Is Houston a Model for Ending Homelessness?

(c) by Mark Dempsey

The Davis Vanguard recently wrote that the city of Houston has handled homelessness far better than California, with a follow-up that confirms how badly California has done (California Has Largest Affordable Housing Deficit in the Nation). To quote the first article: "A decade ago, Houston had an out-of-control homelessness problem—sixth worst in the nation—and now according to a recent report in Smart Cities Dive, the area has seen the homeless population decrease by 63%." 

The three key factors to Houston's success: 1. Housing comes first (and Houston has cheaper housing) 2. A steering committee integrates the various services so the unhoused are not just supplied with a roof over their head, they have services beyond housing. 3. Decisions are data-driven.

Despite billions spent on a similar "housing first" strategy to deal with homelessness, California's slow progress has local governments frustrated and returning to "policing first" (rousting out homeless camps) as their preferred solution. As evidence this remains so, Sacramento County just approved a $450 million addition to its jail, despite opposition from several citizen groups, the ACLU, and most of the local media. Homeless people fill the current jail to capacity, even when they are just awaiting trial. Meanwhile, studies of the policing-and-emergency-room approach to homelessness reveal it is both cruel and more expensive than providing housing.

Not mentioned in the Davis Vanguard article is the fact that Houston has no planning department or zoning. Except for road standards, and some minimum lot sizes, Houston has nothing resembling California's "planning." If you want to open a bar in your living room--and your (private) subdivision's rules don't forbid it--you can do it in Houston.

In contrast, thanks to a state mandate to provide them, California's local governments are awash in "General Plans"--most of them a waste of time and paper since these "plans" are discarded at the drop of a hat. Think of it as a full employment program for planners. 

To be fair, Houston's lack of planning did lead to homes flooding during Hurricane Katrina, so California's planning is not completely, just mostly useless. Once, Sacramento was second only to New Orleans in flood risk. Yet, with all its massive planning apparatus, Sacramento still approved development in the North Natomas floodplain surrounded by weak levees.

Histrionics rather than effective action is not new in American public policy. Never mind the Trump presidency, the TSA let 95% of bombs through its airport checks when tested.  We don't have airport security, we have airport security theater.

Planning authority Jane Jacobs, author of The Death and Life of the Great American City says modern planning is planning kabuki rather than something effective too: "The pseudo-science of planning seems almost neurotic in its determination to imitate empiric failure and ignore empiric success....to put it bluntly, [sprawl planners] are all in the same stage of elaborately learned superstition as medical science was early in the last century, when physicians put their faith in bloodletting."

So Houston's lack of zoning may explain its affordability compared to California--and unaffordable housing drives homelessness--but California's perverse allegiance to land speculation is far more important in driving up the cost of housing.

Land speculators typically purchase outlying farmland for a few thousand dollars an acre, then, once they have permission to develop, sell it to builders for as much as 50 - 100 times what they paid for it. Because IRS lets real estate owners exchange unimproved land for income-producing real estate like malls, or apartments, without income tax, you can consider that egregious profit tax-free, too.

In Germany, the developers have to sell the ag land to the local government at the ag land price, then re-purchase it at the development-approved price. All "unearned increment" accrues to the benefit of the public. In California, the money goes to the speculators and raises the price of the land. 

The late County Supervisor Grantland Johnson said it was widely acknowledged throughout the state that the region most in the hip pocket of developers was Sacramento. Meanwhile, a study of the reason housing has become so expensive (Rethinking the Economics of Land and Housing by Josh Ryan-Collins, Toby Lloyd, and Laurie Macfarlane) attributes 80% of price rises to land costs. Again: speculation raises land prices.

So there is a tremendous financial incentive for land speculators to purchase influence with local governments, and press them to build more sprawling, commute-lengthening suburbs. But building multi-story housing rather than sprawl not only uses land more sparingly, it produces demographics that make neighborhood commerce possible for pedestrians. It's also helpful in reducing CO2-producing commutes, cutting vehicle miles traveled roughly in half. With the right street design, it makes transit economically viable too.

Impatient or not, Californians are going to have to deal with homelessness and unaffordable housing for years to come unless they curb speculation, and get behind effective planning. Otherwise, California is going to have to deal with the frustration of public policy theatrics rather than effectively addressing these issues.     

Finally, the prospect of free prison labor is a motivation to keep incarcerating the homeless. There has been "a push across the country to lock up homeless people, private prison companies keep upping their bribes to elected officials, and stories of corrupt judges keep popping up and are likely only the tip of the iceberg." (from here)

It's not a pretty picture.

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Mark Dempsey is a former real estate broker and member of a Sacramento County Planning Advisory Council.