Tue, Jul

Homelessness and the Million Dollar Question


iAUDIT! - Recently, I was challenged by a colleague to a thought experiment.  What would homelessness programs in LA look like if the budget was only a million dollars? The question does pose an interesting challenge to some long-cherished beliefs and assumptions about homelessness and how policy is created and sustained.

Just for reference, the combined City and County fiscal year 2023-24 budgets for homelessness programs are about $4 billion, so $1 million would be a 99.75 percent reduction. If I were faced with such a massive reduction, the first question I would probably ask myself is “Who are we trying to serve? What’s my target population”? Obviously, there’s no way to reach and help more than 75,500 people with a million dollars.  The good news is that about 63 percent of people who fall into homelessness “self-resolve” or find their way back to more stable housing without direct interventions, at least according to a report from McKinsey & Co. That would mean I wouldn’t have to devote much effort to about 47,560 people and could concentrate on the remaining 27,930. The bad news is there are more people entering homelessness every day than exiting. And those 27,930 are a very difficult population to get into shelter, treatment, and housing. This population has high incidences of substance abuse and/or mental illness—at least 50 percent but as high as 65 percent.  Worse, 95 percent of those with substance use disorders will not want treatment. 50 percent of those with mental illness wouldn’t know they have a problem

This brings up the first fundamental question.  How do we help a large population of people who don’t want help? If you use the current model, you perform “relentless outreach” as the Mayor’s Chief of Homelessness called it; multiple contacts with the same clients, often over months, to build enough trust to convince them to move into interim housing. There are some obvious problems with this approach.  First, of course, is that you have no way of knowing how many contacts will be required to move an individual from the streets to shelter, or how many will refuse to move regardless of the number of contacts.  This makes it exceedingly difficult to hold outreach providers accountable for their outcomes. Providers can claim they did their best to convince all their clients to move into a shelter, but only a few agreed. 

The second problem is a corollary to the first.  In an entirely voluntary system like the one in Los Angeles, no amount of outreach will work on 100 percent of the unhoused. You will soon spend $1 million on trying to convince just a few people to move into a shelter. Third, since it is highly likely the few clients you can convince to move into a shelter will have behavioral problems. Since LA uses the No Barrier Housing First model of homelessness intervention, you, as the City’s program manager, must admit anyone willing to come inside regardless of prior history, but your clients do not have to modify their behaviors. These behavioral issues make it difficult to place and retain clients in any kind of structured housing, as evidenced by the high repair costs that drove Skid Row Housing Trust over a financial cliff, and is posing a significant risk to AIDS Healthcare Foundation.

Since you only have a million dollars, there is no going back to the City Council for more money, as the Mayor and LAHSA typically do when programs exceed their budgets. Your hard ceiling is $1 million.  Logically, you would try to leverage other means to get people into shelters. Perhaps you would consider some behavioral commitments from clients before admission (an approach called Contingency Management). Maybe you would consider some coercive means to move people out of encampments and into shelters, like prohibiting camping on most sidewalks. Maybe you’d take another look at reinstating the ban on sleeping in vehicles overnight.

You’d want to ensure your money is being used to get people housed.  Again, looking at current programs and costs, the City spends more than $65 million on CARE and CARE+ encampment cleanings.  Even though offers of shelter are part of the CARE program, there’s nothing stopping people from moving back into encampments after the clean-up is completed.  LASAN offers a program to allow people living in RV’s to drain brown and black water into containment vessels instead of the storm drains. There’s even a program to provide mobile laundry services to unhoused people.  While these and other services alleviate some of the worst aspects of being homeless, they do nothing to house people.  You’d want to fund only those programs that move you toward the goal of housing as many people as possible for a million dollars.

Having only $1 million to spend on homelessness would also be a powerful incentive for you to assess nonmonetary policies like affordable housing.  You’d advocate for more public housing projects, as fellow CityWatch columnist Dick Platkin does. (For the purposes of our experiment, we’ll exempt housing policies and programs from our $1 million limit since they should benefit low- and moderate-income working families as well as the homeless). You’d want to stop giving millions to developers masquerading as affordable housing producers. In short, if you are going to use your limited funds to get people off the street, you need somewhere for them to go.

This brings us to the second fundamental question: is No Barrier Housing First the best model for reducing homelessness with limited resources? The answer, even with the billions now being spent, is clearly “No.”  Homelessness in general continues to increase every year, and the population of unsheltered and chronically homeless people keeps growing disproportionately as well.  Building housing for the homeless has failed to keep pace with the population, and its costs continue to increase.  Inside Safe, the Mayor’s hallmark temporary housing program, cannot be sustained at its current annual costs. Reports on the City’s website show outreach rarely achieves more than a 20 percent housing rate, and losses back to homeless are typically much higher than the number of people housed.

Again, what would a $1 million homelessness program do? First, it would have to identify and focus services on those most likely to benefit from them.  Many people may be able to lift themselves out of homelessness with limited financial or support services.  They do not need a new apartment.  Others would require more intensive services, up to and including structured institutional care.  The CARE Court is a step in that direction, but it is entirely voluntary and has been underperforming since its implementation. A coercive element would be necessary to move people out of encampments, either to shelters or to other locations of their choosing.  The object is to disincentivize camping by halting a system that supports it. The new program would be customized to each client, rather than using the one-size-fits-all Housing First model.

Finally, a million-dollar program would demand close attention to outcomes over process. A close review of the City and County homelessness performance websites show a focus almost entirely on processes rather than results. They say little about how many people actually move to permanent housing, and they suffer from serious data quality issues.  Such a lackadaisical approach to performance measurement would be unacceptable in a program with a tight budget and well-defined targets.

Limiting the City homelessness budget to $1 million is a good counterfactual thought exercise.  It presents an interesting and revealing challenge to the status quo. Perhaps, if local leaders were willing to challenge business-as-usual and focus on only the most effective means of getting people off the street, the crisis wouldn’t be as serious.

(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.)