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Tue, May

Why Recognizing Housing First’s Failure is So Important

IMPORTANT READS

iAUDIT - As anyone who’s read my columns over the past few months can tell, I often write about how badly Housing First policies have failed Los Angeles’ homeless and housed communities.  There are two reasons.  First, Housing First uses so much funding, there is very little left for treatment, intervention, and alternative shelter models.  Second, we cannot expect our political leaders to advocate for change until a majority of the public demands it, and the public won’t demand it until people understand just how unsuccessful Housing First is, and how many billions of dollars have been wasted on a failed model.

For those who are unfamiliar with Housing First, it is a homelessness intervention model first developed in the late 1980’s, built around the belief that the best solution is to first provide stable permanent housing for people, and then give them the support services they need (e.g., medical, mental or substance abuse assistance).  To encourage as many people as possible to enter housing, Housing First is usually partnered with No Barrier/Harm Reduction policies, which allow anyone to be housed regardless of their current mental state or level of substance abuse, and regardless of their willingness to enter treatment. The theory is, once housed, people are more likely to accept counseling or recovery services.  Based on several--mostly academic--studies of success, Housing First became HUD’s preferred mode of funding homelessness programs in 2009, and California made it the State’s official policy in 2016.

According to the Wall Street Journal, the State of California has spent more than $17 billion on homelessness programs in the last four years, or an average of about $4.25 billion per year.  In fiscal year 2023-24, the Los Angeles’ City and County governments will spend a combined $4 billion on programs for the unhoused. In 2016, the year California formally adopted Housing First,  L.A. County’s homeless population was 46,874.  In 2023, it is 75,518, an increase of 28,644 people, or 61 percent. 

Despite record expenditures, LAHSA’s 2023 homeless count revealed:

  • A 14 percent increase in unsheltered homelessness, to 55,155, or 73 percent of the 75,518 people classified as homeless. For comparison, New York City, with a population of more than 8 million, has a homeless population of about 70,000, only 3,400 of whom are unsheltered.
  • An 18 percent increase in those considered chronically homeless, to 31,991, or 42 percent of the total.
  • A one percent (233 people) decrease in the number of sheltered homeless people, from 20,596 to 20,363, even though LAHSA claims it increased the number of shelter beds and decreased the time it takes to move people from the streets to shelters. And remember, those may not be 20,363 unique individuals, since the County doesn’t track the number of people who rotate in and out of shelters.

Besides LAHSA’s dismal numbers, L.A. County public health reported the average number of homeless deaths per day increased from five to six.  Drug overdose was the major cause of death; deaths associated with fentanyl overdoes nearly tripled from 2019 to 2021. Homicides among the unhoused increased 49 percent between 2020 and 2021, accounting for two deaths per week.

When advocates are faced with these undeniable indicators of systemic failure, they fall back on vague arguments about L. A’s high cost of living, or the eternal bugaboo of an affordable housing shortage. But there isn’t a single large city on Earth where the cost of living isn’t higher than its nation’s average, yet California has at least 30 percent of the nation’s homeless people.  Advocates also point out that, for several years, housing costs have risen faster than wages.

If advocates are concerned about wage stagnation, they should be overjoyed to hear how well their leaders are doing.  Many corporate nonprofit executives make more than our own Councilmembers, who are paid about $225,000 per year.  The budgets of some of these nonprofits rival those of small and medium-sized cities, and they pay their top leaders handsomely. Consider these figures from Pro Publica, a non-profit monitoring group that publishes organizations’ latest tax returns:

  • In 2021, the CEO of St, Joseph Center, one of the city’s largest service providers, paid its CEO $332,310 per year to manage an organizational budget of $42.9 million. In 2019, she made $273,950, for a total compensation increase of $58,360 (21 percent) in two years.
  • In 2022, the CEO of PATH was paid $369,850 to oversee an organization with $131.5 million in revenue. In 2020, the CEO made $295,390; his compensation package increased by $74,460, or 25 percent, in two years
  • In 2022, the CEO of Urban Alchemy, a field service provider with a patchy history, was paid a paltry $218.910.  But fear not; in 2021 she was paid a pitiful $132,920, so she earned herself a  $85,990 (64 percent) compensation increase in one year.
  • Taken together, these organizations’ leaders averaged an 18.3 percent salary increase per year, an enviable rate given advocates’ concerns about wage stagnation.

I do not begrudge anyone their pay as long as they don’t make their earnings by taking advantage of others.  After all, the head of Union Rescue Mission, one of the most successful homeless to housing agencies in the city, makes about $224,000.  It isn’t the pay that’s the issue, it’s what many of these leaders do—or don’t do—to earn it.  Rather than providing services, their chief talent seems to be garnering no-bid contracts from their public sector colleagues. Their compensation certainly cannot be based on actual outcomes because no one knows what those outcomes are, since they’re not measured.  Judging by the ever-increasing number of homeless people on the streets, one could reasonably surmise whatever it is they’re doing isn’t working.

Exorbitant compensation doesn’t cause homelessness, but it reflects the model that contributes to it. In essence, public agencies and nonprofits are rewarded for failure by receiving ever-increasing funding for a crisis they make worse.  Housing First, especially when combined with No Barrier/Harm Reduction policies, traps many people in an endless cycle of homelessness.  Its primary premise is also its critical weakness; that physically housing someone is the determining factor for ending that person’s homelessness.  Surveys from RAND, The California Policy Lab, and UCSF show high rates of substance abuse and untreated mental illness among the homeless population.  While advocates want us to believe these are effects of, rather than causes of, homelessness, the data shows otherwise.  Many respondents reported trouble with drugs and/or mental illness before their first period of homelessness. They also reported both issues caused problems in other areas of their lives, such as keeping a job or maintaining family connections. Unstable work and family life are major contributors to homelessness.

Without consistent treatment, people with substance abuse or mental illnesses get little benefit from being “housed”, often in spartan apartments built at outrageous costs.  Since Housing First does not require a  tenant to agree to treatment, neither as a condition for admission nor for continued residency, there is little incentive for anyone to change their self-destructive behaviors.  Worse, by mixing people who are in recovery with active drug users, Housing First endangers those who do want to improve their behavior.  Allowing people with serious untreated behavioral issues to move into unsupervised housing typically leads to high repair and maintenance costs.  The City of San Francisco has already incurred at least $33 million in repair costs when it forced local hotels to accept homeless people regardless of their condition.  Closer to home, the Mayfair Hotel, which the City intends to buy for $83 million for housing, incurred $11 million in damage costs.

I could spend 10,000 more words detailing many more ways Housing First fails, including stratospheric construction costs combined with laggard completion rates.  Or just what an abysmal job most nonprofits and government agencies do in providing support services to people on the streets or in housing.  I have documented these issues in the past and will no doubt describe more in the future, but the fact remains Housing First is an undeniable failure.  And it’s not that the City and County of L.A. do a poor job managing Housing First programs.  In cities from San Francisco to New York, Housing First simply does not work. It is a failed model.

What, then, should we make of all the studies that “prove” its success? The answer to that question is the old cliché “consider the source”.  Housing First was developed by an academic, Dr. Sam  Tsemberis, who was a psychology professor in New York when he rolled out the model in the late 1980’s.  (Tsemberis now runs his own housing first provider service, Pathways to Housing).  Most of the studies that support Housing First come from universities, where the emphasis is more on theory than chaotic reality, and survey variables can be tightly controlled.

According to a 2020 report from the Manhattan Institute, a critical weakness of Housing First success studies is that few of them rely on the scientific standard of randomized control trial, (RCT), “in which researchers examine the effect of an intervention on two different cohorts who are similar in every important respect”.  As the report details, studies about Housing First’s success are often based on individual-level rather than community-wide benefits. At the community level, the report found that the law of diminishing returns applies: “(1) governments may need to create as many as 10 units of permanent supportive housing in order to reduce the local homeless population by one person; and (2) a certain “fade-out” effect is observed whereby the reduction is only temporary.

In keeping with the Manhattan Institute’s findings, once one looks at professional studies outside the world of academia, one sees a different picture of Housing First.  Just one example is a meta-study (a study of many other studies) done for the highly-respected British medical journal The Lancet. It concluded “Permanent supportive housing [PSH] had no measurable effect on the severity of psychiatric symptoms (ten studies), substance use (nine studies), income (two studies), or employment outcomes (one study) when compared with usual social services”. The study did conclude PSH kept people housed longer, which makes sense since it is provided free of any preconditions, but there is more to housing than just four walls and a roof.

Perhaps the best evidence of Housing First’s failure is what we can see with our own eyes.  Increasing numbers of homeless people on our streets, unserved and unrecognized. A vast armada of derelict RV’s dispersed throughout the city, dumping waste into the storm drain system.  Tent encampments proliferating faster than the sluggish pace of clearing and housing can accommodate.  To use the Latin legal phrase, Res ipsa loquitur: “The evidence speaks for itself”.

(Tim Campbell is a resident of Westchester who spent a career in the public service and managed a municipal performance audit program.  He focuses on outcomes instead of process.)

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