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“Homelessness is a Housing Problem”: When cities build more housing, homelessness goes down

Maybe you’ve seen the headlines: “Affordable housing in California now routinely tops $1 million per apartment to build” (that’s up a few hundred thousand from 2017, when we wrote “L.A. digs a hole more slowly than economics fills it back in: The Proposition HHH Facilities Program RFP“). At a million dollars a unit, not many units will be built, and California will continue to suffer from high housing costs in general and high levels of homelessness. The topic is, unfortunately, timely; I’ve been reading a book, Homelessness is a Housing Problem: How Structural Factors Explain U.S. Patterns, which covers what you’d expect based on the title. Yet there’s a naive, common view that homelessness is primarily about “mental illness” and “drugs” and other potential contributors to homelessness; while those factors exist, the lower the cost of housing, the easier it is for someone on the margin of being housed or being homeless to stay housed. The lower the cost, the easier it is for family, SSDI, Housing Choice Vouchers (HCV, formerly called Section 8), and other income supports to keep a person housed. Intuitively, this makes sense: it’s easier to cover $750 in rent than $2,000 in rent, even for someone with mental illness and drug problems. As the cost of housing goes up, the number of people who fall from the margins of being “housed” to being “homeless” goes concomitantly up. While mental illness and drug abuse are factors, they’re secondary to housing costs, and they’re really red herrings relative to overall housing costs and ongoing housing shortages across America.

The homelessness problem is intractable without zoning reform and the removal of barriers to new housing construction, whether those barriers are height maximums, parking space minimums, or “neighborhood input” or “community input.” Those last two are functionally barriers to building anything, anywhere. We’ve worked on Los Angeles Prop HHH proposals, and, despite that Proposition raising $1.2 billion for housing, not much has materially changed. Why? California makes building anything, anywhere, astonishingly difficult. Until we can increase the supply of housing, we’re going to see homelessness problems.

Colburn and Aldern—the authors of Homelessness is a Housing Problem—write that “the roots of the homelessness crisis in many cities in the United States were being misdiagnosed, often to frustrating and harmful ends.” This is not a failing the Left can easily blame on the Right: the housing crisis is most acute in places like California, New York, and Washington State—all of them solidly to the left. Currently, however, “one of the [. . .] phenomena driving polarization in the country is a grafting of our political identities onto national (as opposed to local) politics.” The more local one gets, the more concrete the policy issues.

Most housing decisions are made at the local level, not the national level, of U.S. politics (which is a mistake). Colburn and Aldern cite data finding that “Seattle and San Francisco, for example, have roughly four to five times the per capita homeless population of Chicago.” Chicago is seeing its population decline, and the city is also building a lot of new housing, which alleviates the supply-demand mismatches common elsewhere. Mental illness and drug use seem to spread relatively evenly across the country—so why aren’t all cities seeing homelessness spikes? The answer: some are much less expensive than others. For example, “Charlotte [. . .] has grown as fast as San Francisco and Seattle, but because of a relatively robust housing supply response, the city has not faced the housing shortages that plague many coastal cities.” Drugs, mental illness, and other issues are simply far easier to deal with when the rent is lower.

The authors’ data shows little to no correlation among various cities’ levels of drugs, mental illness, and poverty relative to homelessness. “Regions with high rates of poverty and unemployment—like Detroit, Cleveland, and Baltimore—have some of the lowest per capita rates of homelessness in the country.” Moreover, “For a highly impoverished household, it is likely easier to access housing in Detroit or St. Louis, where median rents are between $600 and $700 per month, than in San Francisco and Santa Clara County, where costs are three to four times higher.” Do see the graphs in the book.

Housing shortages are a policy choice, and Colburn and Aldern aren’t the only ones to notice the problems. Zillow Research finds that “Homelessness Rises Faster Where Rent Exceeds a Third of Income“—which, again, is exactly what one would expect. We can look abroad, too: “Finland ends homelessness and provides shelter for all in need.” This makes intuitive sense: if there is more housing available, and housing is cheap, it’s going to be much harder to be homeless for an extended period of time. Very few people, even those with drug and mental illness problems, “want” to be homeless. California and New York introduce numerous and complicated barriers to building more housing, and they see homelessness rates soar. Dallas and Houston are somewhat easier places to build housing, and, while they don’t have zero homelessness, they have a lot less. Houston “Moved 25,000 People From the Streets Into Homes of Their Own.” L.A. and San Francisco can do the same any time they want. L.A. used to be zoned for ten million people, in 1960. By 1990, it was zoned for only 3.9 million people. I guess technology got considerably worse from 1960 to 1990, when transistor counts in computer chips dropped, as did the efficiency of gas-powered vehicles (this is sarcasm).

The immediate, emotional response to a person screaming on the street—”homelessness must be caused by mental illness”—is not always the optimal one. There’s typically a long backstory to that person winding up on the streets. A fair number of people writing online seem to have an inaccurate notion of how the price formation process works.

One sees other mistakes of cause, like people railing against “investors” who buy housing units. Investors recognize the obvious: if municipalities restrict the supply of housing, as demand rises, so will prices, allowing them to earn supernormal returns. If housing is a “good” investment, the cost of housing will be expensive. This is a poor local and national policy, but it’s one we’ve been collectively and foolishly pursuing for decades, and we should stop doing it. Making being alive affordable, instead of unaffordable, is good for human flourishing. Moving to the suburbs, exurbs, or the sticks is not a great answer, either, because then the housing may be superficially affordable, but the cost of transit goes up, both in literal money terms and in terms of time. Unless or until we get fast transit from the exurbs to other places—self-flying flying cars would be nice—we’ve got technological limits on how far we can go.

It’s hard to address the issues of people whose model of the world is simply wrong; if someone believes that “bloodletting” is a cure for disease, and ignores the evidence to the contrary, at some point, one will conclude that dealing with a “person who has a wrong view of the world.”

Regular people see that most of the long-term homeless do appear to have substance abuse and mental health issues, and then think that substance abuse and mental health issues are the sole cause of homelessness, while ignoring correlations betweeb the cost of housing and the rise of homelessness—in other words, they’re not thinking at the margin (I suspect “thinking at the margin” is pretty rare). Houston is getting homeless people housed. Why isn’t Los Angeles?

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Unexpected consequences of MacKenzie Scott’s big donations to housing nonprofits like Habitat for Humanity

You might’ve read that MacKenzie Scott, Amazon founder Jeff Bezos’ ex-wife, is making huge donations to some nonprofit organizations, including donating $436 million to Habitat for Humanity. Relative to buying a giant yacht, or yet another Manhattan aerie, or giving money to universities so wealthy that they can’t spend the endowments they have and are so bureaucratic that they can’t support their own researchers during a pandemic, that’s a great thing to do. This isn’t a “you suck” post, because she doesn’t and I like her unusual approach to philanthropy. But there are two notable undercurrents that the lightly edited press releases don’t cover—likely because journalists know little about how nonprofits work or the American housing market—one is the distortion effect on many competing local nonprofits, and the other is the challenge of pouring more money into a constrained, near-zero-sum system.

Regarding the first point, local grant and human services systems will probably be distorted by unprecedentedly large donations to a particular nonprofit like Habitat. While national nonprofits like Habitat do some nationwide work, most of their activities are conducted by local affiliates, which are usually nominally independent nonprofits. When you see a media story about a new Habitat development in Worcester, MA, (I made this example up) a local affiliate is sponsoring the project. Local affiliates of national nonprofits like Habitat are required to conform to certain standards set by the national entity, but essentially do their own thing. A few years ago we worked for a local Habitat affiliate in a big East Coast city. As we worked on the project, we were startled to learn there were actually two Habitat affiliates in the same city: each carved out its own turf, and they even engaged in legal and public relations battles with each other! Many local nonprofits compete with on another for donations, grants, volunteers, and the like, even if they are playing for same team. So, it’s possible some of Scott’s Habitat donation will go to one affiliate, but not the other, in the same city.

A sudden huge donation from Scott to a national nonprofit that in turn sends a big bag of money to a particular local nonprofit, like the imagined Worcester Habitat, might create a toxic mixture of envy and disdain among other local nonprofits, much like a large inheritance or a lotto win often generates resentment among the people around the windfall recipient. The local Habitat affiliate is going to find many other local nonprofits attempting to attach themselves to any project it undertakes, in an effort to become subcontractors on that project or otherwise share in the largess. Since Habitat has the big money, other nonprofits will work overtime to get a piece of that that money. Nonprofits that realize they’re going to be outside the golden circle might quit collaborating and, in some cases, try to sabotage the lucky local Habitat. Letters of support will dry up, which won’t be a short-term problem but may become a long-term one; although “collaboration” among nonprofits is often silly, funders like to imagine it’s happening. Many don’t want to acknowledge that nonprofits compete with each other like businesses to a greater extent than most people realize—though sophisticated GWC readers already know this, either from personal experience or reading us. Another aspect is the the suddenly well-endowed local Habitat affiliate will be able to offer much higher salaries that their competitors and will poach local talent.

We saw this blowback effect happen in spectacular fashion a few years ago to one of our clients in a mid-size Midwestern city. Many nonprofits and even public agencies will become extremely unhappy when one of their peer organizations succeeds wildly. One year, at least half a dozen proposals we wrote for this otherwise ordinary nonprofit client got funded. His organization got millions of dollars in grants, which represented a huge amount of money in his low-income, high-risk community. Every other nonprofit CEO knew about his organization’s success. Superficially, all the players in our client’s service area congratulated our client, but our client, unfortunately, began to believe in his own greatness. Because he did, the quality and quantity of his interest in future grant-writing efforts declined.

Simultaneously, many local collaborators became less eager to help him. Organizations that used to provide letters, as he did for them, stopped being able to provide letters, albeit for innocuous reasons (“staffing changes,” “priority shifts:” those sorts of things). His ability to execute his organization’s mission became compromised by intransigence from the city and from other local nonprofits, all of whom were envious. These factors led to peril for our client’s organization, which eventually went under altogether; by the time he realized the danger, he was already on the deck of his sinking nonprofit ship. He should have handed out more subcontracts and acted with greater humility, but he did not. Will Habitat avoid his fate? We shall see. This is not a new tale, as Greek Tragedies, Shakespeare, movies, and politics are filled with such tales of hubris.

The second point involves housing policy itself, a topic we’ve dealt with before regarding Los Angeles’s Prop HHH initiative. Housing constraints lowered aggregate US growth by 36 percent from 1964 to 2009—an enormous amount most people don’t appreciate (imagine your organization’s budget being 36 percent larger, and your paycheck having 36 percent more dollars in it). Numerous factors impede the construction of affordable housing: parking minimums, improper building lot setbacks, height limits, neighborhood reviews, and more. Supply restrictions are everywhere, and few states or municipalities have gotten serious about alleviating them. If you add large amounts of additional money into a market that is supply-constrained, prices will go up in the face of constant demand, but more supply won’t come online. This results in numerous negative knock-on effects. There are some efforts afoot to change this dynamic—some are now calling for an “abundance agenda,” in contrast to the artificial scarcity mindset and policies now common in housing policy. In the meantime, however, we’re stuck with bottlenecks in the zoning and permitting process, which impede housing developers of all sorts—including Habitat. On top of those bottlenecks, inflation and supply chain problems have kicked up in the last few months, such that even if states begin enacting an abundance agenda, builders are still behind because of a raw-materials and skilled labor deficits. We’re constricting our population itself, as people have fewer children because so much of their money is going into housing costs.

Habitat for Humanity is likely to suffer worse than than for-profit builders. Habitat doesn’t advertise this, but they take forever to build housing units, particularly relative to commercial builders like Lennar (Lennar built 60,000 units in 2021) or Toll Brothers. While merchant builders can churn out single family homes in four to six months, it can take Habitat up to two years to finish a comparable house. I looked at the 2021 Habitat National Annual Report and IRS 990 Form, which obfuscate results with lots of happy talk, but I couldn’t find a clear statement of how many units were actually finished in 2021. Draw your own conclusions. Although Habitat hires subcontractors for the skilled trades that are required for home building, they nominally rely on volunteer labor and the “sweat equity” of buyers. As far as I can tell, Habitat mostly builds single-family units, rather than multi-family, both because those units are easier to build and provide easier roles for volunteers and homeowners, as well as making for better photo ops. But we really need more missing middle housing, rather than more single-unit one-offs in the exurbs. Everyone in the business knows how Habitat works, but don’t expect to see it in the media which has been in love with Habitat since Jimmy Carter picked up a hammer 40 years ago.

The biggest problem in American housing policy isn’t “lack of money” per se: even many nonprofits can find some amount of HUD, state, local, or foundation funding to build affordable housing. The biggest problem is the regulatory regime, which makes building new housing excruciatingly expensive, time consuming, and difficult. Until we improve the regulatory regime, we’re not going to do much to make a real dent in the housing affordability problem (housing can’t both be cheap for end users and a “good investment,” which is one of the many reasons American housing policy is incoherent).

Housing affordability is the income-related issue for our age. If someone is concerned about “income inequality” but doesn’t have “housing abundance” at the top of their agenda, are they virtue signaling, or serious?

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Housing the homeless: the “traditional approach” versus “housing first” for grant writers

We’ve been writing grant proposals for housing and supportive services for people experiencing homelessness (this is the PC phrase, but “homeless” is used in the rest of this post) since 1993, so we’ve been at it for long enough to see changing funder and client preferences around approaches come and go. For many reasons that are beyond the scope of this post, homelessness remains a growing and in some respects an intractable challenge in much of urban and rural America; essentially, homelessness is a housing shortage problem. Until we address housing abundance, we’re not going to be able to solve or substantially ameliorate homelessness as a problem.

Recently, we wrote a post on the emerging trend toward harm reduction instead of traditional SUD/OUD treatment. A similar phenomenon is going on with respect to providing housing and supportive services for homeless folks. This is the concept of “Housing First:”

Housing First is a homeless assistance approach that prioritizes providing permanent housing to people experiencing homelessness, thus ending their homelessness and serving as a platform from which they can pursue personal goals and improve their quality of life. This approach is guided by the belief that people need basic necessities like food and a place to live before attending to anything less critical, such as getting a job, budgeting properly, or attending to substance use issues.

At first glance, Housing First looks like a reasonable and compassionate approach. In the 1980s, when homelessness as an issue entered public discourse, the sentiment was that Mary and her two kids live in their car because she got laid off from the Piggly Wiggly and was evicted from her apartment. While there are many people who find themselves in this sort of predicament, the majority of homeless have SUD/OUD and, in many cases, are co-diagnosed with serious and persistent mental illness (SPMI). But homelessness is easier to avoid, even for people with SUD, OUD, and/or SPMI, when rents are low. That’s why “it’s not the case that homelessness is high where vacancy rates are high. Indeed, it’s the opposite — the vacancy rate is lower in places with more homelessness.”

Housing for the homeless initiatives have traditionally focussed on a step-down approach similar to that which we described in the post on OUD/SUD treatment versus harm reduction. In the traditional paradigm, homeless people receive housing and other services along a continuum of care starting with a high level of care, and then they “step down” to lower care levels in increments, leading to eventual independent living. Following engagement, referral, or self-presentation and development of an individual housing assistance plan (“IHTP”), the step-down levels often proceed something like:

  • Detoxification/stabilization (if needed)
  • Shelter bed in an emergency shelter (usually limited to 30 to 60 days). Significantly, most shelters are “dry,” meaning that drinking and drugging aren’t allowed in the facility. Still, after breakfast, most people living in shelters spend their days out of the shelter on the street, with the idea that they’ll look for a job, attend treatment sessions, etc., and return at night to sleep. While this is more or less “two hots and a cot,” treatment and other supportive services are sometimes provided in-house and/or by referral.
  • Placement in a single room occupancy (SRO) hotel, transitional housing, or supportive housing unit with in-house and referral supportive services (e.g. SUD/OUD and SPMI treatment, legal assistance, workforce development, primary/dental care, etc.) usually provided in the latter two. In supportive housing, such services are usually case-managed and these facilities are usually dry. While there is typically no length of residency cap for SRO units, there is usually a 12 to 24 month max for transitional and supportive housing facilities. Unfortunately, SROs are largely illegal under the modern zoning regime, which may forces many precariously housed people on the street.
  • Independent living, usually with a Housing Choice Voucher (formerly called Section 8) or in another subsidized housing development, or with family.

The levels can be broken down further, but the above was the common approach and was formalized in the 1987 passage of the McKinney–Vento Homeless Assistance Act (McKinney-Vento), administered by HUD. The problem is, though, is that even if a person gets clean and sober, if he or she can’t afford rent, that person is likely to end up back on the street—and thus in high-stress, difficult situations that encourages coping via substance abuse. Covering $700/month in rent is much easier for a person with mental illness and substance abuse challenges than $2,000 a month.

Although McKinney-Vento funds 15 programs with a spectrum of services, the most significant ones are Supportive Housing, Shelter Plus Care (provides site-specific HCVs for the housing development and on-site services), SRO, and Emergency Shelter. One of the first large funded grants S + A wrote was a $4M Shelter Plus Care proposal for a nonprofit in Northern California to convert a vacant motel into a supportive housing facility in 1994. Over the years, McKinney-Vento has disappeared from public view, as these programs have been folded into HUD’s very confusing Continuum of Care (CoC) system. McKinney-Vento programs still form the structure for most federal efforts to help the homeless, but applications are made to the local CoC agency, not directly to HUD—which means local politics come into play, along with typical quiet deals cut among local players. Good luck breaking into CoC funding without an “in.” Well-meaning people in a given community often want to find something to do to help with the issue of homelessness, and they try to find sustainable for it, only to run into the local power structure.

For our first 20 years, most of the proposals we wrote for homeless housing and supportive services followed the above model: the emphasis was always on working with the homeless people to get them clean and sober, with SPMI under control, before moving from a shelter to longer term housing. About 10 years ago, we began to work with clients who wanted to use the Housing First approach: in this approach, underlying SUD/OUD and SPMI challenges are addressed, to an extent, but the overall goal is to provide fast housing—hence the term “Housing First.” This paradigm treats housing as the first step for life improvement and enables access to housing without conditions beyond those of a typical renter. Although supportive services are usually offered, participation is not required. This means the formerly homeless can continue to drink and drug and/or not comply with the SPMI treatment protocols. Utah was the first major state proponent of this approach, in part because Utah allows housing to be built relatively easily, but even Utah has run into problems.

This shift to the Housing Fist model has created something of a battle between the traditional homeless services providers like the faith-based “missions” that are found in most major cities, and the new Housing First kids on the block. This battle is being played out on social media and, most importantly, in public hearings and applications for CoC and other grants. Like any local structured grant system, such as CoC, Ryan White grants for people living with HIV/A, or Title 10 family planning, a “mafia” soon emerges. The mafia is composed of the existing agencies being funded, advocacy groups, and local politicians who have an interest in making sure favored nonprofits get funded. The mafia structure makes it harder for new, innovative agencies to secure a spot at the grant feeding trough. We’ve heard from some of our clients that the Housing First crowd has taken over CoC processes to the detriment of traditional providers. Housing First is clearly the church of what’s happening now.

We’re just grant writers, so we don’t have an immediate opinion as to whether the traditional approach or Housing First is more efficacious, though neither is likely to be highly effective without land-use reform that increases the total number of housing units. Without an abundance agenda, we’re merely reallocating slices of the pie, rather than increasing the pie’s size. Extensive homelessness is a symptom of deeper problems, and it can’t be effectively addressed without dealing with the root cause. Most studies on the subject of “traditional” and “Housing First” are somewhat questionable. While I’ve been in many shelters and other homeless housing settings over the years, I’ve never been in a Housing First facility, but I imagine that things might get a bit out of control come Saturday night. I also don’t know how housekeeping is handled. Also, most people with SUD/OUD and/or SPMI will relapse multiple times, which may send them back to the streets, jail, or residential treatment/hospitalization, meaning that their Housing First unit is actually their Housing Last unit.

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Links: Opioids treatment, unglamorous but important bureaucracy, Pre-K for All, and more!

* “‘Pure incompetence:’ As fatal heroin overdoses exploded in black neighborhoods, D.C. officials ignored life-saving strategies and misspent millions of federal grant dollars. More than 800 deaths later, the city is still reckoning with the damage it failed to prevent.” If your organization is working on the opioid crisis, you should give us a call, because there’s a huge amount of federal, state, and local funding for it. Rural areas are seeing and especially large burst of funding.

* “The Tragedy of Germany’s Energy Experiment: The country is moving beyond nuclear power. But at what cost?”

* America’s National Climate Strategy Starts with NEPA. Unglamorous but important.

* Officials want to clear a mile-long homeless camp on a Sonoma County bike trail. Some don’t want to go. We’re guessing that those who don’t want it to go also don’t use the bike trail or live near it.

* The hottest new thing in sustainable building is, uh, wood. If you’re doing construction-related job training, mention cross-laminated timber (CLT) in your next proposal.

* On the Chinese education system and philosophy. It’s nearly the opposite of what programs like Pre-K For All or Early Head Start attempt to do. I wonder how well it works, although that will be hard to say, since it probably takes 40 or 50 years to properly evaluate how an early childhood education program “works,” by which point the entire cultural, social, and technological environment will have changed.

* For another perspective, read me on Bringing Up Bébé, an essay that is sure to be of interest to anyone providing early childhood education services like Pre-K For All or Head Start. We collectively ought to spend more time looking at early childhood from a cross-cultural perspective and less time on making early childhood “academic.” Life is not a race. France and China seem different in key ways but surprisingly similar in some.

* “Against Against Billionaire Philanthropy.” Donations by rich people are better than not, and criticism is misguided. Foundations offer flexibility that government funding typically does not.

* “Let’s quit fetishizing the single-family home.” This would also make programs like YouthBuild work more effectively: zoning restrictions are now one of the biggest problems with any job-training program that includes a construction training element. Many of today’s challenges are really housing and healthcare policy challenges, with powerful incumbents blocking change and the powerful need for change building up.

* “The Age of Decadence: Cut the drama. The real story of the West in the 21st century is one of stalemate and stagnation.” An interesting thesis, but not necessarily one that I buy.

* Was the nuclear family a mistake?.

* How we write scientific and technical grants.

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Links: Healthcare and how it’s eating the world, education, homelessness and weird public policies, the nature of the good life, and more!

* “The Pedagogical Lessons and Tradeoffs of Online Higher Education.” Education and healthcare both seem to lack silver bullets, although we keep looking for them. See also us on the need to boost apprenticeships and vocational education. This is based in part on my experiences teaching college students.

* “The U.S. Furniture Industry Is Back—but There Aren’t Enough Workers: Companies expanding American production due to consumer preferences and tariffs are finding a dearth of skilled workers.”

* “As Homelessness Surges in California, So Does a Backlash.” Who could have predicted that homelessness is part of the regulatory environment that precludes the building of homes?

* “Apple Commits $2.5B to Ease California Housing Crunch.” Unfortunately, money is not the big problem here—zoning policies that prevent new housing from being constructed is the problem. Until we decide that more housing is a good idea, more money is mostly going to be used to bid up the prices of existing housing. Oregon, for example, has legalized townhomes statewide, and California should be doing the same. We’ve worked on some homeless-service proposals, but it’s depressing to see California raise a bunch of money that then can’t be used efficaciously because of their zoning policies.

* “The Key to Electric Cars Is Batteries. Chinese Firm CATL Dominates the Industry.” Have not seen this triangulated from other sources, however.

* Unraveling an HIV cluster.

* “Why It’s So Hard to Buy ‘Real Food’ in Farm Country. An exodus of grocery stores is turning rural towns into food deserts. But some are fighting back by opening their own local markets.” Seems like an Onion story, but seemingly not.

* “San Francisco Board of Supervisors questions $900K/unit cost for Sunnydale ‘affordable’ housing.” Until we do zoning reform, we can’t build affordable housing, as noted above. Meanwhile, southern California is little better: “Some of Los Angeles’ homeless could get apartments that cost more than private homes, study finds.”

* $30 million in grants to fund nuclear fusion research. That’s cool.

* Air Pollution Reduces IQ, a Lot. If you are worried about human welfare, attacking air pollution is key. Normal people can do this, too, by choosing low-emissions vehicles.

* Medical billing: where all the frauds are legal. We’ve heard that many healthcare providers, including FQHCs, are forced to be medical billers first, and everything else second, or third, or worse. In related news, A CT scan costs $1,100 in the US — and $140 in Holland.” You’ve heard it before, but: price transparency now. What’s stopping this? “Doctors Win Again, in Cautionary Tale for Democrats: Surprise billing legislation suddenly stalled. The proposal might have lowered the pay of some physicians.” There are few if any easy wins.

* Why white-collar workers spend all day at the office. It’s a signaling race. Most writers know we have 2 – 4 decent hours a day in us for real writing, for example.

* “California population growth slowest since 1900 as residents leave, immigration decelerates..” This is purely a political and legal problem, which means it’s very solvable. Also, “‘Garages aren’t even cheap anymore:’ Bay Area exodus drives lowest growth rate in years.” California is a gerontocracy ruled by zombie homeowners who bought their properties decades ago, pay low property taxes on them, and now block anyone else from building anything, anywhere.

* Magic mushroom compound psilocybin found safe for consumption in largest ever controlled study.

* AI and adaptive learning in education. This could and should be a big deal.

* “Denser Housing Is Gaining Traction on America’s East Coast: Maryland joins Virginia with a new proposal to tackle the affordable housing crisis. And it’s sweeping in its ambition.”

* Dan Wang on science, technology, China, and many other matters of interest.

* Letting nurse practitioners be independent increases access to health care? See also my post, Why you should become a nurse or physicians assistant instead of a doctor: the underrated perils of medical school. Healthcare fields seem to have near-infinite job growth, which is useful knowledge for job-training programs.

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Links: The end of the world, schools, teens having less sex, school structure, housing, drug policy, Pre-K For All, and more!

* “The Ends of the World is page-turner about mass extinction.” Note: “The evidence suggests that every single time, mass extinction was the result of runaway alterations in the planet’s atmospheric composition.” I read and loved it.

* “GM and Cruise announce first mass-production self-driving car.” Wow.

* Why do U.S. schools still start way too early? “Tradition and inertia” seem to be the real answers. But starting middle and high schools later in the day is as close as we’re likely to come to a free lunch in education.

* École 42, a free, teacher-less university in France, is schooling thousands of future-proof programmers. Cool.

* “How Local Housing Regulations Smother the U.S. Economy;” nothing here that regular readers don’t know, but the venue is of interest.

* In Defense of Amy Wax’s Defense of Bourgeois Values.

* “Americans Losing Faith in College Degrees, Poll Finds: Men, young adults and rural residents increasingly say college isn’t worth the cost.” Isaac sent this one to me, and I wrote back to say that in some cases. . . they’re probably right. There are a lot of people (and not just men) who likely don’t belong in college and go because it’s “the next thing” after high school. Which is a great way to spend a lot of money, not necessarily learn very much, and then be 22 with five figures of debt. I’ve taught a lot of college classes and wrote about that experience here.

* “Pile it high: Singapore’s prefab tower revolution.” It’s possible to dramatically lower the cost of construction itself.

* “Bored? Underworked? You’re an ideal candidate for a company struggling to find new staff.”

* Leather grown using biotechnology is about to hit the catwalk. Good news is underrated.

* Why Koreans shun the suburbs.

* “Cheaper, Lighter, Quieter: The Electrification of Flight Is at Hand.” Maybe, but we’re still waiting for the flying cars and paperless offices we’ve seen prophesied for decades. For another take, see Why electric airplanes within 10 years are more than a fantasy: Startups plan to make hybrid airplanes, and eventually purely electric ones.”

* Relatedly: As electric motors improve, more things are being electrified.

* “Top medical experts say we should decriminalize all drugs and maybe go even further.” It seems the current approach is ineffective at best and is more likely to be actively harmful, so a new method is in order. Or, rather, a new-old method, because drug laws didn’t come into being until the late 19th Century.

* “The New Preschool Is Crushing Kids: Today’s young children are working more, but they’re learning less.” Should be a familiar story to our NYC Universal Pre-Kindergarten (UPK) clients.

* “Is your state road system broke? Then hit up. . . the Prius drivers!” An example of misguided policy and failing to think about the bigger picture.

* “Is there a Rawlsian argument for redistribution as a form of social insurance?” A brilliant post, do read the whole thing, and note that I have thought this before, albeit phrased differently: “In fact what I observe is people taking the status quo, and its current political debates, as a benchmark of sorts, and choosing sides, yet without outlining the ‘stopping principles’ for their own recommendations.” And I have succumbed to this as well!

* “How to Win a War on Drugs: Portugal treats addiction as a disease, not a crime.” Seems obvious to most people, except for a few elected or appointed officials who are stuck in the 1980s “War on Drugs” fiasco.

* “A 400-year story of progress: How America became the world’s biggest economy.” The important news that’s likely to stay news.

* “How sky-high housing costs make California the poorest state.” Many of you who live in CA already know as much. The point about land and housing costs links to our post, “L.A. digs a hole more slowly than economics fills it back in: The Proposition HHH Facilities Program RFP.”

* “L.A. County now has 58,000 homeless people. So why are there thousands fewer shelter beds than in 2009?

* “Don’t buy the idea teens are having less sex until you take a closer look at the data.” Does “sex” include “oral sex?” The answer changes the way the data are interpreted.

* “De Blasio Expands Affordable Housing, but Results Aren’t Always Visible.” Unfortunately, “The vast majority of the newly created affordable housing units in New York City are existing apartments, not new construction.” This just exacerbates the “haves” and “have-nots” problem in the city. The only affordable housing is lots of housing. Until we get lots of new units built, the cost of existing units will rise.

* “How the University of New Hampshire spun blowing a frugal librarian’s donation on a stupid football scoreboard.” It does seem too nicely symbolic of modern universities.

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Don’t trip over the homeless on your way to the LA Proposition HHH Homeless Facilities Bidders Conference

Although we rarely go to RFP bidders conferences, last week I was in Downtown LA during the Prop HHH Homeless Facilities RFP, so I stopped by—and noticed the interaction between the homeless services professionals and the homeless.

The conference was held on the 15th floor of City Hall South, a faceless 60s concrete monolith between the iconic City Hall and somewhat infamous Parker Center, the LAPD headquarters.* City Hall South is surrounded by the kind of lifeless concrete plaza Jane Jacobs railed against.

As I walked across the plaza, I noticed a fairly elaborate homeless encampment (e.g., tents, tarps, shopping carts, etc.); real homeless are hanging out around the public fortress, and inside the fortress City slugs and nonprofit reps are discussing how to hand out $1.2 billion to help the homeless. I was tempted to invite a couple of real homeless folks to come up to the conference with me, just to gauge the reaction, but I demurred.

I sat in the plaza for about 15 minutes after the conference and not a single attendee—they were marked by their visitor badges—even looked at the homeless. Consider this another small but notable dispatch from the real world to the proposal world.


* When I worked for Mayor Tom Bradley in the mid-70s, my office was on the 23rd floor of City Hall; I parked next to Parker Center and walked through City Hall South every morning and afternoon for about 18 months. It’s a strange, slightly melancholic feeling to be back after all these years. There were no homeless around City Hall or City Hall South back then. I’m not sure what this means, but it doesn’t feel much like progress to me.

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Los Angeles’s Prop HHH Funding for homeless facilities meets NIMBYs

The NYT has learned that “For Homeless Advocates, a Discouraging Lesson in Los Angeles: Money is Not Enough.” The story describes how an LA nonprofit is struggling to build a 49-unit housing development for the homeless in Boyle Heights neighborhood, and the main funding source is a Proposition HHH grant—a program we first wrote about back in August.

As we wrote then, Prop HHH authorizes $1.2 billion for homeless facilities. Although the NYT reporter doesn’t seem to know it, Prop HHH funding is not limited to housing; it can be used for any facility—including medical clinics or supportive services—that can be construed to “benefit persons experiencing homelessness, chronic homelessness, or at risk of homelessness.” The key phrase is “at risk of homelessness,” since, given LA’s astronomical rents and relatively low incomes, Prop HHH grants could be used for almost anything. Remember that, adjusted for the cost of living, California has the highest poverty rate in the country. Overall, the proposed Lorena Plaza illustrates how how challenging it is for nonprofits to get facility grants—and then actually get the facility built.

LA and California as a whole are progressive Democratic Party strongholds that superficially care about affordable housing. While most politicians and voters support expanded human services initiatives like Prop HHH (which is great news for grant writers), the Democratic LA City Councilman Jose Huizar, who represents Boyle Heights, killed Lorena Plaza.

In other words, the City that giveth with one hand taketh away with the other. Councilman Huizar would probably support a homeless housing development in the distant, white and affluent Pacific Palisades neighborhood, but he’s not so much interested in one in his low-income and Latino district. We’re seeing a specific instance of the long-standing NIMBY (Not in My Back Yard) phenomenon.

Even though the City is trying to give away huge Prop HHH grants and Boyle Heights residents likely voted overwhelmingly for Prop HHH, they voted in the abstract for “more funding,” which feels different than looking at concrete plans to build a facility down the street from their home, business, school, church, whatever. As anyone who’s worked in affordable housing development, and especially housing for potentially less than angelic residents, knows that, no matter the income level or ethnicity of the neighborhood, residents with metaphoric pitchforks and torches will oppose a project like Lorena Plaza. In Lorena Plaza, 50% of the units are or were to be for homeless folks with severe mental illness. All politics is local and apparently Councilman Huizar opted for re-election over a place for the most vulnerable people in our society to sleep at night.

At Jake’s recommendation, I’m currently reading Seth Stephens-Davidowitz’s excellent Everybody Lies: Big Data, New Data, and What the Internet Can Tell Us About Who We Really Are. The author uses Google searches and other big data sources to illustrate that much common wisdom is wrong. It turns out that people often lie about things in the abstract (e.g., “I support housing for the homeless” to a pollster), while at the same time googling “how to stop a housing project,” when one is proposed down the street.

All this doesn’t mean that some version of Plaza Lorena won’t get built or that the City won’t eventually award the $1.2 billion in Prop HHH grants. It just means that nonprofits have to be prepared for the struggle. Legal struggles also increase costs, and, in the aggregate, those legal costs help explain why California has the highest poverty rate and affordable housing crisis in the nation. Legal and political struggles also mean at that much of Prop HHH funding will actually be used for non-housing projects, like primary care clinics, which are much easier to “sell” to NIMBYs who have been legally empowered to block any change, anywhere.

Whether an LA nonprofit is proposing a project like Lorena Plaza or a clinic, it’s important for the nonprofit seeking a Prop HHH or any other facility grant to understand that the proposed site can usually be easily changed after the grant award. The funder doesn’t want the grant to be returned. The leverage shifts from the funder to the grantee after funding.

We advise our clients seeking facility grants to pick a site that can be made to seem easy to build for purposes of the proposal but also to be ready to swap the original site for a new site if something goes wrong with the original site, including an attack of the NIMBY Zombies. We see this site-swap frequently in facility grants from HUD, HRSA, etc. YouthBuild projects, for example, often feature site switching. In grant writing, it’s always critical to remember the difference between the proposal world and the real world. In the proposal world everything with the site will work out perfectly and smoothly. In the real world… well, as you can see from the Plaza Lorena example, things rarely works out smoothly.

And, in other LA housing news, “Up to 600,000 expected to apply when L.A. reopens Section 8 housing list this month after 13 years.” Section 8 is a fine program, but it cannot overcome parochial zoning that restricts the supply of housing. Until LA overcomes zoning that limits livable space by mandating height limits, lot setbacks, and parking minimums, it won’t and can’t achieve anything like affordable housing goals.

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L.A. digs a hole more slowly than economics fills it back in: The Proposition HHH Facilities Program RFP

As newsletter subscribers know, last week the City of Los Angeles released the “Proposition HHH Facilities Program FY 2017-18 Request for Proposals for the FY 2018-19 Bond Issuance.” That program is an excellent opportunity for nonprofit and public agencies looking for capital funding. There was $85 million available in 2016, and this year there may be more. Even better, grants to $3.5M are up for grabs.

Prop HHH funding is a great opportunity for nonprofits involved in homeless services, since it provides capital funding for facilities, which don’t have to including housing units. As we’ve written before, facility grants are usually much harder to get than grants for the services provided at the facility. Also, the RFP states:

The Prop HHH Facilities Program is intended to fund the acquisition and/or improvement of real property for facilities (hereinafter referred to as “project(s)”) that provide services or goods to, or otherwise benefit, persons experiencing homelessness, chronic homelessness, or at risk of homelessness (hereinafter referred to as “homeless”).

The key phrase is “at risk of homelessness,” which makes almost any LA human services provider potentially eligible for a Prop HHH grant, not just traditional homeless services providers. This is because clients of most L.A. human providers are well below 200% of the Federal Poverty Guidelines (FPG). Given the very high rents in LA, this means they likely pay well over the federal/state/local standard of housing affordability of 30% on gross income for housing costs (e.g., rent, utilities, etc.).

From a grant writing point of view, this means they’re pretty much all all at risk of homelessness. Whether obvious or not, many of these clients are, have been, or will be episodically homeless (e.g., living in cars, motels, family members, shelters, etc.).

From a larger perspective, though, Prop HHH is also like digging a tiny hole in the housing affordability problem, while the rest of L.A.’s rules and regulations act as a dump truck filling that hole back in. You may ask what that means. One good explanation comes from Reddit, of all places, as this architect explains why virtually all new housing units in L.A. are “luxury” units. As he says, “EVERYTHING built in LA is defined by parking, whether we like it or not.” Moreover:

In making our assessments as to required space for parking, the typical calculation is that each full parking stall will require 375sf of space (after considering not just the space itself but also the required drive aisle, egress, out of the structure, etc. So that 800sf apartment is actually 1175 sf to build. [. . .]

So not only is 32% of your apartment just for your car and otherwise useless, but its also by far the most expensive part of that apartment to build.

It’s not possible to build enough housing for middle-income people in L.A., let alone low-income or homeless people, because of parking and outdoor space requirements. The City of L.A. is doing useful work for a handful of nonprofits with Prop HHH, but unless the City changes its parking requirements, there isn’t much real change that’s going to happen. The high cost of free parking is real. In the proposal world, though, none of these problems and trade-offs exist. In the real world, however, a couple hundred million dollars to build a couple hundred units (or even a thousand units) isn’t going to do much for homelessness in a city of four million and a metropolitan statistical area (MSA) of twelve million. In 1970, L.A. was zoned for ten million people. Today, with our vastly inferior technology, it’s zoned for four million and change. Until the city fixes zoning, it’s not going to fix homelessness.

Basically, it’s impossible to build enough housing for people in L.A. because it costs so much to also build housing for cars.* As grant writers, however, we love to see new programs like Prop HHH that’ll provide “walkin’ around money” for LA nonprofits.

Unsurprisingly, too, research demonstrates that building more housing overall results in fewer homeless persons. We have the technologies needed to dramatically reduce homelessness, but as a society we’ve decided not to allow them to be used.


* Seattle is a little better off, but it still has many perverse zoning issues, which I wrote about comprehensively in “Do millennials have a future in Seattle? Do millennials have a future in any superstar cities?” The short version of that highly detailed article is that many cities severely restrict housing supplies; in the face of rising demand, this raises the cost of housing.

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Links: Job training, college madness, bizarre RFP, writing, the culture that is France, giving things away, and more!

* “Why China won’t own next-generation manufacturing.” Maybe. Useful for those of you who provide job training services.

* A Conversation with Jonathan Haidt, on the madness infecting college campuses (and other topics; his book The Righteous Mind: Why Good People Are Divided by Politics and Religion is essential reading).

* My favorite recent RFP: “Promoting Integrated Pest Management in Affordable Housing.” This RFP makes me think of Isaac’s famous rat story. And, seriously, this is a real RFP. Isaac also notes that the adjective “Integrated” could be fraught with confusion in this context.

* “The Insidious Imps of Writing,” maybe.

* “French PM suggests naked breasts represent France better than a headscarf;” I laughed.

* “Architecture for the Internet: A look inside a carrier hotel in Manhattan — a building where different ISPs and network companies check in with one another.”

* “Economists Profit by Giving Things Away:” In short, economists publish their work freely online and that work isn’t hidden behind pay gates. So that means anyone can get ahold of it, which isn’t true in many other fields. This gives economists outsized influence. I find the publishing practices of academics in English lit bizarre (and revealing) in this respect.

* “Flooding of Coast, Caused by Global Warming, Has Already Begun;” important, under-appreciated news.

* “People in Los Angeles are getting rid of their cars.” As Fox Mulder says, “I want to believe.”

* “Electricians, roofers and plumbers have their pick of jobs, and demand is expected to grow.” A point that you will have to leave out of Department of Education proposals, since the DOE is obsessed with conventional four-year degrees, but that you can and even should put this in Department of Labor proposals.

* Is This the Tipping Point For Electric Cars? Charging stations are proliferating.

* Despite SpaceX setback, future of private space exploration is bright.

* “If drivers expect to be prosecuted for committing offenses [against cyclists] they suddenly stop committing them,” a totally unsurprising yet still important point.

* “How the careless errors of credit reporting agencies are ruining people’s lives.” Many of your participants will likely suffer from credit reporting errors, and getting rid of them can be brutal.

* “‘An aggressive proposal that touched a lot of nerves’: Why Gov. Brown’s plan to stem the housing crisis failed.” And why California is going to continue to be ludicrously expensive to live in for a long time to come.

* “Can U.S. Cities Compensate for Curbing Sprawl by Growing Denser?” So far, no; we are choosing sprawl instead.

* “Jay Z: ‘The War on Drugs Is an Epic Fail.’” Seems obvious, but when notable people say it it becomes news again. After four decades of the War on Drugs, heroin is cheaper, more potent, and more available now than then.

* “Fancy Dorms Aren’t The Main Reason Tuition Is Skyrocketing:” in public schools, it’s state-level cuts. In private schools, it’s tuition discounting: All those $40K – $60K prices are used to soak the rich families, while most students get discounts in some form.

* “Addressing Peak Energy Demand with the Tesla Powerpack,” or, consider the more direct headline: “Tesla Wins Massive Contract to Help Power the California Grid.”

* “Video killed the radio star: How games, phones, and other tech innovations are changing the labor force,” important for anyone involved in job training.

* “To the four policemen who beat me for checking the health of a sick man in their custody,” it is distressing that my first instinct is to add, “More of the usual” to this story (hat tip Chris Blattman).

* “American against itself: does the future belong to authoritarians, left and right?”

* “Trumpism Is the Symptom of a Gravely Ill Constitution: No matter what happens in November, the sickness may be terminal.” In other words, we may be reaching the limits of non-parliamentary political systems, though there is no good way to get from where we are now to where we might like to be. Still, it is possible to imagine another constitutional convention in my lifetime.

* “Sticker shock in Los Angeles Housing:” or, why you should’d live in California. Granted I am writing this from NYC, which faces similar NIMBY and cost challenges. But I am also planning to move, in part because of the effects of NIMBY and cost challenges.

* “‘Do Not Resist’: A look at the normalization of warrior cops.”

* “Anti-globalists: Why they’re wrong.”

* A real-life Project NUTRIA: “Laundromat with a classroom: Charleston’s outreach to underserved kids.” Some of this article’s sentences could be ripped from our proposals.

* Prosecutors who withhold or tamper with evidence now face felony charges.

* “In Rural Bangladesh, Solar Power Dents Poverty.”

* “To end the affordable housing crisis, Washington needs to legalize Main Street.” Local NIMBYs are impeding housing growth and enabling soaring housing prices.

* “House of Cards: How the Chicago Police Department Covered Up for a Gang of Criminal Cops.” A timely reminder of the challenges your participants may face.