning and won't participate. Among these are many skilled people who became homeless during a rough patch and simply can't get back into society because they have no place to take a shower with their own phone and a bed where they can get rest and then go on a job interview or go out and round up clients for work even. Being in the shelter system often means you have to get in line hours in advance for a spot, and have to follow various rules that prevent you from having time to get a job.

Some friends and I had created a small unlicensed shelter one year for homeless people that didn't want to participate in the normal system. We had a bouncer who screened for drugs and other than that there were no requirements. Homeless people responded well to this and began policing themselves and reporting on troublemakers (sneaking in drugs.) We did have people come in to volunteer. Talking afresh to the guests, people found out their history and skills and a network of impromptu referrals was set up which managed to get the 50% of them that wanted a new start into jobs and houses. There were no relapses or problems with these as they were men who had fallen on hard times but who were clean and wanting to work and had skills. Simply finding them a stable place enabled them to fix their own lives without guidance or control from others, neither of which they wanted. That left another 50% that was truly transient or didn't want to work.

Once you institutionalize the system it becomes a method of controlling people. A lot of people don't want to be controlled.

Now that's my experience. In cities, there's a problem with the long term chronically homeless. People who never made it back and who have given up. The issue with this minority of homeless is that they cost a fortune in medical, police and other services each year. For example, if it gets very cold and you can't find a bed then you commit some petty crime to get arrested. Or they might injure themselves when desperate just to get a place to stay at the hospital. Or maybe they are just very ill. There are some homeless people in cold cities who have medical problems who are costing more than $1 million a year in public services.

There's a homeless advocate Philip F. Mangano who was "homeless czar" under Bush who has promoted the idea of finding no-questions-asked housing for the chronically homeless. This is not the people who can find a job with a stable place who just need first month's rent and a deposit, but people who are not going to be able to work long term and who are costing a fortune. Placing them in public studio apartment housing at a cost of perhaps $8,000 a year in rent saves money over all. One key is no restrictions. They can bring in alcohol and drink in their room. They can come and go at all hours. It is their own apartment. When presented like this, they are more likely to take the deal and get off the street.

Does it cost money to do this? Yes. But the idea is that it costs less than providing ad hoc services. Having a stable place makes them more likely to make doctor's appointments. No longer are they coming to the hospital with costly to treat hypothermia or frostbite.

Here's a couple articles about Mangano's work: http://articles.sfgate.com/2004-01-14/news/17408204_1_mangan... http://www.washingtonpost.com/wp-dyn/content/article/2008/12...

tomlin• 15 years ago

You make some really good points. Having been homeless myself, I have experienced the different types of homeless people. There are those who are simply in a difficult situation and are intent to drive themselves back to, or become part of the middle class.

There are those, which I wish were given a more logical and critical eye, who will never attain employment. There are also those (many) homeless who are mentally ill. These people are often categorized as the unfortunate, but more often than not are simply disenfranchised with the society we've created. For the homeless who are mentally ill, disabled or otherwise unable to hold employment it is critical that we take a different approach. A long term, critical-thinking approach. Present the numbers to the population. The math is remarkably simple if you take the time to understand the people and their relationships with commonplace society.

The right-leaning tend to worry about conversations like this, fearing it will stir up laziness and cause mass exodus of labor force. While there may likely be a percentage of that, the overall outcome would certainly be less homelessness, less crime, less strain on the public system and in the end a better economy for all.

ultrasaurus• 15 years ago

How does a system that hands out free apartments deal with moral hazard? I'd also like a no-questions-asked $700/month apartment for free to work on my startup, and I can imagine many other people would as well.

stretchwithme5• 15 years ago

Its been a problem. I seem to recall some people in NYC actually moving into homeless shelter to get on waiting lists for free housing.

I think helping homeless people by giving them housing is a good idea, but it should be very limited housing with a lot of incentive to want to get your own place. It should not be a three bedroom apartment, especially when other people have to wait.

Many people I know, including myself, have suffered through a cramped studio or similar situation in order to save money and I see no reason why others cannot. Its a billion times better than living on the street.

For those engaging in charitable efforts, such a gift can be given to 5 times as many people as a more comfortable, "I'll just stay here forever" situation.

cpeterso• 15 years ago

What if the "apartment" was in a Japanese-style capsule hotel? You might prefer to upgrade to your own apartment soon. OTOH, maybe providing no-questions-asked housing would help promote entrepeneurism?

bugsy4• 15 years ago

That is a question many ask.

The idea with these programs is that it's for the chronic long term homeless. So to qualify for a free apartment to work on your startup, you'd need to first spend 10 years on the streets, get diabetes or aids, and have a foot amputated. This is a big hurdle for most people looking for a free apartment.

There's many different categories of homeless. One of the most difficult to resolve is the long term chronic ones. Pretty much nothing tried has worked. However, pilot programs offering apartments have worked, at least it has reduced the cost of handling them and increased their quality of life. We are talking a small number of people, perhaps a few dozen in a big city like Chicago or New York or London. These are the guys that the police and social workers and hospitals all know by name because they are dealing with them every year for more than 10 years.

Given these constraints, do you agree that there is not a risk with moral hazard as implemented?

Of course there is the risk that such a program would be expanded to the point where it would become either a moral hazard, or become a substitute for welfare programs that deal with long term structural issues of unemployment caused by globalization and other factors. As a theoretical outcome in the future that would require many hypotheticals to happen first. It would be something of a slippery slope to consider it as a criticism of a program that seems to work to help long term chronic homeless get off the street while costing society less.

aedocw• 15 years ago

It's working amazingly well so far for the 100,000 Homes project: http://100khomes.org/

clistctrl• 15 years ago

personally i'd have no problems with you getting $700/month for an apartment to work on a startup. That might encourage more long term "job creation" then many other policy that is being set in place.

zach• 15 years ago

San Francisco used to spend generously on direct payments to homeless individuals, until Proposition N was passed in 2002, redirecting the money to services for the homeless. This measure was championed by Supervisor Gavin Newsom who, as we know, was elected as Mayor the next year.

The arguments summarized here on Wikipedia are a good introduction to some of the issues in play here.

http://en.wikipedia.org/wiki/Care_Not_Cash

Solve Homelessness: Cut Out The Middle Man

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