Bryan Caplan  

Why Does Homelessness Persist in Rich Liberal Cities?

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During my stay in SoCal, a surprising thought kept returning to me: Why hasn't government solved the problem of homelessness? I know this question seems out of character. But I not saying that government should solve the problem of homelessness; I'm wondering why it hasn't.

What's the puzzle? At least in my experience, the homeless congregate in urban areas with (a) extremely liberal median voters, and (b) high-end retail businesses that clearly don't want the homeless around. Why hasn't a "bootleggers and Baptists" coalition between these two groups formed to bestow free housing, food, and cash on the homeless to the point where they give up begging?

If this seems simplistic, keep in mind that (a) real estate values in Santa Monica, San Diego, and downtown L.A. are through the roof, and (b) even in areas with relatively big homelessness problems, only a small fraction of the population is homeless.

Now I understand why homelessness hasn't been solved at a federal level. The median U.S. voter isn't a Santa Monica liberal, and doesn't run a business where beggers keep scaring off the customers. But it's far less clear why places like Santa Monica haven't raised taxes on immobile real estate to get the homeless off the street.

Admittedly, such a program would probably have to be more paternalistic than regular welfare. The homeless would blow a monthly check on a weekend binge, and swap food stamps for drugs. You'd have to feed them in well-stocked cafeterias, and give them their cash on a daily basis. (High-end retail would be particularly pleased if the cafeterias and cash centers were ten miles away from them).

Why hasn't this happened? The simplest answer is that the homeless like their lifestyle. Even if you gave them a nice apartment, three cafeteria meals a day, and beer money, they'd keep bugging the tourists in Santa Monica. Maybe, but it's important to distinguish between the plausible view that the homelessness prefer their lifestyle to conforming to normality, and the implausible view that they would sleep on the streets and beg even if they had comfortable apartments and pockets full of cash.

There's also a popular view that begging provides a pretty good income, but I've seen enough homeless people digging through garbage cans for food to be skeptical.

So what gives? My best story just comes down to mobility. Places like Santa Monica have already tried to throw money at the homeless problem. The result was that they attracted more homeless to Santa Monica, until funds that were initially ample were once again stretched thin. If Santa Monicans redoubled their efforts, they would soon redouble their homeless population as well.

Anyone got a better story?


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TrackBack URL: http://econlog.econlib.org/mt/mt-tb.cgi/626
The author at MaxSpeak, You Listen! in a related article titled THEY TEACH THE CHILDREN OF VIRGINIA writes:
    Your tax dollars at work, if you live in VA: " . . . the homeless like their lifestyle. Even if you gave them a nice apartment, three cafeteria meals a day, and beer money, they'd keep bugging the tourists... [Tracked on January 9, 2007 11:40 AM]
COMMENTS (36 to date)
CptCrunch writes:

You seem to like the GSS. What are the characteristics of the homeless population?

One theory that I have heard is that most homeless fall into three categories: retarded, adict, or insane. Is it likely that these maladies are a better explanation of their behavior?

Dain writes:

Certainly the homeless respond to the same (basic) incentives as everyone else in economic analysis. They congregate in places with a high degree of liberal toleration; NOT simply places with food and other amenities to spare. For instance, I've seen NO homeless in the Chinatown district of Oakland. Could it be because they would swiftly be brushed away by politically incorrect, judgemental Asian store owners? You bet.

On the other hand the previous poster has a point. Almost all homeless I've seen are either emotionally very unstable, depressed, or with substance abuse problems. Sure, a few of them have simply chosen an alternative lifestyle - the crust punks perhaps - but many are the types that would have been treated as vulnerable, "adult children" by religious institutions in previous ages, after adjusting for the effects of the drug war.

shecky writes:

LA/Santa Monica resident here again. From what
I can tell, CptCrunch has it pretty close. There are drug/alcohol addicts, mentally ill, and some folks who just like the carefree, if marginalized, lifestyle. Sometimes a mix of all three. These seem to be the primary constituents of Santa Monica's homeless population.

So why do places like Santa Monica have so many homeless? Santa Monica residents generally seem a pretty tolerant and generous lot. Aside from being an eyesore, they don't usually cause substantial bother. I have a feeling they may offend the aesthetics mostly of visitors, who paradoxically may also view them as part of the local color.

And I suppose if I were homeless, I sure as hell would rather be homeless in Santa Monica or Venice than, say, Cody, Wyoming. Especially this time of year.

Phil writes:

Conventional wisdom in Toronto is that the homeless are mentally ill, and for this reason it is difficult to get them off the streets -- even in below-zero weather. Often, in cold spells, there will be special emergency programs to find homeless in danger of freezing to death.

There was also a statistic that programs for the homeless cost the City of Toronto spent $30,000 per homeless person.

Of course, it is hard to get unbiased information -- maybe the $30,000 got 90% of the homeless of the streets, so it's only $3,000 per person.

Who knows? Obviously, the people who would be able to give clear information are the ones with an inherent interest in inflating the numbers.

John writes:

Why hasn't government solved the problem of homelessness? I know this question seems out of character. But I not saying that government should solve the problem of homelessness; I'm wondering why it hasn't.

It seems to be happening -- slowly -- especially with the provision of long-term studio housing to the chronically homeless. See

jaim klein writes:

Another story? Why not to try to apply here the basic, well proved laws of economy? Is there an supply side? Is there a demand side? Where they meet?

Supply: No doubt some "sick" people actually like the relaxed, loitering, street life. Looking into garbage cans in a rich neighborhood is a very interesting entertainment, I do it and find the most amazing things. Yesterday I fished out an old Australian Aboriginal noisemaking tube, I dont know its name but seemed original, with interesting paintings on it (I placed it near my car because I had an important meeting, and it was stolen in no time, proving that "value" is a question of time and place, more than an absolute thing). There are always interesting things happening on the street and you have interesting conversations with foreigners and other people with time on their hands. And yes, the money is good. It has a diffent queality of the money you actually work for in a formal setting. I cannot explain it, but "stolen water is sweeter" (from somewhere in the Bible).
Demand: Is actually a demand for homeless loiterers? You bet! My religion places great weight in almsgiving, and my daughter makes me walk blocks till we find a suitable beggar to fulfil our mitzvah. There are many well-paying openings for nice clean Jewish beggars at Friday synagogues, but there is a dearth of enterpreneurs. Some European Haredim tell me they never prayed more satisfactorily than in Jerusalem, where the Municipality maintains a traditional body of Jewish beggars. Another religion that places unordinate weight on physical almsgiving is the Muslim one, you can see to congregate beggars at the entrance of the mosque regulating among themselves the charity facilitating business.
I dont know how Santa Monica businessmen relate to street people, but if I were them, I would strive to maintain an active, colorful, interesting street life around my shop. Street artists would be welcome, sleeping drunks tolerated.

Steve Sailer writes:

In January, people who are homeless in places like Toronto or Chicago are clearly in a sorry state. On the other hand, bums snoozing in the sun in the gorgeous park on the bluff overlooking Santa Monica beach are more likely to be quite rational actors who have chosen for themselves one of the nicest places this side of Hawaii.

dan writes:

I remember working with an OT in college that studied schizophrenia, specifically homeless schizos. Her findings during her research for here masters thesis was that independence was critically important to homeless people. The desire to be independent combined with the self medicating drugs preferred probably explains the vast majority of homeless lifestyles. The alternative of stable food and shelter does not offset their desire for their independence and escape from mental illness.

As far as the why have not liberal cities eliminated homelessness, I would think that in addition to the above, you find that efforts made to eliminate homelessness often attract homeless people to the city. I remember reading about a mayor or something in Denver rounding up homeless and busing them to San Francisco when SF started offering monthly checks to the homeless. Also, some of the most desirable climates seem to be fairly liberal (not sure if this is actually true.

jaim klein writes:

Bryan was shocked by "the homeless problem" of South California, one of the richest places on Earth between Kuweit City and Hamburg. Just to put the phenomenon in perspective, I was shocked by its existence, of all places, in Tien Jin, China, in the late seventies. It was then a very poor and hungry place, with little food in the shops and none in the garbage can. Communism was taken seriously and the Government found employment to everybody and forced them to work. The City had done a serious effort to take out beggars from the streets, yet the very cold streets were lined with immobile figures frozen in submissive, pleading positions. Women and children, probably very hungry themselves, threw coins to them. I think the homelessness is independent of the economic level or political organization of surrounding society, and we should be tolerant towards them (and in life in general).

Buzzcut writes:

I agree with the mentally ill/ drug abuser characterization of the homeless. It's a pretty hard question: how do you make mentally ill people take their meds if they don't want to?

Giving people food, or homes, is quite irrelevant to the problem. The only time homelessness was under control was when our society institutionalized people against their will. Thanks to Pat Moynihan, we no longer do that.

I think that the liberalism thing may be an illusion. Urban areas are liberal. Homelessness is concentrated in urban areas, thus it seems like liberal areas have more homelessness.

Chris writes:

There was an urban legend at the University that I attended (U of Illinois) that one of the standard panhandlers was an ex-professor that had an apartment that he went home to every night.

It could certainly be apocryphal, but I have heard NPR stories about entire families that choose homeless life, so choice is clearly one of the options.

I also think that it is interesting that college towns seem to be the only small towns that can support a panhandler - so there is also clearly a supply/demand component to the problem.

liberty writes:

"There's also a popular view that begging provides a pretty good income, but I've seen enough homeless people digging through garbage cans for food to be skeptical."

No reason to be skeptical just because they dig through the trash. For one thing, reduced self-consciousness about doing such leads leads the homeless to try it when current funds dry up (e.g. at night after blowing through their day's "earnings" on booze) and discovering that many restaurants throw away good food; some dumpsters are known for their great meals. Many homeless will go to the restauarant at closing for such things, but some restaurants have a policy of throwing it into the dumpster in order to avoid the spectacle of a line of homeless outside at closing (when customers may still be around, leaving).

Once they have rmmaged through one dumpster, its easy to do again and again. Better to spend the "earnings" on booze which you can't find and find the food and clothing. And its easier and more convenient to check trash cans then to go all the way to the church where they hand it out.

Sebastian Holsclaw writes:

I think you are all very close, but you are missing an important dimension--the evolution of civil rights laws regarding involuntary commitment to a mental institution. In the late 60s and throughout the 70s, a disturbing number of mental institutions were found to be effectively imprisoning people who weren't particularly crazy and/or subjecting their patients to ridiculously bad conditions.

The reaction to this state of affairs was to drastically limit the ability of any institution to involuntarily commit people and especially the ability of any institution to involuntarily administer drugs or other treatment. These rules had a positive effect on many, and a negative effect on many of those whom we now call the 'homeless'. This is especially true in California where the laws are even more strict than many in the nation.

Of course the weather is also very nice here in California.

Max writes:

Imo, the US is a bad example for this, because especially on welfare it is in its infancy compared to the Europe countries.
So, let's examine the same problem in a country with one of the biggest welfare-states in the world: Germany.

If you only take the possibilities of state housing and social welfare, not a single person in Germany had to be homeless. The state grants the "minimum requirements to live", which means an appartment, a small amount of money, a TV, heating etc. (Yes, a TV falls in the category of minimum life requirements)

So, virtually, homelessness is abolished in germany. However, we still find beggars and homeless people on the streets, so it must be a choice rather than product of economic competition.

Nathan writes:

As a prior resident of the SF Bay Area (along with Santa Monica, the epitome of rich "liberal" city), I always wondered why the homeless congregated in relatively inhospitable San Francisco (I say inhospitable because of the fog and cold, compared to other cities, which are generally sunnier). Two things became apparent, one, the abundance of tourists, and business people provided a steady stream of relatively wealthy people to obtain money from. Secondly, the city of San Francisco, which has its own homeless lobby, also paid the homeless around $500 a month (though I believe this changed a year or two ago). Consequently, the homeless gathered in San Francisco. In addition, I attended SJSU and their was a homeless person who was quite notorious for asking students if they could spare some change for coffee. Being that it was on a university campus, a sociology professor observed him, and estimated that he made in the mid $30 thousand range annually. Which, not having to pay the high cost of shelter in Silicon Valley provided him with a lot of tax-free income to spend on coffee.

CptCrunch writes:
However, we still find beggars and homeless people on the streets, so it must be a choice rather than product of economic competition.

Saying that something is a "choice" or "rational" is tautalogical. All people calculate; they use information and act. Different uses of information will result in different actions.

I believe economics is the study of choice. It is not enough to say that homelessness is a choice, rather we should ask why that choice is made.

Jack writes:

Caplan,
You are certainly one massive ass. You bring up the issue of homelessness and then only describe vagrants that you see panhandling on the streets. A grade school kid in any big city knows that the homeless are holed up in cheap motels and shelters. The vagrants are the ones who are so much more disabled, not simply impoverished. You take the complexity of persistent poverty, abject impoverishment, and make a comic gesture of writing a "serious" essay. The homeless are the detritus of our "free market" economy. Yes, in the free market some do suffer the slings and arrows of derision shot out of the empty minds of those who seek to benefit by continuing the myth that the impoverished enjoy their lowly station in our society. What is it in addition to these myths that you contribute inorder to earn the rewards of the free market you so warmly embrace?

aaron writes:

Has anyone tried to use taxes to fund homeless shelters in communities outside of their tax base? Why doesn't LA simply build shelters and provide benefits for homeless in say Kansas?

Xellos writes:

--"Yesterday I fished out an old Australian Aboriginal noisemaking tube, I dont know its name"

It's a didgeridoo.

aaron writes:

OooH. Or better yet, Texas!

English Professor writes:

A number of years ago I read a piece that suggested that homelessness was highest in cities with rent control. The correlation could be explained in at least two ways: 1) rent control tends to decrease the housing stock and drive up rents in whatever housing is available, pricing the poor out of the market; 2) only liberal cities and towns have rent control nowadays, and such places are more tolerant of vagrants and panhandlers. I just did a web search ("cities with rent control") and found out that Los Angeles, Berkeley, San Francisco, and Santa Monica all have rent control. Hmmmm.

Half Sigma writes:

There was a "bum" at the University of Pennsylvania back in the late 1980s (name Skeeter) who made so much money from begging that he was able to pay the rent on an apartment. (We can't call him "homeless" becuase he wasn't. He was just a "bum.")

The community took pity on him and gave him a job at the cafeteria, but somehow, a few weeks later, he was back at his usual location at 36th St and Locust Walk begging again.

Snark writes:

The bindle stiff will always be with us. Try to think of him as an angel sent to earn his wings by testing our capacity to give. Therefore, store up your treasures in heaven and give generously. Your ticket to paradise may depend on it…

spencer writes:

Actually,prior to 1980 the liberal US government had solved the homeless problem. From WW II to about 1980 homelessness was so rare that the Bowery in New York was a tourist attraction -- and technically, the Bowery bum were not homeless
as they had what were called cribs.

But since 1980 our Republican governments have cut the funding,largely for mental health treatment that used to solve the homeless problem in the US.

So your original premise is 100% incorrect --
liberal government did solve the homeless problem.

The reason government has not solved the current homeless problem is that it has deliberately chosen not to.

spencer writes:

The problem for place like Santa Monica is that it is a national problem.

For many, many communities the solution to the homeless problem is a one way bus ticket to Santa Monica.

Barkley Rosser writes:

While Jack notes that the trinity of crazy, depressed, and substance abusers, plus the free, romantic hobo/hippies/whatever does not cover the homeless, I will note that it is not just cheap motels. In some areas there are a non-trivial number of families living in their automobile. These are not going to be the panhandlers on the street. These are mostly economically deprived who had a home and lost it and regret it, probably due to job loss. They often lurk in suburban neighborhoods, and are attempting to hide from many people that they are homeless.

evagrius writes:

Just for your information-

You can't trade your food stamps for drugs.

Food Stamps are now issued as an ATM type card. In order to trade for drugs, they'd have to go to a grocery store. You can't cash the allottment either, unless the store is crooked- and if it's crooked the Feds find out quite quickly, ( unusual tranactions show up on a report done on every recipient).

Barkley Rosser writes:

I don't have a nice link on it, but actually I remember from a number of years ago that the "trinity of thirds" of the homeless was more like one third mentally disturbed, one third substance abusers, and one third "economic," and not meaning our romantic hoboes choosing to be free of homes. No, these are the folks, often families with kids, where the main breadwinner lost their job, or there is a divorce with the mother not having a job, and then the family not being able to afford their home or any other one available, folks with no backup of savings. Again, these people are not the panhandlers in Santa Monica or San Francisco. They may be hiding in Texas suburbs or cheap motels in all kinds of locations, trying not to let people know they are homeless.

secret asian man writes:

Why are they homeless? Because they choose to.

Every morning at the crack of dawn I see young Mexican men lining up at semi-official street corners and parking lots looking for work.

If some barely-educated Mexican with little grasp of English can make enough money to not only provide a roof and food but even to send some money back to Mexico, it stands to reason that an English-speaking American-born man should be able to do even better than that.

The fact that they're not willing to stand out in front of Home Depot seems proof enough to me that they want ot be homeless.

jaim klein writes:

Who was the economist that observed that the poor will always be with you...?

And who stole my didgeridoo?

Snark writes:
Who was the economist that observed that the poor will always be with you...?

The one with the invisible hand...

aaron writes:
And who stole my didgeridoo?

Who had the means? I propose the man with the invisible hand.

rmark writes:

A mini-storage facility I did some outside work for had two men living off site in their cars and using storage units to hold their stuff. They would use the public restrooms to clean up before going to work.

Allen writes:
jaim klein wrote:Who was the economist that observed that the poor will always be with you...?
I hate it when people do a bad job of quoting Jesus. When Christ said "Ye shall have the poor with you always," he was eating at the house of Lazarus, a leper. (Read Matthew, its true.) Lepers in Jesus' time were not rich as they were outside Jewish society. So, there is Jesus and his disciples, at Lazarus' house and he says to the disciples that they will always have the poor with them because it is clear he expected his disciples to always be around the poor. However, this clear meaning has been bastardized to "Screw the poor, 'cause they always gonna be around, no matter what you do." Not what The Man had in mind.
jaim klein writes:

My thanks to Snark and Aaron for their good-natured answers to my "questions".

Allen, if I was thinking on something (and that is never a given), it may have been on Deuteronomy 15:7-11 (New International Version - Copyright ©): "7 If there is a poor man among your brothers in any of the towns of the land that the LORD your God is giving you, do not be hardhearted or tightfisted toward your poor brother. 8 Rather be openhanded and freely lend him whatever he needs. 9 Be careful not to harbor this wicked thought: "The seventh year, the year for canceling debts, is near," so that you do not show ill will toward your needy brother and give him nothing. He may then appeal to the LORD against you, and you will be found guilty of sin. 10 Give generously to him and do so without a grudging heart; then because of this the LORD your God will bless you in all your work and in everything you put your hand to. 11 There will always be poor people in the land. Therefore I command you to be openhanded toward your brothers and toward the poor and needy in your land." As seen in the above comments section, nowadays the poor rarely lack of cash, so your generosity should also extend to those poor in wit, like me.

jaim klein writes:

My thanks to Snark and Aaron for their good-natured answers to my "questions".

Allen, if I was thinking on something (and that is never a given), it may have been on Deuteronomy 15:7-11 (New International Version - Copyright ©): "7 If there is a poor man among your brothers in any of the towns of the land that the LORD your God is giving you, do not be hardhearted or tightfisted toward your poor brother. 8 Rather be openhanded and freely lend him whatever he needs. 9 Be careful not to harbor this wicked thought: "The seventh year, the year for canceling debts, is near," so that you do not show ill will toward your needy brother and give him nothing. He may then appeal to the LORD against you, and you will be found guilty of sin. 10 Give generously to him and do so without a grudging heart; then because of this the LORD your God will bless you in all your work and in everything you put your hand to. 11 There will always be poor people in the land. Therefore I command you to be openhanded toward your brothers and toward the poor and needy in your land." As seen in the above comments section, the poor of today rarely lack money, so our openhandedness should be exercised in terms of good will.

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